Before the CIA, there was the Pond

2010-07-29 21:29

New Tork - It was a night in early November during the infancy of the Cold War when the anti-communist dissidents were hustled through a garden and across a gully to a vehicle on a dark, deserted road in Budapest. They hid in four large crates for their perilous journey.

Four roadblocks stood between them and freedom.

What Zoltan Pfeiffer, a top political figure opposed to Soviet occupation, his wife and 5-year-old daughter did not know as they were whisked out of Hungary in 1947 was that their driver, James McCargar, was a covert agent for one of America's most secretive espionage agencies, known simply as the Pond.

Created during World War II as a purely US operation free of the perceived taint of European allies, the Pond existed for 13 years and was shrouded in secrecy for more than 50 years. It used sources that ranged from Nazi officials to Stalinists and, at one point, a French serial killer.

It operated under the cover of multinational corporations, including American Express, Chase National Bank and Philips, the Dutch-based electronic giant. One of its top agents was a female American journalist.

Now the world can finally get a deeper look at the long-hidden roots of American espionage as tens of thousands of once-secret documents found in locked safes and filing cabinets in a barn near Culpeper, Virginia, in 2001 have finally become public after a long security review by the Central Intelligence Agency.

40 agents

The papers, which the Pond's leader tried to keep secret long after the organisation was dissolved, were placed in the National Archives in College Park, Maryland, in 2008 but only opened to the public in April.

Those records plus documents obtained by The Associated Press in the past two years from the FBI, CIA and other agencies under the Freedom of Information Act portray a sophisticated organisation obsessed with secrecy that operated a network of 40 chief agents and more than 600 sources in 32 countries.

The AP has also interviewed former officials, family members, historians and archivists.

The Pond, designed to be relatively small and operate out of the limelight, appeared to score some definite successes, but rivals questioned its sources and ultimately, it became discredited because its pugnacious leader was too cozy with Senator Joseph McCarthy and other radical anti-communists.

The documents also highlight issues still relevant today: the rivalry among US intelligence agencies that have grown to number 16, the government's questionable use of off-the-books operations with budgets hidden from congressional oversight, and the reliance on contractors to undertake sensitive national security work.

Created by US military intelligence as a counterweight to the Office of Strategic Services, the forerunner of the CIA, it functioned as a semiautonomous agency for the State Department after World War II and ended its days as a contractor for the CIA with links to J Edgar Hoover's FBI.

The organisation counted among its exploits an attempt to negotiate the surrender of Germany with Hermann Goering, one of Adolf Hitler's top military leaders, more than six months before the war ended; an effort to enlist mobster Charles "Lucky" Luciano in a plot to assassinate Italian dictator Benito Mussolini; identifying the location of the German heavy water plants doing atomic research in Norway; and providing advance information on Russia's first atomic bomb explosion.

High-level mole

There were other tangible successes, such as planting a high-level mole in the Soviet secret police and, in a major operation code-named "Empire State," the Pond paid a group of dissidents behind the Iron Curtain with CIA funds to obtain cryptographic systems to break coded messages from Moscow.

But it was Pfeiffer's successful escape that was among the most high-profile operations, garnering headlines, although the Pond's role was kept secret for years.

McCargar, a State Department official who secretly was the Pond's agent in Budapest, had been ordered to find a way to get Pfeiffer and his family out of the country. The Hungarian was the leader of a small but increasingly popular anti-communist party that had made gains in August elections, and he had begun to get death threats.

McCargar co-ordinated the escape with the help of fellow State Department employee Edmund Price, also identified in the papers as working for the Pond.

But it was McCargar, armed with a pistol, who drove them from Budapest, past four road blocks. At one, a Russian guard asked to see what was in the four crates.

McCargar bribed him with cigarettes.

They arrived in Vienna, a hotbed of international intrigue, where the US shared control with their allies, the French and the British, as well as the Soviets. 

Black poodle

Against this politically fraught backdrop, Pfeiffer and his family were taken to an airfield and spirited away to Frankfurt and on to New York. They arrived in the US on November 12 as heroes of the anti-communist opposition.

One of the escapees, Pfeiffer's daughter, Madeline, told the AP she remembered sitting between her mother's legs in one crate and that she was given sleeping pills to keep her quiet.

"It is strange to realise that I have lived though this, and that my parents lived through this," said Madeline Pfeiffer, 67, now living in San Francisco. On the 50th anniversary of their flight from Hungary, she said she sent McCargar a bottle of cognac - what he and her parents drank after escaping.

Two other dissidents were taken out with them.

The head of the Pond was Colonel John V Grombach, a radio producer, businessman and ex-Olympic boxer who kept a small black poodle under his desk. He attended West Point, but didn't graduate with his class because he had too many demerits, according to a US Army document.

His nickname was "Frenchy," because his father was a Frenchman, who worked in the French Consulate in New Orleans.