Secret REL Ger SECRET/RELEASE TO GERMANY o·NLY - :2 - 1 liltulk o 5. op\'JOBition, 1f it 'Wlfll'e to conUnuo, el'ld I\ dit1c1HJB:lon Qf tbo Lenz At.fair before the ~.lonu1·1t~ C~ttee could seriouel1 Jeopl.lrdi~G the leQU111ation of 7.Il'PF.R. 'U1erefore, the tollo\/ing me11.aures have b&en taken& c) ill'N;tt 18 now pueeing infol'llla tiM to 1:11.tlnk 1ihroueh h1a ald.e, or tlu-ough Oenerol Heuaingera b) General 'lruaoott ea\I Oenert.1.l Oehlen and expreeoed OUJ" In fl.nswor, he received denials ot i:e.at. 1nd1o- oret1ouo and l!l.BBUl'&nce foi- tho £uture 1 o) evideno. h being gfithorod to determino whether the ant1..zn~ COll1paign is buusd on ta~t or inimlco.l goHipJ and d) P08 baa be9l\ aake4 ·to enango euch fletico 1UOVoa ae ore fO&si'ble in relnt1on to I.ens, "'th. the &llll or keeping \'iewa. the Jrl6.ttet' O\.\t Of t\1e llurideotc.g Comld.tt.ee. 6. ln the feoe of thi& e11:.untion \18 · cun• · . A. Di1ou1B tho prob~em with lldcinauer d1reotl7, roae1ve1 biu vieve, end l!JU81e&t t.b.Qt ho take eucb 111eaeureo \ as will neaure support of' ZIPPml'e legallsatioza - epeoit- icalfy to tUl8\letJ' Illank'e oho.rgeo - and. the Leaii Artair. n. 'l'ake no direct aot1on •xi:ept. to ilnmpl•ent what. hna already been~ until otter the oleotione, ot vhioh time, d&J'lending on the eitUAtion, deoide to re- taiD 01• get rld ot Oohlen. ln prepar1r1ticm tor tb1a last iiooc:ibil1ty, tbe \11ll1ncnee111 or tbe u. a. govenwent to eH· Oehlen toaieJ2 if that is neooesa:rf tor the future of tl1e QI~ D~\.\14 be oatllltlunicatod to tho c:ho.ncellor. 7. Our OJ'eD euppi:>i·t of Genornl Oehl.en tit a motattnt when ttus emergence.or a cent.l'e.liied Gorman lnt.ell.1~e~ce ft11"Viao lllt\1 require hie i-emo'nl ~PJlOere t<>" be a tnat.1- oal Ol'i'<>r.. It 1u, thereforo, "~"t.ed t.hiit the Director J12! eee Gcn.ral Oeblen ot thiP tiJno. ~\.ICh & "fbit ~t.Bllt aene onl.y to J!lll.\lll Oon'r~l· Gehl•n l\OH in- t1·anaigcint a-nd woulcl 1r1f11titit• h1a en&1ah1, u w-ell afl provide them \11th turthor ev14cmoct of' U,8. col\trol. ln the 1l1reotor•e letter to Oonai-G.1 Ouhlen on l J'une 1953 Mr. ~:rit.otitJel" wao g1'ffn autboilty to dhCllH the wunator a.nd :rell\ted lllllttore. \Jnt11 the picture 1e olur thie. should be tho che.nnel for our diG.!=UBDiOnB lil1th <.\e~rnl Uehlen. ,, I l'l:/FIG/Z1~·• • • • • Distributions Orig & 1-Addressee 7 August 195) 1-RI 2 DD/P . 1: se·cRET/RELEASE 10 GERMANY ONLY \;· 2-D/FIG/Z~ .REL Ge 471 Secr 1

Secret REL Ger .' l"L""'cir;;.-1'."f. ';, '·', .,1, r .1 \ .. l.;.!t, ,i- '-..:~"4'J ••':-o 8-J,~urily AIR '>,., In formation· SECRET/RELEASE TO GERMANY ONLY f, INF01 OOH Chief of aasei, ·!'llllaob Operational/KUMRl/?.II.1Pm Ralat.tons Daokenund Doauments . l. Thi.a 18 •l'911' a ettort to otte a~ 0£ dooument.e uh:l.oh v1U provide pvt o.f ~ biito:rrl.oal ·Je"'1>&0t1ve ·Jl81iil!S0&.17, for Jll'OPitr . evalu4tt.on Of tlie cruft'en'b temiQA bttiween·UtILI'l'r ~. (a) ~us._. Listing of DoOQll!fJntar A MamOranb 'tor tb&.IWoOJ'd Of. a ~t~ ~i10ft 13 lfai'oh 19SJ, MW1" previ~ laJ:t"~ (Attaab, A) <1:1> 1 letter frGlll vm.t~ ·io ·12Mat19S3• ·. "tile aT9 eepoaS.~· thMkf'ol that tho ~ep.d. ~ the vs •re lut months· was to ai'WI tteedtim and .napo.uibt.11ty in the GOnVol ot our OJJeRtt.ons ..... I ~d walotime ·C t,nte.nai• fioatloo ot tl4.1 tandilno;y,n · (o) A letter hoDI ta U'r.11.m i .i'una 19S'l• ."I g. b.crpe!u1 ~'b ~ UaDd. • .c;a.n be ~n~ ·iu:i.d diftriw.4. ~ the aatihlia!lllen~ of • 111\ltua:IJ.1' ~cd.a.1 Rl.Ation.- sM1'•, •• ,somt.tme ~ t.a nUt 1'ew lll0n~9 ? bopa to· have . 