On the Edge of the Cold War

Title:                      On the Edge of the Cold War

Author:                   Igor Lukes

Igor Lukes (2012). On the Edge of the Cold War: American Diplomats and Spies in Postwar Prague New York: Oxford University Press

LCCN:    2012000393

DB2078.U6 L85 2012

Date Updated:  February 27, 2016

This review is based on one by Benjamin B. Fischer[1], “Who Lost Czechoslovakia?”

In the late 1940s and early 1950s, critics of United States foreign policy asked “Who lost Poland?” and “Who lost China?” Both questions were more rhetorical and recriminatory than substantive. But, for another country, Czechoslovakia, the “Who lost?” question raised serious and still controversial issues.

For a brief time post-World War II Czechoslovakia was governed by a coalition of democrats and Communists in a parliamentary system based on free elections. The economy was mostly state-controlled, but allowed for some private enterprise and seemed to be percolating toward solid recovery from the ravages of German occupation. Prague’s foreign policy leaned toward the Soviet Union while maintaining historic ties to the West. Thus, the country occupied a unique position in east-central Europe “on the edge” of the unfolding Cold War. Or so it seemed until February 1948, when the Czechoslovak Communist Party (CPC) seized power and ousted the coalition government.

In his thoroughly researched and gracefully written account, On The Edge of the Cold War, Professor Igor Lukes of Boston University revisits the tragic history of his native country during the years before and just after the Communist takeover. He draws on a vast array of multinational archives, most of which became accessible only after the Cold War, to reveal how and why Czechoslovakia lost its freedom. His main focus is on U.S. policy, whose official objective was to support Czech democracy and sovereignty while keeping the country from slipping or being dragged behind the Iron Curtain. Yet, as Lukes shows, the diplomats and intelligence officers assigned to the U.S. embassy in Prague failed in the very mission Washington had assigned them.

CONTEMPORARY VIEWS

At the end of World War II, some officials in the State Department, as well as analysts from the Office of Strategic Services (OSS), believed that Czechoslovakia would be a test case of Stalin’s intentions in Eastern and Central Europe, as well as an indicator of whether post-war Soviet¬American cooperation was possible. An OSS report described the country as a “pivot point” in East-West relations and even the “master key” to the future of Europe as a whole.

Some grounds for optimism existed. In 1943, the same year the Soviet Union’s Josef Stalin broke relations with the Polish government-in-exile in London over the Katyn affairFebruary 27, 2016—the cold-blooded execution of Polish prisoners of war (POWs)-the leader of its Czech counterpart, Edvard Beneš, signed a treaty of mutual cooperation with Moscow. While the Soviet dictator was dispatching Communist functionaries who had spent the war years in the USSR (the so-called Muscovites) to create satellite regimes elsewhere in the region, he arranged for Beneš and his entourage to return to their homeland from the Soviet Union.[2]

The same train that carried the exile group included Soviet officials and the head of the Communist Party of Czechoslovakia (CPC), Klement Gottwald, but the political symbolism was ambiguous. Perhaps it signaled a willingness to tolerate some form of democratic government with Communist participation, or perhaps Stalin was playing a waiting game to see how events would develop.

Czechoslovakia’s independent status was exceptional compared to Poland, Hungary, and Romania, which were occupied by the Red Army. In 1945, Stalin had agreed to a complete and mutual withdrawal of all Soviet and American armed forces. Unlike Poland, Czechoslovakia did not have a long history of enmity with Russia and the Soviet Union. And, unlike Hungary and Romania, Czechoslovakia had been a victim rather than a collaborator of German aggression. Soviet vengeance was not on the agenda.

After the Communist takeover, some American officials declared that Czechoslovakia had been a lost cause from the beginning, asserting that geography, not politics, had determined its fate. The country shared borders with Soviet Ukraine, Poland, and Hungary, as well as the American, British, and Soviet occupation zones in Germany. Secretary of State George C. Marshall declared that the USSR was never likely to tolerate a “Western protrusion” into its security zone. George Kennan observed that the Soviets viewed neighboring states as either enemies or vassals, and, in either case, the result was the same. Poland had resisted and was crushed.

Czechoslovakia tried to appease Stalin and still lost its freedom.

Harmful Naiveté

Lukes places the main blame for the loss of Czechoslovakia’s freedom squarely on the shoulders of Beneš and other democratic leaders. Their irrational fear of a resurgent Germany, and their turn to the USSR as a counterweight, led them to underestimate the threat of Soviet Communism. Unlike Poland in 1939, Czechoslovakia was invaded and occupied by Nazi Germany alone, not by Nazi Germany and Soviet Russia combined, and hence did not experience the reign of terror that Stalin had unleashed on the Poles. The Czechs also failed to recognize the internal threat posed by a large and influential Communist “cabal,” treating the CPC as a legitimate partner “in a shared patriotic enterprise.” Finally, Lukes explains, they ‘‘believed that their own reasonableness, good will, and polite manners would civilize their domestic opponents and bring about a distinctively Czechoslovak form of socialism.” When the Communists declared that they would no longer cooperate with “reactionaries” and seized power, it was too late. The democrats chose to capitulate rather than resist.

But Lukes’s judgment on America’s role in the Czech debacle is equally harsh, though fair, in light of the evidence he presents. His account of the sorry performance of American diplomats and intelligence officers in Prague is scathing. The U.S. did little to help the democrats when it could have made a difference, and they sometimes caused unnecessary harm. The embassy’s assessments of the Czech political scene were often myopic, even benighted. The American ambassador focused more on economic issues than political reporting when he was in Prague, and he was absent much of the time while pursuing private and legal affairs in New York.

The performance of the U.S. intelligence cadre was even worse. Intelligence officers relied heavily on political and social contacts in democratic circles who passed along gossip and their own often rose-tinted assessments. They had no training and less aptitude for clandestine operations targeting the CPC and the Communist-dominated ministries and intelligence services. Counterintelligence was another blind spot. U.S. intelligence failed to appreciate the web of informants the Czech services had spun around the embassy and the American community, or even to detect those services’ intrusions into the embassy itself.

