Document Type: 
Document Number (FOIA) /ESDN (CREST): 
Release Decision: 
Original Classification: 
Document Page Count: 
Document Creation Date: 
March 8, 2023
Document Release Date: 
March 1, 2019
Sequence Number: 
Case Number: 
Approved for Release: 2019/02/21 CO2606328 SECRET NO FOREIGr DISSE KGB EXPLOFIATION OF HEINZ FELFE Successful Knn. Penetration of a Western Intelligence Service SECRET NO FOREIGN OISSEM Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 SECRET NO FOREIGN DISSEM TABLE OF CONTENTS Page I. Introduction and Summary 1 II. Soviet Operations Against Gehlen Organization In the Early Post-War Years a. Background Information on Felfe b. Background Information on Clemens c. Soviet Recruitment of Felfe and Clemens d. Alternate Versions of Recruitment by KGB and Hiring by Gehlen Organization e. Early Stages of KGB Operation -- the BALTHASAR Deception III. Operations of the Early 1950's a. Efforts to Discredit the Gehlen Organi b. Felfe Settles In -- the LENA Deception IV. KGB Work in West Germany as a Sovereign Country: 1956-61 SO a. Targeting of CIA, Provocation, Tactical Deception 53 b. Support of Soviet Policy and Political Deception 62 c. Methods of Communication 65 d. New Directions? 68 V. Investigation and Arrest 80 VI. The Aftermath 89 ANNEXES A. The HACKE Story 92 B. LILLI HARLEM Case 96 C. The Sokolov Case 101 D. ZUVERSICHT Case 112 E. IMERKATOR Case 115 F. Glossary of German Words and Abbreviations 117 SECRET NO FOREIGN DISSEM 15 17 20 21 26 Ion 33 42 Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 -1/11113M. Iast happens id# the NSW hen a high level penetration of a Western intelligence service? Row does the EGB exploit the voluminous informetion received on enemy, operations, while at the same time protecting the seenrity of its source? More importantly, does the NOB handling of such an agent leave tell4a3.s signs *la would permit an alert and knovledgeable Newton counter- intelligence officer to surmise the existence of such a penetration? It vould be presumptuous to generolixe on the heels of OM case, but study of the 10333 handling of "elm Pelf. NW hap provide questions. successfnl Pelf's vas an officer of the West intelligence ifiervice (AND)** for ten years, a en ioreigp as deputy chief of the section responsible among other things for countering Soviet espionige. le vas &dedicated Soviet agent throughout this period, and4remm4ned loyal to the Soviets even after his arrest in Nevem:her 1961. Nevem detected as a result of aimed provided by a CIA-run penetration of the Folla Intelligence Service CUB). Pelts vas more than &simple penetration agent; he became, in effect, &consultant to the NOB on mow of its operations in West Serumny. Through Fate, the Soviets pursued three objectives: protect the security of Soviet Paper, gm= terminology JOBm be of the ty ** Pros 1947 to 1956, vhen it had no legal status, this we know as the Goblin orgethettoo. In 1956, after West GUMMY had regained its sovereignty, it became the BID, OhiCh is the Gems abbreviatiimillor Federal Intelligence Service. For con- venience sad simplicity it is freqpently referred to as the END evenVItt the earlier period is meant. SSC= ND 1POR=N DTEISMI �/ � Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 NO FOREIGN DIS8ww b. To confuse, disorient end, discredit the Wait German e service. The aim is not only to penetrate the service, but to manipulate it to serve Soviet interests. o. To e on Vest objective of political importance as the case /regressed end y have u1t1it1y become the most important in Soviet eyes, as a supportto Soviet foreign policy objectives. The reader will not find here a colste history of the Pelfe that would require ammch larger volume. Tb. broad lines of the story are here, and one chapter in particular is devoted Prialirily to background information, presenting the dramatie "7-4144,A4,/ge_r moon**. Ah4descklbes how the KGB recruited first Hans Clemens and then, thru Clemens, Felt.. They had been colleagues in Iasi intelligence during the war, motivated after the eaT by revenge artinst the Americans, moneys and a desire to be on What they considered the most powerful side. it this IS essentially a selective and interpretive account, for the purpose of illustrating methods of h41 1'g and importing a vell*place4staff penetration of strnservice. The lessons to be learned lie in the various ption and diversionary operations run by the NAB to build up 015 tion in the END, expand his access, protect his security, end ores 'illusion that the German service was effectively fulfilling its CZ mission, While the Soviets were generally ineffective. There are many woos by which Felfe might have been unmasked earlier than he was. Even &thorough namedbeek might have done the trick. He could also have been caught earlier if more Te in West Germany and in Zest Germany, and to detect Western operations inside the Soviet Union. To this and, the KGB ran deception operations designed to expand Felfel's access to information not only from his own service, but also from other West Sermon and Allied services including CIA. foreign �'k-- ; i c T -Krn wnpRTGNttSSz Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 :BLURB 1: 10 FOREIGN DISSEit 1111111111114ELIIMMI been given to evidence which clearly vas amiss, rather than vatting to be sparred to action by a report ilvai car ovn semsitive penetration source. Indications of Soviet penetration of the AND yore to be fad in the deception end diversionary operatives ran by 4us Xels for the express parp3se of supporting or protecting Pelf*. Although smart avid protection of penetration llesAtli IA Western services is not the may reason deception and 41.1.1 operations, it Aik the principal reasons far each operations. AWAY me sugseets that shen assember of Soviet deception operations are concentrated in one area, or yea41kacel-e A %MOO operations meetate be carefalyanal4zed determine vhether thitIndicate Soviet pemetretion,in that area that service. May examples of deception and diversionary rattcn are dismissed in detail in this study; the mast important IA the folloviag peragripha deception operation IA support of Yelfe vas the "Mz*sAr cases As far as the AND bats/ at the time, BAMNASAR ens of its bettor positive intelligence operations, produalag ier- eation on Soviet of uranium in Nast Garman end its Mhipmeat to the T. Tbe egaftlIALNAASAN was overtime friend of Clemens contact with his mod then *llama himself to be recruited b lemons for the AND. Actmally, BAINNANAThas a XGB spat frc the b.