FBI Memo Brent to Hennrich, October 30, 1950

Date: October 30, 1950 To: Mr. C. E. Hennrich From: Mr. A. S. Brent Subject: Gregory Espionage - R

Purpose

To advise that a review has been made of 54 files covering the breakdown of the Gregory case. To advise that this review reveals that the facts are still insufficient for prosecution under the espionage or related statutes; that the information received from [redacted] will not assist in developing the Gregory case at this time but further information received in that case may assist; that on October 17, 1950, the Department's attention was directed to the Gregory case in response to its request for information concerning individuals who now become liable to register with the Department under Section 20 of the Internal Security Act of 1950. To recommend that all of the individual cases on the Gregory be reviewed by the Internal Security and Espionage Sections to insure that we take all action possible under the Statute. To recommend that we take action in certain selected cases in an endeavor to obtain productive interviews with the subjects.

Current Status of the Gregory Case

You will recall that the field was instructed by letter dated March 11, 1949, to break down this case. I have reviewed 54 files which cover the breakdown of the Gregory case. This review was conducted for the purpose of determining exactly what the picture of the Gregory case is at this time. I found that during the breakdown of this case, the field submitted reports concerning some of the subjects under characters handled by the Internal Security Section. Others reports were submitted under characters handled by the Espionage Section. The Internal Security Section handled 33 of these cases. The status of the 33 cases in that section at the present time is as follows:
 * Pending inactive - 1


 * Pending          - 8


 * Closed           -24


 * Total            33

The Espionage Section has handled twenty-one of these cases. These are broken down as follows:


 * Pending inactive -  2


 * Pending          - 14


 * Closed           -  5


 * Total              21

I will supervise all of the pending cases in the Espionage Section on the subjects who were taken out of the Gregory Case with the exception of the following four cases which are being supervised as follows:


 * Joseph Katz – Special Agent Plant


 * Mary Price – Special Agent Fults


 * George Perezich – Special Agent Cattaneo


 * Abraham Brothman - Special Agent Emrich

Joseph Katz and Abraham Brothman are being supervised as shown in view of the developments in [redacted]. Mary Price is employed as Secretary at the Czechoslovakian Embassy. George Perezich is employed by the Yugoslavs in Washington, D. C.

Prosecution

By memorandum dated January 14, 1947, former Inspector E. P. Morgan presented an objective analysis of the Gregory case from a legal and investigative standpoint for the Director. In his memorandum, Mr. Morgan stated, "With the evidence presently available, the case is nothing more than the word or Gregory against that of the several conspirators. The likely result would be an acquittal under very embarrassing circumstances." On page two of this memorandum, Mr. Morgan notes, “Gregory cannot testify in any instances to whom Golos and his successors.• delivered the material collected for them …”

Mr. Morgan proceeded to analyze the case for prosecution for espionage. In response to the question, "Does the evidence now available establish the obtaining of information with respect to the national defense of the United States, with the intent or reason to believe such information would be used to the injury of the United States, and/or for the benefit of a foreign country?," Mr. Morgan notes that Gregory can testify, generally from recollection, as to the type of information obtained which information, as a type, would probably be construed, considering that a state of war existed, as related to the national defense. However, he observed that we had no one else available to identify this information. It was questionable whether the informant's recollection would. be sufficiently definite and detailed, without some corroboration, to sustain conviction. It would be the word of one defendant against that of several others without more, which is always, he observed, “a precarious predicate for an investigation."

It was also noted that "intent or reason to believe such information will be used to the injury of the United -States. and/or for the benefit of a foreign country," was an essential element of this'• offense. It was pointed 9ut that we had no evidence from which "intent• or reason to believe" could be proved or reasonably inferred in the case of the Silvermaster or Perlo groups. It was noted that even Gregory could not testify where the information went after leaving her and her admission that she believed it would be used by Soviet Intelligence would not be binding on the other co-conspirators.

Mr. Morgan next took up the question "Does the evidence available show that subjects had lawful or unlawful possession of any document or note pertaining to the national-defense and (a) wilfully transmitted or attempted to transmit the same to any person not entitled to receive it, or (b) wilfully retained the same and failed to deliver it on demand to the officer or employee of the United States entitled to receive it?" In connection with this question, he noted that we have only the statement of Gregory as to the nature of the' documents or notes involved, some of which were, according to her, copied or photographed in the basement of the Silvermaster home. He observed that under this section it is the document itself the unlawful possession and transmittal of which is proscribed. He stated that the document must be produced or identified with such definity to show by other facts that it did-relate to the national defense. He doubted if Gregory’s testimony would go sufficiently far in that direction. He summarized this point by stating that you must produce wither the document or, in its absence, show conclusively that it comes within the provisions of the statute which penalizes possession and transmittal of a document. He stated that we did not have the evidence to do this.