Lukes’s most startling revelation emerged from a review of Czech intelligence records. One of the first American military intelligence officers assigned to Prague in 1945 was a mole who had been co-opted by Soviet intelligence before he arrived in the United States as a refugee from Czechoslovakia. While still in Prague he joined the Central Intelligence Agency (CIA). In sum, Lukes concludes: “The problem was that the United States embassy in Prague excelled neither in intelligence nor in diplomacy.”

THE AMBASSADOR

Ambassador Laurence A. Steinhardt holds center stage in Lukes’ narrative. Steinhardt came from a prosperous New York family. After studying law he joined a major New York firm, where he became a successful corporate lawyer and international negotiator in complex business and financial transactions. In 1932, he was an early supporter of Franklin D. Roosevelt’s bid for the presidency and a generous donor to FDR’s campaign. His reward was a series of political appointments to diplomatic posts in Peru, Sweden, the Soviet Union (1939-1942), and then Turkey during World War II.

Steinhardt’s Moscow tour ended on a sour note. He advocated a firm approach in dealing with the Soviets that put him at odds with President Roosevelt and his top advisers. When the White House decided to extend immediate aid to Moscow after the German invasion of Russia in 1941, Steinhardt argued that the U.S. should deal with Stalin on a quid pro quo basis. Before granting aid, he argued, the U.S. should insist on the repatriation of Americans trapped in Soviet-occupied Poland and seek a commitment by Moscow to surrender territory acquired under the terms of the Hitler-Stalin non-aggression pact.

Steinhardt’s advice fell on deaf ears in the White House. Stalin came to distrust and dislike him and refused to meet him. Steinhardt found himself isolated in Moscow as well as in Washington. Roosevelt decided to bypass Steinhardt and dispatched his own emissaries to deal with Stalin. Steinhardt was reassigned to Turkey.

In 1944, Steinhardt learned that he would not be included in the American delegation to the Yalta summit of the Big Three allies, a result no doubt of his record in Moscow. It was a snub he never forgot, as well as a sign that he would never reach higher diploma tic and political aspirations. From then on, Steinhardt devoted more time to his personal and legal affairs and less to his official duties. That became all too evident during his years in Prague.

After his appointment to Prague, Steinhardt remained in New York for several months. He finally arrived in mid-July 1945, the last of the Allied envoys to do so and two months after Beneš. Once settled in, he devoted a lot of time to routine administration and staffing issues, while seeking increased allowances for himself and the embassy. He refused to occupy the Schönborn Palace, a massive building that had housed the prewar U.S. embassy, and waged a paper war with the State Department over its refurbishing and refitting, even though State considered the embassy perfectly habitable. Meanwhile, Steinhardt began looking for a private residence and settled on a sumptuous villa in Prague, which he managed to pay for through an arrangement with the Czech government that involved bartering with military materiel that the U.S. Army had left behind in the country and never intended to repatriate. He boasted to his daughter that he had purchased the villa with “wooden money.” The ambassador also rented a castle in Bohemia as a country retreat.

His first official priority was recovering assets of American companies and private citizens that had been abandoned after the German occupation. Eleven U.S. corporations, including IT&T, IBM, Remington, and Paramount, had invested in branches of Czech companies before the war. But Steinhardt devoted special attention to the New York-based Socony-Vacuurn Oil Company (later the Mobil Corporation), which had owned a refinery in prewar Czechoslovakia. The company was a client of Steinhardt’s law firm, as were several other corporations he assisted, and its chairman was a close personal friend. The State Department either did not see, or chose to ignore, the apparent conflict of interest. Still, for the first and certainly not the last time, State only nudged Steinhardt to pay more attention to his main mission of monitoring developments in Czechoslovakia. Cables from Washington were always restrained, however, probably because of Steinhardt’s political connections.

The ambassador’s first months en poste were, according to Lukes, a “chronicle of wasted opportunities.” His reports were upbeat, claiming that Czechoslovakia was in good shape politically and economically. In reality, the country was drifting to the political Left, and the Communists were gaining influence. But Steinhardt saw no cause for alarm, arguing that the Party’s “conservative streak” was stronger than its radical faction, and that the Communists had been tamed by their role in governing the country.

Otherwise, the end of 1945 seemed to augur well for the future with the withdrawal of Soviet forces. But the next year introduced strains in relations between Prague and Washington, and a stunning surprise in the first postwar national elections.

VEXING ISSUES

Two troubling issues arose in 1946 to cast a shadow over U.S.-Czech relations. The first was an ill-conceived U.S. Army commando raid inside the country to recover documents cached by the Germans near the end of the war. The second was a dispute over compensation for American-owned properties and assets that Prague had nationalized in late 1945. The result was a strain on bilateral relations that hurt the democrats, helped the Communists, and distracted the U.S. embassy from more pressing concerns.

The raid originated with a report from a German prisoner-of-war (POW) in French captivity that he could locate a camouflaged tunnel where a German SS unit had hidden some 30 boxes of official records. When the G-2 (intelligence) section of the U.S. Army headquarters in Frankfurt learned of the report, it decided to go after the records, a decision that was probably fueled by speculation that they contained information on Germany’s atomic bomb program. Another factor was concern over information that the Soviets were mining uranium at two sites in Czechoslovakia for their own nuclear weapons program.

The G-2 acted without informing higher military or civilian authorities. It did inform a junior attaché in Prague, who advised against the operation but was ignored.

The tunnel was located near the Stěchovice hydroelectric dam on the Vltava (Moldau) River some twenty miles south of the capital city. In February 1946, a team of twelve GIs with the German POW and two French guards in tow crossed the Czech border in a convoy of four trucks and a jeep. They quickly located the tunnel, and the team leader, an explosives expert, managed to disarm booby-traps placed at the entrance to the tunnel, inside the tunnel itself, and on the crates containing the records.

