King of Spies Page 16

“Investigations, both formal and informal, inspections and staff visits have confirmed certain of the allegations, complaints and unfavorable reports. The relief and rotation of Major Nichols as commander is the minimum action considered appropriate under the circumstances.”

  This was the first “derogatory report” of Nichols’s seventeen-year military career. Strangely, though, all of the specific criticisms of Nichols in the report were for behavior that his commanding officers had known about and tolerated for a decade.

  “He appears in formation in front of his troops in fatigue uniform without any insignia. . . . He has allowed himself to gain weight up to approximately 260 pounds. . . . He barks orders to his officers and men; yet, his dogs have bitten airmen, congregate in his headquarters building and office during official visits, and eat in the mess hall at the same time as officers. . . . Men in his organization in sworn testimony state they never knew his rank except for the ‘Donald Nichols’ which he signed on official papers. . . . He maintains ‘Prussian’ type discipline in his squadron area; yet, as escort for Korean military officials in uniform, he has appeared in the Far East Air Force Headquarters building in an open-necked shirt, pullover sweater and slacks.”

  The most serious charge in the report was that Nichols mistreated his men and that they had turned against him, complaining over his head to other air force officers, as well as to U.S. senators from their home states. The report said many officers and airmen who served in his unit “have shown little or no loyalty to Major Nichols, have utter contempt for Major Nichols’ treatment of USAF personnel, and are perplexed that such a person should command a USAF squadron.”

  That Nichols would be perceived as a hard-nosed and arbitrary commander was hardly surprising. His spying instincts and aggressiveness, not his empathetic leadership skills, had propelled his rise to squadron commander. Not once during his career had he been back to the States to attend a military leadership school. He had always been too valuable as a field agent to train as a manager.

  During the war, when panic ruled and his bosses were desperate for intelligence, most of the men who took orders from Nichols were Koreans—airmen and officers from the South Korean air force, along with North Korean defectors, deserters, refugees, and local criminals. In the air force and throughout the U.S. military, the treatment of Koreans was abrupt, often racist, and sometimes brutal. An unwritten rule for U.S. Army officers said “never ask a Korean to do anything: tell him.” Nichols had authority to send Koreans on suicide missions—and often did so. Koreans were in no position to complain.

  As for the Americans who worked for Nichols during the war, many were awed by the risks he took with his own life and they admired the relentlessness of his work ethic. They thought he was a decent man, although not especially warm. “Nick was a tough and demanding boss, but he was also a good guy,” said Torres. “He was strict about parties and bringing girls on the base, but he was generally liked and respected,” said Ronald F. Cuneo, a corporal who served as photographer on Nichols’s base in the last year of the war. “He didn’t mingle with us, but he took care of his people,” said Raymond Dean, an air force supply sergeant who also spent the final year of the war on Nichols’s base. “He knew every one of us by name. Sometimes in the evening, we would go walking in the mountains with his little dog Brownie.”

  But turnover among officers and airmen in Korea was high and the reputation Nichols won in wartime had faded by 1957. Most men serving under Nichols rotated in and out of his base in less than two years. Few were veterans of the Korean War and fewer still knew anything about Nichols’s achievements. His junior officers typically had college degrees but no combat experience and most of his airmen were draftees counting the days until they could get out of Korea. Compared to the men Nichols commanded during the war, their tolerance for iron-fisted leadership was low.

  Still, the specific descriptions of mistreatment in Colonel Dunn’s report were skimpy and far from shocking. He accused Nichols of having “overwhelming confidence in his own standards of command and control,” of writing sharply critical evaluations of his subordinates, and of failure to provide “adequate transportation” for his men for recreational activities or sick call.

  But the report also said that Nichols was as good as ever as an intelligence officer.

  “Major Nichols is a ‘unique’ individual and in some respects he can be labeled ‘outstanding.’ Through his personal contacts with the Chief of the Korean Air Force, President Rhee and other officials at all levels of the Korean government, he has performed a consistently splendid ‘individual’ job in keeping the USAF informed of activities and events in South Korea. He is as well informed on South Korean affairs and personalities as any American I know.”

  Nichols was aware of some of his management deficiencies, the report said. He had made “some effort to improve himself. . . . He has lost some weight, has disposed of some of his dogs, permits more reasonable utilization of Government transportation and sends me a statement to the effect that once a month he has appeared before USAF personnel in the uniform of a Major.”

  It was not nearly enough to appease his commander. Concluding his assessment of Nichols, Dunn wrote: “I consider the relief of Major Nichols from command, rotation to the Zone of Interior [the United States] and replacement by a new squadron commander as the most appropriate action available under the circumstances.”

  Colonel Dunn did not, however, spell out specifics that came close to justifying the sacking of the most-experienced, best-sourced American intelligence commander in Korea. The muddy imprecision of his report begs the question: What else was going on with Nichols in Korea that impelled the air force to fire him and send him home?

