In late August 1947, Richard M. Nixon, a freshman congressman from Southern California, arrived in New York City to board the luxurious Queen Mary for a fact-finding tour of war-ravaged Europe that he would later call “one of the greatest thrills of my life.” Nixon’s parents came to see off their ambitious son, and before the ocean liner embarked, the family took in a performance of the long-running Broadway musical Oklahoma! The young congressman was part of a nineteen-member delegation chaired by Representative Christian Herter, a patrician Republican from Massachusetts tasked with investigating the devastation of the war. President Truman hoped the bipartisan delegation’s well-publicized trip would help him win congressional approval for the Marshall Plan, his ambitious, multibillion-dollar aid package to reconstruct Europe. Truman’s sweeping proposal was generating stiff opposition from GOP conservatives, who saw it as another example of Democratic extravagance.
Back home in Whittier, California, one of the conservative businessmen who had helped pave Dick Nixon’s successful entry into politics the previous year warned the young congressman not to be taken in by the slick State Department types during the European junket. The country could only rid itself of “the hangover philosophies of the New Deal” if Republican congressmen like Nixon were “wise enough to refuse to be drawn into support of a dangerously unworkable and profoundly inflationary foreign policy.”
Herter, a Boston Brahmin who was married to a Standard Oil heiress, was part of the bipartisan, internationalist political elite who rejected this type of thinking as narrow-minded and isolationist. Herter’s circle saw the Marshall Plan not only as an essential antidote to the growing appeal of Communism in poverty-stricken Western Europe, but as a financial boon for America’s export industries and international banks, which would profit enormously from the revival of European markets. Herter asked one of his oldest friends to accompany the delegation—Allen Dulles, a man who shared his views and was well known for his powers of persuasion. (Dulles had another motive for backing the Marshall Plan: he and Frank Wisner would later use funds skimmed from the program to finance their anti-Soviet operations in Europe.) As young diplomats in Bern during World War I, Dulles and Herter had shared the joys of bachelor life. Now, the Herter Committee’s round-trip, transatlantic journey and lengthy tour of Europe—a political expedition that would stretch for longer than two months—would give Dulles and Herter ample opportunity to win over conservative skeptics like young Dick Nixon.
The opulent accommodations on board the Queen Mary were a far cry from the drab veterans’ halls and school auditoriums where Nixon had been spending his days just a few months earlier on the campaign trail. On the eve of his trip, Nixon had earnestly declared, “This will be no junket. It will be no cross-Atlantic cocktail party.” But in between delegation meetings, the luxury liner offered a wealth of diversions, from its grand, three-story-high dining salon, to its elegant, tiled swimming pool, to its Art Deco–style observation bar with dazzling ocean views. The storied cruise ship had hosted the likes of Clark Gable, Greta Garbo, Fred Astaire, Winston Churchill, and General Eisenhower. It was all heady stuff for the thirty-four-year-old Nixon, whose Quaker family’s grocery store and gas station had always wobbled on the brink of bankruptcy.
Throughout his career, Nixon’s all-consuming ambition was fueled by resentment and envy, by the sense that he would always be excluded from the top decks where men like Allen Dulles and Christian Herter belonged. When Nixon was finishing law school at Duke University in 1937, he spent a frigid Christmas week in New York searching for a starting position with a prestigious Wall Street firm. He managed to get on the appointments calendar at Sullivan and Cromwell, the firm of his dreams. As he waited in the lobby, he marveled at the “thick, luxurious carpets and the fine oak paneling,” a picture of corporate power and comfort that stayed with him for many years. But he did not meet the Dulles brothers during his job interview, and Sullivan and Cromwell—which, like all the top New York firms of the day, drew their young talent almost exclusively from the Ivy League—showed no interest in this product of Whittier College and Duke Law. Nixon, who could only afford a room in the Sloane House YMCA on West Thirty-Fourth Street during his weeklong job hunt, felt a bitter sense of rejection by the time he returned to school. “He was not charmed by New York,” remembered a Duke classmate of Nixon’s. He felt the city had kicked him in the teeth.
Yet here he was, ten years later, being wined and dined on the Queen Mary in the same privileged company as Allen Dulles. The spymaster and Herter took the young congressman under their wing during the ocean crossing. They schooled him about the importance of foreign aid as a facilitator of U.S. economic and political interests. By the time the delegation returned to the United States in early October, Nixon was fully on board as a supporter of the Marshall Plan. The congressman’s new enthusiasm for Truman’s ambitious proposal did not go down well with his conservative supporters back home. But Nixon was shrewd enough to figure out that senior members of the GOP’s East Coast elite like Dulles and Herter could be of more benefit to him than the Southern California citrus growers and businessmen who had launched his career.
The political relationship forged between the rising politician from California and Dulles’s East Coast circle would become one of the most significant partnerships of the postwar era. Nixon grew into a potent political weapon for the Dulles group, a cunning operator who managed to accrue solidly conservative credentials with the Republican Party’s popular base while dependably serving the interests of the GOP’s privileged leadership class. Together, the Dulles circle and Richard Nixon would bring about a sharp, rightward shift in the nation’s politics, driving out the surviving elements of the New Deal regime in Washington and establishing a new ruling order that was much more in tune with the Dulles circle’s financial interests. The Dulles-Nixon alliance proved masterful at exploiting the Cold War panic that gripped the nation, using it to root out Rooseveltian true believers from government, along with a few genuine Communist infiltrators who posed a marginal threat to national security. When Washington’s anti-Communist witch hunt raged out of control and threatened to consume even those who had lit the flame, Nixon again proved of great use to Dulles, working with him to keep the inferno within safe boundaries. In return for his services, Nixon won the patronage of the kingmakers in the Dulles circle, ensuring the politician’s steady rise toward Washington’s top throne.
Years later, after Nixon’s climb to power was stalled by his loss to John F. Kennedy in the 1960 presidential election, Dulles sent Nixon a warm letter, reminiscing about their relationship and noting that “we have worked together since the days of the mission on the Marshall Plan.” The Dulles-Nixon alliance actually preceded their voyage on the Queen Mary, but the spymaster was understandably loath to officially record its true origins. According to John Loftus, the former Justice Department Nazi hunter, the two men first came in contact in late 1945, when young naval officer Richard Nixon was shuttling up and down the East Coast, wrapping up war-related business for the Navy. While sifting through the military paperwork, Nixon came across eye-opening Nazi documents that had been shipped to an old torpedo factory on the Virginia side of the Potomac. Some of these documents revealed how the Dulles brothers had helped launder Nazi funds during the war. Loftus, citing confidential intelligence sources, alleged that Dulles and Nixon proceeded to cut a deal. “Allen Dulles,” reported Loftus, “told him to keep quiet about what he had seen and, in return, [Dulles] arranged to finance the young man’s first congressional campaign against Jerry Voorhis.”
Dulles and his clients in the banking and oil industries had ample reason to target Voorhis, a five-term Democratic congressman and ardent New Dealer from Nixon’s home district in Southern California. The crusading congressman was a particularly troublesome thorn in the sides of Wall Street and Big Oil. Voorhis shook the banking industry by pushing for the federal government to take over the nation’s privately owned, regional Federal Reserve Banks—a radical proposal that briefly won President Roosevelt’s support, but ultimately failed to overcome the banking lobby. Voorhis was more successful in his efforts to curb the power of the major oil companies. In 1943, after learning that the Navy was about to grant Standard Oil exclusive drilling rights in the sprawling Elk Hills naval reserve in central California, Voorhis exposed the sweetheart deal and succeeded in blocking it. The congressman earned yet more of the oil industry’s wrath by taking aim at one of the industry’s most cherished tax breaks, the oil depletion allowance, and by stopping offshore drilling plans along the California coast.