What became known as the Stěchovice Raid looked like a success. Despite encounters with curious locals and some Czech policemen and soldiers, the team recovered 12,000 pounds (six tons) of records and sent them back to Frankfurt. Then the story took a disastrous turn. The raiders left behind large and unsecured quantities of dynamite (TNT), as well as anti-tank mines and flammable liquid, which had been used to booby¬trap the tunnel and its contents. The OBZ, the Czech military counterintelligence service, then entered the picture and began looking for the culprits. They didn’t have to go far to find three of the Gls. The team leader and two sergeants had decided to visit Prague for a little rest and relaxation (R&R) before returning to their base. There they were arrested, interrogated, and detained pending Prague’s demand for the return of the documents. But the interrogation was little needed since the team leader had retained a copy of his top-secret orders, which outlined the plan and purpose of the operation.

The Army compounded its folly by allowing a journalist and photographer to accompany the raiders. They took the story and photographs to The New York Times, which heralded the operation as a major success. Several Gls received decorations for their participation.

The result was a major scandal in the Czech press. The Communists were handed a propaganda windfall that they exploited to the fullest. But the non-Communist press could not ignore such an obvious violation of national sovereignty. The Americans looked arrogant and duplicitous, not to say incompetent. The State Department was forced to issue a formal apology, and Ambassador Steinhardt apologized personally to President Beneš. The documents, which turned out to be worthless, were returned to Prague. The sorry affair damaged the favorable opinion many Czechs still had of the U.S.

THE ECONOMIC AND POLITICS OF U.S. AID

In October 1945, President Bend announced a sweeping nationalization of the economy that included about 70 percent of Czech industries and private enterprises. American-owned properties and assets, whose value was estimated at between $30-50 million, were taken over by the state. As a corporate lawyer who had been involved in several major international property disputes, Steinhardt not surprisingly pressed for compensation for the expropriated assets.

This situation became long and complicated; the demand for compensation became entangled with the Czechs’ request for reconstruction aid in the form of U.S. loans and credits needed to revitalize the war-ravaged economy. The State Department was divided over the question of linking or separating the two issues, with Steinhardt arguing that no aid should be offered without a prior commitment on compensation. As Lukes notes, the issue “meandered” for the rest of the year but not before it became politicized, creating tensions in bilateral relations.

When the State Department finally made an offer on economic aid, Prague complained that the terms were less favorable, and therefore discriminatory compared to those being offered West European countries. That in fact was true. Concerned over the rising influence of the CPC after the May elections, the U.S. saw, or thought it saw, an opportunity to use the aid issue to pull Czechoslovakia’s foreign policy orientation away from the USSR and more toward the West. When Beneš complained to Steinhardt that Washington’s hard line was hurting, not helping, relations, he rejoined by charging that Prague was trying to dictate to the U.S.

Then things got worse in August 1946 at a Paris meeting of U.S., Soviet, and several European foreign ministers. One item on the agenda was U.S. aid for European reconstruction. The Soviet deputy foreign minister denounced it as an attempt to “bring about the economic enslavement of Europe.” The Czech delegation, led by Foreign Minister Jan Masaryk and including two Communists, applauded. Masaryk had been Beneš’s confidant during their years of exile in London. Beneš defended the delegation’s action, telling Steinhardt that it was intended to protect the country’s Soviet flank without hurting the U.S. But the ambassador’s new boss, Secretary of State James F. Byrnes, took umbrage over the Czechs’ behavior.

Byrnes was the point man for the Truman administration’s new “get tough with Moscow” policy. In a public statement, the former South Carolina U.S. Senator and U.S. Supreme Court Justice declared that no more aid would go to East European countries that “vilified the US and distorted its motives and policies.” Later, Byrnes complained that the Czech delegation had consistently opposed the United States and supported the Soviet bloc. American aid, he maintained, should be used to help U.S. “friends,” not to “subsidize Communist control of Czechoslovakia.” That, however, was a rush to judgment. Although the CPC had done well in the May elections, winning 38 percent of the vote, and even though the prime minister and several ministers in the new government were Communists, to say the country was now under Communist control was an exaggeration.

The next month, the State Department broke off negotiations with a visiting delegation from Prague and denied its request for a $50 million loan from the Export-Import Bank. Byrnes also ordered suspension of the unused portion of a prior commitment to finance Prague’s purchase of surplus U.S. military materiel.

The offer of reconstruction aid began as a carrot to help the Czech democrats, but Washington turned it into a stick to beat the Communists. Lukes argues that the U.S. had thereby made a serious, if not fatal, mistake. By declaring Prague ungrateful and demanding a reduction in the number of Communists in the government, Byrnes “sacrificed America’s policy interest to uphold Czechoslovakia as a Western outpost in the Soviet bloc.”

MISCALLING THE 1946 ELECTIONS

The first national elections to a new Constituent Assembly were held on 26 May 1946. Steinhardt expected the results to strengthen the democrats and reduce the CPC’s influence. He was wrong.

Local elections held in February had offered a preview of what was to come. At the time, Steinhardt cabled Washington that he expected the CPC to win no more than 25 percent of the vote; it won by a much larger margin. But he downplayed the results, saying that parliamentary elections would produce a more favorable result.

Steinhardt predicted that moderates would win 117 of 300 seats in Constituent Assembly, and in a new right-of-center government the Communists would lose control of the critical ministries of interior and defense. Instead, the CPC won a stunning victory. For polling purposes, the country was divided into three electoral districts: two in the Czech regions and one in Slovakia. In the Czech regions, Communists won in every election except one, and they came in second in Slovakia. The CPC even made a strong showing in traditionally conservative rural areas. In all, the Communists won about one-third of the total votes cast.

Steinhardt had predicted the Communists would take 88 seats in the new parliament; they won 114. Gottwald, now Prime Minister, formed a new government in which key ministries were headed by Communists or their sympathizers.