  After Partridge left Tokyo, the Far East command launched two formal investigations of Nichols. The first, which generated a report called “Alleged Mistreatment of Military Personnel,” was conducted by the 6002nd Air Intelligence Group, which supervised Nichols’s unit from Tokyo. While it was under way, Nichols “challenged” the authority of an investigating officer who had been sent to his base near Seoul. A second inquiry was conducted by the Air Force Office of Special Investigations, the internal affairs unit Nichols had once worked for. The findings of these investigations were not contained in Nichols’s military service record and have been destroyed. But a letter about the reports says they “revealed numerous instances of abuse of authority, mistreatment of subordinates, and poor leadership qualities on the part of Major Nichols.” The letter did not specify what abuses of authority Nichols committed or how he might have mistreated subordinates.

  There are, however, a number of tantalizing leads.

  During most of his eleven years in Korea, Nichols had unsupervised access to very large amounts of cash. In his office at Oryu-dong, the base outside Seoul, he had cabinets stuffed with American dollars, South Korean won, and North Korean currency, some counterfeit, some genuine. This was the cash Nichols often tossed to agents bound for North Korea.

  “There was so much money!” said Chung Bong-sun, the South Korean air force intelligence officer who worked with Nichols. “When he opened both doors of the cabinet, all I could see was cash. Nichols’s houseboy told me there was also cash in other cabinets that he did not open in front of me.”

  As early at 1948, Nichols began bringing eye-popping quantities of American dollars to a photo lab run by Frank Winslow, then a twenty-one-year-old first lieutenant in the Army Signal Corps.

  “My lab was just across from the American embassy and Nichols was a constant customer,” Winslow recalled. “In fact, he was my best customer. Everyone knew he was a spook. He wore civvies and came into the lab with greenbacks in bags to be photographed. It was always a substantial amount of money.”

  At that time, U.S. currency in large quantities was an arresting sight in Seoul. The U.S. military in South Korea had created a kind of Monopoly money—military payment certificates (M
PC)—in an attempt to keep dollars from flooding the local economy, distorting exchange rates, and fueling the black market. Most servicemen in Korea were not allowed to possess greenbacks, and when they arrived from the States, they had to convert all their cash to MPC, which they could then convert to South Korean won for purchases off base. Service members were also paid in MPC.

  As an intelligence officer running spies into North Korea, Nichols had a legitimate need for dollars to pay off agents and buy information. But his access—combined with the near-complete absence of oversight that Nichols enjoyed—would also have given him an opportunity to become an expert in exchange-rate manipulation. That market could be exceptionally lucrative, especially to those who, like Nichols, had access to dollars over many years. He could sell dollars for won at the highly favorable black-market rate, then convert his mountains of won back into dollars at the official rate, reaping handsome, untraceable, and untaxed profits.

  Frank Winslow never understood why Nichols wanted photographs of the cash. But given the frequency with which Nichols lugged bags of it into the photo lab, Winslow strongly suspected something illegal was going on. “I could see the value of the stuff he was dealing,” he said. “It just seemed like he was cheating the system.”

  Winslow was not alone in his suspicion. Ed Evanhoe, an army intelligence officer in Seoul during and after the war, told military historian Michael Haas that he suspected Nichols was involved in black-market trading. Chung Bong-sun, the South Korean intelligence officer, said that before Nichols left Korea, there were widespread rumors that he was selling U.S. military equipment for large amounts of money. To recruit spies in North Korea, Nichols had developed contacts within criminal organizations in Seoul, which may have strengthened his network of black-market contacts.

  There is nothing, however, in Nichols’s military service record that accuses him of currency trading or black-market dealings, and he was never charged with any illegality while serving in Korea. Nichols does not refer to currency speculation in his autobiography, although it was common among officers and enlisted men in Korea and rarely punished. He did say that he used the government’s postal savings account to make “regular, monthly deposits and was proud of a small but steadily increasing balance. . . . It may be of interest to mention that when I retired . . . my savings had increased to the thousands. I had enough to buy all the necessities of civilian life, a car, a home and so on.”

  Yet a large slice of the wealth he accumulated in Korea was in cash. When he returned to the States, he banked it in his brother Judson’s freezer in Florida.

  “Uncle Don had big bags of cash in our freezer, three or four bags, maybe a hundred thousand or a couple hundred thousand dollars,” said Donald H. Nichols, Judson’s son. “My father was very nervous about having it.”

  It was an understandable worry. In 1963, $200,000 had the buying power of $1.53 million in 2017. It was an exceptional sum for a just-retired air force major to have saved at all—let alone in cash.

  Besides financial impropriety, it is also possible that the air force could have fired Nichols for homosexuality. As noted earlier, South Korean intelligence officers said Nichols often brought young Korean airmen to his office in the evening for sexual encounters. An air force letter in Nichols’s military service record may support this explanation. Written in 1958, it says that if Nichols had not retired during the previous year, investigators “would have initiated action under the provision of air force regulation 36-2 to cause his elimination from the military service.” That regulation was then the primary tool used to discharge officers for homosexuality—though it was also used to kick officers out of the service for abuse of personnel or insubordination. The letter concludes with this tough, albeit vague, recommendation: “every effort should be made to insure that [Nichols] never again be placed in a position to subject United States military personnel to such abuses.”