� The= initiated the operation to provide -conspirator, Clemens, with an official reason for repeated tripe to W lin (to meet =NAGAR), from where he could easily Cr0.11 to Zest Berlin to meet with itis sal Telfeks IGUI ease officer. option opera illed wizir came -- the most important eingLe contribu to Felfeks career as a West Gamlen intelligence officer, and probe:a/also to his career as a Soviet agent. It geve him status and stature within the AND, and maneuverability as a Soviet agent. It vas the vehicle for many waits to broaden Felfe4s access to oollect information, especially political intonation, and sometimes to disseminate disinformation. yo pen sarily s doe � ces$4ri Y __ -5 C !,TO FORFTrri riTSSIM Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 StCRET NO FOREIGI DISSEM LENA was the BNO cryptonym for an East German political functionary and publisher. He travelled frequently to West Germany, where he was well received in certain West German socialist circles as an apparently independent, outspoken East German. His role as a BUD agent, doubled by the KGB, goes back to the early fifties. But in January 1954, shortly after Felfe's assignment to the BNO Headquarters CE Group, LENA suddenly turned from what had been (from the German point of view) a positive intelligence operation into a CE case. LENA reported to the BNO that he had been introduced to a KGB officer, and that after a flurry of meetings he had been formally recruited by the Soviets and irtriediately assigned the task of creating a net of agents to produce information on the West German Foreign Office and the Chancellor's Office. The Soviet plan, as related by LENA, was highly ambitious. LENA was to be the "German net director." to. recruit two principal agents, a political advisor and. spotter, several support agents, and to provide names of potential penetration agents. As a developing CE case, handling of LENA was then transferred to the CE Group, where the newly arrived Felfe became the Headquarters case officer. His assignment to this case was probably not accidental; Felfe's Immediate superior at the the time eses�eileeeedeezecartialEW another KGB penetration of the BUD. With KGB assistance, LENA developed rapidly into the END'S most important CE case, and it made Felfe's reputation as an authority on Soviet counterespionage. LENA's talkative KB case officers revealed Information n other Soviet operations in West Germany. compromising severe bona fide Soviet and East German agents in the process. LENA was "such an intelligent man" that his KGB case officers ostensibly enjoyed talking politics with him, and these long conversations revealed occasional g1irpses of the true" Soviet policy on Germany. On the surface. LENA's operation to penetrate the KGB SECRET NO FOREIGN DISSEm Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2011/2E21 CO2606328 on ba1t of the D ems far more essful that the soviet operation using LA to penetrate the Donn Somemtment. Although potential recruits to the KOS, the only real pentretion actually rutted ions an wiling and incompetent t3 in the Press Office, who contented himself with the product of waste baskets as his nource material. To same Observers it seemed incredible at the time that the 1G3 should go through many -motions just fir this. Them we created an impression of ND incompetence, and= failure to Obtain important information from Vest Sermon government At the same time, LIRA was passing the DOD detailed and comprehensive information on personnel and installations at the IOMS's Nast Osman Headquarters in Isaashorst. So that this information could continue, Felfe decided it was necessary to provide the 11:015 with build-up materiel to keep =A's faltering Vest German net alive � For this purpose, Felts pioneered procedures within the Vest Oen= governmant for the clearance of build-up material. Be obtained from the Federal Attorney General a statement that any materiel alammely damonetrebly, known to the opposition vas automatically no longer secret. By extension, that Ada vas no longer Secret cos* be passed to the eppositicri as build-up meteriel. Thus thee al= ease officer told UNA, or any other double agent reporting to the END, that certain areas of information were already covered by the NOS Felfe could argot the virtue of providing this information to LENA as build-up, to satisfy pre- seed X= mods-checking) or to make out the presumed Soviet source. Th this wen Felts vas Able to nmneuver vide variety of iaformation legellar into Soviet bands. Discussion within the West Sermon government ofidhat could and could not be cleared for passage In response to Soviet requirements greatly broadened Felfe's access to positive intelligenee otherwise inacceesible to Illo; information which could not be cleared for passage as build material vas passed clamteramaybylelfe. also providel Fel ss fbr inveetige SOB. The 1D1S 44- ffice'would instruct im to try to attet, obtain certain oottoeLnislit ,E,t4West .44 .A5(e - _,-,0,4-r."�^��""- gevLiej-014444511.--,,,e -Zee iczelee for Release: 2019/02/21 CO2606328sEm Approved for Release: 2019/02/21 CO2606328 SECRET NO FOREIGN DISSEM German official. LENA reported this to the BNB, and the reported Soviet interest then provided Felfe with cover for namechecking the official in West German and Allied files. The results went to the KGB directly, through Felfe's own clandestine communications channels, and at a later meeting LENA would report that his KGB case officer was no longer interested. To make this exercise more thorough, Felfe eventually arranged permission not just to namecheck the West German targets of interest to LENA's KGB handler, but to conduct his own detailed investi- gation of them. Felfe argued that if the KGB was interested in certain West German officials and was seeking vulnerability data on them, then it was necessary in order to protect West German security for the BK0 to conduct its own investigation of these persons to determine if they were In fact vulnerable to Soviet recruitment. This was done, with the results of investigation passed by Felfe to the KGB. The LENA operation also helped Felfe break ground for liaison between the BND and CIA Berlin Base concerning operations against Soviet instal- lations in East Berlin. BND information on these installations had been checked in Berlin Base files since 1954, but in l9S3 Felfe began a concerted campaign to collect detailed information from CIA on its operational program to penetrate KGB Headquarters in varlshorst. The urgency of KGB attention to Berlin Base as a CI target as heightened by the arrest in late 1958 of a CIA penetration of Soviet military intelli- gence in East Germany (Lt. Col. Popov) run at the time from Berlin Base. Two years earlier, CIA's Berlin tunnel operation had been detected, as well as an apparently successful CIA attempt to recruit a member of an RU -.d* intelligence point in East Berlin. It was clear to the KGB that CIA's Berlin Base represented a major threat to its security. LENA provided the BND with sizeable amounts of information on KGB off iCPS, *An RU is a Soviet tactical military