Spies: The Rise and Fall of the KGB in America (60 page)

Eventually everything did get sorted out, and Glasser proved to be
enormously productive. The summary inventory of government documents and memoranda that Glasser turned over to the KGB in 1945 takes
up five pages of Vassiliev's notebooks, while the complete inventory in 5.1.45-Contents of a draft by Morgenthau's department [Treasury] with Allied policies with regard to neutral countries.

6.1.45-Draft instruction from the Commander-in-Chief of the armed forces
of the USA, / England / (USSR)-control of German foodstuffs and agriculture.

8.1.45-On a conversation between Taylor and the Legal Counsel of the Polish government in London, Kulsky, about Poland's attitude to postwar Germany and about Sov.-Polish relations.

17.1.45-On a session of the Committee on Liberated Regions under the
State Department, at which questions pertaining to civilian deliveries for liberated regions were discussed.

15.1.45-On the discussion in London of the draft instruction, "On the dismissal of German personnel from the German financial system."

9.1.45-On Eisenhower's telegram to the SSAS regarding forced evacuees to
Germany.

18.1.45-Contents of a memorandum from the Subcommittee on Private Monopolies and Cartels dated 21 November 44-regarding the views of the Allied
Military Occupation Board on German participation in int'l cartels.

20.1.45-Contents of a draft instruction to the Amer. Commander-in-Chief
dated 22.11.44-Control of Germany's finances.

... -Draft instruction on the dissolution of the Nazi Party and the purging
of Nazi personnel, dated 13 Oct. 44.

5.1.45-Memorandum regarding a meeting of the Amer. members of the
Joint Committee on Civil Affairs to discuss: the dissolution of the Allied Commission in Italy, the unauthorized dispatch of rations from Allied storehouses
by the English to Greece, and of Eng. assistance to the Norwegians.

25.1.45-Int. memorandum from "Ruble" [Glasser] to "Richard" [Harry
White] regarding the state of negotiations with the English on changes to
armistice terms with Italy.

29.1.45-Internal memorandum from Morgenthau's department regarding a
conversation between "R-le" ["Ruble"/Grasser] and Emile Despres (from the
State Dept) about the stance of the State Dep. and White House on Germany.

30.1.45-I11t. memorandum from Morgenthau's representatives in London,
L. A. Aarons and Gardner Patterson, dated 20.11.44, regarding their stay in
Belgium and Belgian reactions to the treatment of Germany in the postwar
period.

27.1.45-On negotiations by the Italian financial committee in the USA regarding the settlement of Italian-American financial relations.

the KGB file from which Vassiliev made his summary takes up twenty-one
pages. The inventory for January alone included the following:

30.1.45-On Taylor and Aarons' meeting with Kulsky and Freyd-Poles from
the Armistice Committee-and the conversation between them about exacting reparations from Germany.

The KGB forwarded a number of Glasser's high-value documents to
Stalin, Molotov, and Beria for their review. Moscow Center told Gorsky:
"`Ruble' [Glasser] is one of the primary sources of information in your station. Of `R's' materials that were forwarded to us by telegraph at the beginning of this year alone, 74 special reports were released to the echelon [Soviet leadership]. Your having established direct contact with
`Ruble' and the work that has been done to cultivate in him the necessary
probationer [agent] qualities have served to improve his work."' Under
these circumstances, it is not surprising that Moscow Center recommended that Glasser receive the "Order of the Red Star." But it all came
to an end with Bentley's defection. On 23 November 1945 the KGB New
York station received the order: "Break off contact with: `Ruble."'150

Harold Glasser had many influential friends in Washington, and the
FBI took its time moving against him. Meanwhile, he continued to work in
senior-level positions. He became assistant director of the Office of International Finance, served as economic adviser to the American delegation
at the Allied powers' Council of Foreign Ministers meeting in Moscow in
1947, and was economic adviser to the secretary of the treasury at the board
of governors meeting of the World Bank. But in April and May 1947 the
FBI finally interviewed him about Bentley's allegations. While admitting a
social acquaintance with many members of the Perlo and Silvermaster networks, he denied knowing any of them were Communists. He described his
own politics as "liberal" and not "radical," disclaimed Communist Party
membership at any time, and denied ever passing any government documents or information to any unauthorized person, but he refused to sign a
statement attesting to these claims. He resigned his Treasury position in
December, taking a job as an economist with the New York City Council
of Jewish Federations and Welfare Funds.151