11hli oppGl'~ty. ~ ~ be iii JiUNpe "1d tp d~:acuss pwoonally with JOU ~number of 1111\t:ol'S· ot 301nt inter~,t~n· (d) A letter ~ ottLitr t.o·. o ~· lfSJa (a.'1;uh•. a) Sumaadaed.t (l) ~tie-1.' ~t.l" of ~oan Ub,91 an.µ~ ~1••d. (2) Qoft'8o1dve ~ •houl.d be d18owlsed P,Uo:r 1ov4;ts ·,,-efai'a 'prwJ.ou111 ~Q0111111endat.ioiae ~· ~duoe . a e~Qe at ~riom ~tatf'· an!S -~~ n~bere .,.__.,, (l) U'l'f?.1"'' eta~ he ~d tc;·· ~ae,. ~. no c1amandl.. (4) B•ee 1aG in BOO .a oennan. treat, ioatd.t.loat1on1 ocrppQa.1i. ~ .11,m"e aenous· ~~... (S) Feel.IJ ~ent 811'~ wlnerable ·to ll&l"liamen~ i!IVeett1atiAn. (6) .Adnd.ta ~antaaas· of ·Us IQPPOl't 111 'Dt?Uri, VioDM •to·J ~le they do nl)t oµt-weS.gh dUladventfll.{P.ts politioelJ¥, .(7) Points out, UP<l~oi.ml aocep~ at 7..!PP!t\ aa .QIS In "troateeeh,i.P" ·11 . feather in .US bat1 fuel.a tbia ~ants oonsiderahle t'Os.l indopen- · Ameiit.'oan label ,,.oom.. _n;8!·~B 3 (w/1 oe~ ~tt. A·l.) "' OOK - P"1 Auaust 1953 • . ~:~ ~&(. SECFUM.JBEteASE \ TO GER'MANY·'QNltY 472 4«-J °F

Secri REL Gi EGLA-515? denoo nov. (8) !ndep~ndent ZIPrll11. would be more efficient and more !lt'oduc1.ive. {9) It political g"Oao brull.y 1 diosoluUon or ZIPP!ial lll&Y prove neoesslll'r• · · · £?!gnt1_, Thie lette~ ws dhouaeed· ,f.tth and .._ I , ·in Frank.tu?'t 9 Jul¥ 1953· It vas asreed. that ve · ' should tnke reasonable att.1tu1fe aqd ask U'.i'IL!l.l'Y fQr more opeci- tio proposnlo, . Tlii.s va·s done verbally" by on 13 July. ZIPPP.R Hplf was recaived ten daya l'ate:r. · {At~b. C)' (e) .A :htter U'rILI'l'Y :to '23' JUl7 19S31 . . Spooifio ZIPPER prQpOsale for changea 1n operat.1ntt and repo~tins prooedurea bebween ZIPP~· and JCUB~K staff• On the vbol&, the. . ar~ reall~tic end aooeptable to.ua. Tllo;J'·al'& ·~compile,. 4etaU~ nooD11andatioaa 111&-ie bi"· the ZIPPER. etatr aeot.1on pJ'O.()Oetals ti.Oil or obiets. dlaaueaed thua vitb MlltttER on.12 Aus\ist and•in.- d!oated tha~ ·~ rapq 1fC>'4ci ~ fo~o~ !'1 about o. tort.nip\ •. Ho 11gniti9y) otaaue.J.'t-1tm?l.Yt!i· ' (f) Letter from to ll'l'IL!ft ' Aupet 195-'• (Attaoh, D) $Ubjeo~ va.a rrs.mq ot Httff EUstia~ Dnr:ins t'Uot. ab months ot 1953 ZI~~·at.sff_eft'on~·bave been'cliwl"ted to·inoreae1ns extent to !POt requiZ'81llenta of non;..lJS cnaa~a. This memo \(&UI intended· 'Lo taJce 111111µ1 with ZIPP.ER fbllow1Qg a m1111~:r of, inoid.nta ill wbloh ZIPPm ~tailed -to ue~ requeota well wit.bin their oapabllitq. hrheps too 1"1'ongq wl'ded, it evo~e4 an iJlllllecU.ate · etrong r·eaot1~n OP th~ part of UT:tLITX vho .-etuaed al\Y'·~&Gll8"ion of the points rei.., in ~ letter. lnatruu1, ~· iiw.ed~ately 1.n- tenaU'ie4 ~al atteak egd.nat lroBAHI deaoribed ln 8GLA.-516l Even~ dla011Saed tho problems. with l4BftlC!R \lho ·ursed that- vp llJ. 1ntall.lg8Ma probl.81118 with ~~··•Oth~ than. those wbioh. were \cnow to be ot epeoitio interest to UTlLITY:. · £ ll to (g) Memo tor Recor41 {h) _Sl'ULL 62181 Cabled SUlllW7 Aiz6u«1t 195J. (Attaoh. E) ot UTIJ.l'lT-- oonversa~11 1'7 AlJtUet 19,3. 3. I believe that tbia brings 1117 reporti?lg on tbia. subject reaoonabl.1' up to da.te~ .i · SECRET/RELEASE- TO GERMANY ONLY 473 ·REL C: Sec