intelligence unit n this case, it was the RU subordinate to the Group of Soviet Forces in Germany (OSFG). The RUs are distinct from the qRj, which is on the 0 General Staff level and am concentrates on strategic intelligence. SECRET MO FOREIGN DISSEM Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 Si.Lt1i NO FOREIG D SSEM safe houses, and license and telephone numbers in the Karlshorst Headquarters compound. This information was then checked against Information available to CIA Berlin Base, with the results going back to Felfe -- and to the KGB. LENA also met a number of KGB officers under their full true nameand these too were nametraced by Felfe with friendly services, providing the KGB with a mechanism for name- tracing some of their personnel in CIA files. In addition to LENA, the KGB created other operations producing information on Karlshorst Headquarters, and arranged for these operations to fall under Felfe's � Jurisdiction. Through manipulation of these operations, and his personal role in engineering a number of crises in CIA-BNO relationships, Felfe was able to force a reluctant Berlin Base to give him a general briefing on the status of CIA operations against Karlshorst. Over a period of several years, Felfe with the assistance of KGB operations, was able to achieve ever-closer BND-CIA cooperation in operations against Karlshorst. In one case when he - or the KGB - suspected CIA had an agent in an East Berlin housing office, Felfe, with KGB assistance, boldly provoked confirmation of this fact by trying to recruit one of our agent's colleagues. He placed an ad in a West Berlin newspaper designed to attract secretarial , �44 - A help from the East Sector. Our agent's secretary answered the ad KB " behest), and Felfe informed us that he intended to recruit her as a source. We then told him that we already employed her chief and asked him to stop his approach since it right endanger our agent,. As a result of such activity by Felfe and the KGB, the hitherto unilateral Berlin Base program against Karlshorst wasitoMPromised. There mm were also other cases of provocation to identify CIA agents. One involved mm a West German businessman, recruited by Berlin Base to report on Soviet trade contacts, then approached by the KGB and targeted against the West German and U.S. Embassies in Moscow. He was suspected by the KGB of Western intelligence contacts. Therefore, the KGB closed out all the agent's KGB requirements except one, namely to spot, recruit and maneuver into place a West German girl suitable to be a German Embassy secretary. By introducing a CE factor urgently affecting German security, the KGB succeeded not only in forcing revelation of the case to the BO, but an actual turnover of the case to the BND., SECRET NO FOREIGN DISSEM Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 SECIRtT FOREIGN DISSEY by the IMB of with Pelt. beco*in theMID Neadrinarters case offtee. In another case, a West Gez'msn run by CIA,FeLfe provoked revelation of our interest by seudi us reports awnsdrq; her of seriously insecure behavior.Idaila in Moscow. Subsequently, the became the object of .A sit -re ,Ce INS "dangle operation .. a Soviet laver 4rAMPmcmgab potentially recraltable. lttegral part of the Felts el occurred in 1954, and the related ease of Ludwig year. TAILLi HARM is the Geresn cryptonye which involved the bteatione3 compmeise that it had a more* in the BID field base for CM operations.* To carry out this comprehensive xfteat on the personae the operations of the BID tees. � ration, the KGB prepared rgeninatioe and some of June l9514, a NIB agent was sent to pleas this report in a deaddrop in West Germany. A second UM agent is then sant to confirm that the drop was in place, thau go to the local police and recite a pre-arranged story of observing a man hid* something at this spot. (This agent woo subsequently arrested and conformed his vole in the deception.) wab dispatched on e. mission Three days later, a third. 133B agent to "recover� the drop, with the intention that he unwittingly walk into a police stakeout and be arrested. The le Judged (correctlyithat this particular agent would quickly confess to being dispatched by the ZOB, thus confirming KOD control of the "penetration." Through asttte pollee work, the operation was urieseked as a Soviet deception but the fact remained that the Soviets did have a complete and accurate rundown on the activiteen of this field base end suet therefore have actually had. a. Penetration reporting this informmtion. Subsequent investigation in which alfe played an important role cantered on identification of this t. The report itself provided. several,clnes andZNSB provocation er a week after the report was flcuma =wham, been designed to additional clues pointingto Lt base, *seed Zest German agent 4_ingero1 designation for tLia base vas Orr, Approved for Release: 2019/02/21 CO2606328 senior officer A year later, others, as an N f Approved for Release: 2019/02/21 CO2606328 aborted In addlAct as Thismes a oonvuluted triple-think, a A tbottan The IZILLT KARIM erain's defection, .V55tit1 of his Int 1; 1 ,44-4,41, eao t bev4xti Ilria,C10.G11:13314thatte-d %Iris prAMIU bit, circumstantial evidence suggests ame. Albert Was arrested and later committed suicide; -a" trend knowledge and bard evidence LILLI NAHUM and Albert cams First, initial Impetus for deftetion of KGB officer Pstr tthe German GE branch in KG3 NOB operations icb came just have been &wiped By creating circumstances and feeding informotion which eventually Iel to the arrest of Albert, the KG3 appereatly hoped to shield amaze important or more reliable moot, ?elf�, from inventigation A *mood purpose ja.LJq elimination of Albert wbc_5altbough an actuallimelet agentobad tkpparently berme* dispensable to the (therm are several possible explanations fbr thin. ingest- them relates to the fact that Albert bad become a bitter enemy of Felts and had accused ?elf. a belag a, Soviet agent)))0211111*- dete.e third objecti was to further the 131Bis overall reedy.' ,a "eat in thee1-130 who 'cad Zke means the deliberately exposed far A and T. -LT no.1 deception was e MCI case, *lab s arrest in 1961. within a plot far too complicated to summarize here. It is discussed in detail 4. Deryabin knew the fla c relfe anki his co-coesp � provide details which would 114.4 r (j. ri� _ Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 SECRET NO FOREIG1 DISS In Chapter IV. Its purpose may have been ter AO& /2-efeeeereei) 44144-14wri to ,,leceive the BND 2 �Jae,gc244'606 r Ze-,- ::eXar 8 about its own securityj,1/4 btit the operation e Prem- aturely the KGB rationale and specific objectives are by no means clear. Felfe exposed himself to many risks to get the operation- started, so it must have been destined for an important role. BALTHASAR, LENA, LILLI MARLE14 and BUSCH are all cases run on Soviet Initiative for the purpose of improvine communications, increasing the access of Felfe weetitlareettieet=lettratieme., or otherwise deceiving the BND. There is also an entirely different category of cases which merits study. These are apparently clean operations, primarily double agent Aele operations, initiated by some West German service,Awhich took curious turns after their compromise by Felfe. Two of these, 7UVERSICHT and MERKATOR, are described in annexes to this paper. 