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Company Confessions
Secrets, Memoirs, and the CIA
By Christopher Moran St. Martin's Press
Copyright © 2015 Christopher Moran
All rights reserved.
ISBN: 978-1-4668-4749-1
CHAPTER 1
Herbert Yardley: Playing for High Stakes
I. A 'Magnificent Book'
The truth never hurts. There is too much secrecy in the world. Governments are run by a small clique. They connive and scheme and when they get in trouble they ask the rest of us to settle their disputes by warfare. If a publisher in each country would do what Bobbs-Merrill are doing, a big step would be taken for international peace. Let the people know what is going on. Let them see how governments are conducted.
Herbert Yardley, 4 March 1931.
In December 1930, with the United States slipping deeper into the worst economic depression of the twentieth century, a former star high school quarterback, starved for money, and with a wife, mistress and young child to support, began writing a memoir of his time in government service. Billeted in a dingy, small second-floor apartment in New York's Greenwich Village, the man, in his early forties, was not an accomplished writer and utterly detested spending his days camped inside, tapping away at a rented typewriter. He later recalled: 'I could do no more than stare into space. For days I pecked out a few lines and threw them into the fire ... I wanted to weep for words'. Adding to his feelings of frustration and foreboding, Manhattan's literary and journalistic heavy-hitters poured cold water on the project, telling him, 'You might have a story; I doubt it.'
Scrambling for a living, the man persevered and eventually the words started to flow. After seven weeks of hard graft, working through the night, the man ('dead on my feet and hollow-eyed') delivered his manuscript to George T. Bye, New York's premier literary agent, whose list of clients included such personages as the future First Lady Eleanor Roosevelt and the legendary aviator Charles Lindbergh. To the man's astonishment, Bye considered it a 'magnificent book' – 'ten times better than my most optimistic expectations'. Not long after, a deal was successfully brokered with Bobbs-Merrill, a publishing house from Indiana. George Shively, a senior editor at the publisher, believed that the book had all the hallmarks of a bestseller; indeed, he even predicted that it should 'make the front page of every paper in the world'. The excitement, however, was tempered by anxiety, for publication would represent the biggest leak of classified information in US history. There was a real danger, suggested Shively, that everyone associated with the book would 'be charged with treason and shot at sunrise'.
The book in question was The American Black Chamber by Herbert Yardley, a colourful and controversial character who, in two decades, went from being a precocious small-town boy from the Midwest to head America's first professional and permanent cryptography bureau, funded jointly by the State Department and the US Army. Published on 1 June 1931, the book detailed the inner workings of the 'Cipher Bureau', which Yardley led from its creation in 1917 until its dissolution in 1929. Among the secrets disclosed was the startling revelation that Yardley's codebreakers had intercepted and deciphered Japanese diplomatic traffic during the Washington Naval Conference of 1921–22, meaning that the US diplomatic delegation knew exactly how far they could push Japanese representatives on the critical issue of naval ratios. More broadly, the book revealed that the US had read the communications of some twenty-one countries, including friendly nations such as Great Britain, over the course of the bureau's twelve-year existence. Generally praised by the press, it outraged the cryptanalytic community and ensured that its author would never work for the US government again, a sad demise for a man whose talents and experience would surely have benefited his country in the future cryptographic conflict against Japan during World War Two. In consolation, the book made Yardley a national celebrity, something he relished. When he was not on the radio or lecturing, he was socialising with actors and actresses, famous authors, even Nobel Prize winners and future presidential candidates. A far cry indeed from the cloistered world of a cryptographer.
The story of The American Black Chamber, scarcely remembered today, is hugely significant in the context of US spy memoirs. First, it confirmed that knowledge of intelligence work was a profitable commodity and, by extension, established money as a key motivating factor as to why spies might be tempted to publish. Finding himself in hard times, in the midst of the Great Depression, Yardley exploited his secret knowledge out of financial necessity; although he did not make a fortune, the rewards were plain to see. Second, it showed that there was an enormous global market for recollections by former intelligence officers. The American Black Chamber was a bestseller not only in the United States, but overseas, especially in countries where the hidden hand of US espionage was felt. Third, Yardley's pioneering book established many of the qualities of the spy memoir genre. It followed a quasi-historical narrative, arranging its material in a chronologically sequential order and anchoring the content behind a single, clear story. It included 'revelations'. It gloried in technical detail, yet contained moments of high-drama and adventure. Fourth, it triggered a fevered discussion about whether the book had harmed national security, with critics arguing that the disclosures had prompted Japan to improve the security of its cryptosystems. Debates about the potential damage inflicted by spy books would be commonplace in the years to come.