----------- ---- -------- Secret REL Ger i i~~E8~ru~~9~~~1~lfr,~G~1ri.1rrn" /no;~~;,!i-f i 3 September 1953 MEOORANDID1 FOR: Chief, EE ATIENTION: SuBJECTs ZIPPER 1. I have just finished reading EGL-A-47Ll and EGL-A-5161 which were kind enough to send me. Frankly, my reaction to these memo- ·randa is, as the man at the vaudeville show said, "This is were I came 1 You in~n , 2. Stripped of the current context, the struggle with Utility is essentially the same as it has been all along. I certainly agree with Jini Critchfield that it is becoming increasingly serious, but we are in no !better position today, as I see it, to jettison Utility than we were three years ago when we gave this prospect active and thoughtful con- · sideration. In short, it is my feeling that we should go on trying to live with him, uncomfortable as this may be. Granted that the elections this weekend may have an influence on the future of Zipper and its re- lat}ionship to the West German Government, we have nothing to gain that I can see by changing our relationship with Utility or with Zipper it- sel:t. The thillgs which Utility complains about are points 'Where he is in ;the .main quite obviously wrong. He devotes so little time to the technical and professional aspects of clandestine intelligence work that he .actually lmows little about the subject. His bleats about agent con- trol are the same uninformed nonsense which issues from the mouth of I . every intelligence peddler who is anxious to make his l iv.1.ng by pawning oft on the United States a lot of tendentious material oombined with :tallrication and paper mill production. We know we are right in our ai>Proach to this problem, and no agreement we could work out with Utility can hide that fact. As long as we are putting up the money for ZiP,per 1 we must pursue our aims as we see them regardless of German re- 'sistance or intransigence. It has been my feeling for some time that we :have had considerable success in persuading the working level of Zipper that our methods and pr-ocedures are sowid, and I have no doubt th~t the future German Intelligence Serv.1.ce will keep in mind the operationa1 principles which we have recomended since logic and good serise are on our side • .3. I do not honest]J" see what new relationship we can at this juqcture negotiate with Zipper. Consequently, I for one fav0r a con- tinuance of the existing one. Obviously, I could be perBUaded with SECRET/RELEASE ·' TO GERMANY ONLY srnuntrv wr&1ttJHION sEcnn 474

Secret REL Ger SECRET/RELEASE ~n~,~:·_l _. TO GERMANY ON['f ·: ~- ~· ~:· .H 1 strong reasons, but I would.most certainly want to hear thein before agreeing to any basic changes. · !• • 4. I cannot ·say that I agree with Jim on the point that n • we have greatly exaggerated the imports.rice of the UTILITY/~ relationship." As long as Blank is an influential member .of the West German Government, he is going to have considerable to say about the uJ.timate i'u1;ure of. Zipper. In addition, his. complaints about the: domestic political aptivities of Utility are valid. No sensible German these days -wants another Gestapo, and it is not in the interests of the Western world to create a German Intelligence Service which ndght!form the nucleus·of a totalitaria:n political movement. Therefore, I think that we should hammer away at Utility whenever the opportunity affords .on the necessity for his ceasing and desisting from internal poli~~cking. I recognize that we have little control over him in this regard, but we can at least see to it that our record with him is clear on this ~core. Rich'"6lms Chief of Operations, ,DD/P Attactunents1 EXlL-A-4741 EGL-A-5161 '· SECRET/RELEASE TO GERMANY ONLY SEr.nn ,1 srcumrv mr@:mtoN REL1 475 Se