Voorhis also posed a direct legal threat to the Dulles brothers through his efforts to shine a light on the wartime collusion between Sullivan and Cromwell clients like Standard Oil and DuPont chemical company and Nazi cartels such as IG Farben. Voorhis further unnerved the Dulles circle by demanding a congressional investigation of the controversial Bank for International Settlements, charging that bank president Thomas McKittrick, a close associate of the Dulles brothers, was a Nazi collaborator.
Corporate America viewed Washington politicians like Voorhis as the personification of their New Deal nightmare. In his midforties, Voorhis had the granite-jawed good looks of a movie star. He also combined the same upper-class breeding and populist instincts that made Roosevelt such a formidable threat. The son of an automobile executive, Voorhis was educated at the Hotchkiss School and Yale. But as a young man, he rejected his privileged background, marrying a social worker, going to work on a Ford assembly line, and becoming a Socialist. He changed his registration to the Democratic Party in 1934 when he entered California politics, but his congressional voting record demonstrated he was a stalwart of the party’s left wing.
In 1944, Voorhis published a book titled Beyond Victory, making clear that, as a leader of the progressive caucus in Congress, he was determined to keep pushing for ambitious reforms in postwar America. Voorhis sent alarms through the ranks of his corporate foes by calling for the nationalization of the transportation, energy, and utility industries as well as sweeping banking reforms. He wanted to create a national credit union to compete with private banks and to expand the Social Security system as a way to establish a nationwide minimum income.
Voorhis’s business opponents began searching for a strong candidate to unseat their nemesis long before the 1946 congressional race. While still in uniform, Nixon was recruited to run against the popular progressive by Herman Perry, a family friend who managed the Bank of America’s Whittier branch. Nixon later insisted that no powerful interests were behind his political debut, just “typical representatives of the Southern California middle class: an auto dealer, a bank manager, a printing salesman, a furniture dealer.” But Voorhis knew the truth. He later wrote in an unpublished memoir that he had been targeted by powerful East Coast bankers and oilmen, who saw him as “one of the most dangerous men in Washington.” In the fall of 1945, according to Voorhis, one major New York banker flew to Southern California, where he sat down with local bankers and “bawled them out” for allowing such a progressive firebrand to represent their district.
Nixon knew that it would take a large campaign war chest to defeat the five-term Voorhis—and he also made clear that he was not interested in running for office if it meant taking a pay cut. Republican business circles in New York and Los Angeles quickly rallied to make the campaign against Voorhis worth the effort of their candidate. An executive for Gladding, McBean, a major ceramics manufacturer whose chairman sat on Standard Oil’s board, later recalled how the corporate message on behalf of Nixon was delivered. At a meeting of seventy-five executives held at an exclusive Ojai, California, resort, the president of Gladding, McBean touted the “young man fresh out of the Navy” who had been lined up for the congressional race. “Smart as all get out. Just what we need to get rid of Jerry Voorhis. . . . He says he can’t live on a congressman’s salary. Needs a lot more than that to match what he knows he could make in private law practice. The boys need cash to make up the difference. We’re going to help.”
Gladding, McBean became a key generator of cash for Nixon, shaking down its own executives for campaign contributions and spreading the word to other corporate donors. The company president demanded that his fellow executives deliver the money in cash to his office. “We just gotta get rid of that pinko Voorhis,” he exhorted his team. The strong-arm appeal worked. Gladding, McBean alone raised at least $5,000 from its executive ranks, the equivalent of over $65,000 today. Together, Nixon’s corporate backers amassed a campaign “pot big enough to engulf the world,” as the Gladding, McBean financial officer later put it.
Gladding, McBean had a modest enough corporate profile to escape the scrutiny of election officials, but its board of directors boasted a variety of high-profile connections in the political and financial worlds. One director, Los Angeles corporate attorney Herman Phleger, had worked with Allen Dulles in postwar Germany and would later serve his brother as the State Department’s legal adviser. The Nixon-Voorhis contest took place on the opposite side of the country from the East Coast power centers—in a remote suburban California district where orange groves still dominated the landscape—but its outcome would help shape national politics for years to come.
As the congressional race heated up in summer 1946, it became clear to Nixon’s wealthy supporters that they had backed the right man to unseat Voorhis. The Republican challenger ran a ruthless campaign, cutting up the incumbent as an ineffectual left-wing dreamer, a Communist Party sympathizer, and a tool of Red-dominated labor unions—none of which was true. In fact, Voorhis had long battled against Communist Party encroachment in liberal organizations and had even spearheaded a 1940 bill requiring the registration of political groups that were affiliated with foreign powers—a law aimed as much at the Moscow-dominated CPUSA as it was against the pro-Hitler German-American Bund. But in Nixon’s skilled hands, Voorhis’s support for New Deal programs like school lunches became evidence of his obedience to the Communist Party line. In the final stretch of the campaign, Nixon released one last cloud of poison. Voters throughout the district began receiving anonymous phone calls, which turned out to emanate from Nixon campaign boiler rooms. “This is a friend of yours, but I can’t tell you who I am,” went a typical call. “Did you know that Jerry Voorhis is a Communist?”
The uniformly conservative Southern California press, including the mighty Los Angeles Times, echoed Nixon’s baseless charges against Voorhis and enthusiastically endorsed the Republican candidate. On Election Day, Nixon rolled to an impressive victory, winning 56 percent of the vote. Voorhis was so dismayed by the experience that he abandoned the political arena for the rest of his life.
An outraged Voorhis aide later confronted Nixon. “Of course I knew Jerry Voorhis wasn’t a Communist,” Nixon told the man. “I had to win,” he went on, as if enlightening a political innocent. “That’s the thing you don’t understand. The important thing is to win. You’re just being naïve.”
As promised, Nixon was well compensated for his efforts. When he and his family embarked for Washington, they took with them $10,000 (about $130,000 in today’s dollars), a new Ford, and a generous life insurance policy. Nixon also arrived in the nation’s capital with a game plan for Republican success that would embolden the likes of Senator Joseph McCarthy and change American history. Nixon’s bare-knuckled race against the idealistic Voorhis was the political overture of a new era—a “scoundrel time” of patriotic bullying and rampant fear.
On August 11, 1948, a warm, sticky evening in New York, Rep. Dick Nixon walked into the lobby of the Roosevelt Hotel—the grand, midtown palace named after Teddy, not FDR—and took the elevator up to the fifteenth floor where Governor Tom Dewey, the Republican candidate for president, kept a suite. The freshman congressman was, once again, about to demonstrate his value to the Dulles brothers.
Nixon carried in his briefcase the congressional testimony of two men—Alger Hiss and Whittaker Chambers—whose epic duel would become one of the defining public spectacles of the Cold War. Chambers—a senior writer and editor at Time in Henry Luce’s right-leaning publishing empire—had ignited a firestorm by alleging that he had worked as a courier for a Soviet spy ring in Washington during the 1930s, a ring that included Alger Hiss. The resounding denial by Hiss, a former high-ranking official in Roosevelt’s State Department, was so persuasively delivered that the notorious House Un-American Activities Committee on which Nixon served seemed on the verge of terminating its investigation amid a chorus of catcalls from the press.
When the committee later reconvened in executive session after Hiss’s “virtuoso” performance, Nixon recalled, his fellow congressmen were “in a virtual state of shock.” Furious committee members turned on the staff, berating them for not thoroughly vetting Chambers before putting him on the stand. “We’ve been had! We’re ruined,” moaned one Republican. But Nixon stood firm. If HUAC shut down its probe of alleged Communists in federal government, he argued, “far from rescuing the committee’s reputation, it would probably destroy it for good. It would be a public confession that we were incompetent and even reckless in our procedures.” His impassioned plea succeeded in steadying the committee’s nerves, and they agreed to carry on. But Nixon knew that before HUAC resumed its public hearings, he needed to get outside help if the committee was to prevail in the arena of popular opinion.
