103. Memorandum From the Chief of the Western Hemisphere Division, Central Intelligence Agency (King) to the Deputy Director for Plans of the Central Intelligence Agency (Wisner)1

SUBJECT

  • Compromise of Cable Traffic—PBSUCCESS

1. The Lincoln station advised headquarters on 19 February 1954 that a major compromise of Commo and project security was discovered on or about 17 February 1954 by [2 names not declassified] replacement with the Castillo Armas group. The following is a chronological report of the compromise as received by WHD from LINCOLN:

a.
During the week of 15 February 1954, Mr. [name not declassified] met [name not declassified], owner of an apartment in [place not declassified] formerly occupied by [name not declassified], and settled his account. During this meeting, Mr. [name not declassified] handed to [name not declassified] the original copies of all messages which have been passed by the Chief of Station, [place not declassified], to [name not declassified]. [name not declassified] advised that [name not declassified] left these messages in the apartment when he left the country. [name not declassified] further stated that because of the apparent importance of the information contained in the messages, he had made said messages immediately available to his good friend, President Somoza. When [name not declassified] examined the messages in question, he immediately realized that a serious exposure of Agency cryptonyms and PBSUCCESS organizational methods and procedures had been revealed to at least [Page 198]two known unauthorized persons and probably an indeterminable number of others. He immediately cabled Station LINCOLN advising them of the compromise in general terms and indicated that he was departing for LINCOLN immediately with the documents in question.
b.
Station LINCOLN alerted headquarters at 1300 hours, 19 February 1954, by telephone and advised that a courier would arrive at headquarters at 2200 hours, 19 February 1954, with the compromised documents. LINCOLN followed the telephone call with cable 612 which indicated that fact that the compromise consisted of 5 pages of slightly paraphrased text containing all basic cryptonyms and pseudonyms applying not only to PBSUCCESS but to the Agency at large. The PBSUCCESS desk made a preliminary examination upon receipt of cable 6122 and determined that the compromise involved roughly six cables. It was not possible at that time, however, to determine exactly which cryptonyms had been exposed. When the courier arrived with the compromised messages, Mr. [name not declassified] of Commo was called and he and Mr. Esterline, desk officer PBSUCCESS, examined the documents together and compiled an accurate list of exposed indicators. Mr. [name not declassified] of the Security Office was advised of this list the morning of 20 February and a copy of the list was hand-carried to his office at 1020 hours that date.
c.
The following is a list of those cryptonyms and pseudonyms which were exposed to President Somoza, [name not declassified] and an indeterminable number of others:

LINCOLN (LINC) [not declassified]
[not declassified] KUGOWN
Seekford KUFIRE
PBSUCCESS Cadick
LUGTON GUAT
KUHOOK [not declassified]
Calligeris [not declassified]
WSHOOFS ODYOKE
SARAMAC SROBA
SCRANTON LINCOLN Security Officer } Compromising phrases
KMFLUSH Customs at New Orleans
MT/1 Pivall
MT/3 [not declassified]
[Page 199]

2. A preliminary analysis of the exposed messages has been performed, and based on that analysis and assessment, the following assumptions have been made:

a.
That President Somoza, [name not declassified], and an indeterminable number of others now know that a powerful, well organized, official United States organization is backing the Castillo Armas group.
b.
That a definite possibility exists that the information contained in subject messages may have gotten into the hands of Raul Saqueda, chief of personnel for the Castillo Armas group, and [name not declassified], pilot, soldier of fortune and [less than 1 line of source text not declassified]. If this happened, it could well be that any or all of the information may have gotten into the hands of the Guatemalan government through agents in the Castillo Armas organization.
c.
If [name not declassified] is less than he purports to be, the information may have been passed to any one of a number of other intelligence services. As regards [name not declassified], however, a preliminary investigation gives indication that he is pro-American and that he probably has handled the messages in the manner he indicated.

3. A preliminary analysis of the report by [name not declassified] (attached hereto), otherwise known as Pivall, re the circumstances under which he procured Mr. [name not declassified]’s messages in [place not declassified] clearly indicates the following about Mr. [name not declassified]:

a.
Specifically as regards the copies of paraphrased cables, he apparently intentionally withheld from the Agency information of what was known to him to constitute a major breach of security directly affecting the security of the project and the security of the Agency. The fact that this was known to him is clearly indicated by his having arranged, while in Washington, without notifying the Agency, the mailing of a letter to [name not declassified], who is not yet cleared, in [place not declassified], the expressed aim of which was the recovery of the papers.
b.
[name not declassified] is completely unreliable, professionally and personally.

4. Mr. [name not declassified] has been recalled to headquarters from his home in [place not declassified]. He will be given a very thorough and detailed interrogation. The situation cited in paragraph 3a above clearly and painfully indicates that PBSUCCESS may be compromised to a degree heretofore considered beyond the realm of possibility, and further, a large amount of information yet unrevealed may be in the hands of the Arbenz government.

5. It must be kept in mind that the foregoing report is at best a cursory examination of the situation and that a more detailed analysis cannot [Page 200]be presented formally until LINCOLN and headquarters have had time to collect and collate all information re this specific incident and Mr. [name not declassified]’s general pattern of action since October 1953.

J.C. King3

CWH
  1. Source: Central Intelligence Agency, Job 79-01025A, Box 70, Folder 2. Secret.
  2. Not found.
  3. Printed from a copy that bears this typed signature.