Spy Blog from the International Spy Museum

Dr. Thomas Boghardt, Historian

At the height of World War II, in 1942, the Germans began to produce massive amounts of British counterfeit banknotes. Their goal—bring down the British economy by flooding the United Kingdom with fake money.

The scheme was run by SS intelligence officer Bernhard Krüger, hence its name, “Operation Bernhard.” Upon orders from SS boss Heinrich Himmler, Krüger selected over 140 concentration camp inmates to implement the operation. This course was as ingenious as it was diabolical—while the camps offered a large pool of talent (graphic designers, printers, professional forgers), the selectees could simply be liquidated at the end of the operation to ensure secrecy. Krüger himself always treated his workers kindly—in fact, some testified on his behalf after the war—, but they knew all too well that they lived on borrowed time, and that any day could be their last.

Operation Bernhard was an unparalleled success. Within two years, the inmates produced nearly 9 million pound notes—13 percent of the £1 billion worth of real notes then in circulation. When the Bank of England detected some of the counterfeit notes, it reverently described them “as the most dangerous ever seen.” And even though a lack of German aircraft prevented the notes from being dropped over Britain, and cause financial havoc there, the SS used the notes on a large scale in Europe to buy arms, raw materials, and pay their own spies. The notes also underwrote the liberation of fallen Italian dictator Benito Mussolini in a daring commando operation in 1943.

Operation Bernhard’s most cherished result, however, was that it saved lives. When the war ended, the SS guards in charge of the prisoners simply disappeared. Whether any of the inmates would have survived without joining Operation Bernhard, is highly doubtful.

Operation Bernhard was recently turned into an excellent movie, The Counterfeiters, which won an Oscar as the best foreign (Austrian) film in 2008. The International Spy Museum is pleased to screen it on 4 February, and provide a historical context. For more information, see: http://www.spymuseum.org/programs/calendar_pages/2010/q1/2010_02_04_prog.php

Dr. Thomas Boghardt, Historian

Espionage fiction has long influenced people’s notions of intelligence. And there are a good number of first-rate espionage authors to choose from, including John le Carré, Graham Greene, and Ian Fleming. But who did it best?

The answer, of course, depends much on one’s own taste, but my choice is the British writer Eric Ambler (1909-1989). Here is why: Ambler never loses focus, uses unstilted, crisp prose, and simply tells a good story well. His protagonists are believable, and his scenarios are realistic. Many of his novels are set in the interwar period, and as a contemporary of Mussolini and Hitler, Ambler masterfully uses the backdrop of a Europe gripped by totalitarianism, and on the brink of war, to craft powerful stories. Since Ambler’s hero is typically not a professional spy, but someone who accidentally stumbles into a major politico-espionage plot, the reader can easily identify.

If I had to pick one of Ambler’s many excellent novels, it would have to be Journey into Fear. Published and set in 1940, the book describes the flight of an Englishman, Howard Graham, aboard a small Italian steamer from fascist agents. As the vessel is chugging across the eastern Mediterranean from Istanbul to Genoa, Graham discovers with growing horror that his fellow passengers are not what they initially seemed—and that his journey may not lead to safety at all.

Journey into Fear is a relentlessly paced suspense novel. Whether you are interested in espionage, interwar Europe, or simply a good story, you will not be disappointed. Read and enjoy!

Nothing is What It Seems

Listen Here: The Terrorist Challenge

January 8, 2010

Continuing the Spy Museum’s SPYCast®, Peter Earnest, Museum Executive Director and 36 year veteran of the CIA, is interviewed by Museum Historian Dr. Thomas Boghardt on this week’s breaking intelligence news.
The U.S. authorities’ failure to prevent a Nigerian suicide bomber from boarding a Detroit-bound plane on Christmas Day, and the suicide bombing at a CIA base in Afghanistan have roiled the intelligence community. International Spy Museum historian Dr. Thomas Boghardt discusses with SpyCast host and CIA veteran Peter Earnest how these incidents unfolded and their implications for intelligence reform.

Find past SPY Casts here: http://www.spymuseum.org/programs/spycast.php

Q&A Amy Knight author of How the Cold War Began: The Gouzenko Affair and the Hunt for Soviet Spies. Learn more  about Gouzenko and ask the author your questions at SPY on Wednesday January 20th.

Q: Who was Igor Gouzenko?

A:  Igor Gouzenko was a code clerk for the GRU, Soviet military counterintelligence, in Ottawa, Canada.

Q:  How and why did he defect?

A:   He defected in September 1945 with a large number of secret documents by turning himself in to the Canadian RCMP. 

