| ### PART II - FUNDAMENTALS AND FORMS IN ACTION: The Seventy-Fifth Passenger ### Chapter 1: Budapest, 1946 The reader who has come thus far probably feels that he has earned a story. It was my intention, in the account which now follows of an operation which I conducted in Soviet-occupied Hungary in 1946 and 1947, to provide him with a case history. But in setting down the case history, it turned into a story. A true story, but still a story. The difference between the two is mainly an emotional one. Despite the intervening years, I found myself, in writing this account, immersed again in the sights and sounds, in the sensations and impressions, in my own emotions of the time - outrage, anger, worry, fear, suspicion, curiosity, pride, sympathy, hope, frustration, satisfaction, brief triumphs, occasional humour and final sadness-all of which were as much a part of the reality of the operation as the events and actions themselves. As I said at the outset of this book, secret agents are not necessarily coldly unemotional, Thus, this story may be a more accurate case history than a case history would have been. Its accuracy depends in part, however, on the reader, on his willingness. to view this account critically in the light of the principles described in Part I. For one of the strongest emotions experienced by any secret agent, both at the time of action and in retrospect, is, of course, the very human desire for self-justification. It is not absent from this account. Nor is the reader spared the intrusions of my personal cast of mind. When, for example, in discussing courses of political action open to me at a critical point in 1942, 1 reject a particular course as "tantamount to buying an effort,'' on the basis of which, I state, "no long-term policy can be constructed," the reader will recognize that this viewpoint is at least historically debatable. With the drawbacks of these personal desires and intrusions in mind, l have appended at the end of this account a brief general critique of the operation. I still advise the reader, however, to follow the story without suspending his own critical judgment. MY EMOTIONAL INVOLVEMENT, MY SHOCK, ON THE NIGHT of November 4, 1956, as Soviet troops assaulted Budapest, had their roots in a fight I had waged in that same city, in the same cause, ten years before. That fight too had been lost to the Soviet steamroller, but we who lost had emerged not entirely without honour. I first saw Budapest in the summer of 1946. I came as a covert agent, member of an American intelligence organization - there then being no C.I.A. - which has since ceased to exist. I had been offered the mission because I spoke Russian and was primarily interested in eastern European affairs. And Budapest in 1946 was as much a Russian as a Hungarian problem. In the winter of 1944-5 three Russian armies had swept into the country from Yugoslavia, to the south, from Rumania, to the south-east, and over the Carpathian Mountains from Ruthenia, to the east. The Russians came, and were by and large awaited, as liberators. Nevertheless, the memory still lingered in Hungary of the last Russian invasion, ninety-seven years before, when, at the invitation of the Austrian Emperor, they had come to drown a revolt in blood, to maintain ideological purity, and to keep the virus of political liberty away from the borders of their empire - exactly as they were to do again only twelve years from this winter of 1944-5. Remembering 1848, remembering Bela Kun's Communist regime of 1919, the Hungarian Government in 1943 and 1944 had established contact with the Allies in neutral capitals in the hopes of bringing about an Anglo-American invasion which would forestall, first, a German occupation and, second, an exclusively Soviet occupation. A British Colonel, in hiding in Budapest, but in touch with both London and the Hungarian Government, had been secretly flown down to Allied Headquarters at Caserta. The Hungarian proposals were not acceptable to the Allies, who, in accordance with decisions taken at the Tehran Conference, told the Hungarians to approach the Russians. The military aspects of the proposals were in any case regarded as unfeasible, in view of the planned Normandy invasion. Knowledge of these manoeuvres had been but one item in the German decision to occupy Hungary in March, 1944. A further effort in October by Horthy to surrender to the Russians had led to the arrest and kidnapping of Horthy - another successful operation by Otto Skorzeny, the Nazis' secret operations expert - and the installation in Budapest of the Szalasi Nazi puppet regime. Less than a year after their seizure of the country, the Germans in Hungary were faced with the driving Russian armies, now broken out of the confinement of the mountains ringing the puszta - the Great Hungarian Plain. Here, 1,000 years before, the Magyar chieftain Arpad had decided to settle his people, to cease their nomadic wanderings and plundering forays which had terrorized Christian Europe. As the Russian armies followed in the paths of the earlier Huns and nomad Magyars, their front-line Central Asian troops, with their rape and rapine, struck a special terror into the civilian population. (There was an atavistic ring to all this: Hungarians, with 1,000 years behind them of Christian civilization