The head of the Office of Strategic Services (OSS), William Donovan, created the X-2 Counter Espionage Branch in 1943 to provide liaison with and assist the British in its exploitation of the Ultra program's intelligence during World War II. A few months before, Donovan had established a Counterintelligence Division within the Secret Intelligence Branch of the OSS but rescinded this order upon development of the X-2. The X-2 was led by James Murphy, whose branch would have the power to veto operations of the Special Operations and Secret Intelligence Branches without explanation. Donovan modeled the Counter Espionage Branch on British Counter Espionage. With the creation of the X-2 Branch, the British insisted that it follow British security procedures to maintain the secrecy of Ultra. The X-2 established separate lines of communication for itself as a self-contained unit. By the end of World War II, the X-2 had discovered around 3,000 Axis agents.
Overview
Background
With the beginning of World War II, the Office of the Coordinator of Information, headed by William Donovan, was split and the Office of Strategic Services (OSS) created on 13 June 1942. The State Department and military services blocked the OSS from receiving communications intercepted from the Axis Powers, through the Ultra program, until the OSS created its own X-2 Counter Espionage Branch. The FBI and Office of the Coordinator of Inter-American Affairs further limited the OSS by restricting it from operating in the Western Hemisphere. X-2 became the OSS liaison with the British, opened the doors of Ultra to OSS exploitation and operated throughout Europe and the world. At its peak at the end of the War, the X-2 Branch had 650 personnel in its office.
Missions
The missions of the X-2 Branch were to:
Collect information on espionage and subversive activities of the enemy
Analyze, process and exchange this intelligence
Maintain operational security measures for the OSS and prevent infiltration of the OSS by enemy intelligence services Cooperate and give timely intelligence to United States' and allied intelligence services Create foreign area subversive personality lists to disseminate to commanders and intelligence personnel.
Donovan also established strong communication and sharing between the Secret Intelligence and X-2 Branches. He additionally allowed the X-2 Branch to use field representatives in coordination with the station chief and outlined that the X-2 would maintain separate communication lines, liaisons and records. X-2 had its main base for European operations in London but maintained liaison in Washington, D.C., with other agencies including the FBI, State Department, G-2 and Office of Naval Intelligence.
Special units
Special Counterintelligence Units
The X-2 created Special Counterintelligence Units (SCI Units) to pass counterintelligence information between the Army and the OSS. These units existed between British MI-6 and the British military as well. SCI Units worked under Staff Counterintelligence (CI) Officers and assisted military CI staff in a multitude of areas, including on the frontlines. They advised military staff on selecting CI targets, distributing counter espionage (CE) information, protecting sources and interrogating captured suspects. X-2 officers handled collecting and exploiting enemy intelligence as well as supplying information on Axis intelligence agencies to Army staff throughout the theater of operations. They also served as channels between different Army Headquarters and received special training for their tasks.
Watch List Unit
The Watch List Unit disseminated information on agents such as their cover names, addresses and mail drops. It maintained liaisons with the US Censorship Office, British Imperial Censorship and French Censorship. It also passed information on enemy methods of secret communication.
Insurance Unit
The Insurance Unit's main task was to investigate enemy intelligence's use of insurance as a cover for its activities.
Counter Espionage Smuggling Unit
The Counter Espionage Smuggling Unit was intended to coordinate information on smuggling activities but never became effective due to low staffing.