7.UVERSICHT was an RU urG operation and M .RKATOR an East German foreign intelligence (MfS/HVA) operation, both initially doubled by the BfV. They are selected from among many such cscs because in these two instances we have confirmation from It. Col. Popov and an East German MfS/HVA defector (Max Heim) that the KGB informed the handling services that their agents had been doubled by the West Germans.. The KGB sirbaftoptly asked the RU and HVA to neither drop nor re-double these agents, but to continue running them for source protection or deception purposes. We know the date this happened and can trace the. change in handling which occurred after this date. In the case- of ZUVERSICHT, the RU continued running the case for four more years, but devoted minimum effort to carrying out the KGB instruction to keep the case alive. Because of this minimum effort, RU communications_ with UVERSICHT became more 3ne more "insecure, from the agent's point of view. Felfe used this case to help create the an abbreviation for the Office fo of the Constitution, the principal West German interne - 10 - .R ET NO F) 4 EISSD he iktection ecurity service. Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 SECRET '10 FIIRETn;1 DTSSM impression within the BNO that the RU GSFC is generally an incompetent organization. The MERKATOR case, however, illustrates more imaginative use of an agent known_ to be controlled by the opposition. When the KGB advised the HVA that MERKATOP was a. double agent, responsibility for the case within MfS/HVA Headquarters was transferred to a CI component which apparently also handled other cases known to be controlled by -Ze'ee Western SCrYICeS.A became to disseminate political disinformation, to observe West Germa CE handling of a double agent, and to divert West German counter- - eeee� intelligence by creating suspicion of amosark West German 'eaeeeeee:&u:eleeeee. A fascinating example of KGB exploitation of such an opposition-controlled double agent is the Sokolov case. This started as a V. S. Army CIC double agent operation. The case officer on the Soviet end of the operation was an RU GSFG Major (who used the alias Sokolov) in East Germany. ee In 1959, after several uneventful years. C IC turned the case over to the ee BfV. BfV study of the case reveled that Sokolov was a drunkard, an insecure talker, and a flamboyant and promiscuous type. Further Investigation revealed he was known to various Western services under various aliases. At this point the operation apparently became known to the KGB., whether through Felfe or some other penetration is not known, and it took an interest in exploiting the case.. The purpose was probably primarily investigation of an insecure and possibly treasonous R9 officer (Sokolov). but in the course of its investigation the KGB pursued a secondary objective. This was to promote, and then to monitor -- with Felfe in the middle -- a tour de force of interservice liaison. The method used by the KGB was to create or elaborate upon existing double agent operations involving Sokolov, so as to provoke operational interest in him and in his agent networks in West Germany on the part of the BfV, two LfV's,e the BNB and CIA (on its own and in its capacity as liaison representative for CIC and OSIinterests). From An L V is the security service of a Land or province. It is subordinate to the Land administration and while not directly subordinate to the BfV, cooperates closely with the latter. -11- SECRET 40 FORE! DISSF Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 SECRET '1 FOREIGN DB V the Western point of view, the Vise eventually came to involve several interrelated double agent operations which resulted in Investigation of roughly 200 security suspects, a seemingly excellent operational lead to an RU Major(Sokolov) in East Germany, and the participation of nearly every German and American intelligence and security service in West Germany. By inserting into MO spotting channels an agent who claimed to be Sokolov's mistress as well as his agent, and who hinted that he mieht be recruitable, the KG! maneuvered the BUD (and Felfe) into a controllinj position in the operation. The BND inspired an interservice task force to work on this case; a CIA liaison officer worked full time, for si< months, exclusively on this case. CIA provided traces, guidance, and information on RIS modus operandi and organization. Felfe's behavior on the task force was uncharacteristically passive the case was pursued in the direction he and the KGB) desired without his customary railing at the incompetence of his colleagues, although during one period he did try to persuade the task force to try to recruit Sokolov In place rather than defect him. Eeit most of the time. Felfe simply sat back and allowed himself to be briefed by all par icipents, The executive action phase of the operation proceeded smoothly: five RU agents arrested, many more suspects identified, considerable espionage equipment, including one of the newest Soviet WiT sets. captured, The West German services were very pleased with their 'success.' CIA was impressed by the proof that close operational liaison with the German services could be effective and amicable. But the KGB was also very pleased, and Felfe w even receiver, a rare cash bonus for his work. The kGq achieved the probable arrest of Sokolov and obtained a wealth of information on the operational and liaison procedures of Western services. Only the R' was left out in the cold. Felfe's co-conspirator, Clemens, who was slower and less sophisticated than Felfe, was shocked that the KGB deliberately allowed an RU agent from East Germany to walk into a West German trap and be arrested. Felfe was merely amused. In Summary, the Soviets achieved through their various deception operations a far broader exploitation of Felfe than would normally be considered possible. By rigging an operation especially for Felfe, the KGB could free answers from eissawftway element5of the West German government in the guise of build-up material. - 12. - SECRET/NO. FOREIGP DTSSEM Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 "SECRET EPOREIG4 DISSENT By having double aenti report Soviet interesi Pelf* was a cover Ibr zeseoheck ed agencies. B./creating west Carman situations and complexities, the gag could help 7 