Chapter One

     The Venona Project began because Carter Clarke did not trust Joseph Stalin. Colonel Clarke was chief of the U.S. Army's Special Branch, part of the War Department's Military Intelligence Division, and in 1943 its officers heard vague rumors of secret German-Soviet peace negotiations. With the vivid example of the August 1939 Nazi-Soviet Pact in mind, Clarke feared that a separate peace between Moscow and Berlin would allow Nazi Germany to concentrate its formidable war machine against the United States and Great Britain. Clarke thought he had a way to find out whether such negotiations were under way.

     Clarke's Special Branch supervised the Signal Intelligence Service, the Army's elite group of code-breakers and the predecessor of the National Security Agency. In February 1943 Clarke ordered the service to establish a small program to examine ciphered Soviet diplomatic cablegrams. Since the beginning of World War II in 1939, the federal government had collected copies of international cables leaving and entering the United States. If the cipher used in the Soviet cables could be broken, Clarke believed, the private exchanges between Soviet diplomats in the United States and their superiors in Moscow would show whether Stalin was seriously pursuing a separate peace.

     The coded Soviet cables, however, proved to be far more difficult to read than Clarke had expected. American code-breakers discovered that the Soviet Union was using a complex two-part ciphering system involving a "one-time pad" code that in theory was unbreakable. The Venona code-breakers, however, combined acute intellectual analysis with painstaking examination of thousands of coded telegraphic cables to spot a Soviet procedural error that opened the cipher to attack. But by the time they had rendered the first messages into readable text in 1946, the war was over and Clarke's initial goal was moot. Nor did the messages show evidence of a Soviet quest for a separate peace. What they did demonstrate, however, stunned American officials. Messages thought to be between Soviet diplomats at the Soviet consulate in New York and the People's Commissariat of Foreign Affairs in Moscow turned out to be cables between professional intelligence field officers and Gen. Pavel Fitin, head of the foreign intelligence directorate of the KGB in Moscow. Espionage, not diplomacy, was the subject of these cables. One of the first cables rendered into coherent text was a 1944 message from KGB officers in New York showing that the Soviet Union had infiltrated America's most secret enterprise, the atomic bomb project.

     By 1948 the accumulating evidence from other decoded Venona cables showed that the Soviets had recruited spies in virtually every major American government agency of military or diplomatic importance. American authorities learned that since 1942 the United States had been the target of a Soviet espionage onslaught involving dozens of professional Soviet intelligence officers and hundreds of Americans, many of whom were members of the American Communist party (CPUSA). The deciphered cables of the Venona Project identify 349 citizens, immigrants, and permanent residents of the United States who had had a covert relationship with Soviet intelligence agencies (see appendix A). Further, American cryptanalysts in the Ve-