Pre-War Intelligence Landscape
The origins of the CIA trace back to the Second World War. Before this conflict, the United States lacked a dedicated intelligence agency. Domestic intelligence was managed by the FBI, established in the early 20th century under its influential first director, J. Edgar Hoover. Foreign intelligence, meanwhile, was the responsibility of the State Department and the Department of Defense, with operations confined to a small unit within the State Department.
The Creation of the OSS
This fragmented approach left the United States unprepared for the challenges of global conflict. The surprise attack on Pearl Harbor by Japan in 1941 highlighted the urgent need for a unified intelligence effort. In response, President Franklin D. Roosevelt established the Office of Strategic Services (OSS) to oversee intelligence and covert operations during World War II.
The OSS, a precursor to the CIA, was distinct from traditional military institutions. Its ranks were dominated by members of America’s elite ruling class—figures from Wall Street, corporate law firms, and military leadership—reflecting a deep connection to the nation’s economic and political power structures. This trend would carry over into the formation of the CIA.
William Donovan and the OSS
At the helm of the OSS was William “Wild Bill” Donovan, a World War I hero and self-made millionaire Wall Street lawyer. Nicknamed after a Yankees baseball coach, Donovan had served as the U.S. Coordinator of Information under the Department of Defense. His intelligence background and leadership made him Roosevelt’s clear choice to lead the groundbreaking agency.
Despite his pivotal role, Donovan’s legacy is often overshadowed by figures like Allen Dulles, who became central to the CIA’s evolution. As OSS director, Donovan legitimized the agency with his military and legal credentials. However, his tenure was not without controversy. Critics accused him of favoring an “old boy network” of Wall Street connections over merit-based hiring. Missteps such as leaving sensitive documents in a Romanian brothel and mistakenly ordering attacks on OSS agents further tarnished his reputation.
Even so, Donovan played a key role in shaping the OSS and laying the groundwork for the CIA. Known as the “godfather” of modern American intelligence, he united the OSS agents who would later define the CIA’s culture and strategies. After the war, Donovan returned to private law but remained connected to intelligence, advising Allen Dulles during his tenure as CIA director. His enduring involvement exemplifies a recurring theme in U.S. intelligence—that one never truly leaves the agency.
Allen Dulles and the OSS
Among those who carried Donovan’s legacy forward was Allen Dulles, a towering figure in U.S. intelligence history. Dulles’s career offers a revealing—and often troubling—view of American intelligence. His tenure at the OSS, rise to the CIA’s first civilian director, and lasting influence on U.S. foreign policy cemented his reputation as both impactful and controversial.
Dulles’s influence extended beyond the OSS. In 1927, he became president of the Council on Foreign Relations (CFR), a powerful organization composed of business elites, bankers, industrialists, and government officials. The CFR’s interventionist mission aligned seamlessly with Dulles’s ideology, enabling him to consolidate his power through global intelligence operations.
In a 1946 CFR meeting, Dulles argued against aggressively purging Nazi influences from postwar Germany, reasoning that many capable leaders had Nazi affiliations. This stance earned him a lasting reputation as a Nazi sympathizer and raised persistent questions about his motivations.
Ties Between Intelligence and Nazi Germany
Allen Dulles’s privileged background reflected his deep ties to America’s elite. Born into a prominent East Coast family, he was the grandson of John W. Foster, Secretary of State under President Benjamin Harrison, and nephew by marriage of Woodrow Wilson’s Secretary of State. He graduated from Princeton University and earned a law degree from George Washington University.
Before the war, Dulles worked at the Wall Street firm Sullivan and Cromwell, where his brother, John Foster Dulles, was a senior partner. Their firm represented companies deeply linked to the Nazi regime, including IG Farben and Krupp AG. These ties placed Allen Dulles in a troubling position as an OSS agent tasked with opposing Nazi Germany while maintaining professional relationships with firms supporting its war machine.
This dual allegiance highlighted the intersection of private enterprise and government operations, a recurring theme in U.S. intelligence. Dulles’s actions during this time left a lasting imprint on American intelligence and its entanglement with corporate interests.
Corporate Influence and Nazi Sympathies
Before examining Dulles’s OSS role further, it is crucial to explore his connection to IG Farben, a German conglomerate central to the Nazi war effort. IG Farben supplied critical materials like synthetic fuel and rubber, vital to the Third Reich, and maintained ties with Sullivan and Cromwell. The Dulles brothers’ work with such firms exemplified the conflict of interest between corporate loyalty and national duty.
Dulles’s prioritization of corporate interests, even when they conflicted with U.S. government directives, revealed a disturbing alignment with Nazi Germany. This revolving door between private industry and intelligence defined much of Dulles’s career and influenced the trajectory of U.S. intelligence policy.
Rise of Nazi Germany and the U.S. Response
The OSS operated under Roosevelt’s directive to defeat Nazi Germany, but many operatives, including Dulles, maintained ties to private clients entrenched in the Nazi regime. This dual allegiance shaped OSS priorities, often complicating its mission.
The OSS’s collaboration with former Nazis extended into the CIA’s early years, with covert networks of ex-Nazis used to counter Communist influence in Europe. While some attribute OSS failures to incompetence, the sympathies of figures like Dulles suggest a lack of genuine effort in anti-Nazi operations.
The Transition to the CIA
President Truman replaced Donovan with Roscoe Hillenkoetter, a U.S. naval officer, as the CIA’s first director. Hillenkoetter’s disciplined military background was seen as necessary to guide the agency. Yet Donovan’s influence persisted, as he advised Dulles during his transformative tenure as CIA director.
This period marked the CIA’s evolution from its OSS roots, but lingering systemic issues highlighted the challenges of transitioning to a unified intelligence agency.
The Concept of the Deep State
The OSS laid the groundwork for a “parallel shadow government,” often referred to as the “deep state.” This term describes unelected institutions that operate alongside elected governments to safeguard elite interests. The CIA became a central player in this network, shaping U.S. policy through covert operations.
By exploring the CIA’s history, the idea of the deep state reveals a broader coalition of institutions—from the military-industrial complex to international organizations—that share common goals of protecting capital and U.S. hegemony. These intertwined interests continue to define the CIA’s role in global affairs.