bilreeleretie 111123iplittiOnsi, def factor' into acySSD be transf to the a Soviet Ci factor of any other ageeol; Goma or pc to bring away earthier case under Pelf's iceman and versatile source ems endimpored by the officer able to report on IDS penstretion Of 00.044 the BO the IDS protest Felfeie ***tatty by aommting a deception operation which eonfirmed the existence of penstrat and which wee &tended to divert the inveetiestion to scapegoat selectni by the B. operational his There are certain common ileneidactors the major deception operations discussed in this study. These areas follows a. In pursuit of tbemlbews ob3ectires, the e413,rg to sacrifice agents (their ova as end gest Garman agents), came officer time moneys good interaction, and apparently new eguipmmit and procedures b.nal= had a well.placed penetration In a talon to monitor the target service's resetion to eM tag of eaCh deception. Pregnantly, this penetration benefited from the deception. c. The *vexations vez5 aggressive, imaginative at times esdIose In caption and gleaning their erscutioa ye frspeut3y Inept by comparison They =tad only because of the naivete of many BID officers sod Ste rigid compartmectation within the BED, which In this cue was a disadvantage as it prevented pieces of the puzzle from aCidna together In one Plage � Quite a few CIA officers liaison with the BM felt at the time that theee operations rIe peculiar." TkeICWO4misoon officer responsible for Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 v 4 NO FOREIGN BID assuritr during pert of the period in westion frankly thought they "smelledr and were luminat4ve of penetration. Particularly In the light of Guagwhb knowledge of AIM nodes owemeedi (including this study of the Pare cam), it is vitro possible for en alert CI officer to detect *Mb deception kind diverelonari oparationn. en scums mmterlal for this pmger is voluminous and Even though Pelts never confessed to anything more than could be demeastrablY Proved *dolma his, same of his statements have been halpfel. He was supported througK%nt his it career byte) other agent* Mho have been more frank and AIDS* toestlamony bias been fonnd emereally reliable. lbw* agents were less imporimt and lass knociedgmible than Pere, but their information has been tumoral in reconstructing the ease. =Alai intimate liaison WA the aND GIANT concerting the operations dismesol in this paper and vas directly involved in several of them. Additional Insieht into BID built* of these eases was received unoffic1i417 through close personal contacts with several of the FIND officers. !his imendes informtion m disownment* within the 310 concerning the interpretation and handling of these operations, and the enact role plegelbyFelfe in the Intru.georvice neneuvering. In several instances we know the facts frets defectors or from a CIA-acatroUsd penetration source. CIA was also intimately involved lathe investlention of Felts both before idg after his arrest. while there ere some imps in or information, our knowledge of this period or intelligence history in dersmny Is probelay Most as complete as it ever could be without a fell confession by Felfe or a firct.aand account from his IS come officer. SECRE'i' 510 FOREI': 1' Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 ,TO TITSSEM Api,==Teara The history of the Felts penetration boa its bedanniwg in the early post-vow years. The spotting of people like Melom Felts by the Soviet istalispoce services was not accidental, but** result of $well-targeted, well-developed recruithest campaign directed against former police and intelligence officers of the Masi Belch. the tiese. was simple: old intelligsommt bends vill flock together, vill seek to return to the work they know best. Some ofthese people might be susceptible to a Soviet appromeh because of their general symyethies. Others, =eh as formeresissas Elite Guard (OS)* and Hecurity Service (Be) members of *an were .now weir criminals able to mike their wag 0117 by hiding a pact Idlieh had once int them among the would be vulnerable to blackmail. The Soviet spotters were to be found almost everywhere in Europe . Fast and West - in the POW camps, in the war crimes screening ccendendous, in the courtrooms. The future West German intelligence and security services could be penetrated almoht even bef tliey mit: created. In the losing days of the war, Goma' ReShard Oeblen of the Frsaie Hoeft Ost (410)** hod brougort the =manta\ files sad perecentel to 0-2, V.V. Army, for *bombe, le awl relatively unitise source of information on battle. Under 0.2's gads his /row turgeonsd by l9I9 t had beeome recognized as the primary Western for the collection of Soviet CB and eventually of CI information in the Soviet occupied zone of Germany It was a loosely knit orgnIzation emde up predominertly of Zorn*: military intelligenee (lbvehr) and FHO officers nho wove held together by the officer's �ode of honor and individual tends of friendship. Pram en institutional point of view, however, the problems of control, responsibility and security were serious. agivatropftwi, 0.4a Mod CIA to assume the responsibility for the organization and thus14;41/49v" tubmgel trusteeship Which was tc last for seven years MEW *See Annex F for a glossary of 0111VMAN terms used inthis paper. ** FRO - General Staff victim deftling with information concern- , ing,xmies of countries to the East of Gessmnyr,,e4.1a-c-, epn...4erv-uit: T Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 SECRET MO FOREIGN OISSEM TO the outsider and to its enemies, the Gehlen Organization looked much more like an American puppet than it actually was. 00 -,tive4ipanatratilen=afifaptoft- By mid-19 . tire work against various of Gehlen's field bases had been successful. but an agent working on Soviet operations inside the headquarters organization in Pullach was reportedly still lacking.* Particularly successful had been the KGB work against Gehlen's field base for CE and CI operations which was located in Karlsruhe. Within the Gehlen Organization t isfrOase was designated as GV"L".