  If homosexuality was the reason for sacking Nichols, it is unlikely that the air force would have been so furtive about it. There was nothing subtle, vague, or indirect about official intolerance of homosexuals in the American armed forces during the 1950s.

  Still another possible reason for Nichols’s removal from Korea was that he had stayed too close for too long to Syngman Rhee, who had become a chronic irritant to U.S. intelligence agencies and the State Department.

  “It was highly irregular for Nichols to have been there so long,” said William V. Bierek, who in 1957 was a twenty-four-year-old first lieutenant working for Nichols at the spy base outside of Seoul. “People thought he was too powerful, getting politically involved in the Rhee administration, and endangering America. Colonel Dunn and others may have believed he would cause a potential political problem.”

  Rhee, who was eighty-two in 1957, had been annoying the U.S. military, State Department, and White House for more than a decade. He had also lost support among millions of South Koreans. They wanted a younger, more flexible, less belligerent leader with fresh ideas about how to improve the broken economy. Although Rhee won a third term as president in 1956, it was a far narrower victory than in 1952; his winning margin slid from 75 percent to 56 percent. More telling, the vice presidential candidate of Rhee’s ruling party had lost.

  In Washington, the director of the CIA, Allen Dulles, sensed weakness. He said the 1956 election “indicated a rather startling decline in President Rhee’s influence” and worried that he would resort to violence to stay in power. The Eisenhower administration, after years of paying off Rhee with economic and military aid in return for not provoking another war, was sick of indulging him. A diplomatic dispatch from the American embassy in Seoul said that South Korea is still “dominated by the aging President Rhee, who, although staunchly anti-Communist and friendly to the free world, continues unimaginatively the somewhat sterile policies of past years.” The embassy had been warning for years that Rhee was a risk to South Korea’s future and America’s reputation: “the personal prestige of [a man] approaching senility is an extremely precarious base for a nation’s stability.”

  Like many long-serving, egotistical heads of state, Rhee could not understand why he was not universally beloved. What especially worried American diplomats after the 1956 election was that Rhee viewed his shrinking popularity not as a political problem to be addressed with smarter policies but as “a challenge to his ‘rightful’ authority.” To meet the challenge, he reshuffled his cabinet, increasing the power of hard-line supporters and tightening his personal control over the national police. In a cable to Washington, the embassy warned that Rhee’s determination to maintain control “creates increasing danger of trouble ahead.”

  While the American embassy was skittish and standoffish with Rhee, Nichols was not.

  He maintained his special access to the president, according to his military service record, and it allowed him to walk into the president’s office on “short notice.” The South Korean leader, as he had during the war, continued to shower Nichols with honors and medals. In 1954, Nichols was made an honorary colonel in the South Korean air force, and was given pilot wings, along with an honorary law degree from Seoul National University. A year later Rhee gave Nichols a second Order of Military Merit for exceptional service to Korea.

  In addition to Rhee, Nichols stayed in regular contact with senior South Korean intelligence officials who served the president by destroying his political opponents. Notably, Nichols stayed “very close” to Kim “Snake” Chang-ryong, Rhee’s right-hand man for political intelligence and electoral intimidation. At his spy base, Nichols entertained Kim frequently. A major general in the South Korean army, Kim ran the country’s counterintelligence corps as a personal intelligence shop for Rhee and often fed its reports to Nichols, who repackaged the information as “air intelligence” and sent it on to his bosses in Tokyo. One such report in late 1955 was based entirely on information from Kim’s intelligence operation. It described a purported “
attempted assassination of President Rhee.” Staged assassination attempts around election time had become commonplace in Rhee’s era. Historians have speculated that they were intended to bolster foreign and domestic sympathy for the president.

  Much more real was Rhee’s scheme to eliminate his most serious political rival. Cho Bang-am, a charismatic Left-leaning politician, had challenged Rhee in the 1956 presidential election and won 30 percent of the vote. Rhee saw this as an intolerable political threat, so his special military police went after Cho. They invented a North Korean espionage plot in 1957 and accused Cho of being a spy for Pyongyang. He was arrested and hurriedly convicted in 1958.

  American diplomats followed the Cho affair with growing alarm and disgust. Shortly after he was arrested, a State Department memorandum said the evidence against him was “flimsy” and would “further disillusion popular hopes for improvements [in] the democratic process.” After Cho was sentenced to death, the State Department warned Rhee that an execution would “effectively negate any success we may have had in developing political stability and maturity” in South Korea. The American ambassador in Seoul was instructed to “unofficially bring serious concern” to Rhee’s government.

  As events proved, the American embassy was right to worry about “trouble ahead.” Cho was hanged. Fifty-two years later, the Supreme Court of Korea overturned the conviction, confirming the obvious: South Korea’s founding leader had ordered Cho killed. The execution was called a judicial murder and an indelible stain on the country’s history.

  By 1957, when Nichols received his derogatory evaluation, Rhee’s government was looking more and more like a tin-pot dictatorship. Things were “disintegrating,” the British chargé d’affaires said in a conversation with his American counterpart. Rhee’s enforcer and Nichols’s friend, Kim “Snake” Chang-ryong, was assassinated by his own men.