Foreign Relations of the United States, 1946, Eastern Europe, The Soviet Union, Volume VI

Caserta Consular Files for 1946, Lot 52 F 2.

The Chief of the United States Representation on the Allied Control Commission for Hungary (Weems) to the War Department¹⁸

top secret
priority

Budapest, 31 December 1946.

Z–4844. Within last 5 days large number of arrests were made by the Military-Political Section of the Army (for further reference called KAPO). KAPO is Hungarian counterpart of MVD and is headed by General Palffy-Oestreicher, Moscow trained Communist who is also Chief of Border Guard element of Hungarian Army numbering about 7,000. He is believed to have had assignments from Soviets extending beyond Hungary.

First impression created by nature of arrests was that it may be a purge to eliminate elements known to be friendly to Western cause. It included many who participated in Hungarian resistance against Germans and some who made first contact during the war with Western Allies and Russians.

First it could be assumed that the following motives were behind the arrests.

1. Elimination of Hungarian personalities friendly to West prior to large scale Russian withdrawal from Hungary.

2. Creating impression of Fascist danger in Hungary for the purpose of demonstrating the necessity for further presence of occupational troops.

3. Create an impression Anglo-Saxons were implicated in supporting elements tending to overthrow the present Hungarian Government.

Persons who were released after interrogation by KAPO stated that largely the following 2 questions were asked.

1. What is known to you about the activity of the various persons under arrest to conspire to overthrow the Government?

2. What do you know about the connection between Bela Kovacs (Secretary General of the Smallholders Party), Imre Kovacs (Number 2 man of the Peasant Party), Karoly Peyer (oldtime Social Democrat inactive since occupation who recently attacked present Social Democrat leadership in an open letter) with the arrestees and about the [garble] with British Intelligence.

Over the weekend very high ranking officer of the War Ministry stated that General Palffy-Oestreicher and the KAPO were acting on their own, that their investigation had little results and arrest of [garble] replacement of General Palffy as head of the KAPO would follow within day or two. It was also learned and confirmed by other sources that Prime Minister Nagy, greatly perturbed about the events, called on General Sviridov Acting Chairman of the ACC to ascertain [garble] to demand dismissal of Palffy or resign himself. Sviridov stated that Soviets had not interfered in this matter and KAPO was acting entirely independently.¹⁹

By yesterday it became increasingly apparent that there may have been certain conspiracy in preparation by some of the arrested personalities and others in hiding or still at large. Sub-source of source grandstand, a high political figure close to the Prime Minister, stated that some prominent military and political personalities, most of whom participated in the Hungarian Independence Movement, organized a movement with the primary objective to prevent a Communist Putsch they anticipated coincidentally with evacuation of Hungary by Occupational Forces. Sub-source also stated that movement had distinctly conspiratory and subversive character, its members had to swear allegiance to other than the legal head of the State and according to sub-source had a hidden supply of arms and plans to install a new government by force. Persons taken by KAPO numbered several hundred and the figure will undoubtedly grow.

In hiding are General Janos Voros (former Hungarian Army Chief of Staff and chief negotiator of cessation of hostilities in January ’45 and before) and General Lajos Veress (former leading person in resistance movement). Also believed to be in hiding is Jozsef Dudas considered a close friend and advisor to President Tildy who formerly headed a National Communist group and later joined Smallholders Party.

Known to be under arrest are:

Former Gendarmerie General Gabor Faragho (was War Minister for several months in the first Hungarian postwar cabinet);

Domokos Szentivanyi (Foreign service official);

Several former Hungarian General Staff officers and many others.

While Russian authorities here have maintained ostensibly an attitude of non-intervention in the affair letting it proceed for the time being at least as a purely Hungarian matter, it is generally accepted that Sviridov acquainted Prime Minister Nagy with what was said to be the evidence uncovered by KAPO. This included rosters, records of meeting and plans of the group reportedly uncovered at the home of Mrs. Szentivanyi. Reports also persist that the movement had connection with Hungarian and other Nationals in Switzerland and also had some stores of arms. Rumors, probably planted, were circulating that they also had 4 airplanes and that Allied junior officers had some role in furnishing arms.

It was reported by sub-source that under the evidence presented to Prime Minister Nagy as a result of the investigation, the attitude of Prime Minister Nagy and Smallholders Party Executive Committee has changed and it was decided the only thing they could do is to publicly demand punishment of all guilty.

Political consequence of the affair will undoubtedly be at least a stepping up of Communist demands on the coalition and on the Smallholders Party.

Press has kept silent in the matter. Morning papers on 31st published warrant against General Lajos Veress for crimes against the Republic and large posters appeared on streets today with same contents; such posters are very unusual and may be regarded as indication of future playing up of the affair. Some reports indicated that the affair may be made public today.

18. Much of the information contained in this message was also reported by Minister Schoenfeld in telegrams 2368, December 28, 2370, December 28, 2372, December 30, and 2382, December 30, none printed.
19. According to telegram 2370, December 28, from Budapest, Hungarian Minister of Information Joszef Bognar told Schoenfeld that Nagy had conferred with Sviridov after being told by Minister of Interior Rajk that the arrests were carried out under Soviet orders. Rajk had refused to allow Minister of Defense Albert Bartha to participate in the questioning of those arrested, and political police chief Gabor Peter had refused to make available to Nagy all the documents in the case. (864.00/12–2846) According to telegram 2372, December 30, from Budapest, Defense Minister Bartha told Schoenfeld that Sviridov had denied to Nagy any Soviet interest in or knowledge of the arrests and gave Nagy a free hand in dealing with the situation. Bartha was planning to remove Palffy-Oesterreicher. (864.00/12–3046)