in a beautiful and fruitful land, are sometimes wont to forget their own Asian origins.) The Russians quickly cleared southern and eastern Hungary of the Germans, but it became clear that Budapest could not be by-passed; all the rail lines in the country passed through the capital. The Russians encircled the city on Christmas Eve, 1944, and attacked from the direction of Vienna, striking first into Buda, the more residential half of the city, lying on the western right bank of the Danube, The siege lasted fifty-nine days before the last Germans, holding out in the Var - Castle Hill - ancient seat of the Hungarian kings and site of the Royal Palace and Coronation Church, and on St. Margit's Island, a wooded pleasure area slightly upstream, were finally slaughtered. Their communications secured, the Russians went on to the west, to take Vienna on April 13, 1945, and to confront the Americans, at war's end less than a month later, at Linz in Upper Austria. Austria, while permitted a government, was divided into four zones of occupation - with a fifth International Zone in the heart of Vienna - and the Soviet Zone was interposed between Hungary and the Western zones of Austria. Then the Hungarian drama, which the Hungarians hoped was ended, began. The Yalta Agreements had specified that Bulgaria, Rumania and Hungary, although at war with the Allied Powers, were to be treated as "liberated" countries. Accordingly, as soon as Debrecen, the major Hungarian city in the eastern part of the country, had been taken from the Germans, the Hungarians had been permitted to form a Provisional Government there. An Allied Control Commission had earlier been established, chaired by none other than Marshal Voroshilov, and with American and British representation in the form of Major-Generals. The Russian Kommandaturas throughout Hungary operated in the name of the Allied Control Commission, which was run entirely by the Russian Chairman. At Potsdam the United States had proffered a set of proposed regulations for the Control Commissions, which the Russians, in one of their time-honoured gambits, had accepted as a "basis for discussion." When some high-handed Soviet action in the name of the Control Commission provoked a British or American reference to the regulations, the Russian Chairman's reply was simply that they were merely a "basis for discussion," and that, in view of more urgent business, the Chair would not entertain any discussion on that subject. When Budapest was freed, this comedy, along with the Hungarian Provisional Government, moved to Budapest, in the spring of 1945. However, the Provisional Government was not a comedy, either from a political or an intelligence point of view. It was a coalition government, made up of the four political parties authorized by the Allied Control Commission: the Smallholders, the Social-Democrats, the National Peasants and the Communists. A fifth party, predominantly Catholic, had been authorized in principle, but, due to some dissension within the Church itself, did not succeed in organizing until late in 1947 - which was, as we shall see, too late. Another minor group, the Civic Democratic Party, was authorized, but was not part of the coalition. The Smallholders' Party was a pre-war opposition group which sought agricultural reform in favour of small land-holdings by the peasantry, but which also had some appeal among the small merchants and artisans of the cities and towns. It had a good resistance record, and was conceded to be the majority party. The Social-Democrats, tolerated by pre-war governments, were primarily a trade-union Socialist party; there was no Hungarian Socialist equivalent of the British Fabian Society, nor of the German theoretical Marxists. The National Peasants were more an idea than a party; the brain-child of a group of writers and intellectuals who sought to base Hungarian political life on the traditional values and preponderant numbers of the Hungarian peasantry, this was, in effect, the Hungarian version of the Fabian Society-romanticizing the tillers of the soil rather than the workers in the factories. The Communists-at least the Presidium of the Party-arrived in the baggage of the Red Army, removed their Soviet uniforms, and set to work. Some 500 Hungarian Communists returned with the Russians. They didn't have much to work with: various agents who had been parachuted in during the fighting, and between 1,000 and 1,500 underground Communists who had managed to survive police nets over the years. The parties which had held power in the country during the previous quarter-century were abolished as responsible, in greater or lesser degree, for Hungary's Axis role. By the time the curtain rose on the Hungarian drama, the same play, with the same producer, had already been on the boards for a brief time in Poland, Rumania and Bulgaria. The plot had unfolded sufficiently in those countries so that the only question was whether the producer, a talented but mono- and megalomaniac Georgian, was going to open with the same show in Budapest. The David Merrick of his day, he knew that it was bad box-office for the audience to leave in the middle of the first act. He was therefore reluctant to announce the name of the play - there were already faint stirrings among the critics - and it was