** and it will be referred to by that designation throughout this paper. GVnle� was especially attractive to the KGB. The major part of its work involved the recruitment and handling of informants in other German agencies for the ostensible purpose of protecting the security of these agencies. The same base was also responsible for running double agent operations against the Soviets, a function which brought its personnel into direct contact with Soviet controlled agents. It was especially vulnerable because it was heavily staffed by former SO and SS personnel who in order to maintain their jobs were obliged at least orma to conceal their background, and who sti.11 suffered to some extent from old social and professional caste rivalries which kept the former Abwehr and FHO officers in astendeecy, In reaction to this situation there had gradually cn *Primary source of informationAearly KG8 work in Germany is Petr leryabin. who was assigned to the State Security headquarters desk responsible for CE work in Germany from May 1952 to September 1953. He read the Headquarters file on the Gehlen Organization in July 1952 and has stated that as of that date there were Soviet agents in the field bases but no evidence of a Soviet agent in the Gehlen headquarters; however, we cannot rule out the possibility that there may have existed restricted files to which he had no access. Ernst WORM,, a Gehlen Headquarters officer working on Czech operations, came ender very strong suspicion of being_ an agent for some Eastern service in the/rall of 1952. The GV stamds fpr General Ver�iiiittuno -- General The n arbitrary designation. SECRET . JO FOREIGN DISSEM Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 SECRET NO FOREIGN DISSEM developed within GV"L" a sort of mutual aid society of ex-SS and SD personnel for self-protection and professional advancement. This group was particularly susceptible both to simple blackmail and to the somewhat more complicated appeals of revenge or vindication.* It was through this base, GV"L", that ioe-e41-44-fritat-ei0e-eietts--- was launched. a. Background Information on Felfe Heinz Felfe was born in Dresden in 1918, the son of 4 crmlna1 police inspector. He started his own police career at the age of 13 as a volunteer in a border unit. In 1938 he was inducted into an 55 reserve unit and from then on his schooling, legal training, and subsequent assign- ment to a job in the Criminal Police was guided and fostered by the SS. In 1943 he went into the foreign intelligence section of the Reich Central Security Office (RSHA), where he worked first in the Swiss section at headquarters, then in Holland - for a while under Schreieder of "Nordpol" fame. He finished the war as a 1st Lt. (Obersturmfuehrer) in the militarized branch of the Nazi Elite Guard (Waffen $S) and as a prisoner of the British. He was an average looking individual with no distinguishing physical characteristics. Of the many recorded impressions of him from various stages of his career, certain personality traits dominate: a highly intelligent man with very little personal warmth; a person with a high regard for efficiency, and for authority, but susceptible to flattery; venal; and capable of almost childish displays of vindictiveness. Naturally a devious person, he enjoyed the techniques of engineering a *A variety of formal and informal secret Naz nizations have existed since the end of the Second World War. The KGB WSA a aMuch-success in penetrating and controlling these groups from their inception, and using them as recruitment pools and as propaganda weapons. One of the most interesting reports on this subject was provided by the senior Polish Intelligence (UP) officer Michel Goleniewskl, and concerns an organization which he called HACKE. Information on HACKE is in Annex A. It shows how early and how thoroughly the KGB penetrated and manipulated hard-core Nazi groups, especially the former intelligence and secerity officers. These operations were the logical outgrowth of the KGB's wartime operations and began even before the war was over. They still have ramifications indiamp areas of the world where- former NarI5have settled.. 17- SECRET NO FOREIGN DISSV Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 SECRET NO FOREIGN DISSEM good deception in his profession. He was brilliant as an elicitor of information, an: excellent listener and an operations officer of such generally recognized capability that from time to time he was given special "vest-pocket" operations to manage for the chief of his German service. Infinitely cool and brazen in the face- of danger, thoroughly aware at all times of what he was doing, -17a- SLCRET NO FOREIGN DISSEM Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 SECRET NO FORUCN DISSEU -cold calculator" as he once ringly described ble in his disdain for The only klitsdtgr e*)tiona .srehisAMSHeirigeritie, enjoyment of the gems his fellow man. These, together with his great admiration for Soviet 'over and efficiency, seem U.', have sustained his throughout his career and imprisonment His attachment to his wife and two children seems to have been :elatively perfunctory As for his colleague in espionage for ten years - and friend in adversity of even longer standing, Hans ,lens -Faro found his in the end merely a convenient scapegoat. An a British W, Felfe is inter interrogation center near Utrecht, whi interrogation of former German intell poseible that his name came to Sevint ten on among the rutch interrogators. One of Felfess a former SD officer named Helmut Proebsting, r Dutch authorities in 1946 that he and Pelfe had been pproaChed by Mix WesserPf the interrogators, to work for the Soviets. Bet Felts denied that any such incident had occurred, When confronted with thin infonmition after his srrest. This is one of anumber of suspicious o1nta in raft's background Which could have been uncovered by an aggressive investigation long before bils arrest. settle in tly been Dresden 946 with thedeter- any, although his home Soviet occupied sone. His wife and child joined him at the end of the year. Seven difficult months followed until he finally found work as an agent for a British military intelligeneq. unit (Sixth Area Intelligence Office, BAOR). His task was to develop information on Communist student groups at the University of Bonn. Under British instruction he settled himself in the D,nr., area, registered in the Faculty of Law and Joined the Ccemonist Farty(VD). In the course of his work he made several tripe to East Berlin and to Beat Oermsny to observe student rallies', from Which he took off on his own Initiative to visit his mother in Dresden. Here again the possibility of Soviet tprgetineelliss. Felts mays that on ; Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 SECRET NO FOREIGN D1SSEM one of these trips, in 1948, his mother warned him that someone in the town had recognized him and reported him as a former 55 officer. On another occasion, he says, he was arrested by tfeib police, but quickly released at the intervention of his host, an official of the East German Ministry of Public Education. The British finally dropped Felfe in April 1950 for serious operational and personal security reasons, none of which unfortunately, came to the attention of the Gehlen Organization in any very detailed or forceful form until long after Felfe was entrenched in it. British files on Felfe were received by the BND in 1961 and by CIA in 1962; These revealed that early complaints against Felfe included attempts to sell inforeetion collected for the British to several other Intelligence