The Hiss case, Nixon later wrote in his soul-baring memoir Six Crises, was one of the defining crucibles in his career. Nixon was often wracked by self-doubt, and this was one of those contests that brought out his deepest anxieties. Nixon’s antagonist boasted all the credentials that had eluded him in life. Hiss had been one of the most brilliant law students in his class at Harvard. After graduating, he was picked to serve as a law clerk to octogenarian Supreme Court justice Oliver Wendell Holmes, a living legend of American jurisprudence. Hiss quickly became one of the rising stars in the Roosevelt administration, capping his Washington career by accompanying FDR to his final summit at Yalta and playing a key role in the formation of the United Nations.
When he appeared before the House Un-American Activities Committee, Hiss made a striking impression—thin, handsome, smartly dressed, and self-assured. Even Nixon had to admit that his performance was a striking contrast to his accuser’s “lackluster” appearance before the committee. Chambers was “short and pudgy,” observed Nixon. “His clothes were unpressed. His shirt collar was curled up over his jacket. He spoke in a rather bored monotone.” Hiss insisted that he had never met anyone named Whittaker Chambers—and he and the rumpled Chambers seemed to come from such different worlds that it was easy to believe him. But it was Chambers whom Nixon found convincing: he simply knew too many details about Hiss’s personal life. And there was something about this sad sack—a troubled but intelligent man who seemed to exude a strange mix of admiration, envy, and resentment toward Hiss—that strongly resonated with Nixon.
Nixon quickly emerged as Hiss’s most dangerous inquisitor, but Hiss held his ground under the young congressman’s relentless questioning, slyly taking aim at the most vulnerable part of his psyche. “I am a graduate of Harvard Law School,” Hiss coolly informed the committee. He let that sink in, and then fixed Nixon with a level gaze. “And I believe yours is Whittier?” It was an expertly aimed harpoon, certain to deeply wound the man who was so obviously afflicted by what sociologists would later term “the hidden injuries of class.”
“It absolutely ripped Nixon apart,” recalled Robert Stripling, HUAC’s chief investigator. “I realized from that moment on that he could not stand Hiss.”
Nixon knew that he was facing a formidable opponent. Hiss clearly had the Washington press on his side, as well as the White House. While the committee was interrogating him, President Truman told a press conference that the HUAC spy scare was nothing more than a “red herring” to divert Washington from more important business. Hiss’s testimony was full of references to leading political personalities with whom he was on a familiar basis. And they weren’t all Democrats. The biggest name he dropped—John Foster Dulles—produced a mighty echo in the cavernous caucus room of the Old House Office Building. Hiss reminded the committee that it was the Republican wise man who had offered him his current position as president of the prestigious Carnegie Endowment for International Peace, where Foster Dulles served as chairman of the board.
Nixon was well aware that Hiss, who accepted Foster Dulles’s offer and took over the Carnegie Endowment in January 1947, belonged to a Washington aristocracy that transcended party lines. By accusing Alger Hiss of being a traitor to his country, Nixon was not only threatening the career of a well-connected and widely respected public citizen, he was jeopardizing the reputations of Hiss’s prominent patrons—powerful men like the Dulles brothers, whom Nixon was counting on to advance his own career.
When he phoned Foster Dulles at his Wall Street office on the morning of August 11—the same office where he had been snubbed as a young law student—Nixon understood that it was another make-or-break moment for him. Foster agreed to meet that evening at Dewey’s hotel suite to discuss the Hiss-Chambers case. The Wall Street attorney appreciated the delicacy of the situation. As Dewey’s top foreign affairs adviser, Foster was poised to become the next secretary of state. The last thing he needed was a Washington tempest that tied him to a Soviet spy.
For Nixon, the anxiety hovering around the meeting was heightened by the fact that he harbored his own doubts about the case against Hiss. But men of action learn to conquer these disquieting voices inside, Nixon reminded himself. “One of the most trying experiences an individual can go through is the period of doubt, of soul-searching, to determine whether to fight the battle or fly from it,” Nixon wrote in Six Crises. “It is in such a period that almost unbearable tensions build up, tensions that can be relieved only by taking action, one way or the other. And significantly, it is this period of crisis conduct that separates the leaders from the followers.” A leader acted decisively. The failures are “those who are so overcome by doubts that they either crack under the strain or flee.”
Published in 1962, Six Crises was Nixon’s strangely belated answer to Profiles in Courage—the 1957, Pulitzer Prize–winning book by the charismatic man who had just beat him for president. Nixon intended his book to be a leadership manual, but it only highlighted his neuroses. Many observers thought Nixon’s desperate self-puffery bordered on hysteria. Writing in his journal after the book’s publication, Arthur Schlesinger Jr. called it “an orgy in unconscious self-revelation.” President Kennedy told Schlesinger it showed that Nixon was a “sick” man.
But, as usual, Nixon’s opponents underestimated him. Nixon may have suffered from a tortured psyche, but it made him acutely sensitive to the nuances of power. He had a Machiavellian brilliance for reading the chessboard and calculating the next series of moves to his advantage.
When Nixon walked into Suite 1527 at the Roosevelt Hotel that summer night in 1948, he faced a formidable array of power. With Foster were his brother Allen, Christian Herter, and Wall Street banker C. Douglas Dillon, who would later serve President Eisenhower in the State Department and presidents Kennedy and Johnson as Treasury secretary. These men made up a significant section of the Republican Party’s ruling clique. If Nixon failed to convince them that he had a solid case against Hiss, HUAC would have to close its noisy show, and his political career would be wrecked just as it was gaining traction.
Foster felt that Nixon approached the group with the proper sense of humility, and no doubt trepidation. “It was clear he did not want to proceed [with the Hiss investigation] until people like myself had agreed that he really had a case to justify going ahead,” Foster later remarked. Nixon knew that he was facing a skeptical audience. Herter, a mentor ever since their Marshall Plan junket, had already told Nixon he didn’t think he had a case. Herter had checked with his friends at the State Department, who assured him Hiss was not a Communist.
But Nixon was also aware that he came into the room with his own unique leverage. As the leading inquisitor in the Hiss case—an affair whose tendrils laced their way as far as John Foster Dulles himself—Nixon had the power to upend the Republican presidential campaign.
Nixon sat quietly in the suite while the Dulles brothers carefully read through the Hiss and Chambers transcripts. When they were done, Foster got to his feet and began pacing the room with his hands clasped behind him. The brothers realized that Nixon was right—and they had a problem. “There’s no question about it,” Foster frowned. “It’s almost impossible to believe, but Chambers knows Hiss.”
The Republican wise men took Nixon into their confidence, and once again the ambitious young politician came to a mutually convenient arrangement with the Dulles circle. It was another significant step for Nixon through the portals of power. With the Republican brain trust’s full support, Nixon would continue his aggressive pursuit of Hiss while keeping the spotlight carefully away from Foster and other GOP luminaries who were tied to the accused man. Meanwhile, Foster moved quickly to distance himself from Hiss, pressuring him behind the scenes to resign his Carnegie Endowment post, while Allen fed incriminating intelligence to Nixon to bolster his case. Some of this confidential information about Hiss likely came from the Venona project, the Army intelligence program that had been set up in 1943 to decrypt messages sent by Soviet spy agencies. The Venona project was so top secret that it was kept hidden from President Truman, but the deeply wired Dulles might have enjoyed access to it.