Mr. Morgan concluded by stating


 * 1. That the evidence available at that time in the Gregory case was insufficient to assist a successful prosecution under existing Federal statutes.


 * 2. That the investigation as being conducted at that time offered little likelihood of providing corroborative evidence with respect to activities occurring during the association of Gregory with the subjects.


 * 3. That it was highly problematical whether the investigation would establish violations independent-of those indicated by Gregory. He observed that without an informant working within the group of subjects, the odds in this respect would be practically nothing.


 * 4. That the principal value of the investigation had been to develop subjects in addition to those indicated by Gregory.


 * 5. That the continuance of the investigation on the basis existing then did not appear justified, in as much as the results were largely cumulative except for an occasional new face in the picture.


 * 6. That "Had we been in contact with Gregory during the course of his courier activity, beyond question evidence could have been developed sustaining a prosecution for espionage. Coming in after the event as the Bureau did, we are now on the outside looking in, with the rather embarrassing "responsibility of having a most serious case of Soviet espionage laid in our laps without a decent opportunity to make it stick. This very circumstance, however, necessitates pursuing more direct methods, particularly since the facts of the Gregory statement are known to several persons and agencies outside the Bureau.”


 * 7. That the only hope of salvaging a successful prosecution was (a) to try to make an informant of one of the subjects and/or (b) to interview the subjects hoping that at least one would break and serve as a corroborative witness.

Mr. Morgan noted that if we failed to sufficiently develop one of the subjects as an informant, he doubted whether any more could be accomplished of sufficient value through further investigation based upon the interviews.

Mr. Morgan recommended


 * “(1) That one of the subjects of this case, possibly the weakest member, be contacted with a view to making him an informant. This is an outside chance but offers the only reasonable prospect of making a case with respect to contemporaneous and future events.


 * “(2) Failing in this respect, the other subjects should be exhaustively interviewed. Since an interview with one would virtually amount to putting all of them on notice, it would seem logical to conduct such interviews as nearly simultaneously as possible.


 * “(3) That inasmuch as the case is in the hands of the Department, its approval be obtained before taking the foregoing action.


 * "(4) That failing to break any of the subjects, serious consideration be given to exposing this lousy outfit and at least hounding them from the federal service. Several possibilities exist in this regard but this would seem to be a bridge to cross when we get to it.” (65-56402-20771)

Since the preparation of the above memorandum by Mr. Morgan, we have interviewed or endeavored to interview the Gregory subjects. We have interviewed some of them on more than one occasion and , we have tried to interview some of them on one or more occasions. Many of them have appeared before one of the two Federal Grand Juries that met in New York City from June 1947 to June 1950. Some of them have appeared more than once. Many of the subjects have appeared before the House Committee on Un-American Activities. However, a review of the fifty-four cases reveals that we still have insufficient facts upon which to base prosecution for the violation of the espionage and related statutes because of the reasons noted by Mr. Morgan. It was observed, however, that all of the subjects have left the United States Government.

Perhaps the most important investigative accomplishment since the breakdown of this case was instituted has been identification of the Unknown Subject, "Jack" as Joseph Katz. However, when this identification was made, Katz was in France where he remains. The chances of obtaining prosecution in this case would be considerably better if we were able to develop Katz as a witness for the Government.

Information Developed  in  Soviet  Re  Gregory  Subjects

I conversed with Special Agent R. J. Lamphere concerning the information developed in the [redacted] on individual who were involved in the Gregory case. The facts developed in

[several lines redacted]

It is my understanding that Special Agent E. J. Van Loon will prepare a memorandum which will contain the pertinent information developed in [redacted] on the individuals connected with the Gregory case. I will channel this information to the appropriate case files.

Special Agent Lamphere advised that he will retain all unidentified subjects [redacted] If any of these are identified as Gregory subjects, they will be turned over to me.

The Internal  Security  Act  of  1950

As you know, this statute was enacted "to protect the United" States against certain un-American and subversive activities by requiring registration of Communist organizations, and for other purposes."

This statute provides in Section 20 that the Act of June 8, 1938, "an act to request the registration of certain persons employed by agencies to disseminate propaganda in the United States and for other purposes," be amended to add the following paragraph:


 * "(5) any person who has knowledge of or has received instruction or assignment in the espionage, counterespionage or sabotage service or tactics of a government of a foreign country or of a foreign political party, unless such knowledge, instruction, or assignment has been acquired by reason of civilian, military, or police service with the United States Government, the governments of the several States, their political subdivisions, the District of Columbia, the Territories, the Canal Zone, or the insular possessions, or unless such knowledge has been acquired solely by reason of academic or personal interest not under the supervision of or in preparation for service with the government of a foreign country or a foreign political party or unless, by reason of employment at any time by an agency of the United States Government having responsibilities in the field of intelligence, such person has made full written disclosure of such knowledge or instruction to officials within such agency, such disclosure has been made a matter of record in the files of such agency, and a written determination has been made by the Attorney General or the Director of Central Intelligence that registration would not be in the interest of national security.”

