US–Hungarian negotiations had dragged on for too long, close to half a year. As in the case of the delay of six weeks spent by the Allies and the anti-Nazi Badoglio government to negotiate an armistice, the Germans were given ample time to prepare their next moves. Had there been a quick accord following the September 1943 meeting in Istanbul, events might have taken a different turn. Momentum might have gathered for closer cooperation, and Donovan might have found support in the US Army and the White House for his proposal to land an airborne division or two in Hungary at a time when Wehrmacht troops in the country numbered only a few thousand. Another step would have been to line up Hungarian military units loyal to Horthy and Szombathelyi to receive and protect the Americans. The arrival of additional US forces from nearby Italy could have turned a token presence into a bridgehead.

Another mistake was to maintain a second channel of communications with the Americans. Kállay insisted that in addition to his General Staff’s contact with OSS-Istanbul, his Foreign Ministry conduct separate negotiations with OSS-Bern, where station chief Dulles listed him as OSS asset #655. Sooner or later, the Germans were bound to pick up some of the signals from the high volume of human and cable traffic – and they did. The arrival by parachute of three American officers was the last straw, and Hitler gave orders for “Operation Margarethe” – the invasion of Hungary, prepared several months earlier – to proceed while he entertained Horthy as his guest. With the new pro-Nazi government in place, the US–Hungarian partnership folded, even though Szombathelyi’s men continued to send messages to OSS-Istanbul and complied with the “agreement in principle” of 22 February 1944.

Kállay had too much sang-froid. No great power could rush him into an accord before he had tried every means to protect what he regarded as his country’s vital interests. Up until the very last moment he believed that he could persuade the Americans to recognize what he believed was the justice of Hungary’s call for border modifications favouring Hungarian minorities in neighbouring countries.

Kállay envisioned Hungary as an oasis of tolerance and peace in the middle of Hitler’s Europe, embroiled in wars of conquest and extermination. He offered Hungary as a safe haven for refugees from Nazi-occupied Poland, as well as for downed Allied pilots and escapees from POW camps in Germany. Under his premiership, Hungary had a free press and enjoyed a parliamentary democracy that outlawed only the extremes of right and left. A romantic nationalist, Kállay was also a diplomat who carefully calibrated his stance of standing up to the Germans and to Hungary’s far right. He refused German demands to send the Jewish community to “work camps” in the Eastern territories occupied by the Reich. Unlike Horthy, who admired the Germans, Kállay had no illusions about the fate awaiting Jewish deportees under German control. He gave his “word of honour” to leaders of the Hungarian Jewish community, the last intact Jewish community on the continent, that he would never surrender Hungarian Jews to the Germans. He remained true to his word.

While Horthy had only contempt for much of Hungarian Jewry, especially those from the countryside, Kállay saw the Jews as Hungarian citizens for whom he was responsible, and he referred to their maltreatment as “un-Christian”. He thought that curbing the Jewish role in Hungary’s economy might satisfy the Nazis, which made some critics think that he was caving in to German pressure.

During his premiership, Kállay ignored German threats that demanded action, not words. Thinking that at worst the Germans would gradually sever all contact with him, he believed he would be able to continue to pursue his policies indefinitely. Other Hungarians (the great majority), who recognized the hopelessness of Hungary’s predicament, slipped into lethargy. But Kállay was a poker player, a bluffer who kept raising the ante. He conducted himself as if he held four aces in his hand. He lost only when the Germans finally called his cards.

Kállay was guilty of wishful thinking when he predicted that the marriage of convenience linking the Western democracies to the Soviet dictatorship would break up before the war’s end and Hungary might escape Soviet occupation. The Allies did agree on the paramount need to crush Germany, but they had little patience for Hungarian diplomacy distancing itself from the Reich. The Western Allies expected Hungary to prove its anti-Nazi bona fides by joining them without delay. Neither the Americans nor the British thought much of what they perceived as a fig leaf of Hungarian sovereignty within the Axis.

The Western Allies were indifferent to what a Hungarian nobleman considered courageous or Christian or honourable. But Kállay hoped that the United States would appreciate the Hungarian achievement during his two years of premiership and deal favourably with Hungary at the post-war peace table. He also counted on the support of Pope Pius. He maintained his honour under harsh circumstances and he believed that “the civilized world” would eventually come to respect this and treat his country favourably.

However, the Americans wanted bridges blasted and trains carrying German troops blown up. For OSS Director Donovan, the model leader was Tito, and the greatest heroes were the communist guerrillas who killed more Germans than did their rivals under royalist leader Draža Mihailović. Familiar with his people’s mentality and his country’s terrain, Kállay argued that in contrast with Yugoslavia, Hungary was not suited for guerrilla warfare, as mountains and forests were few and small, and his people were disinclined to engage in that kind of resistance.