Secret REL Ger ,:f( .. ':''f ~. ID?!P ?..'.:t~.9. \::tl!JdSR SECRET/RELEASEt.v l111'orm:itinr1·. TO GERMANY ONLY :-· .... •t•, ... .:....i,.-.... t.1·~ 17 September 1953 MEMORANDUM TO Chief of Operations TlffiU I· • FROM I SUBJECT; I· .C/EE EE/FIG/Z Historical swvey of Present CIA/ZIFPER Relations a~ Reflected in Recent Correspondence · 1 ' ! I I . I 1. The tension between General Gehlen and Mr. Critchfield 1 which resulted in the explosive meeting reported in PULL 6218 1 (IN 11314) is a developnent of several months standing. . It was not simply a case of pre-election jitters although the WJcertrtinty of the fUture certainly led to the acerbity of recent events.'. 2. The princiJl\]: bone of contention between General Gehlen and CIA has been the degree of control exerted by CIA over ZIPPER. We have recently_received (Attachment 11 A0 to EG,LA-5157, attac~ed) a memorandum of a meeting between Mr. Critchfield and Generalj Gehlen oti lJ March 1.953 • The meeting Wl:lS largely inconclusive and did not result in any cono~ete conclusions with regard to!the subject in hand, the ZIPPER/Middle East problem. However, in: viev of the later intensification or General Gehlen•s private 'war on American control some of his remarks take on significance. I During the conversation, General Gehlen used the Intelli- 1 gence ae an example of how· to enga~intelligence collection a_s opposed to the US method. The - Service, he. said, silllply advises their man of the targets 1t expecte him to cover, consistent with his own estimate of his capabilities and provided him with a monthly stipend, whl.cb was increased as the agent ; ne•d more. Continued pay wo s based O'!l an evaluation of his ' product. He attacked our .method of concentrating on evaluatiijg information by ·having operational details and kno~ledge. of the source. Our system calling; as it does, for centralization, he felt to ·be insecure •. Mr. Critchfield naturally was discour!g~d by this picture dn which General Gehlen rejects the gains ve i have achieved with ZIPPER and VO\IS to return to the prof~ssional ! I SECRET/RE~EASE TO GERMANY ONLY . i .!. . I I 476 ~

__ .[ . JI I' Secret REL Ger procedures which can only result in a second-rate service, 1 General von Mellenthin, who WGs present at the· conversation but took no part in it, attempted to.soften the blow afterwards by telling Mr. Critchfield. th&t General Gehlen never says what he means, that he inevitably sounds sharper in.his opinions than: he is, and th&.t he, von Mellenthin, is convinced that most of'.· the changes which have emphasized control) ed source operation's 1 will have a lasting effect. 3. In May General Gehlen gave Mr.' Critchfield a letter for delivery to Mr. Dulles in which he stated, "We are es:pe- : cially thankful that the trend during the last months was to . give us more freedom and responsibility in the control of our: operations ••• I would welcome an intensification of this . tendency." The Director's answer gave Mr. Critchfield carte . blanche in discussing the future relationship with General i Gehlen a.nd was strictly non-committal on any relaxation of con- trol. . · : .i • 4. On 8 July 195.3 the ilituetion came to n new climax with a letter from General Gehlen to Mr. Critchfield. (Attachment 11B 11 to EGLA-5157 - original with translation). In effect he:; a) emphasized the political danger of the American I label on ZIPPER; : b) stated thet corrective measures to overcome this should be discussed at"a policy level to includ~ a reduction in staff and the "opposite numbers ' system"; c) I stated that he had been prepared to make compro-:. mises in the past and had made no demands in th~ . light ot the fUture transfer to German sovereignty, but, in view of the lag in EDO he sees the American label as a problem vhich must be solved now, : especially in view of possible parliamentary in~ee- tige.tion; l J. · t d) admitted the advantage~of US support