According to Lukes, Steinhardt’s pre-election analysis “may well be one of the most reckless documents in the annals of twentieth-century American diplomacy.” The elections marked a turning point in Czech politics and foreshadowed the CPC takeover in 1948. Lukes describes the bleak situation: “The prime minister was a Communist, the military was undergoing rapid sovietization, all the large enterprises had been nationalized, the country’s foreign policy was coordinated with Moscow’s, the security services were in the pocket of the CPC, and the public was passive and frightened.”

Steinhardt’s post-election analysis was as wrong as his pre-election forecast. He claimed that the CPC’s success was a temporary setback. In fact, according to Lukes, the U.S. had suffered a “strategic political defeat.” The ambassador’s assessment of Gottwald was egregious. He now characterized the same man who had been a Moscow-loyal Communist since the 1930s as “reasonable, patriotic, and trustworthy.”

THE COMMUNISTS TRIUMPH

By late 1946, realistic observers—none of them inside the U.S. embassy—believed that the CPC was determined to seize power, with or without Moscow’s assistance. The Party was gaining in strength and in numbers, now accounting for some twelve percent of the entire population. But this was not the only sign of which way the wind was blowing. Upper-middle class Czechs who had the means and opportunity to leave for safe havens in the West were doing so.

At this critical juncture, Steinhardt himself departed for New York in January, remaining there until March. Once back, his reporting continued to be upbeat. He argued that the CPC, despite its political strength, was actually losing ground with the Czech people, and that the economy, though largely nationalized, still had a flourishing private sector.

In June 1947, Secretary of State George C. Marshall, who had succeeded Byrnes, announced a new economic initiative to rebuild European economies. Officially designated the European Recovery Program, it was better known as the Marshall Plan. From 1948 until 1952 it provided some $13 billion to rebuild West European economies.

The Marshall Plan was generous, though not altruistic. The U.S. needed European recovery in order to create export markets and stave off what some economists feared would be a post-war depression at home as the country transitioned from large wartime spending to a peacetime economy. Another goal was stabilization of democratic governments in the recipient countries and the containment of Communist influence, especially in France and Italy.

Initially, the Soviet bloc countries, and even Moscow, welcomed the prospect of U.S. aid. But once the Soviets realized that Washington would manage the plan unilaterally rather than through the United Nations, and would also require a coordination of aid with the recipients’ economic policies, they announced that they would not attend an organizing conference in Paris.[3] The other bloc countries fell in line. None of this came as a surprise to the State Department, where George Kennan had predicted that there was no chance the Soviets would accept U.S. terms.

The Marshall Plan was the first hard test of Prague’s balancing act between East and West. Masaryk welcomed the U.S. initiative and announced that he would lead a delegation to Paris. Rather than object outright, Moscow secretly instructed Gottwald and the other Communist members of the delegation to attend the conference, denounce the United States, and then walk out in protest.

A few days later, however, Stalin summoned Gottwald, Masaryk, and several others to Moscow and ordered them to boycott the conference. Acceptance of U.S. aid, he warned, would compromise Soviet-Czech relations. Stalin also played the German card, telling the Czechs that the Marshall Plan was a disguised effort to rebuild German industry and armed forces for a crusade against the USSR.

The next day, after the Czechs returned from Moscow, the Gottwald government reversed itself. Prague issued a statement parroting Stalin’s admonition that Czechoslovakia’s participation “would be understood as a measure against its friendship with the Soviet Union.”

Both the U.S. military intelligence component and the embassy learned of the Moscow visit from their government contacts. In fact, the embassy had a copy of the telegram Gottwald and Masaryk had sent from Moscow saying that they had accepted Stalin’s demand to boycott the Paris conference. It was unequivocal evidence of Soviet interference in Czech foreign policy.

Steinhardt was away from Prague when the embassy learned of the Moscow visit. When he returned, he conceded proof of the Czech government’s taking orders from Moscow. Yet, he remarkably reported that future Kremlin interference was unlikely. Going further, he asserted that, while some democrats were in a panic mode and were even discussing plans to leave the country and form an exile government, no real cause for alarm existed. The panic had passed, he claimed, and the political situation was returning to business as usual.

Moscow’s Minions

Steinhardt was wrong, again, and another ominous sign soon appeared. In September, packages containing powerful bombs concealed in perfume bottles were addressed to three prominent democrats, including Masaryk. Two of the “perfume bombs,” as they were dubbed, were disarmed before they detonated, and the one sent to the foreign minister was intercepted en route to his office.

Lukes notes that that violence was alien to Czech political culture. But it was not alien to the Communists and their Soviet allies. The Interior Ministry, a Communist stronghold, investigated and determined that several minor CPC members were involved. But the affair was quickly covered up. Gottwald denounced the bombs as a “provocation” by “reactionary forces,” and even compared the incident to the Nazis’ 1933 instigation of the Reichstag fire in Berlin, which Chancellor Adolf Hitler had used as pretext for assuming extraordinary powers and unleashing a reign of terror against opponents of the Nazi dictatorship.

The Soviet response to the Marshall Plan came the same month. In Poland, the Soviet Union convened a meeting of the ruling Communist Parties in Eastern and Central Europe, plus representatives from the French and Italian parties. A delegation from the CPC also attended.

The ostensible purpose, the delegates were told, was to exchange ideas and information about the international situation. Once there, however, they learned that Moscow’s real purpose was to announce the formation of a new organization, the Communist Information Bureau (Cominform), to formalize Soviet control over the international Communist movement. The first item on the Soviet agenda, which was not revealed until the meeting convened, dealt with “The task of democratic organizations in the struggle against attempts by American imperialism to enslave economically the countries of Europe (‘Marshall Plan’).”[4]

George Kennan accurately predicted that the CPC would soon make a bid for power that would finally bring Czechoslovakia into the Soviet bloc. Analysts at the newly-formed Central Intelligence Agency (CIA) concurred. Steinhardt demurred, however, arguing that domestic coexistence between the Communists and moderates was still possible. He left Prague in November 1947, remaining in New York for three months. It was his third extended absence; from January 1946 until February 1948, he was away for some 200 days.