There was a clash of two perceptions: timeless, romantic Hungarian and impatient, pragmatic American. The contest of wills and means was unequal. On one side was Britain’s counsel to ignore the plea of a small country of no special importance. While not agreeing fully with its tutor’s imperial style, the United States proceeded to accept intelligence data from the Hungarian government and to plan for joint military action – but insisting on unconditional surrender regardless of the consequences. On the other side was the gamble of a feisty leader of a small nation spurning the demands of its great power neighbour to the West while attempting to gain assurances from the Anglo-Americans that its other great power neighbour to the East would not be allowed to become a similarly brutal colonial master.


In trying to negotiate their way out of the Axis, Hungarian leaders had to move with the caution of a man trying to retrieve his valuables from a house overrun by thieves. “Budapest was swarming with German spies”, remembered Ödön Gáspár of the Foreign Ministry, a nest of pro-Allied sentiment, and Gestapo agents “thoroughly penetrated” Hungary, whose native extreme rightists “worked overtime to prove their loyalty to the Nazi cause. Their eagerness was shameful”.

In both pro-Allied and pro-Nazi circles Hungarians thought they knew who stood on which side and could tell someone’s loyalty by a wink or a raised eyebrow, or by just a sarcastic hint. They felt secure in having figured out who worked for the Nazis, just as they thought they could tell who had Jewish genes and who did not. They trusted their friends and they detested their enemies. They clung to high notions of honour and duty, or at least they pretended that they did. For a select few living – and fighting – according to a centuries-old code of chivalry, noble ideals proved stronger than the instinct for survival. But that morally comforting world collapsed like a house of cards when the unthinkable happened: a stranger embraced as an enthusiastic volunteer or a trusted friend known for half a lifetime turned out to be a traitor.

People bucking Nazi orders knew that they risked execution. Throughout 1943, top officials of the German Foreign Office confided to their most fervent ally, Ambassador Baron Hiroshi Oshima of Japan, that very soon the Führer would lose his patience and order the retirement of “the old fool Horthy”. Unlike the Romanians, who fought hard, the Hungarians were not doing their duty on the Russian front, the Japanese ambassador in Berlin was told; Romania’s Marshal Ion Antonescu was trustworthy, but Horthy was not. Oshima described the German Foreign Office specialists briefing him as “furious” that Hungarian leaders kept delaying the fulfilment of their promise to Hitler to send Jews to “labour camps” in Germany. But, the Germans added, the lowest of the low Hungarians “whose days were numbered” was Kállay, whom they characterized as “a paid agent of the Anglo-Americans and the Jews”.


The declassified files in the US National Archives explain that the sentence about “sincérité” in the American broadcast cited earlier referred to a “personal message” that Radio North Africa repeated six times in French on 13 October 1943. The transcript simply said: “Sincérité avant tout” – sincerity above all. The instructions for the radio station that accompanied the text specified that the announcer accentuate the word “tout” and that the announcer must be a man, which, one imagines, added yet another coded meaning. The “personal message” was addressed to “Trillium”, a Hungarian intelligence agent entrusted by his boss Kádár to produce and deliver reports to the Istanbul station of the OSS.

Perhaps the OSS message was encrypted, or, just as likely, it had a plain, literal meaning reminding “Trillium” and his Hungarian colleagues and bosses one more time that the Americans regarded “sincerity” as the indispensable condition in the evolving cooperation of the two agencies and the two countries. However, it is also possible that based in Istanbul, the world’s wartime capital of deception and double agents, OSS officers, new to the business of espionage, designed the message to carry both a hidden and a literal meaning.

“Trillium’s” name in his passport was András György, and he was the passenger in the back seat of the car that took Hatz to his first meeting with the OSS.

A Hungarian citizen, multilingual, slick, and street smart, György-”Trillium” knew Central Europe and the Middle East and had many contacts throughout both regions. He did not like to turn down intelligence assignments or business opportunities, and he excelled in combining the two. His multifarious activities illustrated to the OSS the advantages and disadvantages offered by Central European agents. György’s cover was his export-import business, which was at least partly a black-market operation. Coleman of the OSS believed, for instance, that György bought diamonds on the Turkish black market that he would smuggle into Germany where they would be broken into industrial diamonds. OSS-Cairo was of the opinion that Hungary’s military intelligence service not only employed him but had close links to his business, or, perhaps even financed it. He travelled frequently between Budapest and Istanbul, and could move around in different countries with ease at a time when everyone else ran into problems at every border crossing.

