Handbook of intelligence studies / edited by

MARK STOUT
addition to the effort devoted by the British and French services (possibly among others).
Helms judged that all this furious activity “took our attention away from developing the
techniques that in the future were to produce significant results.” 25
Moreover, disagreements over paper mills sometimes led to nasty interagency disputes. Peter
Sichel, the agency’s Chief of Base in Berlin at the time, recalls a major battle with the US Army
in the late 1940s or early 1950s. The CIA became aware that the Army was purchasing bogus
intelligence from a “fabrication network” and forced the Army to shut it down. The Army
intelligence chief in Berlin was so incensed that he went to the FBI and reported his suspicions
that Sichel was a Soviet agent. A fruitless investigation ensued but “they never did find my
Soviet handler,” Sichel recalls, laughing ironically. 26
The Association of Hungarian Veterans
No group better exemplifies the paper mill problem than the MHBK (Magyar Harcosok Bajtársi
Közössége) or Association of Hungarian Veterans. The MHBK had its genesis in the last months
of World War II in Europe when General András Zákó, the last wartime head of Hungarian
military intelligence, and his assistant, Captain Miklos Korponay, formed an organization of
members of the Arrow Cross party and paratroopers called Kopjas (Pikemen). Kopjas numbered
about 1,500–2,000 officers and warrant officers pledged to resist the Soviet invaders by
conducting sabotage and collecting intelligence. However, the war came to such a quick end
that the group quickly became a stay-behind network. 27
Accounts vary as to what happened to Zákó and Korponay after the war. According to one,
Zákó went straight to Tyrol in Soviet-occupied Austria. There he met up with Korponay,
gathered Hungarian soldiers about himself and planned for the future. Soon deciding that he
needed further information about the situation in Hungary he went back into his home
country disguised as a priest, probably in late 1946. Perhaps because Hungary was not yet fully
under communist control, he was able to spend 15 months there laying the groundwork for
resistance and intelligence work and reactivating Kopjas. 28
Another version of the story is that Zákó was interned by the US Army and later extradited
to Hungary as a war criminal. As he was being transported to Hungary, he escaped and went to
the Soviet zone of Austria where he worked under an assumed name as an agricultural worker
until 1947 when he went to Innsbruck. 29 According to that same story, Korponay during this
time was the head of a group of about 25 Hungarians which remained inactive until the spring
of 1946 when Sandor Lang, a naturalized British citizen from a Hungarian family, approached
them. Lang was associated with British intelligence and seeking men to go back into Hungary
and report from there. Korponay put a man who had connections to Kopjas at Lang’s disposal
and they set to work creating an intelligence network in Hungary. 30 Korponay was pleased
with this connection with the British and was soon inspired to approach the French service, as
well. The French were amenable to working with him and placed three men at his disposal,
including the talented Attila Kovacs. 31
In any event, Zákó came to Innsbruck in 1947 and linked up with Korponay. Soon thereafter
they approached the US Army’s Counterintelligence Corps (CIC) office in Hallein to offer
their services. They neglected to mention that they were already providing intelligence to the
British and French. Ignorant of this fact, the CIC accepted their offer. Zákó and Korponay
appointed Lieutenant Colonel Georgy Kollenyi, a former Hungarian army intelligence officer,
as their liaison to the Americans and soon intelligence started flowing to the CIC. 32
Unfortunately for Zákó and Korponay, CIC personnel frequently talked with their British
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