Plausible Denial
Dossiers

Operation Rusty

1946-07-01

The 1946–1949 US Army G-2 and Counter Intelligence Corps operation that re-employed General Reinhard Gehlen and the surviving cadre of the Wehrmacht's Foreign Armies East branch as an American-controlled intelligence-collection apparatus in occupied Germany, prior to its transfer to CIA control on 1 July 1949.

Background

Reinhard Gehlen was a Major General of the Wehrmacht who from April 1942 until April 1945 headed Fremde Heere Ost ("Foreign Armies East"), the German Army General Staff branch responsible for military intelligence on the Soviet Union. Foreign Armies East had assembled, over the course of the Eastern Front campaign, an extensive archive of order-of-battle data on the Red Army, an interrogation product derived from Soviet prisoners of war (including the cadre of the Vlasov movement and other anti-Soviet émigré formations), and a network of agent contacts in Eastern Europe. Gehlen was dismissed by Adolf Hitler on 9 April 1945 for what Hitler characterised as defeatist reporting on Red Army strength.1

In the closing weeks of the war, Gehlen and a small circle of senior officers — among them Gerhard Wessel, Hermann Baun, and Heinz Danko Herre — micro-filmed the most operationally significant elements of the Foreign Armies East archive and concealed the films in metal canisters at several sites in the Bavarian Alps, principally at Lake Spitzingsee and in the area subsequently known to Allied interrogators as "Misery Meadow." Gehlen surrendered to a unit of the US 7th Army Counter Intelligence Corps near Bad Reichenhall on 22 May 1945. He offered the surviving Foreign Armies East product, and the team that had produced it, in exchange for employment by the United States.2

The Operation

After preliminary interrogation in Germany, Gehlen and six selected officers were flown to Washington on 20 August 1945 and held at Fort Hunt, Virginia — the same facility used for the high-value-prisoner interrogation programme designated "P. O. Box 1142." Gehlen was interrogated and debriefed at Fort Hunt for approximately ten months, during which the surrendered Foreign Armies East archives were translated and assessed by US Army G-2. By June 1946 a working agreement had been reached between Gehlen and Brig. Gen. Edwin Sibert (Assistant Chief of Staff, G-2, US Forces European Theater) under which Gehlen would return to the US occupation zone in Germany and re-establish a German-staffed intelligence-collection apparatus under American direction. Gehlen returned to Oberursel on 1 July 1946.3

The operation was given the cover designation "Rusty" — sometimes rendered in the period documentation as "Operation RUSTY" or "Project RUSTY" — and was administered by US Army G-2 with Counter Intelligence Corps participation. The operational base was first the former Luftwaffe interrogation facility at Camp King (Oberursel, near Frankfurt), and from December 1947 the walled compound at Pullach, south of Munich, that had been built during the war for Rudolf Hess and that subsequently became the headquarters of the West German foreign-intelligence service. Cover entities included the so-called "South German Industrial Development Organization" and a series of front companies registered in Pullach. Internal Wehrmacht-era hierarchy was substantially preserved; recruitment drew on former Foreign Armies East and Abwehr officers, with a smaller but documented complement of former SS and Sicherheitsdienst personnel.4

Operation Rusty's intelligence product was directed primarily at Soviet and Soviet-satellite military and political targets. Reporting covered Red Army order of battle in the Soviet zone of occupation, Soviet civilian-administration developments in East Germany, and human-source reporting on Soviet activity in Eastern Europe more broadly. The volume of reporting was substantial — by 1948, the operation was producing thousands of reports per year — but the analytical quality, source reliability, and operational security of the network were the subject of sustained internal US Government criticism. The Bolling Report of December 1948, prepared under Brig. Gen. Alexander R. Bolling (Director of Intelligence, US Army), assessed the operation's product as substantially over-stated by the German staff and as significantly penetrated by hostile services, and recommended either the wholesale reorganisation of the operation or its termination.5

Disclosure

The decision on Rusty's future was taken inside the US Government across 1948 and the first half of 1949. The newly created Central Intelligence Agency, established by the 1947 National Security Act, had taken the position from late 1947 onward that any post-war German intelligence-collection effort under US control should be in CIA hands rather than Army hands. Army G-2 resisted the transfer at successive levels through 1948. The transfer was approved in early 1949 and effected on 1 July 1949, when operational control of Rusty passed from the Department of the Army to the CIA. The CIA assigned the operation the new cryptonym ZIPPER and re-designated the underlying organisation, in internal documentation, as "the Gehlen Organization" — the form by which it would be known until its formal conversion into the West German Federal Intelligence Service (Bundesnachrichtendienst, BND) on 1 April 1956.6

The CIA's institutional history of the operation, prepared by Kevin Conley Ruffner of the CIA History Staff under the title Forging an Intelligence Partnership: CIA and the Origins of the BND, 1945–49 and originally classified Secret, was declassified and released to the National Archives in 2002 in connection with the work of the Nazi War Crimes and Japanese Imperial Government Records Interagency Working Group. The Ruffner volume — running to two volumes and several hundred pages of operational detail — is the principal authoritative US-Government account of the Rusty period and of the Army-to-CIA transfer. Ruffner's parallel volume Eagle and Swastika: CIA and Nazi War Criminals and Collaborators, declassified in 2010, addresses the recruitment of named former Nazi-era officers across CIA operations and includes substantial material on the Rusty cadre.7