At the same time, Coleman noted, another OSS operative called “Gerbera”, who also represented the Jewish Agency’s underground in Istanbul, employed György in the humanitarian enterprise of smuggling into Germany gold coins that were turned over to Jews in Central Europe to assist them in getting to Turkey or some other neutral country. On occasion, Coleman wrote, György bribed the Gestapo “to permit him to carry on his person into Axis territory from time to time as much as seventy-five pounds weight of gold coin”. Nevertheless, Coleman blurted out, György was “acknowledged to be an untrustworthy double-crossing rat”. He added that OSS-Istanbul accepted that fact from the start.

Coleman was impressed that György first came to him highly recommended by “Gerbera,” whom Coleman praised as “very active, very smart, and acknowledged to be very trustworthy”. “Gerbera” was a handsome, blond Jew born in Vienna, Coleman reported. His original name was Teddy Kollek. (After the war, he returned to Palestine where he soon became a prominent Israeli politician and eventually an outstanding mayor of Jerusalem who made friends with Arabs and kept the Holy City’s deep hatreds at a reasonable approximation of communal peace.)

In a message on 17 January 1944, the director of OSS-Cairo warned his colleague in OSS-Istanbul that György not only worked for Hungarian intelligence but also kept the Germans informed. While the counterintelligence branch of the OSS charged that some of György’s reports echoed disinformation disseminated by the Germans, his OSS-Istanbul boss Alfred Schwarz defended him as an “uncompromising Allied partisan”. György might well have been an “Allied partisan”, and by most accounts he worked hard to turn the US–Hungarian partnership into an alliance. But his murky connections to the Abwehr and, far worse, to the Gestapo did in the end compromise him in the eyes of the OSS, even though his purpose might well have been to keep the Germans off his back. While he was of Jewish origin – and Jewish according to the Nazi laws – it is unclear whether he helped Jews trying to escape from Hitler’s Central Europe because he accepted some solidarity with Jews.

The jury is still out on whether György helped or hindered the anti-Nazi cause, and whether he was more of a resourceful operator of courage than a greedy, contemptible traitor – or an adventurer who enjoyed playing a high-risk game that he would not or could not get out of. It was, after all, a way to make a living, even to get rich, during dangerous times. He may have been all of the above.

No similar doubts clouded the anti-Nazi credentials of Kállay and Horthy, or Szombathelyi and Kádár. Donald Jameson, a senior CIA official during the Cold War, recalled that in lectures and conversations about the Second World War his older colleagues even spoke of Horthy as “the man who was on our side”. (Kállay was imprisoned first in the Mauthausen and then the Dachau concentration camp. American troops liberated him, and he was allowed to emigrate to the United States. He took up residence in New York, where he was a respected exile leader until his death in 1967.)

Much of the intelligence the Hungarians sent to OSS-Istanbul was accurate and important, including the locations and the production figures of Hungarian military industries working for the Germans, assessments of German morale on the Russian front, and the details of German plans to send planes to Bulgaria. Regardless of the failure to prepare military units for a resolute stand for independence and the tragic helplessness in face of the German invasion, official Hungarian resistance to German power was sincere. It was sincere above all.


Was there ever a concrete, sincere plan to land British or US troops in Hungary or elsewhere in the region? Or was such an idea only a British-manipulated “strategic deception”, designed to mislead the Germans and make them shift divisions from the Atlantic shore to the Balkans? Did the Americans focus on obtaining intelligence data without giving serious thought to backing up the cause of Hungarian or Romanian or Bulgarian independence and democracy?

In his biography of Donovan, Anthony Cave Brown described the pugnacious spy chief as “seizing” the surprise news of Mussolini’s fall on 25 July 1943 in his presentation of his plan during the Anglo-American summit at Quebec’s Château Frontenac. Donovan pushed hard. In the end, the Joint Chiefs of Staff accepted his “Proposal to Accentuate Our Present Subversive Efforts in the Balkans” but cautioned that the OSS must “show preference among resistance groups or prospective successor governments only on the basis of their willingness to cooperate, and without regard to their… political programs”. That carefully calibrated language, intended to justify support for communist groups, was reproduced in the agreement that the OSS reached with Hungary, even though the Communist Party in Hungary numbered less than one-thousand members at the time.

But in his contacts with political and military leaders at the summit, Donovan pursued a different tack, Brown noted. Donovan argued that Italy’s break with Germany intensified fears of a Soviet takeover in Bulgaria, Romania, and Hungary, and that the Allies must seize the moment by “capitalizing” on those fears and “inducing” the three countries to break their Axis ties.

