Office of Strategic Services - Origins and Activities

Origins and Activities

Prior to the formation of the OSS (the American version of the British Secret Intelligence Service and Special Operations Executive), American intelligence had been conducted on an ad-hoc basis by the various departments of the executive branch, including the State, Treasury, Navy, and War Departments. They had no overall direction, coordination, or control. The U.S. Army and U.S. Navy had separate code-breaking departments (Signals Intelligence Service and OP-20-G). Also, the original code-breaking operation of the State Department, MI-8, run by Herbert Yardley, had been shut down in 1929 by Secretary of State Henry Stimson, deeming it an inappropriate function for the diplomatic arm, because "gentlemen don't read each other's mail".

President Franklin D. Roosevelt was concerned about American intelligence deficiencies. On the suggestion of Canadian/British spymaster William Stephenson, the senior British intelligence officer in the western hemisphere, Roosevelt requested that William J. Donovan draft a plan for an intelligence service. Colonel Donovan was employed to evaluate the global military position in order to offer suggestions concerning American intelligence requirements because the U.S. did not have a central intelligence agency. After submitting his work, "Memorandum of Establishment of Service of Strategic Information," Colonel Donovan was appointed as the "Co-ordinator of Information" in July 1941.

The Office of Strategic Services was established by a Presidential military order issued by President Roosevelt on June 13, 1942, to collect and analyze strategic information required by the Joint Chiefs of Staff and to conduct special operations not assigned to other agencies. During the War, the OSS supplied policy makers with facts and estimates, but the OSS never had jurisdiction over all foreign intelligence activities. The FBI was responsible for intelligence work in Latin America, and the Army and Navy guarded their areas of responsibility.

From 1943–1945, the OSS played a major role in training Kuomintang troops in China and Burma, and recruited Kachin, and other indigenous irregular forces for sabotage as well as guides for Allied forces in Burma fighting the Japanese Army. Among other activities, the OSS helped arm, train and supply resistance movements, including Mao Zedong's Red Army in China and the Viet Minh in French Indochina, in areas occupied by the Axis powers during World War II. The OSS also recruited and ran one of the war's most important spies, the German diplomat Fritz Kolbe. Other functions of the OSS included the use of propaganda, espionage, subversion, and post-war planning.

The OSS purchased Soviet code and cipher material (or Finnish information on them) from émigré Finnish army officers in late 1944. Secretary of State Edward Stettinius, Jr., protested that this violated an agreement President Roosevelt made with the Soviet Union not to interfere with Soviet cipher traffic from the United States. General Donovan might have copied the papers before returning them the following January, but there is no record of Arlington Hall's receiving them, and CIA and NSA archives have no surviving copies. This codebook was in fact used as part of the Venona decryption effort, which helped uncover large-scale Soviet espionage in North America.

One of the greatest accomplishments of the OSS during World War II was its penetration of Nazi Germany by OSS operatives. The OSS was responsible for training German and Austrian individuals for missions inside Germany. Some of these agents included exiled communists and Socialist party members, labor activists, anti-Nazi prisoners-of-war, and German and Jewish refugees. At the height of its influence during World War II, the OSS employed almost 24,000 people.

In 1943, the Office of Strategic Services set up operations in Istanbul. Turkey, as a neutral country during the Second World War, was a place where both the Axis and Allied powers sought to set up networks of spies. The railroads connecting central Asia with Europe as well as Turkey's close proximity to the Balkan states placed it at a crossroads of intelligence gathering. The goal of the OSS Istanbul operation called Project Net-1 was to infiltrate and extenuate subversive action in the old Ottoman and Austro-Hungarian Empires.

Head of operations at OSS Istanbul was a banker from Chicago named Lanning "Packy" Macfarland who maintained the cover story as a banker for the American lend-lease program. Macfarland hired Alfred Schwarz, a Czechoslovakian engineer and businessman who came to be known as "Dogwood" and ended up establishing the notorious Dogwood information chain. Dogwood in turn hired a personal assistant named Walter Arndt and established himself as an employee of the Istanbul Western Electrik Kompani. Through Schwartz and Arndt the OSS was able to infiltrate anti-fascist groups in Austria, Hungary and Germany. Schwartz was able to convince Romanian, Bulgarian, Hungarian and Swiss diplomatic couriers to smuggle American intelligence information into these territories and establish contact with elements antagonistic to the Nazis and their collaborators. Couriers and agents memorized information and produced analytical reports; when they were not able to memorize effectively they recorded information on microfilm and hid it in their shoes or hollowed pencils. Through this process information about the Nazi regime made its way to Macfarland and the OSS in Istanbul and eventually to Washington.

While the OSS "Dogwood-chain" produced a lot of information, its reliability was increasingly questioned by British intelligence. Eventually by May 1944 through collaboration between the OSS, British intelligence, Cairo and Washington the entire "Dogwood-chain" was found to be unreliable and dangerous. Planting phony information into the OSS was intended to misdirect the resources of the Allies. Schwartz's "Dogwood – chain" which was the largest American intelligence gathering tool in occupied territory, was shortly thereafter shut down.

In 1942, a young physician named Christian J. Lambertsen invented the first Self-contained Underwater Breathing Apparatus (SCUBA) and demonstrated it to OSS – after already being rejected by the U.S. Navy – in a pool at a hotel in Washington D.C. The OSS not only bought into the concept, they hired Lambertsen to lead the program and build up the dive element of their maritime unit.