plain that we would get nothing out of the producer's assistants - the Russians in Hungary. We therefore turned to the cast - the Hungarian Government - in the hopes that as the play progressed they might slip us the title. In brief, we had to learn about what the Russians were doing in Hungary from the Hungarians. This was one part of the intelligence significance of the Hungarian Government. The other part was the Government itself. If Stalin was putting on the same old show, it was the Hungarians about whom we would have to know in the future; the factions in the country, the trends of opinion, the personalities, who was prepared to oppose and who not, why, and what for, which people could work together and which not, the talents and motives of various leaders, actual and potential, who were Soviet collaborators and why, the resources and capacities of the country - the interminable and inexhaustible range of questions which go into assessing an entire nation. Further, the Hungarian Government's interest to us was not only as a source of intelligence. The United States' interest in Hungary was a part of our objective of a stable peace in Eastern Europe, so long - and still - a major temptation and battleground for the Great Powers. With this end in view, we would obviously seek to develop and maintain influence in the councils of the Hungarian Government. Also, if Russian intentions turned out to be of the worst - of which there was little doubt among experienced observers of the Russian performance - there would then arise the question of whether the American Government would oppose this development, and if so, how and to what extent. These were questions as yet undecided. But whichever way they would be decided it was clear we would want the Hungarians on our side. The most direct, though not sole, instrument to achieve this was their own Government. Thus, this hodge-podge Government, existing on sufferance of the occupiers, had a considerable political significance of its own in the international scene. In so far as the purely Hungarian elements in the immediate post-war scene were concerned, there was much on our side. To understate the case, the Russians were cordially disliked by the overwhelming majority of the population. All political leaders with any genuine following in the nation were oriented to the West; indeed, their major aspiration was to avoid being swallowed up in the Soviet Empire. While there was strong sentiment for political and economic reform, there was no class or group in the country interested as such in applying Communist solutions to their problems; the bitter taste of the short-lived Hungarian Communist regime of 1919 lingered. The American position was particularly strong: there were certain historical associations - Kossuth, among others; Hungarians of all classes were quick to recognize that the United States was now the leader of the Western world; and there were the innumerable ties resulting from the large Hungarian population in the United States. Ranged against this was the presence of the Red Army. Its effectiveness was doubled by the fear it inspired. Its menace was reinforced by the hard fact that, except for the Allied Sectors in Vienna, the nearest Western outposts lay almost 400 miles to the west of Budapest. To the north Czechoslovakia lay close, but the Czechoslovaks were hostile, and had strong claims against the Hungarian state. The Hungarian Communists, then, had little on their side, but what they had was implicitly effective - the Red Army had to intervene openly only once to assist the Communist take-over of the country - and decisive. Among their Hungarian opponents they had two allies: personal ambitions and dissension. In November, 1945, Hungary's first post-war elections were held. They were free and unrigged, the sole such instance in Soviet-occupied territory, and Soviet history. The results were striking: the Smallholders' Party - which had interestingly enough also won a majority immediately following the collapse of the Hungarian Soviet Republic in 1919 - received 57 per cent. of the votes. The Socialists won 18 per cent., the Communists 17 per cent., and the National Peasant Party 8 per cent. There has been much debate over the reasons for Soviet acquiescence in holding these elections. One theory is that they were misled by exaggeratedly optimistic claims of the Hungarian Communists. Another is that the decision was the result of factional quarrels among the Russian and Hungarian Communists - each Hungarian Communist leader had his own patron in the Soviet Politburo. Some students of the matter feel that the Russians desired to delude the Western powers as to their ultimate intentions while consolidating their hold on all of Eastern Europe. Matyas Rakosi, who directed the Communist seizure of power in Hungary and became dictator until his final fall from power in 1956, has stated, but without reference to the elections as such, only that the period from April, 1945, to the end of 1948 - distinguished for his famous "salami" tactics, or gradual takeover - was necessary to bring the majority of the workers and peasants to support the Communist Party, in accordance, so he claimed, with Lenin's teachings. Whatever the reason for these unusual elections, the Communist 17 per cent. was