Reporting to Donovan on 7 September, OSS-Istanbul listed its contacts with “reliable opposition elements in occupied countries”, and two of the four mentioned were in Hungary: the Popular Front and the Smallholders’ Party. The others were the Austrian Party of Liberation and the Peasant Party of Romania. In its report to headquarters on 2 January 1944, the OSS Planning Group listed “inspiring and supporting” subversion in Germany and Austria as the first two priorities. “Inducing” Hungary’s withdrawal from the war constituted the third priority.

“The OSS tried to get something cooking in every German-controlled country”, OSS Lieutenant-Colonel Abram Gilmore Flues recalled in 2002. “And Tito’s Yugoslavia was the model.”

In attempting to inspire leaders in Hitler’s satellites to rise up against the Reich, the OSS brandished the stick of war crimes trials as well as the carrot of membership in the Grand Alliance. At a tense Istanbul meeting on 22 January 1944 with delegates of Hungary’s General Staff in attendance and the fate of the US–Hungarian quasi-alliance hanging in balance, OSS officers warned sternly that “the political leaders of enemy and satellite countries were considered guilty of war crimes” and would be punished. But then the Americans balanced the threat by expressing the hope that Hungarian military leaders, “if they cared to avoid the same fate, might wish to seize the present opportunity of leading a revolt against Germany, or at least cooperate to that end”.

OSS plans called for the US–Hungarian alliance to become public in the latter part of 1944, following the arrival of an OSS team at an airport near Budapest supported by a Hungarian military unit or a US airborne division. Such a landing would have established the American military presence requested by anti-Nazi Hungarians who were equally fearful of the kind of German revenge that the Italian switch had provoked and the communist rule they knew that the Red Army would impose.

Entering the country from the south, from territory controlled by Yugoslav partisans, was another option, and it was advocated by Chief of Staff Szombathelyi, who sent OSS-Istanbul detailed maps of the region and its airfields. However, partisan commander Tito, though dependent on Anglo-American supplies, refused to allow the OSS the use of Yugoslavia as a springboard. He even threatened to shoot at the Americans if they tried to set foot on Yugoslav territory without his express permission. Among OSS officers, Flues recalled, the explanation was that Stalin kept Tito on a short leash and Tito obeyed Stalin.

According to Flues, the commander of what was called the Budapest City Unit, as early as the summer of 1944 he and his OSS specialists were ready to take off from Italy on a two-hour notice and “hit the ground running at a Hungarian airfield”. He added that the operation, called “Toledo” after his hometown in Ohio, was high on Donovan’s agenda, and it was scheduled to take off in December 1944 but was stopped at the last moment. Flues learned that the cancellation followed sharp protest from Ambassador to Russia Averell Harriman who was worried about Soviet reactions. However, as late as January 1945, on a visit to the OSS camp in Caserta, Italy, Donovan told Colonel Howard Chapin, head of the OSS there, that “a small advance group of fifteen” of the Budapest City Unit should enter the Hungarian capital at the earliest possible opportunity, then “ease in the remaining members after the advance unit was established”.

Then came the Yalta summit of February 1945 and an agreement that divided the post-war world. The Budapest City Unit was consigned to what George Orwell called “the memory hole”.

Could it be that deception played a major role in what appears to have been valiant attempts by both parties to build an alliance? And if deception was practiced, who was fooling whom?


Soon after the Hungarian overture to OSS-Istanbul in September 1943, OSS-Cairo voiced concern that German intelligence planned a double-cross and that Hatz was its instrument. Repeating earlier warnings based on credible but unidentified “enemy sources”, Donovan put his Istanbul station on notice that Hatz was a German agent.

But OSS-Istanbul took the gamble. “The centre and the field often have that sort of conflict”, James McCargar, a veteran US intelligence officer, explained. Under Donovan’s leadership, McCargar recalled, it was often left up to the field to reach its own decisions. In this particular case, OSS-Istanbul continued dealing with Hatz despite the stern warnings of the centre.

The apprehensions of OSS headquarters, never put to rest, rose sky-high after the German invasion of Hungary on 19 March 1944. At roughly the same time, the Gestapo rolled up the branch of Austrian resistance backed by OSS-Istanbul, arrested its leader, Franz Josef Messner, who had driven from Vienna to Budapest to pick up an OSS transmitter smuggled in for him by Hatz in the Hungarian diplomatic pouch. Eventually, the Gestapo executed Messner and at least a score of his associates. Several US studies of the case consider it likely that Hatz betrayed the Austrians, a view shared by many Austrian scholars.