By memorandum dated September 26, 1950, the Criminal Division of the Department advised that it would be interested in receiving any information the Bureau might have regarding individuals who now become liable to register with the Department under Section 20 of the Internal Security Act of 1950, and also requested that the Criminal Division be advised of the identities of persons concerning whom a written determination might be made by the Attorney General that registration would not be in the interest of national security.

The Bureau advised the Department by letter dated' October 17, 1950, that the problems raised in its memorandum were being given consideration and it was called to the Department's attention that in the meantime it might wish to review the case of "Nathan Gregory Silvermaster, was., et al," and the case of "Jay David Whittaker Chambers, was. et al, Perjury, Espionage - R and Internal Security - R," both of which are replete with individuals falling under each category.

It is suggested that the individual cases on the Gregory subjects be reviewed by the Espionage and Internal Security Sections to determine whether the cases should be presented to the Department for a ruling on Section twenty.

Possibility of  Developing  the  Gregory  Case  Through Concentrated Investigation  on  Certain  Subjects

As noted previously in this memorandum, there are many things that could occur in the future which would develop this case and probably lead to successful prosecution. Joseph Katz might talk. We might obtain information through [redacted]. One of the important Subjects may unexpectedly talk. It appears to me that we face the choice or waiting with the hope that some of these possibilities will be realized or we can proceed in certain selected cases with an investigation designed primarily to develop successful' interviews with some of the Gregory subjects.

As noted above, most of the subjects in the Gregory case have been interviewed or attempts have been made to interview them. At the present time there is no indication that any of them will talk. In view of this situation, it is believed that we should concentrate our investigative efforts on the subjects who really have the information which may result in successful prosecution. It is realized that we are dealing with callous individuals. However, it is felt that we should concentrate our investigative efforts at this time on trying to find a weak spot in the armors of these people which will enable us to obtain successful interviews with them. After a review of the fifty-four cases concerning individuals who were formerly connected with the Gregory case, I have selected certain cases which appear to me worthy of additional investigative efforts as stated above. These cases are:

1. Anatole Boris  Volkov
 * Security Matter – C
 * 100-329903

Volkov is the son of Helen Silvermaster by a former marriage. This case was closed by the field in June 1950 in view of Volkov's apparent lack of activity. At that time, he was a research assistant in the Civics Department of the University of Wisconsin at Madison, Wisconsin. By letter dated November 21, 1947, the Charlotte Office reported

[several lines redacted]

Gregory advised that Volkov was regarded as a good Communist and on occasions would come to New York and deliver to her material that had been gotten together in the Silvermaster home.

On June 17, 1947, Volkov was interviewed by agents of the Charlotte office, at which time he denied the allegations of Gregory. He volunteered that he was not a member of the Communist Party and had never attended any of the meetings and was not associated with anyone whom he knew was a member of the Communist Party. It is believed that if we concentrate on Volkov and are successful in obtaining additional witnesses who will testify concerning his Communist Party. membership and activity, we will have grounds for a reinterview with Volkov or maybe able to have him brought before a Federal Grand Jury to establish a perjury violation. All of this, it is felt, will affect the Silvermasters and may possibly persuade them to cooperate with the Government.

2.	 William Ludwig  Ullman
 * Security Matter - C
 * 100-364197

It is believed that we should concentrate on Ullman, who is the subject of a pending case, in view of the fact• that he is alleged to have photographed the documents for Silvermaster and he may be able to identify some of the classified material which was furnished to Silvermaster by members of his group.

The relations between Ullman and the Silvermasters appear unusual. He came to Washington, D. C. in approximately 1935. Shortly thereafter he began to live with the Silvermasters and has continued to reside with them. He has no background of Communist activities. He apparently comes from a loyal American family. His parents reside in Springfield, Missouri, and he has a sister who lives in New York City. When interviewed in April of 1947, Ullman appeared as being the weakest member of the triangle.

It appears that the Silvermasters have always watched Ullman very carefully. It also appears that he never gets very far away from them.

A recent report from the Newark Office reflects an interview by our Special Agents on August 31, 1950, with Jesse Thompson, who worked for Silvermaster and Ullman as a carpenter in Harvey Cedars, New Jersey for about three years up to July 1950. Thompson commented on Silvermaster as a personality. He stated among other things that Silvermaster was a man of a very high nervous, erratic and taciturn nature. He advised that Silvermaster apparently is in constant fear of something. He feels sure that Silvermaster is not a well man, either mentally or physically. He explained these statements by saying that should a car or strangers appear anywhere near the vicinity, both Ullman and Silvermaster go into a whispering conference and there is much anxiety and nervousness displayed by both of them until the cause is removed.

