Memorandum for the Attorney General, January 27, 1947

I have been advised by Mr. Tamm of his conference with you on January 23rd concerning the disposition to be made of the Gregory Case. You requested that I furnish to you my views as to a recommended course of action with consideration given to the possibility of (a) the Bureau continuing the investigation of this case as an intelligence operation, (b) the Bureau or a Federal grand jury interrogating a selected number of the subjects, or (c) that the Department furnish to the employing departments the basic data concerning the activities of the individual subjects of this case in order that the employing departments might take administrative action against these employees who were participants in the operation of the intelligence ring.

As to the first possible course of action; that is, the Bureau continuing its investigation of this case as an intelligence operation, I am of the opinion that in view of the unfortunate publicity given to this case by a Departmental source, it will be impossible to continue the investigation on an intelligence basis. In this regard, information reaching us from our coverage of the activities of these subjects indicates they are now all very security conscious and that a practical coverage of their activities is impossible. Collaterally, I might point out, for your confidential information, that as a result of this premature and ill-advised publicity, the Bureau's key informant has [redacted] and absolutely refuses to continue to cooperate with the Bureau. It is needless to point out that without the cooperation of this informant a real coverage of this case is impossible.

Relative to the second suggestion, namely, that the Bureau or a Federal grand jury interrogate a selected number of the subjects, I must point out that this program would appear impractical at this time for the same reasons that I have enumerated above as applying to the first proposal.

I believe that the publicity originating in the Department has placed each of the subjects on notice of the Bureau's knowledge of his activities and that consequently any attempt to interrogate them, either by Bureau agents or before a grand jury, would produce nothing. Obviously, this situation leaves only the third alternative; that is, that the Department furnish to the employing departments the basic data concerning the activities of the individual subjects as a possible means of concluding the case. It is assumed, of course, that the employing departments will take administrative action against the subjects who are employed in these departments. If you desire to follow this course of action, I will arrange to have Bureau supervisors prepare appropriate summaries in such form that you may transmit them to the interested government departments. It will, of course, be necessary to exercise some care in the preparation of this material in order that the bureau's sources of information and modus operandi in this case will not exposed and the Bureaus’ coverage of future cases thereby jeopardized.

Respectfully,

John Edgar Hoover Director

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