Hatz too was arrested. He and his friend “Jacaranda” were having a conversation in Hatz’s apartment when five plainclothesmen burst upon them with revolvers drawn. Thinking that it was a practical joke by Hatz’s friends, “Jacaranda” (Kövess) refused to put up his arms and the plainclothesmen roughed him up. The apartment was searched, and the two men were taken to the Gestapo prison. When Frantisek (or Fritz) Laufer (“Iris”) sent word to OSS-Istanbul that he had freed Hatz from jail, OSS-Washington cabled its Istanbul station chief Macfarland to sever ties forthwith with both Laufer and Hatz. This time the centre did not “recommend”. It issued an order.

Nevertheless, Coleman’s report defended Hatz as innocent in Messner’s capture and blamed the arrests on a leak in the Hungarian Foreign Ministry.

A subsequent OSS counterintelligence investigation concluded that at least some of the reports “Dogwood” agents had sent to Istanbul from Central Europe reflected German disinformation and suggested that “Dogwood” employed agents who were probably German-controlled. As a result, the OSS dumped most of its Dogwood Chain. Even “Dogwood”, previously acclaimed by Macfarland as “our principal agent” at OSS-Istanbul’s Central Europe desk, fell under suspicion. “Dogwood” – real name Alfred Schwarz – was a successful Czech-born businessman in Turkey and Macfarland’s first hire. Soon Macfarland was replaced by former Wall Street lawyer Frank Wisner.

Wisner’s contempt for anyone suspected of being a double agent clashed with the modus vivendi of Macfarland, who opened OSS-Istanbul for business in April 1943 without having a single agent in the field. Macfarland accepted the Central European argument that some contact between his agents and German intelligence was unavoidable and that those contacts had the virtue of ensuring the flow of information across enemy lines. Macfarland required an agent’s primary loyalty to the Allies and left it up to “Dogwood” to determine that.

On 31 July 1944 Wisner disbanded the Dogwood Chain. He pronounced the “Dogwood Show… no longer desirable or justifiable in relation to its production of useful intelligence”. He left open the possibility that “some portion” of “Dogwood” personnel “may be salvaged as of value in connection of other work” where activities can be closely supervised. In a memorandum six weeks later, on 12 September 1944, Wisner no longer minced words. He condemned Hatz as “an Axis informer, collaborator, and traitor”, and Ferenc Bágyoni (“Pink”), Hatz’s deputy, as Hatz’s “stooge” who played “a rather ambiguous role”. On the other hand, Wisner wrote, Chief of Staff Szombathelyi, military intelligence chief Kádár, and Kádár’s assistant Major Károly Kern “might possibly be deserving candidates for American protection” after the war.

The doubts about Hatz’s loyalty to the Allied cause stemmed from the highly sensitive information to the effect that Hatz had briefed the Abwehr station chief in Sofia, Otto Wagner, his old friend from the days when he had been a military attaché in the Bulgarian capital, on his contacts with the Americans in Istanbul. The reports on what Hatz said to Wagner were among the batch of documents photographed by German Foreign Ministry official Fritz Kolbe and delivered to Allen Dulles in Bern. Kolbe’s material proved one hundred percent genuine.

However, the OSS record of its contacts with Hatz proves that he was less than truthful with Wagner. Speaking to his German friend, Hatz claimed that he had proudly rejected the American demand for intelligence information, which in fact he and other Hungarian couriers delivered to the OSS from September 1943 on. Hatz also exaggerated US–Hungarian differences, and he kept assuring the Germans that the talks were bound to collapse. What amounts to the smoking gun is the German report on what Hatz said to Wagner on 26 February 1944: Hatz stated that the Istanbul talks had failed and the Hungarian General Staff had ordered him to break off all contact with the Americans, and he did.

Clearly, Hatz misled the Germans. What he said to Wagner was the opposite of the truth. Only four days before his meeting with Wagner, on 22 February, Hatz had delivered to OSS-Istanbul the final, definitive Hungarian “agreement in principle” to the US proposal, and talks on military cooperation were supposed to begin immediately.

Nevertheless, OSS headquarters, perhaps hobbled by the need not to reveal the super-secret of its knowledge of the German reports obtained by Dulles from superspy Kolbe or perhaps still sceptical of their authenticity, persisted in its view that Hatz could not be trusted and that he was in the Germans’ pocket. (It was probably true that Hatz was on the Abwehr’s payroll.) Indeed, the German cables from Sofia obtained by OSS-Bern confirmed that Hatz was successful in persuading the Germans that he was their man and they believed that he “would report to the Germans anything crooked aimed against them”. But a comparison of the OSS report on the negotiations with what Hatz told the Germans makes it clear that Hatz’s true purpose was to keep the Germans in the dark about what had really transpired between the OSS and the Hungarian government – and, not so incidentally, to keep the Germans off his back. In fact, Hatz impersonated an agent loyal to Germany while remaining loyal to Hungary, and he was sincere in his dedication to conclude the Hungarian agreement with the OSS.