Nixon was impressed by the Dulles brothers’ bold decision to politically exploit the Hiss affair rather than run from it. The HUAC investigation could have been “acutely embarrassing” to Foster, Nixon later noted. The Dulleses “could have suggested that I delay the proceedings until after the election.” But instead, with Nixon’s help, they turned the Hiss case to their advantage, with Dewey fulminating against the laxity of the Roosevelt and Truman administrations that had allowed Communists to penetrate the government. The meeting at the Roosevelt Hotel proved a turning point. For the next decade, Republicans would use Cold War hysteria not just to indict Communist Party members and sympathizers as traitors but to brand the entire New Deal legacy as un-American. Even former high-ranking New Dealers with impeccable credentials like Alger Hiss would be fair game in Washington’s new inquisitorial climate.
The age of paranoia brought out Nixon’s brilliance as a political performer. He had a deep, demagogic instinct for playing on the public’s darkest fears. Robert Stripling, his right-hand man on HUAC, came to believe that there was no genuine ideological passion in Nixon’s pursuit of the “traitor” Hiss, just the same cold-blooded calculation he had brought to his campaign against Jerry Voorhis. “He was no more concerned about whether Hiss was [a Communist] than a billy goat,” the HUAC investigator later remarked.
This was not an entirely fair assessment of Nixon. The young politician clearly had developed deeply felt convictions about the brutality of the Communist system. When his Marshall Plan tour took him to Greece, Nixon was horrified to meet a young woman whose left breast had been hacked off by Communist guerrillas. He returned from the trip with a firm belief in the implacability of Communist regimes, and the conviction that they only understood force—a view that he would modify when he became president and engaged both the Soviet Union and China in strenuous diplomacy.
But at home, Nixon’s anti-Communism reeked of political cynicism, earning him the nickname “Tricky Dick.” He smeared his opponents with reckless abandon, labeling them as Reds or “dupes” or, in the case of his 1950 senatorial opponent, Helen Gahagan Douglas, a woman who was “pink down to her underwear.” Nixon never proved that Hiss was a card-carrying Communist or a Soviet agent, but, with typical hyperbole, he treated him like he was a mortal threat to the American way of life.
The highlight of Nixon’s obsessive, Javert-like pursuit of Hiss came when Chambers dramatically led HUAC investigators to a pumpkin patch on his Maryland farm, where he produced a hollowed-out pumpkin containing sixty-five pages of retyped State Department documents, four pages of copied government documents in Hiss’s handwriting, and five rolls of classified film—all of which, Chambers claimed, had been slipped to him by Hiss in 1938. Nixon staged a dramatic return to Washington from a Caribbean vacation cruise, with the help of a Coast Guard rescue plane, in order to publicize the so-called pumpkin papers. The documents, which seemed to prove that Hiss did have an espionage connection to Chambers, sealed the diplomat’s fate. He was indicted in December 1948 by a federal grand jury for lying to Congress.
Hiss continued to vigorously deny his guilt, insisting that the pumpkin papers had been forged by Chambers. Neither he nor his wife, Priscilla, could have retyped the State Department documents, said Hiss, because they had given away the Woodstock model typewriter that they allegedly used to copy the classified memos before 1938. Four jury members at his first deadlocked trial believed Hiss, agreeing that someone other than Hiss or his wife had retyped the State Department documents. Hiss’s suspicion that he was framed was given further credence years later by John Dean, the former White House attorney who became a key witness in the Watergate scandal that ended the Nixon presidency. Writing in his memoir Blind Ambition, Dean alleged that Nixon told fellow White House aide Charles Colson, “We built [the typewriter] in the Hiss case,” implying that with the help of FBI technicians, Nixon had used a replica of the Woodstock machine to trap his prey.
Hiss’s second trial did not go in his favor. Among the witnesses who testified against him was John Foster Dulles, who disputed Hiss’s recollection of the events leading to his resignation from the Carnegie Endowment. It was the final nail in Hiss’s coffin by his former patron. In January 1950, Hiss was convicted of perjury and sentenced to federal prison, where he would serve three and a half years. Meanwhile, Chambers, a man who had launched his writing career by working for the Communist Party press, continued to enjoy his new life as a polemicist for the conservative media, first in Henry Luce’s plush Time-Life tower and then in the more modest Manhattan offices of William F. Buckley Jr.’s National Review.
For Nixon, the Washington spy spectacle demonstrated not only the moral turpitude of Alger Hiss but the intellectual bankruptcy of the liberal elite. His successful pursuit of Hiss brought him national fame, Nixon later observed, but it also attracted the “unparalleled venom and irrational fury” of the liberal intelligentsia, which saw Hiss as a New Deal icon. He was convinced that he would never be forgiven by “substantial segments of the press and intellectual community” for exposing how the New Deal had been compromised by the Communist underground. Nixon brooded that it was this “hatred and hostility” that might have cost him the 1960 presidential election.
Chambers, too, saw his decision to incriminate Hiss as part of a broader assault on New Deal–style government and its “drift toward socialism.” In his 1952 memoir Witness, Chambers conflated the Roosevelt presidency with the evils of Communist rule. The New Deal, he wrote, “was not a revolution by violence. It was a revolution by bookkeeping and lawmaking.” Both types of revolution, he argued, led to a triumph of the state over the individual.
The Cold War furies that Nixon and the Dulles brothers helped to unleash scoured all nuance and charity from American politics. There were indeed a few committed Communist agents embedded here and there in Roosevelt’s bureaucracy, such as Nathan Silvermaster, a Russian-born economist with the War Production Board during World War II who was dedicated to the dream of a Soviet America. But by far the more common “traitors” were men like Hiss: well-educated, progressive idealists. They were the type who had come of age after the stock market crash of 1929 and had grown sick of a hands-off government that allowed encampments of hungry and homeless people to spring up all over the country without taking action.
When Roosevelt was elected in 1932, and Hiss received a telegram from Felix Frankfurter, his former Harvard law professor and an adviser to FDR, urging him to come work for the new administration “on the basis of national emergency,” Hiss knew that he had to sign up. For young New Dealers, “it was a call to arms, being told that the nation was in danger. I think many of us who went down [to Washington] in those first few weeks thought of ourselves as civilian militia going down for the duration of a real emergency, as if we were going to war. Roosevelt, in his first inaugural address, used the sacrifices of war as an analogy.”
In despair over the enormous human suffering of the Depression, with some fifteen million jobless—a quarter of the U.S. labor force—some of these New Dealers found themselves drawn, at least for a time, to the discipline and militancy of the Communist Party. Some were intrigued by the Soviet economic experiment, which appeared at least comparatively functional, and thought their own ailing capitalist system might learn something from it. During World War II, when the Roosevelt administration urged Americans to regard the Russians as indispensable comrades-in-arms, some of these federal officials looked for ways to strengthen these bonds by sharing information with our allies. But while some of these men and women crossed the line, most saw themselves as patriots whose dreams for the future were deeply rooted in American traditions, not European ideologies. Roosevelt was their guiding light, not Stalin.
To this day, Alger Hiss—who was convicted of perjury, not treason—remains a conundrum, his guilt or innocence still hotly debated along ideological lines. When the Venona decrypts were declassified in the 1990s, some saw smoking-gun proof of his guilt, while others argued that the case had only entered an even murkier stage. In the end, Hiss will likely be seen as a perplexingly mixed bag: a fundamentally loyal American who had associated with left-wing circles in Washington and was not entirely forthcoming with Congress, but was never a serious threat to national security.