in Berlin,; Vienna, etc. but felt.they do not outueigh the dis- advantages politically; ; e) pointed out the.t Adenauer acceptance of ZIPPER as a ors in "trusteeship" is a feather in us hat; reit that this war1~nts considerable real independence I S£C~ET/RELEASE Securi\y lnfol'maliolO GERMA~Y qNLY SEGiiET I,_ 477 REL Ger Secret

Secret REL Ger C':·~G:ti ) Securit~; l~t'fl:rmation· SECRET/RELEASE TO· GERMANY'.! ONLY . - 3 - I f) stated that an independent ZIPPER would be more;. efficient. and more productive; ended with a. forecast of doom by expressing the· view th£t if the political eit'llation goes "in a• certain direction" the onus of Amer.ican support! wi11 result in the transfer's befog no longer ws- sible, I . , I 5. This is the letter \1hich was diacussed with General; Truscott, Gordon Stewart, and C.. . .:t in Frankfurt on : 9 July 1953 and is referred to in the la~r cable exchange (FRAN 8353 (IN 12292) 1 etc.), It was agreed that CIA should ' take a reasonable attitude and ask Gehlen for more specific Jli.o- posals. Mr, Critchfield received the ZIPPER proposals on 23 ~uly. g) ' 6. The proposals are acceptable and realistic to . Mr, Critchfield. They are a compilation of detailed recommenda- tions made by the ZIPPER staff sect.ion chiefs. No significant change is involved, (Attachment "C" to EGLA-515? - original with translation}. 7. .'.~·· -- . . On 5 August · ' Mr. Critchfield presented a letter (Attach- to G~neral GebJ.en taking issue with Zlf.PER ment "D" to EGLA-5157 ~ following a n1unber of incidents in which ZIPPER failed to meet re- quests vell within their capability, It evoked an immediate te- action which came to a head in the turbulent session with Gen~ral Gehlen on 17 August Yhich was reported in PULL 6218 (IN 11.314) and EGLA-5161 (previously routed to COPS), Eventually, the problE!ms 1 raised by Mr. Critchfield s letter of 5 August (which Generali Gehlen chose not to discuss) were solved with General von Mellenthin, who urged the.t Mr. Critchfield take up all intelligence probl~ms with him , •• other than those of specific interest to General Gehlen. : ••••I' .f Ill•••• 8. A side-light on this incident is given in Memo for the record on conversations he had with I Generals von Mellenthin and Gehlen on 7 August 195.3. Much of iwha.t was s~id by General Gehlen was a repeat of the old, old song, which was.so eloquently characterized in the COPS Memorandum to C/EE of 3 September 1953 on ZIPPER, and need not be repeated here. (Attachment 11 E11 ) , However, the notes on h~s lunch with Gener~l von Mellenthin throw an interesting light on the entire situation. Obviously, General von Mellenthin speaks freely to and in this conversation exposed his own personal 'l(:ieus on SECRET/RELEASE <:f.;~r;'~1· TO GERMANY ONLY o ...tu... . ~·- Security In formnlion: . I 478

I -L--~~~-'--'-'-''--~'--~~~ Seer' REL G SECRET/RELEASE TO GERMANY ONLY I General Gehlen to an outsider. It is plain that 1 despite his: loyalty to General Geh:\.en, von HelJ enthin is disturbed over the Gehlen/ZIPPER relationship. _ _ states that General' Gehlen emerged from the-conversation as 11 a man who has permitted himself to become quite divorced from his subordin&tes, 11hose! restlessness and creative .spirit keep him on the move and pre+ occupied with planning for the future and whose vati.ity and pos- sessive instinct keep him from relinquishing fully the functibns of leadership which no longer interest him and which his spirit- ual separation from the rank and file of the organization dis+. 