Coleman, Number Two in OSS-Istanbul, was not privy to the Kolbe documents. But in his comprehensive December 1944 report on the Dogwood Chain which he co-directed, Coleman revealed how Hatz had “covered himself by paying a call” on Wagner, “whom he knew well”. According to Coleman, Hatz had told Wagner that he was going to Istanbul to try to penetrate Anglo-American intelligence, and Wagner had responded by urging Hatz to go ahead. During the two weeks Hatz spent in the Gestapo prison in Budapest in the spring of 1944 he acknowledged that he had been in contact with the Americans but suggested that if the Gestapo needed verification of what he had done, it should contact Wagner in Sofia. It did, and Wagner flew to Budapest to clear Hatz.

In one place in his report Coleman named his source of information: Hatz himself, who visited Istanbul after the Gestapo released him and who had earlier acknowledged having been ordered to Bratislava, where the Germans had questioned him at great length on his contacts with the Americans.

As Hatz deceived Wagner and did not reveal to him the agreement he negotiated with OSS-Istanbul, the Hungarian overture to the Americans should be seen as sincere. It appears that Hatz was the wiliest of Hungarians and a consummate charmer, leading the Germans by the nose. Coleman too succumbed to his charm and trusted him, as did at least some of the OSS officers who met him. His Hungarian colleagues were convinced of his loyalty to Hungary. Amazingly, all the Hungarians who knew Hatz well – his boss Kádár, his deputy in Ankara Bálintitt, and his classmates from the military academy – rejected the charge that he, even though an ethnic German, served German interests. They cleared him as “a stalwart Hungarian patriot”, and perhaps he was, at least primarily.

But Hatz was at least a quadruple agent. He also worked for the Russians, probably from the time when he served as a military attaché in Sofia. In November 1944, he took the grave risk of flying over the front, to the Southern Hungarian city of Szeged occupied by the Red Army. According to a Hungarian lexicon of the anti-Nazi underground published in 1987, he carried with him important military documents, including Hungarian defence plans, and found employment in the headquarters of Marshal Rodion Malinovsky as an information and propaganda consultant. (The Arrow Cross response followed the Nazi pattern: Hatz was stripped of his rank and several members of his family were sent to a concentration camp.) A few months later Hatz received another assignment suggesting that the Russians trusted him, at least temporarily: he was told to produce a plan to reorganize the Hungarian military along communist lines.

The period following Allied victory was dangerous for anyone who had worked for the USSR. A few weeks after he set up his office in Budapest in late 1945, the Russians arrested Hatz, condemning him as a spy for the Germans, and sent him to the gulag. Most likely, he was a victim of Stalin’s global roundup of all agents who had worked for him during the war, according to James McCargar, an intelligence veteran assigned to the first post-war US embassy in Budapest. The Soviets waited at least a year to arrest those who had served the Western Allies, McCargar added, and they were “remarkably consistent”.

Unlike many of his colleagues, Hatz did not perish in the gulag. He was allowed to return to Hungary in 1955 – a year ahead of his boss Kádár. Hatz remained his handsome, charming self, still a nimble fencer with a sharp eye for an opponent’s weak spot. He kept his sense of humour and considered himself undefeated.


British historians have long argued that the true purpose of Prime Minister Winston Churchill’s talk about a Balkan landing was to prompt the Germans to transfer forces to Southeast Europe and thus thin out their defences in the continent’s Northwest. Roger Hesketh, a British official who took part in the operation known as “strategic deception”, documents in a recent book how through the use of double agents controlled by Britain, the Allies successfully misled the Germans into thinking that there would not be a landing in Normandy.

Hungarian historians have scoffed at the “failed handshake over the Danube”, the title of Miklós Lojkó’s thesis arguing that Anglo-American involvement in the liberation of Central Europe was rooted in an early British theory, born before the Soviet and US entries into the war, which posited that “the German Reich would eventually be brought down by mass uprisings in occupied Europe, instigated and assisted by the British”. Lojkó contends that Britain’s various “imaginary plans” and “bogus operations” in places such as Salonika, Greece and Varna, Bulgaria “concurred with the unrealistic strategy campaigned for by Churchill and [Sir Harold] Alexander”, Supreme Commander in Italy, “to concentrate on Italy and achieve an Eastward expansion later”. Such plans, Lojkó concluded, “only existed in the realm of fantasy, i e deception” and “were ultimately designed to assist [the Normandy landing codenamed] Overlord”.