New elections were scheduled for the spring of 1948. The CPC was pulling out all stops to win. Besides the terrorist acts already noted, the Communists were using their control over the civilian and military security services, as well as their own secretive intelligence apparatus, to intimidate the opposition and spy on the U.S. embassy. Steinhardt was oblivious. He predicted that voters would reject the Communists in view of what they saw happening elsewhere in Eastern Europe. After their defeat, he added, Beneš would maneuver the CPC out of the government, and Prague would reverse course and join the Marshall Plan. A more inaccurate assessment would be hard to imagine.

Zarin’s Role

Steinhardt returned to Prague on 19 February. His flight landed a few minutes behind a Soviet aircraft carrying Deputy Foreign Minister Valerian Zorin. Zorin’s official mission was to oversee the delivery of wheat promised by Stalin to alleviate a crop failure and to attend a session of the Soviet-Czech friendship society. The arrival of such a high-level official, who served as both diplomatic troubleshooter and intelligence official, should have, but didn’t, elicit concern in the U.S. embassy.[5] Steinhardt believed he was there to survey the political scene. In fact, Zorin was in Prague to oversee the impending coup.

The conventional view holds that Gottwald was in complete control of the planning and execution of the government takeover. Lukes’ research reveals a different story. CPC leaders were hesitant to act without help from Moscow. Zorin’s task was to stiffen Gottwald’s backbone and make certain that the coup be carried out without revealing the Soviet hand.

Sensing that a CPC move was imminent, several non-Communist ministers resigned. They hoped the tactic would cause the government to fall and lead to new elections before the Communists could act. This calculated risk failed. Of 26 ministers, only 12 resigned.

Tightening the Grip

The CPC meanwhile mobilized its forces with public displays of support and mobilized armed units to intimidate opponents. Thanks to their control of the security services, they had extensive information about the opposition and the U.S. embassy. On 25 February, CPC leaders sent Beneš a letter stating that they would no longer cooperate with “reactionary” ministers. Twice the same day Gottwald and others confronted the President, alternately threatening a civil war if their demands were not met and duplicitously claiming that a return to normal politics was still possible. They presented Beneš with a list of new ministers, all Communists or their sympathizers, which he accepted. The CPC had won a complete victory with threats and ultimatums but without violence. But the threat of violence was palpable. Armed CPC activists occupied public places. Police and militia units commandeered the headquarters of the democratic parties.

On 27 February, Beneš received the new ministers, among them Jan Masaryk, who later told Steinhardt that he had sided with the Communists in order to exercise a moderating influence within the new government. Less than two weeks later, Masaryk’s body was found lying beneath a window of his second story apartment. Speculation over whether he had jumped or was pushed continued for years thereafter, but he was almost certainly murdered. This was a prelude to the new police state and reign of terror that would grip the country for years.

President Beneš resigned in June and died in September.

AMATEUR HOUR: THE U.S. INTELLIGENCE CADRE

On the Edge of the Cold War reveals how woefully unprepared American military and civilian intelligence officers were for the challenges that faced them in Czechoslovakia. The key figure was Army Major Charles Katek, who opened the U.S. Military Mission upon his arrival in Prague in May 1945. The handsome and charismatic officer was the son of Czech immigrants, spoke his parents’ native language, and held a Ph.D. in modern history with a focus on Central Europe. After enlisting in the Army, he was assigned to the OSS. As the resident expert on Czechoslovakia, he also served as liaison to the Czech government-in-exile, which was located in London during 1939-1945.

Despite these qualifications, Katek fell short as an intelligence officer. For one thing, he was a “Good Time Charlie,” who liked to throw parties and hobnob with aristocrats, government officials, and, of course, young ladies who were attracted by the steady supply of liquor, good food, and cigarettes delivered from the military store (PX) in Nuremberg. The war was over, and Katek apparently wanted to continue celebrating. But what might have been appropriate in liberated Paris was inappropriate in liberated Prague. Some of Katek’s guests were also his sources, and others were informants planted by the Czech security services.

Katek and his colleagues set up offices in a building not far from the Palace. The Czech security services were waiting for him when he arrived, based on his London assignment. Their surveillance was made easier by the fact that a local police station occupied the first two floors of the same building. In March 1946, the Military Mission was transferred to the Office of the U.S. Military Attaché but remained in its offices outside the U.S. embassy. Although Katek and company now had diplomatic cover, it made little difference since their real status was well known.

In early 1947, G-2 in Frankfurt ordered Katek to develop a covert network of agents, but he had neither the penchant for, nor interest in, clandestine operations, preferring to rely on political and social contacts from democratic circles. (Katek actually confided his orders from Frankfurt to a Czech who was spying on him.) As a result, he failed to develop sources in the CPC or the Communist-controlled security services. On another occasion, Katek acknowledged-again to an informant-that G-2 had criticized him for not recruiting sources where they were needed most. What was the point, he asked? He was getting all the information he needed from government ministers and parliamentary deputies free of charge. Lukes tellingly notes that many potential sources in the armed forces and even in the Communist-led ministries would have cooperated if approached. Instead, many opportunities were lost.

Betraying the U.S.

Katek’s assistant and confidant was Kurt Taub, the son of a prosperous German-Jewish family from Prague. On the eve of the Nazi invasion, the family managed to escape to Sweden. Taub and his brother Walter were determined to reach the U.S. To do so, however, they needed transit visas to cross the USSR. The Soviet embassy in Stockholm provided the visas-but at a price. The two brothers had to agree to work for Soviet intelligence. They did, and were assigned cryptonyms.