Glasser was not called to testify to the House Committee on UnAmerican Activities in 1948, and the press largely ignored him. But in
1953 he had to testify twice: before the Senate Internal Security Subcommittee and the Permanent Subcommittee on Investigations of the
Committee on Government Operations (Joseph McCarthy's committee).
In both cases he invoked the Fifth Amendment. By 1954 he was working
for Liberty Brush Company. Thereafter one of the KGB's most productive spies in Washington faded from public sight.152

Charles Kramer, another valuable Perlo group source, was born Charles
Krivitsky in New York in 1906, attended New York University, and received BA and MA degrees in economics. He was hired as an economist
by the Agricultural Adjustment Administration in 1933 and went on to
join other federal agencies, including the National Youth Administration,
National Labor Relations Board (NLRB), and Civil Liberties Subcommittee of the Senate Education and Labor Committee. He also worked
for the CIO in 1937-38. During World War II Kramer worked for the Office of Price Administration, the Senate Subcommittee on War Mobilization (chaired by Senator Harley Kilgore), and the Senate Subcommittee on Wartime Health and Education (chaired by Senator Claude
Pepper). In 1944 he temporarily left government service to work as a
speech writer for the Democratic National Committee and two years
later wrote speeches for the reelection campaign of Ellis Patterson
(D-CA).1.53

When Kramer went to work for the AAA in 1933, he quickly became
a member of the "Ware group," a secret caucus of young Communist professionals. Nathaniel Weyl, an original member of the group, wrote that
Kramer was not one of the founding members but joined shortly thereafter. He soon became an active and influential figure in the Communist
Party's Washington underground. A 1945 memo on Kramer that Victor
Perlo, a founding member of the Ware group, prepared for the KGB
stated that "Mole [Kramer] has actively participated in Party work since
1933." Hope Hale Davis remembered her branch of the party underground meeting at the Kramer residence. Fellow members of the
CPUSA underground assisted him in obtaining his various jobs. John Abt
hired Kramer for the Civil Liberties Subcommittee, Nathan Witt helped
him get the job with the NLRB, and Victor Perlo signed his job performance rating at the OPA and provided an employment reference.154

Whittaker Chambers identified Kramer as an underground Communist and hinted of his involvement in espionage when he met with Adolf
Berle in 1939, and Elizabeth Bentley identified him as a participant in the
Perlo group in 1945. The FBI confronted Kramer in August 1947, but he
refused to cooperate and claimed the justice Department had "smeared"
him. In the summer of 1948, while Kramer was working for the Progressive Party, Bentley publicly identified him as a hidden Communist
and espionage source in congressional testimony. (A dozen KGB cables
deciphered by the Venona project confirmed that Kramer had been a So viet spy with the cover names "Mole" and "Plumb.") The House Committee on Un-American Activities subpoenaed him in 1948, but he refused to answer questions about his Communist links.155

With Earl Browder's endorsement, Bentley took over liaison with the
Perlo group, including Kramer, in March 1944, and began to collect material from its members. Bentley told the FBI that she remembered
Kramer mostly providing "Capitol Hill gossip." But she also reported on
the composition of the group to the KGB, and in June Moscow Center
told the New York station: "`Plumb' [Kramer] is of great interest to us."
By the fall of 1944 the KGB had taken over direct liaison with the Perlo
group and set about reorganizing it for maximum utility. At its request
Kramer was asked to write an autobiography in which he discussed his
family background, education, and employment history in detail. Of his
political activity, he wrote:

"I officially joined the CP in 1933, although I had participated in CP work for
two years beforehand. I was there for all the organizational changes in the
Washington group of the CP that have taken place since I joined, with the exception of the three years I spent in the NY Party organization, of which I am
currently a member.... In NY, my wife worked as a courier at first, and subsequently in various oth. positions, and worked for center [CPUSA headquarters] under "Peter's" [Josef Peters's] leadership. I am not familiar with the nature of the work. My wife joined the CP officially in 1934 after several years of
active work, which she carried out in the Party group at the University of California, Berkeley. Three sisters and two out of three brothers are also CP members; they joined in 1930."