In his book titled “Hoodwinking Hitler”, William B. Breuer focuses on the worldwide Anglo-American effort to distract German attention from the Allied decision to land in Normandy. He details how at the Tehran Allied summit in November 1943 Churchill lost the argument for a Balkan invasion, and then gleefully accepted the assignment of running a deception campaign, codenamed “Operation Bodyguard”. Stalin listened, puffing on a pipe, as Churchill explained that “the plan has to be just close enough to the truth to seem credible to Herr Hitler, but will mislead him completely”. He concluded: “If we pull it off, it will be the greatest hoax in history”. Of the scores of projects and operations Breuer lists, he identifies “Operation Zeppelin” as designed to suggest to the Germans that the principal Allied effort in the spring of 1944 would be in the Balkans. He attributes the Anglo-American interest in Kállay’s peace feelers to Operation Zeppelin and describes the parachuting of the three Americans into Hungary in mid-March 1944 as intended to organize armed resistance in Hungary – and not, as Kállay had hoped, to prepare an Allied landing. “The Hungarian premier was unaware of both operations, Bodyguard and Zeppelin, and the Allies manipulated him”, Breuer writes.

However, the plan for a Balkan landing was part deception, part contingency plan, with top leaders and their subordinates altering the proportions of the mix from time to time. While champions of the Balkan landing prepared for it in the fervent belief that it would happen, those in charge of the deception, primarily British officers experienced in the imperial art of intrigue, kept devising

additional sub-operations in Istanbul, Lisbon, and Madrid. They loved every minute of it once it became clear that the Germans, including Hitler who had originally expected Normandy as the invasion target, were swallowing Operation Bodyguard – hook, line, and sinker. However, for anti-Nazi Central and Southeast Europeans fearing a Russian invasion and Jews fearing the Nazi death machine, the Balkan landing constituted the only ray of hope – one that they would not abandon.

For those seeking clarity of purpose, the target of the invasion had to be either in France or the Balkans, and those who made the decision had to make up their minds in favour of the real thing or a feint. Even within the target area of Northwest France, an enormous Allied deception effort codenamed “Operation Fortitude” focused on persuading the Germans that the landing would be in the Pas-de-Calais, so the crack German Fifteenth Army would stay there, rather than shift to fight the Allies in Normandy in a battle that the deception artists camouflaged as a feint. But those distinguishing shades of gray do recognize an element of British hesitation in giving up the possibilities of diversionary action in the Balkans, even while working loyally on the American project of a direct

confrontation with the Germans in Northwest France. In his book on the Normandy landing, historian Max Hastings writes that “throughout the autumn and winter of 1943, even as planning and preparation for ‘Overlord’ gathered momentum, the British irked and angered the Americans by displaying their misgivings and fears as if Overlord were still a subject of debate”. Hastings cites Churchill’s letter to Roosevelt from 21 October 1943, cautioning that Overlord “is much the greatest thing we have ever attempted”. An 11 November 1943 Churchill cable to US Army Chief of Staff George Marshall struck a worrying tone: “We are carrying out our contract, but I pray God it does not cost us dear”. Hastings quotes Chief of the Imperial General Staff Sir Alan Brooke writing as late as 5 June 1944 about the Normandy landing: “At the best, it will come very far short of the expectations of the bulk of the people, namely all those who know nothing about its difficulties. At its worst, it may well be the most ghastly disaster of the whole war.”

There was tension between the Western Allies. The impulsive Americans, who had not had much of a chance to fight the Germans, were eager for a showdown.

The cautious British, chastened in Dunkirk and barely escaping an invasion of the British Isles, were wary of a head-on collision with the enemy they perceived as better equipped and better trained, and often fanatical. In the end, the benefits were unequal. As the English Hastings put it, “for the British people far more than the Americans, the invasion represented a rebirth, a return, a reversal of all the humiliations and defeats that they had endured since 1939. Here, at last, the British army could resume that which it had so disastrously abandoned at Dunkirk: the battle to defeat a major German army in Northwest Europe”.

Focused on the British, Hastings does not compute the American gains: in Normandy the Americans won not only an unquestioned primacy in running the world, but were on their way to achieve the novel status of a superpower.

It would have been a grave sin of omission if the Anglo-Americans had failed to stoke the embers of resistance in Hitler-controlled Europe or if they had let that fire die down by ruling out the notion of a rescue by liberating armies. To OSS personnel as well as some Allied military officers the plan to open a Balkan front made solid strategic sense, and a landing near Budapest or close to the Yugoslav border seemed feasible, especially if the Hungarians marshalled a reliable supporting force.