agencies, two West German news services and to the East German Socialist Unity (i.e., Communist) Party (SED). They also contained an account of Felfe's attempt to involve the British in a double agent operation with the Soviets, as well as various agent reports showing that he had blown himself as a L'eltish agent to all and sundry, Including the West German Communist Party he was supposed to be penetratingand that he was guilty in general of "sharp practice" and "varnishing of the truth. � As specific grounds for dismissal, the British told Felfe that his refusal to give up undesirable contacts with former S personnel could no longer be tolerated. Specifically. they named Helmut Proebsting and Hans Clemens. Clemens was an old Dresden friend and former colleague from the foreign intelligence arm of the RSHA. After leaving the British, Felfe continued to work against the West German Communist Party for the Land security office (LfV) in Nordrhein-Westfallen, to which he had already been reporting on the side while a British military intelligence agent. He incurred the wrath of this organization on at least two serious counts for having sent a report on it to a contact in East Germany l and for having tried to peddle the plans for the BfV charter, which he had somehow acquired from someone in the Finance Ministry, to a West - 19 - SECRET NO FOREIGN OHS& Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 SECRET NO FOREIG% DISSEM German newsman. From the LfV Felfe went to the Ministry for All-German Affairs,* where he worked as an interrogator specializing in refugees knowledgeable on the East German People's Police (VW). He remained at this job, eventually writing a study of the VOPO for the Ministry until his recruitment into the Gehlen Organization in 1951. b, flackround Information on Glens Anyone who has tried to understand Germany knows that bonds of common local origin are often far stronger than the larger national concept. The fellowship of former Dresdeners is a thread which runs very heavily throughout this story. Both Hars Clemens and Felfe were from Dresden, and their recruitment by Soviet intelligence was directed by the KGB office in Dresden. Clemens had been chief of an SD field office in Dresden in the late thirties, when he had worked agdinst the German Communist Party (KPO). Later he was posted to RSHA Amt VI (foreign intelligence), where he learned to know Felfe well, and subsequently he went ta the SD command in Rome. At the end of the war he was captured by Italian partisans and interned in various Critish and U.S. POW camps. In 1948 he was indicted, and acquitted, during the well-publicized trial of his chief. the Nazi Police Attache Herbert /appler, notorious for the murder of Italien hostages in the Ardeatine Caves, At some point during his captivity he learned that his wife Gerda, in Dresden, with whom he had been corresponding, had been sleepira with Soviet officers. He claimed that this knowledge severed his already weakened affections for her and decided him in favor of resettling in West rather than East Germany after his release from POW camp. He settled in West Germany in October 1949, but continued to remain in loose correspondence with his wife, through whom he had learned the whereabouts of some of his old friends. One of these was *At the time, this organization was known as the Kaiser Ministerium. It became the Ministry for All-German Affairs when Germany regained its sovereignty in 1955. The latter name is used here for simplicity and clarity. - SECRET NO roriGN DISSU Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 SECRET 0 FOREIG!-! D1SSEM Erwin Tiebel. a fellow-Dresdener then practising law quietly in a small town in the Rhineland. Tiebel had at one time been a confidential informant for Clemens in the Dresden SO. Later1 he had been assigned to the Swiss Desk of RSHP- VI. where he had also known Felfe. He was to become a support agent for Clemens and Felfe in their work for the Soviets. Felfe had already looked up Tiebel in 1947. Clemens wrote to him from SECRET NO FOREICN DISSEM � Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 PORDIGN PO/ camp in 9 Clauses' wire 4ati Womb= liebelo suggests that these old thr wart 441//sr# with Incognizance accused of kV" his 3 A letter from and mentioning hostages in den, 51g .there is acne susses tics that Clams=was similarly listed. Gorda Clemens was working as a Soviet agent (eTilia;ikAgvaleceibler 194, and probably Lad beams/nee the end of the we:roes Pelf, later told his Britt& case arficer. ller cover name was "Wilma% She reported to a =Colonel called "Me in an office in the Soviet Cammand Dresden Whivb, according to Clemems, was concerned with tracking down farmer police end intelligence officers frau the Dresden area who vere liable for war crimes. older ag pernicious and asking Ma a as a E sen 4pI.Ine -Wel Inferior which is x' his arrest, he pretended that the 'a aenier - bedexercieed a daminetdng &rawi bin into the Soviet service t their s however they remaimed wood friends, and Clemens in his post-arrest tatemart claimed that there bad Al', er been any friction or rivalry between time in their Soviet work. C. *ere. I C �nsani relit) hort time after Clemens return to Germany - t Garda Clemons to Meet Germany with a recrutt This occurred just at the end of-l949 or 1950. Clemons claims that the situation wee face Charges. Moreover, he bad no be was also intrigued by the idea of ussei the attuation with both Pelf, and Tiabel. three seem to have opposed outright the ides of accepting PG. Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 NO FOFEIGN DISSEM the Soviet approach, they did emtertain the notion of trying to offer Clemens to someone as a doUble-agent. Clemens evea tsikel to an official In the Ministry of interior. Uhfortunattly, the latter bruthalhin off without giving him any concrete advice. Felfe may have offered Clemens to the IfV; Britieh files Show that he told his <d.