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

Secret REL Ger MEHORA llDUM F'OR 'IHE RE:qmo Meetipg of 23 Gept.ember 1<]5J Presents Donald Huerner Gordan St.swart Peter Sichel Subjects ZIPPER-UTILIT'X Relations 'i'be purp:>se Of the meeting of our next moves as regards ZlPHl1. that& to detenoine the na t\U"e It was decided· end cgreed WllS 1. \Jo do want. to negotiate. 2. Basic policy agreement should be raRde at HQ as to minimUlll and mexh\um posi tiona, Uow- ~ve~, the negotia tioo should not be beaed on - 1-i:rushing these details. 3. Jim Critchfield sllould continue inforinal dls- cussiona with Gehlen with the ajm of determin~ ing e:xactly vbe~e be stands. He is nut to f1.nallae any posi Uon. 4. At the point of transfer n.egotintion should be at the government level. 5. The concept of a Secret Bilateral Agreement between tlle two inte111gence services is still ok - will have to be re._-ealed to Gelilen ae ·the government representotive~,. 1Hr: fits. lbe present task for headqunrters ie to prepare an out- line of the egrees!lent vhioh will coyer ·the maximum desireo and minimum demands we shall make in any Bilateral Agreement. f'i~et priority is the question of intolligence production trom the fUturo GIS. 1hie must be negotiated with Zli'NR, Secondly, thore is the question of a continuation of our own OIA operu.tiona in · Oermuny and support thereof. This 1s to be negotiated on a .1 olnt . Govermnent-ZIPPER level. l"inaUy, there 1a the question ot u.s. controlled joint oi;erationa. \ J ,I REL Ger 481 Secret

---------~-- - - - Secret REL Ger (•I I"- .. '\' SECRET/RELEASE ,,,..,/, .•·.· .''· TO ~ERMANY ONLY - ·• 2 - i i ' . In the pre1'.tlrat1on of nn outline on such an agree;. 1 ment the statements on record from the ~st wiJl be included.· Particularly Gehlen 1 s rast position 19 to be considered. ; own . ' Until the changeover takes place we intend to retu.ih the opposite nUJnber system and the personnel will remain the ~ same with minor chonges. Our intent in preparing and propoai~g liaison 1.11th the GlS i.rill be to make this as pi.latsble to the! Germans e.s possible. Gordon Stevart stnt.ed that until the , changeover comes about ther-e should be an attempt to develop in the Germana a necessity for continued close liaison in certain fields. Dut in the long r.un we should ruake it clellr that ve intend to protect ZIPP~·secrets. Details of ZIPPF.n..PQJ! Relation.a The files at PullAch are dynamit.o. There should be an attempt 111ade now to withdrav them from f\lllo.ch so thut tJ1ere 1 won't be t.t mass exodus with ~B resultant publicity. A bnsjo point et iasue with ZIF'FER is Oehlen 's refuslll ·!;o •Accept our views on the control or operations. He, by oldli close liaison have persuaded t.he llQ st.arr. (After all, 1o1e 're Ion their aide.) Oordoa. Stewart proposed and it \1&8 agreed the.t 'n attempt should be Jiil.ide to convert Gehlen ~ by 11. special trip it necesuar;y. Although there we doubt th&t th~ vould aain anf~ thing, thia 1i1as agreed - to ihclude Mellenthin. l case. - .no enthueia8111 for roe ·~ Almost nny- ansver poor. However, Gordon Stewart sug- In the - prooch. gested that tbe possibility exists for J~eld a toot down on the operational sup110rt o f - - · SECRET/RELEASE TO GERMANY ONLY l · .. I 482 ' to ~t l - l i ! l