The plan had operational ramifications. In his December 1945 report on the Istanbul station of the OSS, Coleman mentioned that in February 1944 he and his boss Macfarland discussed preparations for a possible invasion of the Balkans and the establishment of a team under Coleman’s command, assigned exclusively to the collection of secret documents in Axis territory soon to be occupied. Coleman subsequently travelled to Cairo, Algiers, Caserta, and Bari to find out what those

stations planned to do and how they would cooperate. Upon his return to Istanbul in May, he found out that the project was still pending. A few weeks later the station received a cable from Washington that the Balkan landing had been cancelled.

Flues recalled how Donovan assured him that almost every Hungarian had relatives who had migrated to the United States and would not shoot at Gis. Donovan agreed with the Hungarians, who argued that the Red Army would strip Hungary of its independence, Flues said, and he described Donovan as “all for putting ourselves on Hungarian soil to prevent that disaster. All of us in the Budapest City Unit agreed with him wholeheartedly”. At age ninety-seven, Flues was as persuaded as he was in his younger days that just because Washington’s decision favoured a landing in Normandy, other plans should not have been demoted to mere pipe dreams or make-believe operations aimed at deception.

One afternoon in his home in Chevy Chase, Maryland, Flues remembered how in the summer of 1944 Donovan, running a high fever and in bed yet insisting on working, asked to be briefed on the preparations for the Budapest landing. “He wanted to know every small detail”, Flues said. “He was very enthusiastic about our ‘Operation Toledo’”.


A simple reason for the superior appeal of France as the Allied landing site had to do with the vigour of the French Resistance. It guaranteed what OSS documents called “reception committees”: locals extending a heartfelt welcome to the Americans and the British who penetrated the Nazi defences. During the months of 1943 while the governments of Hungary, Romania, and Bulgaria sought out the OSS in neutral capitals, eager to obtain assurances of Anglo-American landings, French Resistance struck at German occupation force: the number of their actions jumped from four hundred in July to one thousand fifty in August and reached one thousand two hundred and fifty in September.

The importance of the statistics, which came from the usually reliable Japanese diplomatic dispatches to Tokyo intercepted by American code-breakers, was underscored by the fact that they were added to the carefully selected file, called “Of White House Interest”, of OSS reports and intercepts placed on Roosevelt’s desk every day. The volume of Resistance activity – showing that the French did not simply wait for the Allies but did their share of fighting the Nazis – helps explain the reason Supreme Commander Dwight Eisenhower and other generals of the US Army favoured landing in friendly France. As US and British intelligence launched mission after mission parachuting personnel into France to link up with Resistance forces, Allied contacts in Hungary, Romania, and Bulgaria were limited to a handful of high-ranking individuals who were not about to move against German interests without guarantees of Allied protection.


Even during the heady days of the summer and fall of 1943, American and Hungarian mindsets differed dramatically. By the time the two governments had reached their agreement, OSS officers were buoyed by an imminent victory over Nazism, while Hungarian leaders began to feel a pit in the stomach, fearful of the approaching Red Army. The ascending curve of American enthusiasm for the war about to be won intersected with the vertiginous spiral of Hungarian depression set off by the increasing certainty of Russian occupation. A significant section of the Hungarian people, perhaps the majority, preferred the Anglo-Americans. But they had reason to fear fierce Nazi revenge in case Hungary bolted from the Axis, not to mention the comparable horrors of communist brutality.

With fires in their bellies, the officers of America’s intelligence service pushed for more and more projects to undermine the ramparts of Hitler’s Fortress Europe. They believed that when encouraged by the Allies, anti-Nazi resistance could spread from Norway to Italy and Greece, from France to Romania. At the same time, most Hungarians were feeling more helpless with each report of yet another city “liberated” by the Red Army, and they agonized over whether they should flee Westward or risk living under what they knew would be a communist dictatorship.

Donovan could do little to dissuade his superiors, the Joint Chiefs of Staff and President Roosevelt, who had their hearts set on landing on the familiar shores of France and looked forward to the local equivalent of a Broadway tickertape parade. But Donovan was neither a decision-maker nor a Roosevelt insider.

What he did was to make sure that his specialists and the “reception committees” they helped organize in Axis-controlled lands were ready in case plans changed and the Eastern part of Hitler’s Europe became a landing target. Regardless of whether Allied leaders projecting operations for East of Vienna were sincere or only played a part in a strategic deception, OSS officers stationed in Turkey and Italy forged ahead, planning and training, eager to liberate the little-known lands where they knew they would find friends.

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