Once in the U.S., Kurt joined the American Army and was eventually assigned to the OSS, where he met Katek and later joined him in Prague. Soon after Taub arrived, the Czech military counterintelligence service attempted to recruit him. The first pitch was friendly—”you’re one of us”—which could have meant he was Czech by birth or a Soviet agent or both. He refused. The next pitch was not friendly. The OBZ detained him and threatened to reveal his relationship with Soviet intelligence. Taub again refused, but then made a counter offer. He would cooperate with Alois Susánka, the man who had helped his family flee Prague in 1939. Susánka had been a Communist since the 1930s. With Soviet forces still occupying Czechoslovakia he served as agent of SMERSH, the Soviet wartime counterintelligence service. Susánka accepted the role of case officer, and Taub began passing U.S. information to Czech and Soviet intelligence.

When the Red Army withdrew in December 1945, the Soviets tried to hand Taub over to an intelligence officer in the Soviet embassy. But Taub disliked and distrusted the Russian and refused to work with him. He was willing to continue spying, however, but only if Susánka, who had since retired, resumed their previous relationship. The Soviets agreed.

Taub later claimed that he had informed the OSS about his encounter with Soviet intelligence in Sweden, and, with Katek’s backing, received a clean bill of health. Lukes believes that may have been true, but Taub never acknowledged his relationship with Czech intelligence in Prague. Lukes surveyed intelligence files in Prague that reveal beyond a shadow of a doubt that Soviet and Czech intelligence considered Taub a valuable and productive agent during his posting to Prague. He provided a comprehensive picture of the U.S. intelligence and diplomatic communities and revealed the cadre’s organization, activities, and sources.

Taub also fingered Katek’s main source in the Czech government. When he and Katek were expelled after the Communist coup, Taub identified ten more agents whose identities he had withheld because he feared that their arrests might cast suspicion on himself. Some of the agents he betrayed escaped: others were arrested and tortured before receiving long prison sentences.

Lukes raises, only to dismiss, the possibility that Taub was acting as a double agent, pretending to cooperate with Czech intelligence while remaining loyal to the U.S. In fact, Czech intelligence files show that the Czechs and Soviets considered Taub valuable and productive agent.

While in Prague, Taub changed his name to Kurt Leslie Taylor and joined the CIA. In 1948, after the Czechs expelled him from Czechoslovakia, he was assigned to the Agency’s base in Regensburg, West Germany. There he recruited Czech refugees living in DP (displaced persons) camps for covert missions. Sadly, most of those agents disappeared soon after crossing the border and were never heard from again. Was Taub still working for Czech intelligence? Lukes could find no hard evidence, though a hint appeared in the Czech archives. As late as 1957, Soviet intelligence evaluated Taub as a valuable agent, albeit in reference to his years in Prague. Czech intelligence did not close its file on him until 1973, concluding by then that he was no longer useful. Taub/Taylor never returned to the U.S.; he retired in Austria.

Taggart Arrives

In February 1946, the Central Intelligence Group, the CIA’s short-lived predecessor, assigned Spencer Taggart to the U.S. embassy. Taggart came well prepared in some ways, but was unsuited for the job in others. In the 1930s, he had served as a Mormon missionary in Czechoslovakia, where he learned the language and got to know the country. Like Katek, he had served in the OSS during the war and had dealt with the Czech exile government. (Taggart and Katek had crossed paths before the war when both attended a seminar at the University of California in Berkley.) Taggart was already known to the StB, the Czech intelligence service, which put him under round-the-clock surveillance.

According to Lukes, Taggart had other handicaps. He describes him as “stiff, passive, socially reserved, and unimaginative.” He was more of an intellectual than an intelligence “street man,” for he had neither the interest in nor the aptitude for clandestine work. He perhaps blindly relied on the same sources Ka tek had acquired and who were already known to StB. Taggart also failed to recognize the counterintelligence threat the StB posed to the embassy. The Czechs had multiple sources inside the Schönborn Palace and on occasion made surreptitious entries into the diplomats’ offices. The StB even managed to breach Taggart’s own secure facility. The result? Lukes found some 190 detailed dossiers on American personnel in the Czech archives.

Taggart was the sole professional intelligence officer in the CIA station. His chief assistant, Samuel Meryn, a naturalized American citizen born in Prague, was hired as a civilian employee of the military attaches office but in fact worked exclusively for Taggart. Meryn had no diplomatic cover or intelligence training.

Taggart’s only agent, as it were, was Reinhold Pick. Born in Ukraine, his father was Czech and his mother Russian. He was working for the U.S. Army in 1945 when the senior commander recommended him to Steinhardt, who hired him. At first, Pick was assigned to administrative duties, but Taggart decided that his operational skills would make him a good agent. Like Meryn, he was a civilian employee without diplomatic cover or status, and was not even a U.S. citizen.

The U.S. intelligence cadre was crippled from the beginning. Rank amateurism was part of the problem, and with a mole in its ranks, it was seriously, if not completely, compromised. The real test came after the Communist takeover, when failure turned into catastrophe.

SPY MANIA

In the wake of the February coup, the U.S. embassy found itself more isolated than ever. Surrounded and besieged by the security services, diplomats and intelligence officers found themselves cut off from all outside contacts. Before departing for his next assignment as ambassador to Canada, Steinhardt made what was undoubtedly his most trenchant observation of the internal political scene. Trying to organize resistance to the Communist regime, he warned, would be futile in a “police state.” Neither his successor nor the CIA station chief heeded his warning.

In mid-1948, during the first weeks of the Berlin blockade, Gen. Lucius Clay, the military governor of the American occupation zone, summoned Taggart to his headquarters. Clay believed that war with the Soviet Union was imminent, though both the State Department and the CIA rejected the war scare scenario. Clay instructed Taggart to organize a network of stay-behind radio stations that could provide military intelligence in the event of Soviet aggression.

Taggart was scheduled to depart Prague in October. To fulfill Clay’s orders, he turned to two diplomats, Walter Birge and Louise Schaffner. Birge, a capable professional, had served under Steinhardt in Turkey and then joined him in Prague. Schaffner was a first-tour Foreign Service Officer. Neither one had experience or training in intelligence.