The least credible aspect of Hiss’s testimony was his insistence that he had never known “an individual by the name of Whittaker Chambers.” When Nixon later staged a face-to-face meeting between the two men, Hiss finally acknowledged that he had known Chambers, though under another name, and only briefly in 1935. But the evidence pointed to a more intricate relationship than that. The political complexity of the Hiss case was further entangled by its interpersonal complications. Although a married man with children, Chambers confessed to the FBI that he had led a secret homosexual life. He was clearly enamored of Hiss and his family. In Witness, he wrote that he came to regard Alger and Priscilla Hiss “as friends as close as a man ever makes in life.” Under questioning from Nixon, Chambers warmly described Hiss—the man whose life he was in the process of ruining—as “a man of great simplicity and a great gentleness and sweetness of character.” It was a far cry from how Nixon viewed the “cold and callous” Hiss.
Chambers recounted the final meeting he allegedly had with Hiss—when he went to Hiss’s Washington home in 1938 to beg the diplomat to leave the Communist Party—with the wounded clarity of a man remembering a lovers’ breakup: “We looked at each other steadily for a moment, believing that we were seeing each other for the last time and knowing that between us lay . . . a molten torrent. When we turned to walk in different directions from that torrent, it would be as men whom history left no choice but to be enemies. As we hesitated, tears came into Alger Hiss’s eyes—the only time I ever saw him so moved. He has denied this publicly and derisively. . . . He should not regret those few tears, for as long as men are human, and remember our story, they will plead for his humanity.”
Hiss came to believe that Chambers’s accusations against him were those of a rejected suitor. Chambers had never made sexual advances, said Hiss, but “his attitude to me, and his relations, were strange . . . he had a hostility to the point of jealousy about my wife. . . . My guess is that he had some obscure kind of love attachment . . . about me.”
Hiss’s reluctance to acknowledge his relationship with his accuser might have been due to his uneasiness about the nature of his involvement with the man. Nixon concluded that Hiss had reciprocated Chambers’s passion and that a homosexual drama lay at the heart of the political tempest. “The true story of the Hiss case,” Nixon revealed to a congressional confidante on board his presidential yacht a quarter century later, was that Hiss and Chambers had been “queers.”
But whatever human subtleties might have explained the Hiss affair were pounded to dust by the blunt instruments of Cold War discourse. The investigative apparatus that Nixon and his patrons built in Washington had no way to measure political nuances and peculiarities of the heart.
Alger Hiss had moved in political circles viewed as benign in Roosevelt’s Washington but would take on a sinister cast in the panicky atmosphere of the Cold War. Even Allen Dulles had worked with Communists during the war. After the war, you could remain a Communist or Socialist in Western Europe and still be granted a place in the democratic arena. But not in Washington. There, even New Dealers were in danger.
On August 13, 1948, two days after Nixon met with the Dulles group at the Roosevelt Hotel, the HUAC “show trial”—as the hearings were being called in the liberal press—resumed in the Old House Office Building. Once again, the palatial caucus room, with its Greek revival décor and glittering chandeliers, was the scene of a media extravaganza. The day’s leading witness was a man whom many considered the committee’s top target, since he had held a considerably more important post in the Roosevelt administration than Hiss.
Harry Dexter White was a slight, bespectacled, fifty-five-year-old former government economist whose name meant little to the general public. But as the big thinker in Henry Morgenthau’s Treasury Department, White had played a major role in shaping New Deal policy. Among his many accomplishments was the creation of the World Bank and the International Monetary Fund, two linchpins of the postwar global financial order that White was widely credited with spearheading. White joined forces with the esteemed British economist John Maynard Keynes to hammer out the plans for the world’s new financial system, but while Keynes provided substantial intellectual input, it was the politically savvy White who was key to bringing the plans to fruition. White would later be hailed as “arguably the most important U.S. government economist of the 20th century.”
There is little doubt that Harry Dexter White was one of the main topics for discussion, along with Alger Hiss, at the Roosevelt Hotel that night in August 1948. In fact, the Dulles group saw White as a bigger threat to their postwar plans than Hiss. The formidable White was intent on building a new financial order that would be a “New Deal for a new world,” with the new global institutions channeling investment to needy countries in ways that produced the broadest public good rather than the greatest private gain. When the Roosevelt administration unveiled its plans for the World Bank and IMF, Secretary Morgenthau declared that the goal was “to drive . . . the usurious money lenders from the temple of international finance.” Not surprisingly, Wall Street banks saw the new institutions, which were to be “instrumentalities of sovereign governments and not of private financial interests,” as dangerous new competitors in the global capital markets.
For the Dulles group, there were a number of disquieting developments at the Bretton Woods Conference, held in the green foothills of New Hampshire in the summer of 1944, where 730 delegates from around the world thrashed out the final plans for the new financial system. Morgenthau and White led a movement at the conference to abolish the Bank for International Settlements, an institution they saw as an instrument of financial collaboration among New York, London, and Nazi Germany. It took a major, behind-the-scenes campaign at Bretton Woods—an effort mounted by representatives of Wall Street, the State Department, and the Bank of England—to head off the Morgenthau-White assault on BIS, which the New Dealers wanted to replace with the World Bank and the International Monetary Fund.
White further unnerved Wall Street and Republican circles by pushing for the Soviet Union to be integrated into the new international framework. The Treasury Department’s financial wizard saw this postwar partnership with the Soviet Union—a nation with vast markets and resources—as a potentially enormous boon for the U.S. economy, which he feared could slip back into depression after the wartime stimulus disappeared. White also saw this East-West financial partnership as a way to continue the wartime alliance with Moscow and to ensure world peace, a goal that President Roosevelt had made clear was a priority.
By 1948, the visionary internationalism of the Roosevelt years was being rapidly replaced by the hardening nationalism of the Truman presidency. Men like Harry White had been driven from Washington, but he still served as a consultant to the IMF and he was still widely respected throughout the world. And White still had detailed, inside knowledge from his years as Morgenthau’s top aide about the wartime activities of the Dulles group.
If the political winds had been blowing in a different direction in 1948, it might well have been men like Foster and Allen Dulles, Thomas McKittrick of BIS, and Walter Teagle and William Stamps Farish of Standard Oil instead of New Dealers like Hiss and White who were put under the investigative spotlight for treason. But by turning the table on New Deal officials such as White, who had long wanted to prosecute these high-level Nazi collaborators, the Dulles group ensured their own legal protection. By seizing the investigative momentum, Republicans like Dick Nixon, whom Loftus called “Allen Dulles’s mouthpiece in Congress,” made sure that the Dulles circle would never have to answer for their wartime actions.
By the time Harry Dexter White walked into the packed hearing room on the morning of August 13, he had been under FBI investigation for seven months. J. Edgar Hoover’s agents had tapped his phones and conducted scores of interviews in a determined effort to find evidence that he was a Russian spy. White’s two principal accusers were Chambers and an emotionally unstable alcoholic named Elizabeth Bentley, who had taken Chambers’s place as a Soviet spy courier in wartime Washington after he fled the Communist Party in 1938. HUAC made Bentley, who appeared in front of the committee two weeks before White, one of its star witnesses. Earlier, she had told the FBI that White was not a “card-carrying Communist,” but when she stepped in front of the dazzling newsreel lights, her story grew more dramatic. White was no longer simply a “misguided idealist” but a central player in the Nathan Silvermaster spy ring, feeding confidential information to the group and using his influence to place Communist “contacts” in key government positions.