Q:  Why was his defection so important in “starting” the Cold War?

A:   Gouzenko’s defection had a huge impact, contributing to the growing Cold War between the Soviets and the West, because he had clear proof that the Soviets had an extensive espionage operation in North America.

Q:  Beyond the documents Gouzenko defected with, how did the western intelligence agencies utilize him afterward?  Did his training as a cipher clerk provide any unique opportunities?  

A:   Gouzenko’s training as a cipher clerk as such did not offer western intelligence unique technical opportunities to learn more about Soviet espionage, but his broader knowledge about what the Soviets were up to was seen as invaluable to western intelligence.

Q:  What became of Gouzenko in his later years? Did the Soviets ever attempt any known acts of retribution against him?

A:   Gouzenko’s use to the west gradually declined because his knowledge became outdated.  He lived with his large family under an alias in a town near Toronto and became very embittered with Canadian authorities, who he thought did not treat him fairly.  The Soviets never attempted to go after Gouzenko, as far as I know.  Stalin reportedly ordered that Gouzenko be left alone because an act of retribution would make the Soviets look bad.

 Dr. Thomas Boghardt, Historian

In 1894 the French army obtained a letter revealing that a high-ranking officer was selling secrets to Germany. Suspicion fell on Captain Alfred Dreyfus, a Jewish officer. Ignoring the fact that Dreyfus’ handwriting did not match the letter, an anti-Semitic court convicted him of treason and imprisoned him on a barren island.

Eventually the truth emerged: the real traitor was Major Ferdinand Esterhazy, a close friend of an officer in the French Intelligence Bureau. But the military ignored this new evidence until public pressure forced a retrial. Once again, Dreyfus was convicted, and only a presidential pardon eventually secured his freedom. But it took another century until French President Jacques Chirac offered an apology for Dreyfus’ maltreatment, and officially rehabilitated him in 2006.

Dr. Thomas Boghardt, Historian

Today The Wall Street Journal ran an article revealing that militants inside Iraq have hacked U.S. Predator drones and were able to access real time information used by the military.  

Unmanned Aerial Vehicles, or drones, are used extensively by the CIA and Pentagon to conduct surveillance, as well as identify and kill insurgents and terrorists. In fact, armed drones have eliminated half of the CIA’s twenty most wanted “high value” targets, including Saad bin Laden, Osama’s oldest son. A few months ago, CIA director Leon Panetta even referred to the drone program as “the only game in town.”

Given the drones’ central role in America’s counter-insurgency and anti-terrorism efforts, it is worrisome to learn that Iran-backed Iraqi insurgents this summer successfully hacked into a drone feed and downloaded large amounts of surveillance footage (which the U.S. military later discovered on a laptop belonging to a Shiite militant). To date, there is no indication that any drones have been manipulated, but the implications are troublesome.

As successful as the drones have been tactically, their usage is controversial. Missiles fired from drones have killed numerous innocent civilians—exact numbers are hard to come by—further complicating America’s already difficult relationship with Pakistan, where many of the strikes were conducted. What if someone hacked into a drone and fired a U.S.-made hellfire missile into a major Pakistani city? True, it is a far-fetched scenario, but then again, who would have imagined that insurgents could have downloaded highly classified drone video footage simply by using commercially available software, as happened this summer?

Nothing is What It Seems

Dr. Thomas Boghardt, Historian

The International Spy Museum’s permanent exhibition ends with the following quote: “The most successful spies—those too clever to be caught, too loyal to defect, too shrewd to speak up—will never be recognized, their missions never revealed.” This statement is largely true. It is in the nature of spies and secret services to stay covert, and we usually hear only about those spies who were caught. But sometimes we get a glimpse of what lies beyond.

I was recently visited by an inconspicuous-looking gentleman who told me that he used to work for the foreign ministry of a Soviet Bloc nation. He calmly elaborated that, while serving as a diplomat in a Western country in the 1970s, he contacted the CIA and provided information to the agency up to the end of the Cold War. It is a remarkable story, given that most Cold War Human Intelligence (Hummit) espionage operations known to the public lasted far shorter than a decade, and a reminder of how much there remains to be learnt about the “secret history of history.”

Our Museum will remain in touch with the above-mentioned gentleman who has by now returned to his home country. He has already generously donated some of his spy gear to our collection, and we are hoping to tell more of his fascinating story in the future. Stay tuned as an amazing tale of Cold War espionage unfolds!