fully as striking as the Smallholders' absolute 57 pet cent. majority. The fact is that a party comprised of no more than 2,000 members at the outset had, seven months later, at the time of the elections, 700,000 members. A minority of this number was obtained from peasants who had benefited from the land reform, for which the Communist Party took credit, and from workers, particularly miners. The great majority was taken from the so-called "small Nazis" - that is, the rank and file of the Hungarian Nazi Party which, in 1944, had numbered 1 million members. These people were by definition subject to reprisals; their easy way out and their safety were gained by joining the Communist Party, which, by its control of the Political Police, could decide who would be prosecuted and who not. On the basis of these elections, a Government was formed which was quickly granted full recognition by all the major powers - with the exception of France, which chose to delay, ostensibly until the settlement of certain property questions, but in fact as part of characteristically de Gaullian manoeuvres to assert the voice of France. The leader of the Smallholders' Party, Zoltan Tildy, was elected President of Hungary - the second in its history, Count Mihaly Karolyi having held the post in his short-lived republic at the end of the First World War. The Prime Ministry devolved upon another Smallholder leader, Ferenc Nagy (no relation to the Communist Imre Nagy who was to become Prime Minister eight years later, and then again during the 1956 Revolution). The Government was a coalition of the four parties which had participated in the elections, notwithstanding the Smallholder absolute majority, since a majority Government would have excluded the Communists from power - a solution the Russians were not prepared to accept. Accordingly, Arpad Szakasits for the Socialists and Matyas Rakosi for the Communists were each made Deputy Prime Ministers. The various Ministries were then apportioned out on the same principle; of the key ministries the Smallholders received Foreign Affairs and Finance, the Socialists the Justice Ministry, and, on standard Communist insistence supported by the Russians, the Communists - in the person of Imre Nagy and later Laszlo Rajk received the Interior Ministry, meaning, in Hungary as in the rest of Europe, the police power. Within each ministry, in turn, each of the coalition parties had its own representatives (although in the case of the Communist ministries, this participation was purely nominal). In those days Hungary was so much a coalition that it was scarcely possible to summon a plumber or have lunch except on a coalition basis. The American Minister to Hungary at the time gave it as his opinion that not even France, with its traditional individuality and multi-party system, could compare for sheer complexity of partisan politics with postwar Hungary. This ferment was not solely a political phenomenon, but was a reflection of the whole Magyar temperament. While it is true that Hungarians are given to streaks of melancholy, and even that Budapest had one of the world's highest prewar suicide rates, it is also a fact that as a people the Magyars are vivacious and resilient. The theatre is probably their best art form; and the coffee-house - kavehaz - astir with gossip, intrigue and above all a flourishing and irreverent sense of humour, is the national institution. Their forthright, tolerant, highly appreciative and continuous, but withal balanced, regard for the joys of the relations between the sexes causes even the most repressed Anglo-Saxon or dour puritan characters to realize almost exuberantly that life is much richer than they feared. The Hungarians are susceptible to a streak of self-pity, but they are also capable of laughing at themselves, and they combine with this a simultaneous streak of rashness often emerging as bravery. They are cynical of slogans, but they are beguiled by living. The vitality of the Hungarians was nowhere more evident in the summer of 1946, when I arrived, than in the comparison between Vienna and Budapest. In Vienna, prostrate under four occupation armies, life just barely dragged along: there was no black market, the currency was stable, food was rationed and scarce, and people trudged through the streets, silent, grey, drab. In Budapest, which had suffered a degree of destruction comparable only to the major German cities, and which lay at the not so tender mercies of the Red Army, there was whipped cream for the numerous daily coffees - and milk for the babies; reconstruction went on energetically - immediately following the siege the people of Budapest had voluntarily restored the famous and favourite Coronation Church on the Var, in Buda; the theatre flourished wherever a stage could be found, and the night-clubs were legendary in Europe for the period - one of the best being ultimately purchased with the profits of their loot by a consortium of nine Soviet officers; the currency entered upon the fastest and farthest inflation ever seen-rising in eighteen months from some 50 pengoes to the dollar to a final quotation of 11,000,000,000,000,000,000,000,000,000 (27 zeros) to the dollar; and stimulating it all was one of Europe's liveliest black markets, in which, of course, theft and hijacking