The Devil’s Chessboard: Allen Dulles, the CIA, and the Rise of America’s Secret Government. David Talbot
in cafés and on the city streets. “Too much secrecy can be self-defeating,” he observed.
This strategy of hiding in plain sight did not make much sense from an espionage point of view. And it confounded and angered Dulles’s counterparts in the local office of MI6, the British spy agency, who dismissed the American as a rank amateur. But Dulles was involved in something far more ambitious than mere spy games. He was running his own foreign policy.
William “Wild Bill” Donovan, director of the OSS, originally wanted to station Dulles in London. But Dulles insisted on Bern and he prevailed. Donovan was a legend—a World War I combat hero and self-made Wall Street millionaire lawyer who had charmed FDR and outmaneuvered powerful rivals like J. Edgar Hoover to build the country’s first international intelligence agency. Undaunted by Washington bureaucracy, Donovan had recruited an impressively eclectic array of talent for his new spy agency—from Ivy League adventurers and society girls to safecrackers and professional killers. But Dulles, who moved in the same social circles as Donovan and competed aggressively with him on the tennis court, was not awed by his boss. He thought he could do a better job than Donovan of running the show. Dulles knew that the isolated splendor of Bern would afford him free rein to operate as he chose, with only tenuous supervision from back home.
Dulles also positioned himself in Bern because the Swiss capital was the center of wartime financial and political intrigue. Bern was an espionage bazaar, teeming with spies, double agents, informers, and peddlers of secrets. And, as Dulles knew, Switzerland was a financial haven for the Nazi war machine.
The Swiss demonstrated that they were masters of duplicity during the war. Banks in Zurich and Basel allowed the Nazis to stash the treasure they were looting from Europe in secret accounts, which Germany then used to buy the essential products from neutral countries that fueled the Third Reich—tungsten from Spain, oil from Romania, steel from Sweden, beef from Argentina. Swiss bankers promised the Allies that they would block Germany’s stolen assets, but all the while they reaped huge profits from their behind-the-scenes deals with the Nazi Reichsbank.
Dulles knew many of the central players in the secretive Swiss financial milieu because he and his brother had worked with them as clients or business partners before the war. Sullivan and Cromwell, the Dulles brothers’ Wall Street law firm, was at the center of an intricate international network of banks, investment firms, and industrial conglomerates that rebuilt Germany after World War I. Foster, the law firm’s top executive, grew skilled at structuring the complex merry-go-round of transactions that funneled massive U.S. investments into German industrial giants like the IG Farben chemical conglomerate and Krupp Steel. The profits generated by these investments then flowed to France and Britain in the form of war reparations, and then back to the United States to pay off war loans.
Foster Dulles became so deeply enmeshed in the lucrative revitalization of Germany that he found it difficult to separate his firm’s interests from those of the rising economic and military power—even after Hitler consolidated control over the country in the 1930s. Foster continued to represent German cartels like IG Farben as they were integrated into the Nazis’ growing war machine, helping the industrial giants secure access to key war materials. He donated money to America First, the campaign to keep the United States out of the gathering tempest in Europe, and helped sponsor a rally honoring Charles Lindbergh, the fair-haired aviation hero who had become enchanted by Hitler’s miraculous revival of Germany. Foster refused to shut down the Berlin office of Sullivan and Cromwell—whose attorneys were forced to sign their correspondence “Heil Hitler”—until his partners (including Allen), fearful of a public relations disaster, insisted he do so. When Foster finally gave in—at an extremely tense 1935 partners’ meeting in the firm’s lavish offices at 48 Wall Street—he broke down in tears.
Foster still could not bring himself to cut off his former Berlin law partner, Gerhardt Westrick, when he showed up in New York in August 1940 to lobby on behalf of the Third Reich. Setting himself up in an opulent Westchester County estate, Westrick invited influential New York society types for weekend parties, taking the opportunity to subject them to his pro-Hitler charm offensive. Westrick’s guest lists were dominated by oil executives because he was particularly keen on ensuring the continued flow of fuel supplies to Germany, despite the British embargo. The lobbyist finally went too far—even by the hospitable standards of the New York society set—when he had the gall to throw a gala party at the Waldorf-Astoria on June 26, 1940, to celebrate the Nazi defeat of France. Westrick’s shameless audacity created an uproar in the New York press, but Foster rushed to the Nazi promoter’s defense, insisting he had “a high regard for his integrity.”
Until late in the day, Foster harbored sympathy for the devil himself, Adolf Hitler. Even after the Nazi regime pushed through the anti-Semitic Nuremberg Laws of 1935 and unleashed waves of terror against Germany’s Jewish population, Foster clung to a sympathetic view of the Führer. He could not help being impressed by a man “who from humble beginnings … has attained the unquestioned leadership of a great nation,” Foster told a friend in 1937. By 1939, Eustace Seligman—a Jewish senior partner at Sullivan and Cromwell—had become so fed up with Foster’s position on Nazi Germany that he confronted his boss, telling Foster he was hurting the firm’s reputation by publicly suggesting “that Germany’s position is morally superior to that of the Allies.”
Like his brother, Allen Dulles was slow to grasp the malevolence of Hitler’s regime. Dulles met face-to-face with Hitler in the Führer’s Berlin office in March 1933. He was ostensibly on a fact-finding mission to Europe for President Roosevelt, but Dulles was particularly interested in determining what Hitler’s rise meant for his law firm’s corporate clients in Germany and the United States. As Dulles subsequently informed Foster, he did not find Hitler particularly alarming. And he was “rather impressed” with Joseph Goebbels, remarking on the Nazi propaganda chief’s “sincerity and frankness.” After Dulles and fellow U.S. statesman Norman Davis returned to the Adlon, their luxury hotel across from the Brandenburg Gate, Davis was unnerved to find the word “Juden” scrawled crudely on the door of his room, even though he was not Jewish. “The conditions are not quite as bad” as anxious reports about Hitler would indicate, Dulles nonetheless wrote Foster from Germany.
By the late 1930s, Dulles’s views finally shifted and he came to dismiss Nazi leaders as “those mad people in control in Germany.” He grew increasingly certain that the United States must prepare for an inevitable showdown with Hitler. But, out of deference to Foster, Allen was reluctant to make his opinions public. He also continued to do business with the Nazi financial and industrial network, joining the board of J. Henry Schroder Bank, the U.S. subsidiary of a London bank that Time magazine in 1939 called “an economic booster of the Rome-Berlin Axis.” And Allen and his wife, Clover, continued to socialize with the Lindberghs, who were their neighbors on Long Island’s Gold Coast shore. (Lindbergh, enamored of Hitler, noted in his diary that he and Dulles “have somewhat similar views in a number of instances.”)
Even after Dulles was recruited into the OSS by Donovan in October 1941, his loyalties were still questioned by some administration officials, including Roosevelt himself. Dulles’s various financial connections to the Nazi regime prompted FDR to place the Wall Street lawyer under close surveillance when he began working in the OSS’s thirty-sixth-floor suite in Rockefeller Center. Monitoring Dulles proved an easy task since he shared office space with a massive British spy operation run by legendary Canadian secret agent William Stephenson, who