Nothing is what it seems

Dr. Thomas Boghardt, Historian

Intelligence agencies are facing two principal challenges—the acquisition of secret information, and its twin, the peril of information overload. The difficulty of finding the proverbial needle in the haystack has exponentially grown since the introduction of the Internet and the explosion—and availability—of human knowledge. Every day, intelligence agencies must sift through literally millions of pieces of information—satellite images, blogs, intercepted phone calls, emails, blogs, etc.—to determine what is going on in the world. Evidently, human beings cannot accomplish this task alone.

Several years ago, the CIA commissioned its investment arm, In-Q-Tel, to devise a scheme to mine and evaluate information on the web. In-Q-Tell, in turn, hired the software company Visible Technologies to monitor and analyze social media. Now, the company crawls over half a million web sites a day, mining more than a million posts and discussions taking place on blogs, online forums, Flickr, YouTube, Twitter and Amazon. Every hit is categorized, thus making the mass of online information easier to digest for human end users at Langley and elsewhere in the intelligence community.

At this point, Visible Technologies limits its monitoring to openly available sources. The process is designed to provide U.S. intelligence an “early-warning detection on how issues are playing internationally,” says an In-Q-Tel spokesman. In fact… if you are using any of the common online tools—and since you are reading this blog, you probably are—chances are, you’ve already been mined.

Nothing is What It Seems.

Dr. Thomas Boghardt, Historian

The Enigma looked like a typewriter and was the Germans’ most prized cipher machine. Germany’s air force, army, navy, and secret services used it from 1928 to encipher and decipher sensitive communication. If Germany’s foes succeeded in breaking the Enigma cipher, they would have unprecedented insight into German thinking and strategy.

The Allies did break the Enigma cipher, and it is commonly assumed that most of the cryptanalytic work was done at Bletchley Park in England during World War II. But in fact, Marian Rejewski of the Polish cipher bureau succeeded in breaking the Enigma long before the war, and it was the Poles’ decision to hand over their knowledge to their French and British Allies in 1939 that subsequently enabled Bletchley Park to decipher increasing amounts of German Enigma traffic.

Director of Adult Education, Amanda Ohlke, outside of the building in Poland’s Pyry Forest where the Enigma code was first broken.

I just returned from a week-long conference held in Warsaw and Bydgoszcz on this very subject. Many of the presenters emphasized the critical—and typically underappreciated—contribution of Polish cryptanalysts to the breaking of the Enigma machine. One Polish participant argued persuasively that for much of the war, the Poles’ groundwork was absolutely essential to Bletchley Park. In fact, he suggested, mathematic principles created by Rejewski were still being used for cryptanalytic purposes during the Cold War.

It seems to me that the arguments brought forth by the Polish conference participants cannot be dismissed lightly. While not ignoring Bletchley Park’s accomplishments in attacking German ciphers, Poland’s role in breaking the Enigma machine can hardly be overestimated. Remarkable as it is—even though Poland succumbed to the combined onslaught of Nazi and Soviet forces in 1939, the wit of Warsaw’s cryptographers provided an important element to Allied victory in 1945.

Nothing is What It Seems.

SPY staff member, Abbie,explores the new cyber warfare gallery

Dr. Thomas Boghardt, Historian

Computer experts have repeatedly warned about our nation’s vulnerabilities to cyber attacks. These concerns are certainly not unwarranted, given the rising number of cyber incidents registered by U.S. networks, ranging from destructive viruses to spyware. More interesting to me is our government’s offensive capabilities.  

By all accounts, our cyber capabilities are enormous, and the U.S. military has fully embraced this new type of warfare. The Pentagon graduates 80 students per year from its cyberwar school, and the 57^th Information Aggressor Squadron of the Air Force and the Network Warfare Battalion of the Army are diligently war-gaming cyber attacks. Much of the military’s training and strategizing is done in collaboration with the nation’s premier cryptanalytic organization, the National Security Agency.

The United States has already wielded this virtual weapon on several occasions. In the late 1990s, Washington launched cyber attacks on Serbian government and communications systems. Similar assaults were carried out against Iraq in 2003. The Pentagon and the intelligence community even planned to electronically freeze billions of dollars in Saddam Hussein’s bank account and cripple his government’s financial system, but the operation was eventually shelved for fear that its execution would wreak havoc across the Middle East and beyond (much of Saddam’s money was tied up abroad).

 As one of the most internet-dependent nations of the world, the United States is well-advised to ponder the unintended consequences of a cyber strike as well as the havoc caused by possible counter-strikes. It will be interesting to see how cyber planners will deal with this issue. But you may rest assured that they are working on a solution as you read this blog.

Nothing is What It Seems.