Finally, for all the positives of The American Black Chamber in establishing the embryonic form of the nascent spy memoir genre, it might also be said to have had a chilling effect on memoir production in the short term. For the rest of his life, Yardley became a 'watched' man and an outcast. The authorities impounded the manuscript of a further volume of reminiscences and scrupulously examined for classified information the trashy spy fiction stories he produced to make ends meet. In its hour of need after Pearl Harbor, the US government refused his services and then, suspecting him of harbouring pro-Axis sympathisers, watched his movements and staked out a restaurant he opened in Washington. Legislation was also passed, triggered by Yardley's writings, to criminalise the unauthorised disclosure of cryptographic material. In short, he became a cautionary tale for any aspiring memoirist looking to follow suit.
II. Codebreaker
I knew that I had one of the most dramatic stories in American history.
Herbert Yardley, 14 June 1931.
Being a pariah in intelligence circles was not the life that Yardley had imagined for himself when, in late 1912, at the age of twenty-four, fresh out of college, he became a code clerk and telegrapher in the State Department's code room in Washington, DC. Yardley came to the nation's capital burning with ambition. His formative years growing up in Middle America had given him the taste of success. He had been a high-achiever in the classroom, especially at mathematics, and was an outstanding sportsman. He earned good money on the side by playing poker in the smoke-filled saloons and dive bars in the small frontier town of Worthington, Indiana, and, to the envy of his male friends, was unerringly successful at chasing members of the opposite sex. At State, Yardley became fascinated with the magic and mystery of cryptography. In his spare time, he became interested in the construction of US diplomatic codes, and tried to solve them. The White House was horrified and amazed when, in less than two hours, he translated an encoded message from Colonel Edward House to President Woodrow Wilson. He then embarrassed the State Department by penetrating its system of secret communications. As a direct result of this cryptographic stunt, a new method of encoding State Department messages was introduced. Leveraging his unique talents, he charmed his way to an army commission and a pay rise to $1,000 a year.
US entry into the war in April 1917 gave Yardley the perfect platform to use his cryptographic expertise. His apprenticeship complete, he was promptly made head of MI-8, the covert and deniable cryptologic branch of the newly created Military Intelligence Section in the Army War College Division. As the historian David Kahn has argued, although MI-8's creation was a secret, 'it marked one of the most significant steps in American intelligence'. For the first time in its history, the US had an official agency to break foreign codes. From humble beginnings, with just two civilian clerks on its books, it grew to an organisation of 151 men and women at its peak.
After the armistice was signed in 1918, Yardley was given a Distinguished Service Medal and then used his considerable powers of persuasion to convince the army to extend the life of his unit into peacetime, with himself remaining as chief. He supported his case by proudly declaring that, in eighteen months, his staff had read nearly 11,000 messages of eight foreign governments. An unexceptional brownstone three-storey building just off Fifth Avenue in New York was selected as the organisation's new home, renamed the 'American Black Chamber' after the secret letter-opening service of King Henry IV of France, the cabinet noir (or 'black room'). $100,000 of annual funding from the army and state allowed for the employment of twenty-five code and cipher experts. Yardley, the consummate 'wheeler-dealer', talked his superiors into giving him a salary of $6,000 – a sum exceeding that of the principal assistant secretary of state.
The cipher bureau worked in conditions of absolute secrecy. Personnel were remunerated in cash from a secret payroll, and were instructed, if questioned about their job, to say that they worked for the War Department's Translation Division. Mail was delivered to a numbered post box at Grand Central Station. The bureau itself took the cover of a private business, the Code Compiling Company, which produced commercial codes. To add to the verisimilitude of the cover, Yardley served as a consultant to commercial firms in code matters. He was also a licensed real estate broker. His colleague William Friedman later claimed (possibly out of spite, for they were no longer friends) that Yardley had a 'field day' at the government's expense by spending most of his time on private enterprises. In terms of actual government work, commented Friedman, Yardley devoted 'two or three hours a week'.
The highpoint for Yardley came with the Washington Naval Conference of 1921–22, where, at the invitation of President Warren Harding, the world's largest naval powers had gathered to discuss disarmament and ways to relieve rising tensions in East Asia. The key issue was to determine the relative allowable tonnages of capital ships for the major powers. Concerned about growing Japanese militarism, the US desired a favourable ratio of ten to six over Japan; Japan, which was looking to build its navy to realise its ambitions in the Pacific, insisted on a ten to seven ratio. However, a week before the conference commenced, the bureau deciphered what Yardley later described as 'the most important and far-reaching telegram ever to pass through the Black Chamber's doors'. The telegram in question was addressed from Tokyo to Admiral Baron Kato, head of the Japanese delegation. In it, Tokyo told Kato that, if pressed, he was authorised to accept the 10:6 ratio as a final compromise. Armed with the knowledge of Japan's bottom line, US negotiators, led by Secretary of State Charles Evans Hughes, only had to stand firm until the Japanese caved in, which they did. In Yardley's words, 'Stud poker is not a very difficult game after you see your opponent's card.' The bureau thus helped the US achieve a major diplomatic victory. Knowing this, Yardley asked for – and got – a salary of $7,500, equivalent to the Under Secretary of State.