Bentley, however, proved a highly problematic witness for HUAC. The former spy admitted she had never met White, and over time, as her alcoholism grew worse, she became an increasingly erratic “expert”—as the committee billed her—on Communist Party machinations. As her life spun out of control, Bentley blackmailed the FBI into putting her on its payroll. She would remain a deeply troubled ward of the bureau for the rest of her life, a witness-for-hire whom government investigators would drag into the spotlight in between blackouts, car wrecks, and tumultuous lovers’ quarrels. Instead of the glamorous “red spy queen” of the tabloid media’s dreams, the matronly, weak-chinned Bentley grew to become a pathetic symbol of Cold War exhibitionism.
When Chambers testified about White before HUAC, he was more circumspect than Bentley. He claimed that he had met with White from time to time as a Soviet courier, but he conceded that the Treasury economist was always cautious and never gave him government documents. “I cannot say he was a Communist,” he testified. In fact, Chambers seemed not to know what to make of White. “His motives always baffled me,” he wrote in his memoir.
Nixon and his fellow HUAC members knew that their case against White was weak. Earlier in the year, the former Treasury official had already made a successful appearance before a federal grand jury in New York that was investigating government subversion. The jury, which would later bring charges against Hiss, found insufficient evidence to indict White. And despite the FBI’s obsessive surveillance of White, even Hoover’s intimate colleague Clyde Tolson acknowledged that there was simply not enough proof to label him a “Soviet espionage agent” and warned that FBI officials were “making a great mistake in using this phraseology.”
In his appearance before HUAC, White conducted himself with dignity and eloquence. The committee’s badgering style often brought out the worst in witnesses, with many resorting to obfuscating tactics or outraged histrionics, and others cowering cravenly and surrendering all that was asked of them, including their self-respect. But White responded to the committee’s questions head-on, and when he felt compelled to enlighten his inquisitors on constitutional principles and the fundamentals of the American legal system, he did so with a respectful, professorial calm. White began his testimony by firmly denying that he had ever been a Communist, explaining that he adhered instead to a set of beliefs that he called “the American creed.”
I believe in freedom of religion, freedom of speech, freedom of thought, freedom of the press, freedom of criticism, and freedom of movement. I believe in the goal of equal opportunity, and the right of each individual to follow the calling of his or her own choice, and the right of every individual to an opportunity to develop his or her capacity to the fullest.
I believe in the right and duty of every citizen to work for, to expect, and to obtain an increasing measure of political, economic, and emotional security for all. I am opposed to discrimination in any form, whether on the grounds of race, color, religion, political belief or economic status.
I believe in the freedom of choice of one’s representatives in government, untrammeled by machine guns, secret police, or a police state. I am opposed to arbitrary and unwarranted use of power or authority from whatever source or against any individual or group. I believe in the government of law, not of men. . . .
I consider these principles sacred. I regard them as the basic fabric of our American way of life, and I believe in them as living realities, and not as mere words on paper. . . .
“That is my creed. Those are the principles that I have worked for. Those are the principles that I have been prepared in the past to fight for,” concluded White, who had enlisted in the Army during World War I, “and am prepared to defend at any time with my life, if need be.”
White’s statement, a ringing invocation of the embattled New Deal philosophy that was in full retreat in Washington, evoked a loud and sustained round of applause from the audience. The former FDR official’s performance was so self-assured that committee members lunged at ways to rattle him. HUAC chairman J. Parnell Thomas, a New Jersey Republican who sought to ride the investigation to political glory but instead ended his career in prison for corruption, aimed a particularly low blow at White.
For a number of years, the economist had been grappling with a serious heart condition. The FBI had been forced to delay its interrogation of White the previous year, after he suffered a heart attack. Before his HUAC appearance, he informed the committee of his medical history in a confidential letter. But when White began speaking about his connection with Nathan Silvermaster, explaining that it was a harmless relationship that consisted of such recreational activities as playing Ping-Pong in the accused spy’s basement, Thomas shocked the room by interjecting a comment about White’s illness. “For a person who had a severe heart condition, you certainly can play a lot of sports,” sneered Thomas. It was a typically ugly moment for the HUAC chairman, and when White replied with gentlemanly restraint, pointing out that his athletic days were far behind him, the audience again burst into applause.
Nixon also got into a losing sparring match with White, clashing with the witness over whether or not the HUAC hearings were “star-chamber proceedings.” The congressman insisted that they did not meet that definition because they were open to the public. But White pointed out that by denying alleged “subversives” the right to confront and cross-examine their accusers, HUAC veered dangerously close to operating as a royal tribunal. “Congressman,” White patiently explained, “I am sure you appreciate that you need to balance the need for conducting a hearing of this kind against the dangers of doing irreparable harm to some innocent persons. That is a patient heritage which Americans have, that a man is presumed to be innocent until proven guilty . . . and certainly you would be the first to recognize that, in order for a man to have a fair trial, it requires all the rules and regulations of a court hearing.”
Nixon, who had acknowledged that he was locking horns with a “rather noted scholar,” a man who held degrees from Columbia, Stanford, and Harvard, could only bow in agreement. “You are absolutely correct,” he told White.
The only committee member who found a weakness in White’s story that morning was John McDowell, a Pennsylvania Republican, who suggested that the former Treasury official had kept some suspicious company when he served in the Roosevelt administration. Several of the men whom he called “good friends,” including Silvermaster, were accused spies, McDowell pointed out. “In case we proved that these men are all part of an espionage ring, your place in history is going to be changed considerably, would you not think?” It proved to be a prophetic remark, since, after his death, White would indeed be widely condemned as a spy, a conclusion that was based largely on guilt by association.
White was certainly not entirely blameless. As the smartest man in Secretary Morgenthau’s inner council, he had sometimes operated in the Washington arena with a reckless arrogance. He was dismissive of bureaucratic protocols and saw nothing wrong with pursuing his own diplomatic initiatives with the Soviets. As White’s biographer, R. Bruce Craig, would conclude, he probably was guilty of “a species of espionage,” but a fairly benign one. There is no evidence that White handed over classified documents or subverted U.S. policy to correspond with the Soviet line. But he was guilty of frequent indiscretion when discussing policy issues with Soviet officials or with his left-wing friends and colleagues.
To White this boldness was all in service to a higher good—his dream of a harmonious global financial order. White felt that his communications with the Soviet camp were not only in line with American interests but were in keeping with the sentiments of his bosses, Morgenthau and FDR. By pursuing this dialogue, he believed he could help rope the Soviets into Roosevelt’s new world order. But White knew that he was taking a risk, and when the political mood in Washington shifted after FDR’s death, he suddenly seemed not merely idealistic but dangerous.
White claimed not to know the political affiliations of the men he helped bring into the federal government, yet he certainly must have known that some were close to the Communist Party if not actual members. To White, what mattered was that they were talented economists who brought impressive skills to government. The fact that most of them were, like him, products of eastern European Jewish families, who had worked hard to climb the academic and professional ladders while maintaining a strong sense of public service, only reinforced the bonds that he felt with them.
Despite the committee’s insistence that he disown former colleagues such as Silvermaster, White refused to do so. “You cannot erase seven or eight years of friendship with a man that way unless I see evidence, unless the court declares he is [guilty]—and until they prove he is guilty, I believe he is innocent.” It was one final, heartfelt declaration of principle from White, and it brought forth yet another eruption from the crowd. White, at pains to avoid coming across as a grandstander, apologized to Thomas. “I am sorry, Mr. Chairman, this applause is not my fault.”
After concluding his testimony, White left Capitol Hill for Union Station, where he boarded a train for New Hampshire. He and his wife had recently bought a farm there, known as Blueberry Hill, and he looked forward to some much-needed relaxation after the relentless stress of the FBI, grand jury, and HUAC investigations. On board the train, White felt chest pains, but when he arrived at the local station he insisted on continuing on to his remote farm, which lay at the end of a three-mile dirt road. The following day, August 14, he suffered a massive heart attack. Two physicians were summoned, but they declared the patient beyond their medical powers. Two days later, Harry Dexter White died at home, surrounded by his family.