& case officer in early 1.950 that he intemded tOfto so. Fall* bad already tried zisuceess- fully in Bever 1949, upon Clemens' arrival, to aell hit to the British as an agent. (BO also tried to persuade then to recruit Tiebel4) This effort had nerely earned him the admonition to stay away from his old S, friends, Vho were bed medicine far someone eupposed to penetrate the Corm-mist Perty. in January 1950 Fife tried again, this tie' offering Clemens as a British-Soviet double Nowt. A letter dated 25 41e-emery 1950 from Tiebel to Fells states that Clemens had alreedy agreed in priocUls to cooperate with the Soviets La Dresden. The Britith files contain a ammo �revisit by Pelf* to his ease officer on 29 %Ternary 2959, during which he reported that Garda Clemens had arrived two days earlier and vas planning to return Shortly to Dresden with Ler huaband in order to put him in touch with the BM The British lingerea oray briefly over the decision of vhsther to play Clemens as A double agent. Shortly after Felfe's proposal, evidence of his double-iinalitg with the UV became evident, and he confessed to having sent a report on that organization to an Bast German Commuslet Party contact :tallest Berlin. Aga Frau Clemens appeared in Germany again in early April, and Felfe tried once more to persuade his employers to undertake an operation., the British case officers came to the decision that they Should drop, Felfe and list Clemons as a security rift". By this time, of course, Clemems vas no longer Just a security risk; be had already gone to Dresden and became a Soviet agent. In February 1950 Clemens vent to Dreeden, Where he vas led by his vita to meet Colonel hex in the Soviet "Weldschlossechen" Compound. Bere, Max debriefed Clem�, on his life history and present contacts lectured Mil on his culptbdlity an au SD criminal, probed his feelings of confusion and resentment, listened constructively *bile Clemens deliver- ed himeelf of a long pent-up statement of his hatred for the Americans. (They had been Wide the cause of German defeat, etc., had emaShed his home town and caused the death of at least five of his relatives.) Max at this point took Clemens on a tour of bombed-out Dresden and, at the tide of Clemens' emotional reaction, offered bin an opportunitY of revenge againet the Americans. The pronsalmis clear cut and precise: Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 SECRET MO FOREI1N DISSE3 as a Soviet agent Clenens was to return to the Western zones, seek out old police and SD contacts and through them try to penetrate the Oehlen Organization. The Gehlen Organization was an "Amiladen" (an American shop), and any blow aimed at it was a blow at the Americans. Clemens agreed: for money, for a personal cause, and to be on the side of power, but not, he insisted, because of any special svmnathy toward the Russians. (Here, as in many other cases. re strains of the old Nazi theme of German superiority to Russians.) He signed himself on as a Soviet agent with the cover name "Peter-" later he used German girls' names. At this first meeting Clemens provided Max with a list of potential recruits in which he included the names of both Felfe and Tiebel. Clemens says he was very impressed by Max and by his psychological adroitness: Max was civil, sober, authoritative, knowledgeable. but most important - as both Clemens and Felfe have stressed many times - he never pushed or threatened directly. His watchwords were to proceed slowly and naturally. When Clemens returned to West Germany he told Tiebel and Felfe the whole story and was able without much difficulty to recruit them, in turn, for Max. (Clemens states it was perfectly clear to his friends that Max's target was the Gehlen Organization. Felfe claims that he did not understand that this was the case until much later.) When Tiebel paid his first visit to Dresden some months later, he received much the same treatment as had Clemens, with perhaps greater emphasis on the threat of war crimes indictment. He received the cover name �Erich, hici- he kept throughout his agent career. Felfe, who by this tire emi working as a refugee interrogator in the Ministry for All-German Affairs, resisted making the trip east for another year. He did, however, submit reports to Clemens. Tiebel was later to be used as a courier. Clemens was able to carry out his assignment for Max with mewing rapidity. In March 1950 he came across an old acquaintance from the Uresden police named Wilhelm Yrichbeup who was then employed in e sub-unit of GV1." in Bavaria. Through him Clemens wds able to Join - 23 - SECRET NO FOREIGN DISSEM Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 SECRET NO FORE1Gq DISSE the Gehien Organization in June of 1950 as a registry clerk and courier for the same unit. (Clemens' Gehlen Organization alias was "Cramer.") Krichbaem himself was later to become highly suspect as an early MGB/Oresden penetration of the Gehlen Organization, but it is not known whether or not he wittingly maneuvered Clemens or Felfe in the organization for the Soviets. Clemens remained in Krichbaum's unit for two years, during which time he reported on the organization and personnel of both the Bavarian unit and its parent base. GV1.:, and on anything else that came his way. His reports were typed on thin paper and hidden in cans of powdered milk which he sent periodically to his wife in Dresden. Re collected reports from Felfe whenever they had the opportunity to meet and sent them on in the same way. (Since Felfe is reported. in British files, as having made a trip to Southern Geneany within a few days of trying to sell the plans for the BfV charter to a news service, it is a good guess that these documents might also have found their way into one of Clemens milk cans.) There was relatively little communication from Max; what there was was handled by Gerda Clemens, who served as courier ane, mail drop. When Felfe's work for the inistry for All-German Affairs drew to a close in September 1951, he aereed to myke his first visit to Max in Dresden. At about the same time Clemens recommended him to Kriehbaum as a reliable and experienced Intelligence officer and Krichbaum arranged for his employment by the Gehlen Organization. Although Felfe will not admit it, it seems likely that there was a definite cause and effect relationship between the timing of his availability for work .in the Gehlen Organization and his trip to Dresden. Max was primarily interested in the Gehlen 0rganization as a target, and presumably it was at the point when Felfe was actually able to penetrate his target that Felfe became of importance. There is some suggestion in our records - no evidence - that Felfe might really have neen recrulted-earlier, but even if this is so his serious Soviet work probably did not begin until he wasoroperly accredited West German intelligence officer. - 241 SECRET NO FOREIGN DISSEM Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 SECRET NO FOREIG DISSEM Around the firs, of September 1951 Felfe flew to West. Berlin where he was met by Gerda Clemens, who conducted him to Max in the East Sektor. Max drove- him to the Soviet Compound in Karishorst, where he questioned Felfe on his background Felfe iaid he appeared to be very - 21a SFPET U0 FOREIGN DTSS Approved for Release: 2019/02/21 CO2606328 Approved for Release: 2019/02/21 CO2606328 bti tarloadY end 'gavehia tile't.:6.31: arriaLl , laratton he did, not � ISA a tsle4*0 snob*, 'Ne received tbe",coviter nevus a friendly* eodiable�!., - . OS Itit tit( LI* 111010t1IW � events TikAayed theass2.ves out exactly wish*** ami- work tor Soveet et wee well vine sat d.ined 26th,ot October� Falfe VAS dolled to Xerleruhe far a persoael