Enemies: A History of the FBI (14 page)

The FBI set out to investigate every member of the Communist Party and its affiliates, along with the leaders of American fascist and antifascist movements. It went after left-wing labor leaders in the coal, shipping, steel, newspaper, and garment industries. It sought to find Communists and subversives at schools and universities, in the federal government, and in the armed forces. Hoover ordered his agents to recruit new informants and to write new reports on prominent subversives. He started classifying “subversive activities” under the broadest headings of American political and economic life.

“M
EN OF ZEAL
”

With the new authority vested in him by the president, Hoover revived one of the FBI’s most valuable intelligence techniques: wiretapping.

Governments had been tapping wires ever since there were wires to tap. Army spies on both sides listened in on telegraph lines throughout the Civil War. Police departments and private detectives had been secretly recording conversations for decades. On the authority of President Wilson, the government took over the operation of public telephone lines during World War I. The Bureau had listened in on countless people during the lawless
years after the war—not only Communists, but senators, congressmen, and judges.

And wiretapping now was legal—as long as it was secret.

The Supreme Court had drawn that fine line in a 1928 case,
Olmstead v. U.S
., a 5–4 ruling in which Chief Justice William Howard Taft, a former president of the United States, cast the deciding vote. Roy Olmstead was a Seattle bootlegger; Prohibition agents from the Treasury Department had tapped his telephone. His lawyers had argued that the secret installation of wiretaps to gather criminal evidence violated the Fourth Amendment’s protections against illegal trespasses and unlawful searches and seizures.

The majority in
Olmstead
had ruled that the government was within its rights: “A standard which would forbid the reception of evidence, if obtained by other than nice ethical conduct by government officials, would make society suffer and give criminals greater immunity than has been known heretofore.”

The minority, led by Justice Louis Brandeis and Hoover’s old boss, Justice Harlan Fiske Stone, had issued a powerful dissent. Brandeis warned: “The greatest dangers to liberty lie in insidious encroachments by
men of zeal, well-meaning but without understanding.”

“Crime is contagious,” Brandeis wrote. “If the government becomes a law-breaker, it breeds contempt for the law; it invites every man to become a law unto himself; it invites anarchy. To declare that in the administration of the criminal law the end justifies the means—to declare that the government may commit crimes in order to secure the conviction of a private criminal—would bring terrible retribution.”

Brandeis compared wiretapping and bugging to the “writs of assistance” and “general warrants” that the British had used to search the homes of American colonists before the war of independence that created the United States: “As a means of espionage, writs of assistance and general warrants are but puny instruments of tyranny and oppression when compared to wiretapping.” And he shrewdly pointed out that one wiretap was in effect infinite: “Tapping of one man’s telephone line involves the tapping of the telephone of every other person whom he may call, or who may call him.” Hoover’s men knew that well.

Six years after
Olmstead
, in 1934, Congress passed the Communications Act, a law banning the interception of telephone calls and the disclosure of their contents. The lawmakers thought they had made wiretaps a crime.
But they had left Hoover a loophole. He interpreted “disclosure” in a lawyerly way: wiretapping was not illegal if the information was not used as evidence in court. Therefore, if it was secret, it was legal. The FBI thenceforth used wiretaps whenever Hoover authorized it. Wiretapping, bugging, and break-ins became a holy trinity for FBI intelligence operations from the 1930s onward. Hoover believed that they were essential tools for protecting the United States against spies and saboteurs. President Roosevelt knew such methods were standard practice in the game of nations.

At the highest levels of power in Washington, an awareness dawned that Hoover might be listening to private conversations. This sense that the FBI was omnipresent was its own kind of power. In a 1936 investigation into the suspected leaking of Supreme Court decisions, the FBI tapped the home telephone of a court clerk. Chief Justice Charles Evans Hughes suspected that Hoover had wired the conference room where the justices met to decide cases. If you had to watch what you said in the chambers of the Supreme Court, times had changed.

“H
OW UNPREPARED WE ARE
”

In 1937, Hoover began to understand that his FBI was no match for an experienced foreign espionage service. He saw—too late, to his sorrow—that the Soviets, the Germans, and the Japanese had been spying for years on America’s shipyards, aircraft plants, military bases, and maneuvers in the Atlantic and Pacific oceans.

His understanding came through the work of military code breakers. The army’s Signal Intelligence Service was working on stealing radio communications from abroad. The navy had been trying to crack Japan’s military codes and ciphers, with a weather eye on a potential attack in the Pacific; they had an under-the-table agreement with RCA, the Radio Corporation of America, to receive copies of Japanese cable traffic.

The navy’s intermittently successful efforts led the FBI to arrest the first American tried and convicted for espionage since World War I. The investigation started when a navy cryptanalyst, Aggie Driscoll, stared at an odd word in a Japanese radio message: “TO-MI-MU-RA.” The word
mura
means “town,” but it also can mean “son.” Thinking out loud, she heard the name “Thompson.” Her insight led to the FBI’s arrest of Harry Thompson,
a former navy yeoman and a spy for Commander Toshio Miyazaki, a Japanese Imperial Navy officer studying English in California. Thompson had sold top secret weapons and naval engineering data to Japan.

Broken codes also led to the conviction of John Farnsworth, a Naval Academy graduate, a former lieutenant commander, and a desperate alcoholic who had been dismissed for misconduct. Farnsworth was hanging around navy bases up and down the Pacific Coast, flashing wads of cash, picking up bar tabs, and asking old shipmates about codes, weapons, and warship designs. The navy turned the case over to the FBI. In 1937, Farnsworth was arrested, tried, and convicted of selling secrets to Japan for $20,000.