1 11 11 qualify him from exercising • ._...comments that as ; long as General Gehlen shows u~every two weeks orlso and exercises, however briefly, the functions of leadership, von Mellenthin cannot enjoy the position of complete authority which would be necessary for the kind of leadership the organizatio~ now desperately needs and which von Mellenthin is probably quali- fied to.give''· (See General. Heusinger 1 s evaluation of the · 1 ZIPPEH leadership as reported in ·MemorandLUD to COPS dated 15 September :1953). . , . On.19 August 1953 9. (Attachment "F"), General Gehlen ex- 1 pressed a desire to see General Truscott and later Hr. Dulles to discuss "current problems". The resulting correspondence end: cable traffic has been fully covered in previous reporting. Comments: The results of the German election have , strengthened Gehlen's position in the German scene but have a~so destroyed. his erg\Ullents for the reduction of American influence 1 in ZIPPER. The ininlical elements with which he threatened us no longer have the strength to combat ZIPPER. LegalizRtion will I probably come after ratification of the Contractuals and the : formation of the EDC or as a result of a multi-lateral agreement of the western occupying powers. We have been notified tho.t the German.government has plans to fiil!lnce ZIPPER after 1 April 1954. Adenauer's recent moves indicate he is aiming at that date. l During this period our relationship with ZIPPER must b~ consolid- ated for the future. If we merely hang on and insist on ridirlg the horse hard to the finish of the first lap we may find our4 selves without a horse to ride. After German financial support and political autonomy comes forth,. ZIPPER negotiation will bJ difficult, Now, while the opposite number system so odious td .· . General Gehlen is in effect, we may be able to influence the I ZIPPER staff to suanit to their chief proposals for future co~ operation 1'1hioh would go beyond any they would do.re to present if they owed undivided loyalty to their chief. This is particu- SECRET/RELEASE ~EGIT~'f .TO GERMANY CDNLY Ser.unty lnlr": m·1l1nn· : REL GeJ 479 Secre·

Secret REL Ger C".(i"T-ii 1.:~ ,,}LL~ ~er.udly Jnforrncilinn, - 5- SECRET/R~LEASE TO GERMANY .QNL't larly true at the present time 'When the strain of an inner and outer guard is tugging.at ZIPPER 1 a vitals. It is suggested : that any proposals originating with Mr. Critchfield asking for the limited concessions. intimated in the letter of 23 July be. given careful conaidera tion. The ZIPPER staff is appe.rently :in the mood to continue for some time the cloRe relationship with the Americans. The staff proposals vere not as strong as on~ might have anticipi.ted from General Gehlen 1 s statements. If ~ Mr. Critchfield is able to assuage Gener~l Gehlen 'With relaxa~ tions which are more apparent than real he may be able, on th~ basis of negotiations on this lim}ted goo.l, to firm up a re- , lationship 1·•hic4 will be acceptable for the. post-legalization: era i.rhich will 'provide us wit.ti a greater insight than we can now '. hope for on the basis of post-legalization negotiation. This, is an admitted gamble but one 'Which Mr, Critchfield is in a , position to judge, His fl-eedom to negotiate is essential 1n the fev months remaining to us. · However, Mr •. Critchfield should be strongly advised that any negotiation or step which.represents a retreat from our ' present.relationship prior to autonomy 'Will require head- quarters approval prior to implementation. ~.~ ... : i -- Attachments (9) SECRET/RELEASE TO GERMANY ONLV SEGFrET Sr.curily l11formntior1, 480