Kramer assured the KGB, however, that although known as left-wing, he
was not publicly identified as a Communist, the Civil Service Commission
had never investigated him for Communist ties, and he had not been the
subject of congressional inquiry.156

The KGB Washington station also discovered that personal relations between Perlo and Kramer had become strained and might be affecting the
latter's productivity. In April 1945 Moscow Center reminded Gorsky,
""Mole' [Kramer] is the only source in his station who has begun to systematically hand us info. about the U.S. Congress, the policies, views, and
personalities of its individual members,"' and it ordered that the KGB Washington station establish direct contact with Kramer, bypassing Perlo.157

It did so in May, using Joseph Katz, who reported that Kramer was
potentially a productive source being held back by poor leadership from
Perlo and the structural difficulty of Perlo's group being simultaneously a KGB intelligence unit and a functioning part of the CPUSA underground arm and the consequent overburdening of Kramer with requests
from two different masters:

""Mole" [Kramer] has no doubts about where his materials are sent. One of the
main problems he brought up was how he was experiencing difficulties simultaneously meeting the requirements of the Comparty and `our organization.' In
light of this, I did not try to conceal from him the true state of affairs and spoke
with him frankly. "Mole" said that he has been doing this work for many years
and is quite aware of the differences between the two organizations. "Mole"
had been a personal friend of "Steve's" [J. Peters's], who used to oversee this
group, and they had discussed all matters pertaining to work. "Mole" raised the
following issue relating to his work: Someone named Blumberg, who lives in
Baltimore and oversees the Washington Party group, is in constant contact with
"Mole," receives various materials from him, discusses every possible issue, and
gives instructions through him to other friends who work with him."

(Albert Blumberg headed the Maryland-Washington CPUSA district.)
Katz also discussed Kramer's relationship with his employer, Senator
Harley Kilgore (D-WV):

"The relationship between Mole [Kramer] and Kilgore is very close, and he
has significant influence over him. Whenever a decision has to be made, Kilgore discusses it with "Mole"; "Mole" writes memoranda for Kilgore, which
Kilgore makes use of when working on the corresponding issues. According to
"Mole," Kilgore is very weak-willed and indecisive, but at the same time he is
very amenable and gives in easily to influence. "Mole" thinks that Kilgore has
an excellent chance of becoming Secretary of Labor, whereupon "Mole" could
go with him as his assistant, providing he wants to.

I asked Mole about the matter that had been raised by Raid [Perlo],
namely, that in "Mole's" opinion, his contribution to our work should be directed toward influencing govt policy, and that therefore he should not be
used to gather info. Mole assured me that this was not the case and that he
understands full well that it was possible to do both things at once."

Katz and Kramer discussed disentangling him from Blumberg and Perlo,
and Katz concluded: "`I explained to M. ["Mole"/Kramer] the type of
info. we would like to receive from him, and he said that from now on, he
would organize his work in accordance with our instructions."' Kramer's
access to information further increased when he later left Kilgore to become chief of staff (with budget and hiring powers) for Senator Claude
Pepper (D-FL), chairman of the Senate Subcommittee on Wartime
Health and Education.158

Kramer handed over documents dealing with American policy toward
Germany that came to Kilgore's committee and briefed KGB officers about
Truman's choices for secretary of state (James Byrnes) and secretary of the
treasury (Frederick Vinson), former senators with whom he had worked;
discontent with Truman by some labor unions and their prodding Pepper
to lead a liberal anti-Truman bloc in the Senate; and the political evolution
of Truman's policies. A number of KGB reports based on Kramer's material were of sufficient interest to be forwarded to Stalin, Molotov, and Beria.
The KGB awarded him a $5oo bonus (nearly $6,ooo in zoo8 dollars) in October 1945. But the next month Bentley's defection ended contact. Because Bentley had met with Kramer personally, Moscow instructed Gorsky
to have an agent tell him what had happened and that he should be prepared for FBI questions on their relationship.159