played no small part. The flavour of the Hungarian black market was well illustrated at the time by a statistic and a joke: statistically it was a fact that the number of automobiles in Hungary - without an automobile industry - increased tremendously in the first year after the war, while Austria, with several plants, experienced a sharp decline, to the point where the American Army in Austria would send a mission to Hungary from time to time to look for their missing cars. This was also the period when the coffee-house wags, seeing a friend in a new suit, would remark that he was "a Hungarian by day and a Russian by night." (These stories do not, however, do justice to the full range and flavour of the Hungarian genius: the story is often recounted of the meeting in Washington in the early 'fifties of the Scientific Advisory Board of the U.S. Atomic Energy Commission. When a count of the members showed a minority absent, but still a quorum, another count enabled the Chairman to say to his colleagues, in his faultless and native Hungarian, "Shall we conduct the meeting in the mother tongue?" Agreed and done.) Notwithstanding all this variety and activity, the problem of my cover posed some special difficulties. The Russians controlled all entry into and exit from Hungary, and were most strict on this score. Entry was permitted only for members of official missions, and even they often had to wait a considerable period; for some correspondents, with similar delay; and for a very few business-men who had to be representatives of already existing American properties in Hungary. As the American companies with interests in Hungary - principally the manufacture of electrical equipment and the oil industry - needed whatever entry permits were available for their own people, and since it was a matter of policy to avoid jeopardizing either the American investments in eastern Europe or the access of bona-fide correspondents to Soviet-controlled territory, there was no possibility of a private cover which would give me residence privileges. It was therefore decided that official cover was the only possibility. This gave a choice of either the U.S. Legation in Budapest or the U.S. Military Mission, which was the American Representation on the Allied Control Commission for Hungary. As my functions involved some risk, it was, as is customary, decided to avoid any possibility of embarrassment for the Legation, our permanent diplomatic mission, and to attach me to the Military Mission. The Military Mission was, of course, a temporary institution. It was not known how long such a mission would be maintained, for it was American policy to seek the departure of foreign troops from all occupied European countries except Germany at the earliest possible moment - which meant in practice, of course, U.S., British and French departure from Italy, U.S., British, French and Soviet departure from Austria, Soviet departure from Hungary, Rumania and Bulgaria, and a limitation of the Red Army in Poland to supply and communications lines to Germany. (This was the effort and hope at the time, due to be blocked by the Soviet refusal to sign a State treaty with Austria for many years, thereby giving them the pretext for continued stationing of troops - as supply lines to Austria - in Hungary and Rumania.) In support of this aim, the Paris Peace Conference had already been convoked for the autumn of 1946, and it was thus hoped to be only a matter of time before the U.S. Military Mission in Hungary, as with those in Rumania and Bulgaria, would be withdrawn. With this time-limit in mind, and with the enormous bureaucratic obstacles to transforming me into an Army officer at a time when our Army was to a large extent being disbanded, I was designated as an adviser to the Military Mission, acting as a civilian. This cover not only gave me greater flexibility than if I had been in uniform, but it offered the possibility that, if circumstances turned out propitiously, I might, with the ultimate departure of the Military Mission, be readily able to transfer to some form of private cover. Alternatively, one of my tasks was to explore the ground and arrange or recommend a suitable cover for a successor if it should prove impossible for me to stay. To explain to the Russians the somewhat unusual presence of a civilian adviser on the staff of the Military Mission, advantage was taken of the functions of the Allied Control Commission itself. There was at the time, in the U.S. Government, an operation known as "Safehaven," the purpose of which was to uncover hidden Nazi personnel and assets in areas outside of Germany. At the same time, one of the principal agreed functions of the Allied Control Commissions was to eliminate the last vestiges of Nazism in the countries where they operated. It was therefore explained to the Soviets that the tracing of refugee Nazi personnel and assets outside of Germany was a civilian function under our arrangements, and that, in effect, I would be at their disposition for whatever co-operative activity in this field they might find useful. It was thus hoped. not only to explain my civilian status, but to give me a special access to the Russians themselves, from which something of value might emerge. This manner of presenting things also served to provide a valid