Spying Among Friends: The Troubled Waters of the CIA and BND

The rapid erosion of US-German relations continues to prompt much attention and consternation on both sides of the Atlantic. The new era urged by presidential candidate Barack Obama in Berlin in 2008— one based on “allies who will listen to one another, learn from one another and, most of all, trust each other”— has conspicuously failed to materialize. With the enthralled crowds that had gathered at the Victory Column now a distant memory, recent German public opinion polls reflect a widespread disillusionment; only 29% regard the United States as a trustworthy partner, while 57% feel their country should be more independent of their longtime ally in matters of foreign policy.

No one appears more aggrieved about this development than German Chancellor Angela Merkel. Not only was her cell phone tapped by the CIA from the rooftop of the US embassy in Berlin, causing her to break her normally low-key demeanor and object personally to Obama, but upon receiving the report that two German citizens—a midlevel staffer in the Bundesnachrichtendient (Federal Intelligence Serivice; BND) and a civilian employee in the Defense Ministry—were suspected of having been recruited by the CIA, she promptly expelled the US chief-of-station in Berlin. Moreover, according to secret documents leaked by Edward Snowden (who enjoys a decidedly favorable reputation among Germans), the National Security Agency maintains more than 150 listening posts in the country.

Various explanations have been advanced regarding this turn of events, but few have taken into consideration the deeper historical and cultural factors at play, especially in the realm of espionage. The relationship of the CIA to the Bundesnachrichtendienst (Federal Intelligence Service; BND) has complex roots originating in the mid-to-late 1940s. The pivotal figure was Reinhard Gehlen, who had served as head of Foreign Armies East (FHO), the organization responsible for collating and analyzing intelligence on the Eastern front during World War II. Dismissed by Adolf Hitler in April 1945 because of his pessimistic yet realistic assessments, he then took steps to insure his position in a postwar world. Most notably, at his instruction, copies of the comprehensive FHO archives were placed in sealed drums and buried in the vicinity of Bad Reichenhall in Bavaria. Convinced of the artificiality of the Allied alliance with the Soviet Union, Gehlen foresaw a key role for Germany, specifically by providing intelligence about a new antagonist that Great Britain and the United States so sorely lacked.

A combination of good luck and Gehlen’s own adroitness and persuasiveness laid the groundwork for Germany’s first postwar intelligence organization. By mid-1946, the so-called Organisation Gehlen (OG) had been authorized as an operational branch of US Army intelligence. Yet there soon appeared major complicating factors on both sides. Gehlen feared, for example, that his fellow Germans would regard him as a traitor for offering his services to the “enemy”; thus he emphasized in his later memoirs that he was working “with,” not “for,” the Americans. As the underground struggle against the Russians intensified, he also faced competition from those Germans engaged by the services of two other occupying powers, Great Britain and France. For the Americans, the OG quickly proved an awkward arrangement on numerous counts—financial as well as jurisdictional. In fact, the Army Counterintelligence Corps, charged with pursuing those individuals guilty of Nazi crimes, made no attempt to conceal its intense hostility and suspicion (despite his earlier ranking position, Gehlen himself managed to sidestep serious prosecution).

The creation of the CIA in 1947 provided an auspicious opportunity for the Pentagon to divest itself of the OG. Gehlen, too, welcomed the prospect of a transfer. Still, the fledging US agency proceeded cautiously and even weighed the elimination of the OG before concluding that American interests were better served by continued involvement with an intelligence organization that now employed 4,000 Germans. Large areas of disagreement between the OG and the CIA persisted nevertheless. Foremost for the Americans was learning the identity of Gehlen’s agents—which had been successfully withheld from the US Army. In the end, Gehlen partially acquiesced and provided only the names of his 150 top officers.

The arrangement that took effect in 1949 called for a division of labor whereby the CIA would issue the intelligence requirements and the OG would administer the operational aspects. Professing “boundless” admiration for the early CIA liaison staff, Gehlen later claimed these individuals, given the relative youth of their organization, tried “to learn as much from us as they could.“ Yet one member of the staff, reflecting the heightened wariness on the American side, countered by remarking that it was more accurate to say their main job was “to learn as much about them as we could.” Much to the displeasure of Gehlen and his staff, the CIA developed an intricate system of checks and counter-checks in order to construct their own German personnel dossiers.

What the Americans feared most was Soviet penetration of Gehlen’s organization. The most serious case came to light after the official transformation of OG into the BND in 1956.   Five years later, Hans Felfe, fortuitously placed at the Soviet desk in the counterintelligence section, was arrested as a long-term KGB agent, having been recruited by a fellow OG colleague as early as 1950. As a result of Felfe’s activity, not only were 100 BND informers lost along with codes and dead drop locations but a wave of mistrust swept through the network of existing and prospective agents in Eastern Europe. The CIA’s official analysis direly concluded that the KGB had gained more than merely secrets but “control of the intelligence apparatus itself.” Germany’s domestic counterintelligence agency, the Bundesamt für Verfassungschutz (Federal Office for the Protection of the Constitution), also became notorious for several major Cold War penetrations.

This brief sketch illustrates the degree to which reluctant patronage and limited oversight mixed with profound mistrust in the formation of the US-German intelligence alliance. Even though prominent officials such as Allen Dulles expressed keen admiration for Gehlen and his organization– and much close cooperation took place in the intervening years– the vestiges of this early period, which involved outright top secret spying on a sister service, have not been easy to overcome. Repeatedly the CIA has reminded the BND that it is not playing in the same league. How different the historical relations among the so-called Five Eyes– those five English-speaking countries (the United States, Great Britain, Canada, Australia, and New Zealand) that pledged early on not to spy upon one another or recruit each other’s nationals without first obtaining permission.

Further compounding this ambivalent situation is a glaring cultural gap in security matters. Fear of domestic abuse by clandestine state agencies runs far deeper in German society than elsewhere in the West—a clear product of brutal Gestapo methods in the Third Reich and ubiquitous Stasi surveillance in the German Democratic Republic. One need only look at the overwhelming response to the 2006 film Das Leben der Anderen (The Lives of Others) to see how powerfully the theme of systematic eavesdropping by the Stasi continues to resonate in the public at large. Moreover, Germany’s two principal political figures– Chancellor Angela Merkel and President Joachim Gauck—are both Easterners and thus acutely sensitive to transgressions of this sort. Gauck himself initially headed the government agency that oversaw the voluminous Stasi files and allowed citizens to inspect their own dossier. He recently commented that if the present allegations turn out to be true, it would amount to “gambling with friendships and close alliances. . . . enough is enough.”

Unfortunately, such historical and cultural considerations tend to count for little in the decision-making process at the CIA. The old agency adage—“an op is an op is an op”—all too frequently becomes the guiding principle and reinforces the “present-mindedness” that has long prevailed among American intelligence officials. What is needed is a serious, thoroughgoing review of US policies toward Germany and other NATO allies, not just by the security agencies but by a panel of outside authorities. It would echo the “B-Team” experience during the Cold War, when serious questions arose about the accuracy of CIA estimates of Soviet military spending and a group of independent experts was assembled. By no means should the current impasse between Germany and the United States in matters of intelligence be allowed to stand. 

About the Author(s)

Jefferson Adams

Professor of History at Sarah Lawrence College and Senior Editor of the International Journal of Intelligence and Counterintelligence; publications include Historical Dictionary of German Intelligence and, most recently, Strategic Intelligence in the Cold War and Beyond.