Mr. Thompson stated that the two men exhibited a tremendous amount of distrust toward each other and that each is constantly checking on the whereabouts and activity of his partner. He said even if one goes to the post office to pick up the mail without the other, the one who did not go would begin making checks among the other workers on the construction job to determine how long the other had been gone and what mail had been picked up. He said that a like attitude was displayed by Silvermaster and Ullman in everything they did. He believed that a love triangle existed between Silvermaster, his wife Helen, and Ullman and was responsible for this distrust. (101-786-130)

As you know, it is a common practice in the course of criminal investigations conducted by the Bureau to contact parents and other relatives of the subject, if such action is deemed appropriate. It is believed that we should explore this possibility in the case of Ullman. If it is determined that Ullhlan's parents and sister are loyal Americans, it is believed that we should contact them for information concerning Ullman and particularly any information which may lead to a successful interview with him. It may be that they will in some way assist the Bureau in obtaining Ullman's cooperation. Undoubtedly, an interview with them would disturb Ullman if it came to his attention.

3.	 Duncan Chaplin  Lee
 * Security Matter - C
 * 100-364U3

Duncan Lee and his wife were interviewed by the Washington Field Office on May 29, 1947. Both were quite nervous and upset. He was shaking considerably and did not stop trembling until the interview had progressed for approximately one hour. He appeared before the. HCUA on August 10. 1948. Washington Field has reported that there are seven discrepancies in Lee's HCUA testimony and the information he furnished our Special Agents. It is believed that a thorough review of the investigation concerning Lee might be productive.

It is again suggested that there may be a way of persuading Lee to talk by interviewing his parents and relatives. Lee comes from an old prominent Virginia family and it is possible that we start with his parents and relatives he may become cooperative. If these interviews draw complaints from him then it is felt that we would be in a position to interview him thoroughly concerning the noted discrepancies. The Security Matter - C case of Lee was closed by Washington Field Office report of September 26, 1949.

4. Abraham George  Silverman
 * Security Matter - C
 * 100-363633

The Bureau has made several attempts to interview Silverman. His case is now closed. Our latest was in early September 1950 after his testimony before the HCUA. This met with negative results. We have also endeavored to interview his wife, Sarah, with negative results. Mr. T. Vincent Quinn, former Assistant Attorney General in Charge of the Criminal Division, once stated that if Silverman talked he probably would be able to prosecute not only the conspiracy case but also a substantive violation, in that Silverman might be able to identify certain classified material furnished to the Silvermasters. (Memorandum from to Mr. Ladd to the Director dated July 10, 1947, 65-56402)

You will also recall that Silverman was involved in the Jaham case. He is in a position to furnish us considerable information if he could be persuaded to do so. In the course of our past investigation of him we have endeavored to use the third party approach, but this method has been unproductive. It is believed that we should give consideration to interviewing Silverman's son, Richard, who is grown and in 1947 was attending Harvard University. Richard should be able to furnish us information concerning his father’s associates in Washington, D. C., particularly some of the individuals who were involved in the Gregory case. It is believed that Silverman would be very sensitive to an approach to his son. It is felt that an interview with Richard Silverman would disturb his father and might be the thing which will cause Silverman to cooperate with us.

5. Robert Talbot  Millar, III
 * Internal Security - R
 * 101-6611

It is believed that we should give consideration to closing in on Miller by talking to his father, who is a prominent New England physician. We have never talked to his father or any of his relatives and it may be that such interviews might persuade Miller to cooperate with us. At the present time, Miller is an associate of Randolph Feltus in the firm of Randolph Feltus Associates, Public Relations, New York City.

6. Victor Perlo
 * Security Matter - C
 * 100-362128

He is the subject of a pending case being supervised by the Internal Security Section. He was, of course, the leader of the Perlo group in Washington, D. C. It is believed that we should give consideration to interviewing his parents for whatever information they may have concerning his Communist activities. It is to be noted that Perlo continues his contacts with Communist and Communist front groups.

Recommendation 1. That the Internal Security and Espionage Sections review their respective cases on the Gregory subjects to insure that we take all action possible under the Internal Security Act of 1950.

2. That a thorough review be made of the files on the individuals mentioned above to determine whether we should interview their relatives in an endeavor to persuade these subjects to cooperate with the government/ It is believed that  the investigations should now be directed toward making these subjects talk.

3. That the review be made by the Espionage Section.

4. That the pending cases on Ullman and Perlo be transferred from the Internal Security Section to Espionage for review in accordance with the suggestions contained in this memorandum.