explanation for my command of the Russian language. Communications were somewhat easier. I was instructed to enter into friendly personal relations with "Mark," a high official of the American Legation, who would, without knowledge of their contents, handle my communications. (The code names used throughout this account are obviously not those really used in the operation. Furthermore, none of the personnel of the network knew the code name by which I referred to them in my communications, although they had, whenever necessary, different code names for operational use among ourselves.) I would give Mark a sealed envelope addressed with only a code word for my organization, inside of which was another envelope with a code name for my case officer in Washington. He would forward all this by regular diplomatic courier in another envelope addressed to a cover office in Washington. Incoming mail arrived addressed in an outer envelope to him, which was the only one he opened; he then gave to me an inner envelope with the code word for the organization, which contained a final envelope addressed with only my code name. Telegraphic communications I simply gave to him already encoded in my own cipher. It was then encoded again in the Legation and transmitted to Washington. Messages for me came to the Legation, were decoded-and since the Legation's decoded version ended up still encoded, but now in my cipher - then given to Mark, who would pass the message to me. My instructions were specific and strict: I was forbidden to disclose to Mark any details of the network I was operating, nor could I reveal to him in any way actual operations in which I was engaged. I was to take political guidance from him as to U.S. Government policy; and, while I was not to withhold information from him of direct value to the Legation, I was to limit it in so far as possible to matters of urgency or of physical safety of the Legation itself, and then without revealing the sources. This was sound practice: the procedure may seem roundabout, but in fact all the information which I obtained, and which was considered to be essential to the Legation's functions, was in due course transmitted to the Legation in general or special Government reports and intelligence analyses. What was omitted, and thus protected, was the source. Thus the network and the agent were protected, the organization was shielded, the information which the network obtained was subject to the necessary control of who should benefit from it, and the U.S. diplomatic establishment was not unduly compromised. For full efficacy, such arrangements always depend upon the human relationships involved: in this case, the key relationship was that between Mark and myself. To everyone's good fortune, it turned out to be very nearly ideal; a genuine meeting of the minds, as the lawyers say, and a due respect for the value of each other's functions, led to a most effective working relationship. In addition to these regular arrangements, I was also given a connection with another agent residing in Switzerland. Facilities were established whereby I could contact him directly in case of emergency; in such cases I was entitled to take his word, if he gave it, as equivalent to full authority from headquarters. This agent, known as "Peter," travelled widely and often throughout all of Europe. I was therefore authorized to discuss with him the details of my work whenever a meeting rendered that possible. As important, it was also his function to provide me with funds. In the Hungary of the period, this meant transfer by hand to me of cash sums, either in Swiss francs - preferred - or American dollars. This money I then cashed, either myself or through cutouts, on the Hungarian black-market, which continued to flourish well after the replacement in August 1946 of the pengo by the new, stabilized forint, or, if my recipients so preferred, I simply disbursed to them in the original currency. (In view of the nation's acute shortage of foreign exchange, both non-Communist and later Communist governments were happy to blink at illegal transactions which continued for long to bring in hard currencies. Thus my transactions aroused no suspicion. Even after the blackmarket was later severely reduced in scope, remittances via banks and such organizations as C.A.R.E. from exiles and emigrants to their relatives, no matter what the source, were - and are to this day - encouraged by all the Soviet satellite regimes as a valuable source of foreign exchange.) Peter, in Switzerland, was the only other agent in Europe - outside of my own network in Hungary, of course - with whom I was in touch. While I could reasonably assume that there were other networks operating in the various countries neighbouring on Hungary, I obviously never inquired about them - until an emergency did one day arise. With cover, communications and funds arranged, my headquarters had done all it could do. The rest could only be worked out on the spot in response to what were bound to be rapidly changing circumstances. What I didn't know, as I arrived in Budapest in late June, 1946, and remarked, in the hot and lazy summer sunshine, the contrast between the pretty and chic Hungarian girls and the sullen and soiled Russian soldiery, was how fast and how far all would change.