These cases paled in comparison to the FBI’s first great international espionage investigation: the Rumrich case.

“N
AZI
S
PIES IN
A
MERICA
”

On Valentine’s Day, February 14, 1938, Hoover was on vacation in Miami. He was mourning the death of his mother, with whom he had lived all his life. He was forty-three years old and looking for a new home. He was also about to publish his first book,
Persons in Hiding
, a ghostwritten rehash of some of the FBI’s gang-busting stories. When he first heard about the arrest of Guenther Rumrich, in a telephone call from headquarters, Hoover had deep doubts about the facts of the case. The story was far stranger than his crime-fighting yarns.

A senior British intelligence officer, Guy Liddell, had warned the U.S. Embassy in London about a Nazi spy ring in the United States. A few days later, a clerk at the State Department’s passport office in New York answered the telephone. The caller said he was Cordell Hull, the secretary of state. He ordered the clerk to deliver thirty-five blank passports to the McAlpin Hotel in Manhattan.

The New York police arrested Guenther Rumrich when he picked up the package of passports. They searched his room and found a note describing a plot to steal the American military’s plans to defend the Atlantic Coast.

Rumrich, the weak-chinned son of an Austrian diplomat, was twenty-six, an American citizen, AWOL from the U.S. Army—and, as he freely confessed, a spy for the German military intelligence service, the Abwehr.

Hoover assigned a star FBI agent, Leon Turrou, to the investigation. He had one of the highest profiles of any of Hoover’s men; he had cultivated
newspaper reporters all over New York. He saw the Rumrich case as a path to fame and fortune. In April 1938, while Turrou was supposed to be preparing for the presentation of the case to a federal grand jury in New York, he was meeting at night with a newspaper reporter, readying a series of first-person stories to be serialized in the
New York Post
and published in a heroic (and half-invented) true-crime adventure book entitled
Nazi Spies in America
.

Turrou had learned that the German espionage operation had run free in the United States for years; some of its members had been stealing American military technologies since 1927. Their leader was Dr. Ignatz Griebl, a physician in Manhattan, a public figure who ran an openly pro-Nazi political group called the Friends of New Germany. Within two months, with help from Rumrich, the FBI had identified eighteen members of the ring, both Germans and Americans, who had stolen the blueprints and specifications for a new generation of American warplanes and destroyers. The ring also distributed funds from Berlin to the ever-growing German-American Bund and members of American Nazi militias, whose numbers now ran into the tens of thousands.

It could have made a great movie. But Turrou made a mistake. He told every one of the eighteen members of the Abwehr spy ring that they would be subpoenaed to appear before a grand jury on May 5, 1938. Fourteen of them immediately fled the United States, some stowing away on German passenger ships whose captains and stewards were German intelligence agents. Rumrich, who had pleaded guilty in a bargain with the government, remained in New York along with three relatively minor co-conspirators. Dr. Griebl of the Abwehr turned up in Berlin—where, as the head of the FBI’s New York office ruefully noted in a letter to Hoover, he and his fellow spies “
probably have laughed time and again at our efforts in connection with the instant case.” The case was all but destroyed. When Turrou took the stand at the trial of the remaining suspects, he was painted as a pathological liar.

The case made the FBI a laughingstock. That was Hoover’s greatest fear.

“T
HE UTMOST DEGREE OF SECRECY
”

The Japanese and the Germans were not the only foreign intelligence services spying on America. By the time Rumrich entered prison for a two-year
sentence, a Soviet intelligence agent named Mikhail Gorin was arrested in Los Angeles. In the first case of its kind, the Soviets stood accused of recruiting a spy within the American military. The mole worked for the Office of Naval Intelligence—Hoover’s best source for the secrets of foreign espionage.

President Roosevelt expressed outrage. He reflected on “how unprepared we are to cope with this business of spying which goes on in our country.” The president said: “Only by reinforcement of our intelligence services can we successfully combat the activities of foreign agents.”

On October 14, 1938, Hoover gave the president and the attorney general a bold proposal to create an immense intelligence service under his control. His plans were an awesomely ambitious grasp for power in a nation where few were prepared for the next war.

Hoover had 587 agents in the FBI. He proposed to hire 5,000 more. He would take over the immigration and customs services. He would run the Federal Communications Commission, which controlled the national and international networks of radio, cable, and telegraph systems. He would be responsible for the security of every factory holding a government contract and every military research facility. He would oversee the issuance of passports and visas by the State Department. He would have the power to investigate anyone in the United States suspected as a foreign agent.

He proposed that all this should be done in secret, by presidential fiat.

“The utmost degree of secrecy” was required “for the expansion of the present structure of intelligence work,” Hoover wrote in a memorandum to the president on October 20, 1938. The goal was “to avoid criticism or objections which might be raised to such an expansion.”

Espionage was “a word that has been repugnant to the American people,” Hoover continued. “Consequently, it would seem undesirable to seek any special legislation which would draw attention to the fact that it was proposed to develop a special counter-espionage drive of any great magnitude.”

On November 2, 1938, the president called Hoover to the White House. Once again, the only record of the conversation is Hoover’s secret memorandum. It read: “
He stated that he had approved the plan which I had prepared.”

But Hoover found that secrecy could cut both ways in the exercise of power.

10

THE JUGGLER