The Nazi War Crimes Disclosure Act of 1998 (Pub. L. 105-246) and the parallel Japanese Imperial Government Records Disclosure Act required US executive-branch agencies to identify, declassify, and release records relating to Nazi-era and Imperial Japanese war crimes and to the post-war US Government employment of named individuals associated with such crimes. The Interagency Working Group established under the Act delivered its Final Report to Congress in April 2007. The Working Group's review, conducted across the CIA, FBI, US Army, US Air Force, US Department of State, and other agencies, produced the declassification of approximately 8.5 million pages of records — the principal primary-source basis for the public-record account of Operation Rusty and of the operations that followed it.8

Legacy

Operation Rusty is the institutional starting-point for the post-war American re-employment of Nazi-era German intelligence personnel and for the longer arc of US-German intelligence cooperation that culminated in the Bundesnachrichtendienst. Its specific operational record — the size of the network, the volume of the reporting, the extent of the documented hostile-service penetration — has been assessed by the CIA's own institutional history as substantially weaker than the Gehlen group claimed at the time. The Bolling Report's December 1948 conclusions on penetration were largely vindicated by the subsequent identification of senior BND officers, most prominently Heinz Felfe (arrested 1961), as agents of the Soviet KGB and East German Ministry for State Security; Felfe had been recruited into the Gehlen group during the Rusty period.9

The operation's significance for the broader question of post-war Nazi recruitment lies less in its scientific or technical product (which was largely contested) than in its precedent-setting institutional logic: the willingness of US Army G-2, and subsequently of the CIA, to absorb a Wehrmacht-era German intelligence apparatus essentially intact, to extend operational protection to its personnel, and to structure the relationship in such a way that the German cadre exercised substantial autonomy over its own internal recruitment and security clearances. That logic, established under Rusty, was carried forward into the Gehlen Organization period under CIA control, and influenced parallel US programmes — including the recruitment of émigré formations under Operation Bloodstone, the protection of named individuals such as Klaus Barbie, and, in the scientific-and-technical domain, Operation Paperclip.10

The Rusty record has subsequently been the subject of substantial academic, journalistic, and former-CIA-officer commentary. James H. Critchfield, the CIA officer who took over operational direction of the Gehlen group at the moment of the Army-to-CIA transfer in 1949, published an account of the period in his 2003 memoir Partners at the Creation. Christopher Simpson's 1988 Blowback and Mary Ellen Reese's 1990 General Reinhard Gehlen: The CIA Connection drew on declassifications then available; Eric Lichtblau's 2014 The Nazis Next Door and the IWG-era declassifications enabled a more comprehensive account.11

This dossier is the institutional precursor to the Gehlen Organization (1949–1956 CIA-control phase) and provides the Counter Intelligence Corps context for the Klaus Barbie case. It is the US-Army-controlled counterpart to the parallel scientific-and-technical recruitment of Operation Paperclip and to the émigré recruitment of Operation Bloodstone. The agency-level entries are the Central Intelligence Agency and the Federal Intelligence Service (BND); the country-level context is on the pages for the United States and Germany.

Sources & Further Reading

  1. Reinhard Gehlen, The Service: The Memoirs of General Reinhard Gehlen (World Publishing, 1972); David Kahn, Hitler's Spies: German Military Intelligence in World War II (Macmillan, 1978).
  2. Kevin Conley Ruffner, Forging an Intelligence Partnership: CIA and the Origins of the BND, 1945–49 (CIA History Staff, 1999), declassified 2002, vol. I, ch. 1; Mary Ellen Reese, General Reinhard Gehlen: The CIA Connection (George Mason University Press, 1990), ch. 2.
  3. Ruffner, Forging an Intelligence Partnership, vol. I, chs. 2–3; James H. Critchfield, Partners at the Creation: The Men Behind Postwar Germany's Defense and Intelligence Establishments (Naval Institute Press, 2003).
  4. Ruffner, Forging an Intelligence Partnership, vol. I, chs. 4–5; Christopher Simpson, Blowback: America's Recruitment of Nazis and Its Effects on the Cold War (Weidenfeld & Nicolson, 1988), chs. 3–4.
  5. Bolling Committee Report, December 1948, US Army G-2, declassified under the Nazi War Crimes Disclosure Act and held at the National Archives, RG 319 (Records of the Army Staff); Ruffner, Forging an Intelligence Partnership, vol. II, ch. 8.
  6. Ruffner, Forging an Intelligence Partnership, vol. II, chs. 9–10; Critchfield, Partners at the Creation, chs. 4–6.
  7. Kevin C. Ruffner, Eagle and Swastika: CIA and Nazi War Criminals and Collaborators (CIA History Staff), declassified 2010 and held at the National Archives, RG 263 (CIA records).
  8. Final Report to the United States Congress, Nazi War Crimes and Japanese Imperial Government Records Interagency Working Group, April 2007; Nazi War Crimes Disclosure Act, Pub. L. 105-246, 8 October 1998.
  9. Hans-Henning Crome, Heinz Felfe: Spion für Stalin und Mielke (Berlin: Christoph Links Verlag, 2008); BND historical commission, Die Geschichte der Organisation Gehlen und des BND, 1945–1968 (multi-volume institutional history, ongoing publication from 2011).
  10. Simpson, Blowback, chs. 1–2; Eric Lichtblau, The Nazis Next Door: How America Became a Safe Haven for Hitler's Men (Houghton Mifflin Harcourt, 2014), ch. 4.
  11. Critchfield, Partners at the Creation; Reese, General Reinhard Gehlen; Simpson, Blowback; Lichtblau, The Nazis Next Door.