For many, White seemed to be the victim of HUAC’s “special sort of tyranny,” in the words of one partisan reporter. An unusually passionate editorial in The New York Times condemned the committee for its coarse handling of White. HUAC could not be blamed for his heart disease, stated the editorial, but it could certainly be charged with having “aggravated” his condition by putting him through an investigative “ordeal” without “the due protection of laws. . . . This procedure is not the American way of doing things. It is the un-American way.” But Nixon appeared unfazed by the press furor, moving quickly forward with his inquisition of Hiss—who, after White’s passing, would serve as the next best emblem of Rooseveltian treachery.
Harry Dexter White’s death signified the final collapse of Washington’s New Deal order and the unique brand of utopian internationalism that he had championed. It was men like Nixon and Dulles who now moved into the vacuum.
By 1952, Richard Nixon’s triumph as a Cold War inquisitor had won him the number-two spot on the Republican presidential ticket headed by war hero Dwight D. Eisenhower. But on September 29, Drew Pearson, Washington’s leading muckraker, dropped a bombshell on Nixon—one of his favorite targets—that briefly threatened to end his political career. The story was part of a larger theme of corruption that reporters like Pearson believed hovered over Nixon’s career. Nixon, the humble son of Whittier, always seemed hungry for ways to profit from his public service.
Earlier in the race, Pearson had discovered that Nixon’s wealthy Southern California supporters had set up a slush fund for the politician’s personal use—a revelation that had nearly forced the vice presidential candidate to resign as Eisenhower’s running mate. It took Nixon’s brilliantly homespun TV address to the nation—which would go down in history as the “Checkers speech” after the black-and-white cocker spaniel that had been given to Nixon’s daughters by a supporter—to preempt the budding scandal and save his political career. “And you know, the kids love the dog,” Nixon told the largest audience that had ever tuned in for a political speech. “And I just want to say this right now, that regardless of what they say about it, we’re going to keep it.” His shameless performance managed to transform a case of blatant political corruption into a domestic drama that touched the hearts of millions of Americans.
Nixon’s enormous relief was shared by the GOP power brokers who had picked him for the race. It was the Dulles-Dewey group that had tapped Nixon for vice president. Their decision was conveyed to Eisenhower by Herbert Brownell Jr., a fellow Wall Street attorney who had taken a leave from his blue-chip firm to run the Republican campaign for the White House. The GOP brain trust convinced the aging general that the young senator from California not only brought regional balance to the ticket but the kind of slashing energy and anti-Communist fervor that the campaign needed.
But now, in the final weeks of the presidential contest, Pearson was again on the verge of blowing up Nixon’s career. Reporting in his widely syndicated Washington Merry-Go-Round column, Pearson revealed that the vice presidential candidate had left out something very important from his Checkers speech: namely, his crooked relationship with a Romanian industrialist named Nicolae Malaxa. The wealthy Romanian émigré had collaborated with the Nazis during the war, and later with the Communist regime that took over his homeland. But Malaxa’s reputation, Pearson reported, did not discredit him with Senator Nixon, who pulled strings on his behalf to allow him to continue living in the United States and to procure a major tax break for him.
Pearson knew that Nixon had performed these favors for Malaxa in return for an impressive bribe. But, lacking the documentary evidence, the columnist had to leave this crucial piece of evidence out of his story.
There was indeed a smoking gun: a $100,000 check from Malaxa deposited in Nixon’s Whittier bank account. But Pearson was unable to get his hands on it. In a twist of bad luck for Nixon, one of the tellers at his bank branch turned out to be a Romanian refugee who loathed Malaxa. He sent a photostatic copy of the check to political rivals of the notorious industrialist in the exile community, who in turn forwarded the copied check to their contact in the CIA, Gordon Mason, chief of the agency’s Balkans desk.
By fall 1952, Allen Dulles was the number two man at the CIA and was in line to take over the agency with an Eisenhower-Nixon victory in November. As deputy director, Dulles was already making the agency his own, working with loyal associates like Frank Wisner—who would soon take over the agency’s action arm—on ways to escalate the covert war against the Eastern bloc. But the ambitious plans that Dulles and Wisner were hatching for a long-awaited Republican presidency suddenly seemed in peril when Gordon Mason walked into Wisner’s office with a copy of the Malaxa check. “Jesus Christ!” Wisner burst out. “We’d better see Allen Dulles.”
As he had long demonstrated, Frank Wisner was quite willing to recruit from among the ranks of ex-fascists for his espionage operations in Eastern Europe—many of whom he had slipped past immigration authorities into the United States despite their barbaric wartime records. But Wisner, somewhat mysteriously, had insisted on drawing the line with Nicolae Malaxa, whom he considered a particularly “unsavory” character. In a March 1951 CIA memo, Wisner had even urged that Malaxa—who had finagled his way into the United States after the war as part of a Romanian trade delegation—be deported. Wisner had served as the OSS station chief in Romania, and he considered the country his turf. He was acutely sensitive to the factions and feuds within the Romanian exile community, where Malaxa provoked feelings passionate enough to tear apart all hope of a united anti-Soviet front.
Despite Wisner’s feelings about Malaxa, he realized that Allen Dulles was deeply implicated in the Romanian’s “unsavory” story. Dulles had not only been Malaxa’s lawyer, he had introduced him to Nixon. The Malaxa money trail, in fact, led in many compromising directions, including Nixon’s bank account, Dulles’s law firm, CIA front organizations like the National Committee for a Free Europe, and even some of Wisner’s own secret combat groups. The Romanian industrialist, who reportedly stashed away as much as $500 million (worth over $6.5 billion today) in overseas accounts before he fled to the United States, had made himself extremely useful as a shadow financier for the underground Cold War.
Malaxa was the type of charming scoundrel with whom Dulles enjoyed doing business. The Romanian oligarch had no ideology; he believed only in opportunity. He had a witty sense of humor and the dark good looks of a dashing werewolf, with thick black hair and a pronounced widow’s peak. He conducted himself with a cynical, Mittel-European confidence that everyone had a price, greasing his way through life by smoothly slipping cash to all the right people. Bribery came so naturally to Malaxa that he once tried to buy off the dedicated U.S. Immigration and Naturalization Service prosecutor who was handling his case—a man who, to Malaxa’s great surprise, turned out to be incorruptible.
He began his career in modest fashion, as a locomotive repairman, but he had a talent for making connections and opening doors, and soon he amassed a small fortune as a manufacturer of railroad equipment. In the 1920s, he and his family moved into a mansion in Bucharest, where he entertained the capital’s high society, and befriended the mistress of King Carol II, Madame Magda Lupescu. In a deft, Game of Thrones–like move, he cemented his royal connections by arranging for his own daughter to become the mistress of the king’s son, Prince Michael. By forging a partnership with the king, who proved equally avaricious, Malaxa became a dominant player in the country’s steel, munitions, and oil industries.
In the 1930s, as Hitler built his war machine in Germany, King Carol’s rule came under increasing pressure from a homegrown fascist movement known as the Iron Guard. The virulently anti-Semitic organization blamed Jews for Romania’s woes and targeted prominent Jewish figures such as Madame Lupescu. Despite the debt he owed the king’s mistress for her patronage, the ever-opportunistic Malaxa began currying favor with the Iron Guard as the group grew more powerful, financing its activities and flying its flag from the roof of his stone mansion.