Through his Czech mistress, Birge met Veleslav Wahl. They became friends, and Wahl offered to help Birge. He then introduced the diplomat to another man he trusted and recommended as a collaborator, Jaromir Nechanský. Wahl and Nechanskýappeared to be ideal candidates for organizing agent networks. During the war, Wahl was part of the Intelligence Brigade, an underground organization that provided the Western allies with valuable information on the German army. Nechanský, a professional army officer before the war, had escaped to France to fight with the free Czech forces. After the fall of France, he reached England, where he eventually received training in intelligence and special warfare operations. He parachuted into Czechoslovakia, where he organized agent networks and conducted operations against the German forces.

Urged on by Birge, by mid-summer 1948 the Czechs had organized two agent networks and were in the process of forming a third. Birge assured them that they would receive full support from the U.S. embassy, and that in the future they would be met by professional intelligence officers. Several clandestine meetings, first with Meryn and then Taggart, followed. Taggart emphasized the importance of completing the agent networks as rapidly as possible, saying that the international situation was about to change radically. The Czechs took that to mean that war was imminent.

The promise of U.S. support and enhanced security proved hollow. Taggart’s man Meryn was assigned to deliver radios for the stay-behind agents. The first time he went to the wrong meeting site. When he finally delivered the radios, the Czechs discovered that the operating manuals and coding instructions Meryn provided were designed for a different model. Several more attempts to provide the proper manuals and codes failed as well. The CIA then decided on a risky plan to send its recruited agents across the border and into the American zone in Germany for radio training, but the entire operation came to an end before that could happen. At their final meeting in November 1948, Meryn told Wahl and Nechanský that he was leaving the country. The war scare had passed, he added, but he encouraged them to continue recruiting agents.

The StB Moves in

With Taggart and Meryn gone, Birge resumed contact with Wahl and Nechanský. Without regard for the risk involved, Birge met the pair at Wahl’s home, where he debriefed them and passed along intelligence requirements. He even invited both men to his wedding. Before leaving Prague in May 1949, Birge introduced the Czechs to Issac Patch, an assistant political attaché, and Schaffner. Only one meeting with Patch took place. But Schaffner, like Birge, continued using Wahl’s residence as a meeting site.

The two men were already under StB scrutiny when they volunteered to help Birge. Nechanský was suspect because of his wartime association with British intelligence as a commando officer. Both men almost certainly appeared on the StB’s radar screen be ca use of their known association with Katek and Taub.

When Meryn returned to Prague for a brief visit in August 1949, the StB decided to move. Nechanský was arrested first. Schaffner urged Wahl to flee, but he refused, saying that his departure would only make his compatriot’s situation more difficult. He was arrested soon thereafter. Within a month the entire network of subagents was rounded up.

Meryn was detained for twenty-one days and interrogated but not tortured. Forced to face Nechanský, he refused to implicate the former military officer. Meryn was released and expelled. Prague then charged five Americans with espionage: Birge, Taggart, Schaffner, Meryn, and Patch. Birge and Taggart had already left the country. Schaffner and Patch were both persona non grata-ed. Soon thereafter, the Communist government claimed to wrap up a second spy ring, comprised mainly of Louise Schaffner’s contacts in the Foreign Ministry. Meanwhile, a captain from the attaché’s office was entrapped and expelled.

Wahl and Nechanský were put on trial in April 1950. The Czech press mounted a campaign around the theme of American spies and saboteurs. Newspapers carried pictures of the Americans, as well as the useless radio equipment, which was exhibit A at the trial. The ensuing spy mania was embellished with reports of weapons allegedly found in some of the agents’ possession.

Wahl and Nechanský were sentenced to death, and their Czech collaborators received long prison terms. The executions were never publicly revealed. Later, Schaffner, now back in the U.S., received an anonymous letter saying the death sentences had been carried out. She assumed that the StB had sent it.

Washington’s official reaction was to denounce the spy mania as Communist paranoia. But, years later, when Lukes showed Taggart, Taub/Taylor, Birge, and Schaffner protocols of the investigation from the Czech archives, they acknowledged that they were largely accurate. [6]

Roiling the Waters

The expose of American espionage set off a diplomatic war of the kind that would be often repeated during the Cold War. Prague demanded that the U.S. close its consulate general in Bratislava and reduce the embassy staff. Washington retaliated by closing Prague’s counterpart in New York and branches in three other cities, and ordering a two-thirds reduction of staff at the Czech embassy. Prague then demanded a further reduction in the official U.S. presence, leaving the embassy with only five diplomats, seven administrative officers, and a janitor.

The real burden of the American fiasco fell on the Czech people. The security services exploited the ensuing spy mania to launch a campaign of terror and intimidation against persons known or suspected of opposing the Communist regime.

Several people I [Benjamin B. Fischer] have known who were living in Czechoslovakia during those years still harbored bitter memories about the Americans’ foolhardy and amateurish behavior. Tweaking the Communist rulers’ paranoia had endangered the lives and freedom of many innocent people. Moreover, the Wahl-Nechanský trial and genuine evidence of U.S. espionage gave credibility to the security services’ ensuing witch hunt.

CZECHOSLOVAKIA AND ROLLBACK

The debacle in Czechoslovakia did nothing to dissuade U.S. intelligence from mounting ill-conceived covert action operations elsewhere in the Soviet bloc. Rather, the CIA embarked on a new course known as “rollback,” which envisioned using propaganda, subversion, sabotage, and paramilitary operations to undermine Soviet domination and “liberate” the satellite regimes. One after another, schemes to support resistance groups in Poland, Ukraine, the Baltic states, and elsewhere failed. The CIA recruited agents from the East European émigrés living in Germany and dispatched them behind the Iron Curtain by land, sea, and air. With few exceptions, they disappeared without a trace, having been either executed or sent to the Gulag.