By the end of the decade, however, the bureau had fallen on hard times. At the start of 1929, its budget stood at one-third of what it had been eight years before. Cryptographic coups had dried up. Indeed, as David Kahn has written, it did not contribute any decisive information about any of the major events of the decade: not the Rapallo Pact in 1922, when Germany accorded the Soviet Union de jure recognition; not the Ruhr Crisis in 1923, when French and Belgian forces occupied Germany's premier industrial district; and not the breaking of diplomatic relations between Britain and Russia in 1927. On 31 October 1929, it closed its doors for good, its fate sealed a few months prior when Henry Stimson, President Herbert Hoover's new Secretary of State, terminated its chief source of income, the State Department's disbursement.
Stimson's decision to close the Black Chamber was based on several factors. Firstly, in what with hindsight seems to have been undue optimism, he believed that the world was entering a new era of lasting peace. He could point to the fact that most major countries now had peace agreements to preserve, such as the Kellogg-Briand Pact, ratified in summer 1928, in which signatories promised not to use war as a way of settling disputes. In this context, influenced by the open government idealism of Woodrow Wilson, it was his opinion that spying, secret diplomacy and cryptography could make way for mutual trust and frankness between nations. Secondly, Stimson was uncomfortable with the idea of the State Department taking the lead when it came to codebreaking, believing that the War Department was the natural home for this sort of activity. When biographer McGeorge Bundy interviewed him in 1946, Stimson said that it was 'highly unethical' for the State Department, in its capacity as the lead US foreign affairs agency, to be reading the messages of officials it had invited to the country as guests. Finally, Stimson, by most accounts a man of high moral value, possessed a squeamishness about the whole enterprise of spying. His famous and quaint pronouncement – 'Gentlemen do not read other gentlemen's mail' – is testament to this. As he saw it, the Black Chamber went against the puritanical principles on which the Republic had been founded, principles that set the United States apart from every nation on earth. In short, it was un-American.
The idea that honour counted for more in geopolitics than the benefits of codebreaking was anathema to Yardley. In his view, Stimson was ignorant to the realities of the anarchic international system, where gentlemen in the traditional sense were in short supply. Other nations were intensifying, not reducing, their cryptographic efforts. Stalin was certainly no gentleman. In Yardley's eyes, the consequences of not being vigilant were severe. History had taught him that if you cannot see an enemy, it is necessary to acquire stronger binoculars. His pleas nevertheless fell on deaf ears. In late 1929, the US Army Signals Corps offered him a job on half his normal salary, almost certainly knowing that he would turn it down, which he did. A slightly improved second offer was forthcoming in spring 1930, but this too was rejected, with Yardley believing that he could make a handsome living out of real estate and private consultancy. However, with the stock market crash and resultant Great Depression, Yardley, like many of his generation, found work hard to come by. Casting about for an income, he served briefly as forensic cryptologist at the Scientific Crime Detection Laboratory of Chicago, created to put an end to the city's violent criminal element, but generally found that his esoteric expertise was in low demand. A spendthrift all his life, constantly frittering away his money in hard-drinking male company, he had no savings put aside for a rainy day. 'Out of a clear blue sky', Friedman later wrote, 'the bottom fell out of his affairs.' In desperation, with a family to support, plus a bibulous lifestyle made particularly costly by prohibition, he decided to become a writer.
III. Outcast
Lies! Lies! Lies!
William Friedman, annotated remarks in his personal copy of The American Black Chamber.
Few could have predicted that Yardley would spill the beans about the Black Chamber. His reputation in official circles was that of a staunchly closed-mouth civil servant, fully aware of the need to be security conscious for the sake of operations. In October 1924, he wrote to a colleague and declared: 'Ever since the war I have consciously fought against disclosing anything about codes and ciphers. My reason is obvious: it warns other governments of our skill and makes our work more difficult.' He regularly impressed upon his staff the importance of secrecy. Giant posters adorned the walls of his Manhattan workplace, emblazoned with warnings like: 'SECRET! If enemies learn that we can decipher their present codes, they will try to devise more difficult forms'. On his watch, nothing ever leaked to the press, although it is interesting to note that Captain (later Admiral) Reginald Hall, head of British Naval Intelligence from 1914 to 1919, refused Yardley permission to visit Room 40, Britain's codebreaking nerve-centre, citing his garrulous manner. However, one should not read too much into this; the British were not only notoriously secretive about their intelligence services, but also very protective of their patch, even with allies like the US.
(Continues...)
Excerpted from Company Confessions by Christopher Moran. Copyright © 2015 Christopher Moran. Excerpted by permission of St. Martin's Press.
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