In September 1940, the Iron Guard forced King Carol to abdicate and a pro-German fascist government took power in Bucharest. With Hitler’s influence expanding in Romania, Malaxa made another nimble move, merging his industrial empire with that of Herman Goering’s brother Albert. “Your interests, my dear Mr. Malaxa, are the same as ours,” the Nazi industrialist warmly assured him.
In January 1941, Malaxa’s green-uniformed Iron Guard thugs, feeling betrayed by Romania’s new fascist government, launched a coup attempt, using the industrialist’s mansion as a base for their assault. During the coup, the Iron Guard fell upon the country’s Jews in one of the most horrific spasms of violence in Romania’s history. Thousands of Jews in Bucharest were rounded up and beaten and tortured, including one group of more than a hundred—among them children as young as five—who were marched into a municipal slaughterhouse and butchered. The Iron Guardsmen hung their victims, some still alive, on meat hooks and “mutilated them in a vicious parody of kosher slaughtering practices,” according to one later account. The Iron Guard’s Bucharest pogrom was so depraved that it shocked even the country’s fascist regime, which appealed to Hitler to help put down the uprising.
After the coup was suppressed, Malaxa was jailed as a leader of the conspiracy and his industrial empire was confiscated by the Nazis and the Romanian government. But, in 1944, as the advancing Soviet army drove the Germans out of Romania, Malaxa again rose from the ashes, insinuating himself into the new Moscow-backed regime. He was the only Romanian capitalist to whom the Communist government returned his industrial property.
Nevertheless, Malaxa was savvy enough to realize that his future was not bright in a Communist Romania. He had already taken the precaution of salting away much of his huge fortune in U.S. accounts. After the war, by making a generous distribution of bribes—including jewels, Cadillacs, and cash—Malaxa persuaded Romanian officials to allow him to travel to the United States, ostensibly on trade business for the country. He arrived in 1946 and never returned home.
Malaxa wisely chose to apply for permanent residency, instead of American citizenship, knowing the process was not as demanding. But his résumé was so eyebrow raising that his battle to stay in the United States would drag on for years. Malaxa’s OSS, CIA, FBI, and INS files bulged with condemnations of his morally dexterous, shape-shifting life. One government report labeled him “notorious.” Another called him “the most perfidious man in Romania.” He was a “master of the art of bribery” who had ushered in an “era of corruption” in Romania. He was a flagrant “opportunist” who “had been on all sides of the fence at various times.” He had gone from playing “Hitler’s game” to someone who “must be considered an agent of the Soviet government and of the Romanian Communists in the United States, even if he himself is not a Communist at heart.”
According to a 1952 CIA memo, “perhaps the most concise appraisal of Malaxa” came from an American diplomat who found him “entirely unscrupulous, turning with the wind, and like a cat [he] has developed to a high art the knack of landing on his feet. He is considered to be essentially a dangerous type of man.”
None of this mattered to Allen Dulles when Malaxa turned up at his office at Sullivan and Cromwell. The pertinent fact was that the Romanian had a huge fortune, and he was willing to spend millions of it where Dulles wanted him to. In return for financing Dulles’s far-flung anti-Communist network—which stretched from Buenos Aires to Bucharest—Malaxa secured Dulles’s influential help in his battle to stay in the United States. Some of Malaxa’s treasure went to prominent Romanian exile leaders who hoped to take power after the Communist regime was toppled. Other funds went to Juan Perón’s Argentina, where Malaxa was involved in a rising neofascist movement, and France, where he underwrote “scholarships” for exiled Romanian “students” who turned out to be veterans of the vicious Iron Guard.
By 1948, Malaxa was ensconced in a luxurious apartment on Manhattan’s Fifth Avenue, but his wheeling and dealing had begun to attract unwanted press attention. In May, gossip columnist Walter Winchell exposed the notorious collaborator who was freely enjoying the city’s pleasures—the “Balkanazi on Broadway,” he called Malaxa. Winchell noted that the “distinguished” firm of Sullivan and Cromwell had recently dropped the Romanian as a client, presumably because he had grown too hot.
But Dulles did not abandon Malaxa; behind the scenes, he entrusted the Romanian’s immigration battle to his political protégé Nixon. In return for Malaxa’s substantial gift of $100,000, the California senator began vigorously lobbying INS officials on his behalf and pushing an immigration bill through Congress that was designed to win Malaxa U.S. residency. When those efforts stalled due to determined resistance from legislators who were repelled by the émigré’s past, Malaxa and Nixon tried a different tack. With the help of Nixon cronies in Southern California, Malaxa announced that he was setting up a pipeline factory in Whittier that he called the Western Tube Corporation. Nixon wrote a letter to the Defense Production Administration, claiming that Malaxa’s project was “strategically and economically important, for both California and the entire United States.” The Western Tube factory was never built, but the phantom project succeeded in winning Malaxa a huge tax windfall. And it kept alive the Romanian’s immigration campaign. California congressman John Shelley later denounced the Western Tube affair as “a complete fraud, a springboard for [Malaxa’s] entry to the United States.”
As the smoldering Malaxa scandal threatened to erupt into flames in the final days of the 1952 presidential race, Dulles moved quickly to douse it. After Wisner and Mason showed him Malaxa’s $100,000 check, the deputy CIA director knew that he would have to send it up the chain of command to his boss, General Walter Bedell Smith. But Dulles also realized that, in this case, passing the buck was as good as destroying the evidence. CIA director “Beetle” Smith had served as Eisenhower’s intensely dedicated chief of staff during the war, and he was just as devoted to Ike’s presidential victory as Dulles.
It was Gordon Mason who was given the unpleasant task of showing the evidence of Nixon’s corruption to General Smith, who predictably flew into a rage. “Smith was a man who could cuss in three languages and in almost every sentence,” recalled Mason. “He also had a violent temper, and he acted as though I personally was trying to scuttle Eisenhower.” Smith demanded that Mason immediately gather up every scrap of incriminating material against Nixon and bring it to his office. “The story was cleaned from the books,” said Mason. Wisner, too, had no doubt what was done with the evidence. “Beetle just flushed it all down the toilet.”
Without a copy of the Malaxa check, Drew Pearson could not keep the story going, and it soon petered out. On Election Day, Eisenhower and Nixon swept to a decisive victory, winning 55 percent of the vote and carrying thirty-nine of the forty-eight states.
After the Republican triumph, Dulles and Nixon were finally able to speed Malaxa’s immigration case through the bureaucracy. In December 1953, officials in Eisenhower’s Justice Department bypassed Congress and the INS and granted Malaxa permanent residence through an administrative decree. Justice Department officials explained that they had reached their decision due to the unique technical services provided by the Western Tube Corporation. The fact that Malaxa’s company did not actually exist—and never would—was politely overlooked by the new administration.
Nicolae Malaxa lived out the rest of his days in the comfort of his Fifth Avenue apartment. He began to fancy himself a great benefactor. In January 1953, shortly before Eisenhower’s inauguration, Malaxa reached out the hand of friendship to a prominent Jewish exile named Iancu Zissu. Malaxa sent word that he was eager to meet with Zissu, who was the cofounder of a Romanian exile group. The odd meeting took place in the New York apartment of a popular Romanian singer. According to one witness, “Malaxa told Zissu that he had wanted for some time to know him because he is a great friend of the Jews and a great admirer of the Jewish religion. Malaxa stated that if he could change his own religion, he would adopt the Jewish faith.”
As he bid Zissu farewell, Malaxa “assured him that those who had been his friends had never had reasons to regret it.” It was a surprising burst of goodwill—or, more likely, another attempt by the wily millionaire to buy political support.
From the financial patron of Iron Guard butchers to “great friend of the Jews”—it was just one more grotesque twist in a life filled with them.