The template for rollback came from the OSS and its wartime mission of supporting resistance groups in Nazi-occupied Europe. But the template did not fit the much different postwar realities of Eastern Europe, where Communist regimes, backed by the Red Army (with the exception of Czechoslovakia) and saturated by the Soviet and Soviet-trained security services, held sway over the countries they ruled. The failure of U.S. intelligence in Czechoslovakia could have served as an early warning that rollback would fail. Unfortunately, it didn’t. Many more years and more failures followed before the U.S. abandoned the political and moral fiasco known as rollback.

Reviewed by Hayden Peake.[7]

In 1955 during a meeting of the National Security Council Operations Coordinating Board, DCI Allen Dulles commented that he “for one believed that Czechoslovakia would never have been lost if someone had been there doing something about it.”[8] Dulles’s reference was to the 1948 Soviet takeover that ended Czechoslovakia’s postwar democratic government. Boston University history professor Igor Lukes has investigated the question of who was there at the time and whether anyone in fact attempted to deter the Soviets. On the Edge of the Cold War reports the results of his investigation.

Lukes begins with a review of the events from the Munich appeasement in 1938 to the liberation of Czechoslovakia by the Red Army in May 1945 and the return of President Edvard Benes. This includes an analysis of the American decision to halt Patton’s 3rd Army west of Prague and a failed attempt by an OSS team to reverse the ruling. That team had penetrated German lines and joined a British Special Operations Executive team (PLATINUM) already in Prague. (49) The first permanent OSS team arrived on 10 May 1945 and began setting up an embassy in preparation for the arrival of the ambassador, Laurence Steinhardt.

The next several chapters compare the relatively relaxed way the embassy functioned-the ambassador didn’t even arrive in Prague for another six months—to the more determined activities of the Soviet delegation. These involved the persistent political machinations of the Soviets during first free elections in May 1946, when the communists won the most seats, to the takeover by a Soviet-backed communist government in 1948.

As these events unfolded, the intelligence and security elements of both sides played a role, and On the Edge of the Cold War does a fine job of telling their story, much of it for the first time. The American intelligence staff, headed by Col. Charles Katek—initially of the OSS, then SSU, CIG, and finally CIA—remained relatively unchanged through the period. Its mission was long term: “to help the Czechs guard their independence and to promote Western democracy.” (p. 157) When the 1948 crisis came, however, Lukes concludes, “US intelligence did next to nothing.” (p. 200) He attributes this to the effectiveness—not to mention ruthlessness—of the Soviet-dominated Czech security service (StB) and the inexperience of the Americans.

The problem wasn’t that Katek and his officers hadn’t recruited agents or attempted to establish agent networks. (pp. 222ff) Katek’s men, often with the help of embassy staff, even learned how to help agents and Czechs escape arrest. Lukes describes the effectively run BLACKWOOD operation that fooled the StB as one example. The exfiltration of an agent’s fiancé—on the ambassador’s plane—is another. The difficulty, however, was that the StB’s round-the-clock surveillance identified all of the recruited agents and had them arrested when necessary.[9] Furthermore, at least one of Katek’s men, Kurt Taub-who had grown up in Prague and was serving Katek’s deputy-had had prewar contact with the Soviet intelligence services.

Lukes makes a strong case that Taub continued that relationship after his return to Prague.

On the Edge of the Cold War is a superbly documented, well-written story of US intelligence operations in early postwar Czechoslovakia, not told before in such detail.

[1] Fischer’s review appeared in The International Journal of Intelligence and Counterintelligence, 26,2 (Summer 2013), pp. 394-412. Benjamin B. Fischer, the former Chief Historian of the Central Intelligence Agency, is a specialist on Eastern European and Soviet affairs. A graduate of Cornell University, Ithaca, New York, and Columbia University, New York City, he served for nine years in the Agency’s Directorate of Intelligence as an analyst of Soviet issues, fifteen years in the Directorate of Operations in the United States and abroad, and ten years on the History Staff of the CIA ‘s Center for the Study of Intelligence, where he edited several of the Agency’s classified publications on Cold War events, some of which have been partially or fully declassified.

[2] The original plan was for Beneš and his entourage to return home from Britain accompanied by the first Western diplomats accredited to Prague. But Stalin insisted, and Beneš complied, that the Czechs fly to Moscow and return from there.

[3] As a member of the UN’s Economic Committee for Europe, the USSR had taken a consistently obstructionist role.

[4] Haslam, Jonathan (2011). Russia’s Cold War: From The October Revolution to The Fall Of The Wall. New Haven, CT: Yale University Press LOC: 2010026281; DK266.45 .H37 2011

[5] Zorin was in charge of the short-lived Committee for Information, a unit in the Foreign Ministry that coordinated all Soviet foreign intelligence operations.

[6] Lukes interviewed Taub/Taylor before discovering evidence of his treason.

[7] Hayden Peake is a frequent reviewer of books on intelligence and this review appeared in The Intelligencer: Journal of U. S. Intelligence Studies (19, 1, Winter/Spring, 2013, pp. 120-121). Hayden Peake is the Curator of the CIA’s Historical Intelligence Collection. He has served in the Directorate of Science and Technology and the Di recto rate of Operations. Most of these reviews appeared in recent unclassified editions of CIA’s Studies in Intelligence. These and many other reviews and articles may be found on line at http://www.cia.gov.

[8] Foreign Relations of the United States, 195S-1957, Volume XXV, 7. Notes on the Meeting of the Operations Coordinating Board, Washington, 5 January 1955.

[9] For an account of a deception operation used against Czechoslovakian dissidents, see Igor Lukes, “KAMEN: A Cold War Dangle Operation with an American Dimension, 1948- 1952” in Studies in Intelligence (55, 1, March 2011). This article is available online at https://www.cia.gov/library/center-for-the-study-of-intelligence/csi-publications/csi-studies/studies/vol.-55-no.-1/kamen-a-cold-war-dangle-operation-with-an-american-dimension-1948-1952.html.

 

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One Response to On the Edge of the Cold War

  1. jkmhoffman says:

    Reblogged this on kjmhoffman.

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