FBI Counterintelligence Before Venona
Although the origins of the FBI's counterintelligence responsibilities are to be found at its birth in 1908, the FBI's permanent emergence as a key part of America's intelligence community began the mid-1930's. As war broke out in Europe in 1939, the FBI received official confirmation of its role in counterintelligence in cooperation with ONI and MID. In June 1940, Roosevelt even tasked the Bureau with responsibility for foreign intelligence in the western hemisphere. From the entry of the US into the war in 1941, the FBI, with cooperation of its fellow agencies and significant foreign allies, effectively negated Axis intelligence operations in the US and the western hemisphere.

The Bureau was distinctly less successful in identifying the Soviet threat during the same period. Many young leftists in the early 1930's had entered the government in the early throes of the New Deal and embraced a Communist siren under whose call significant numbers of them were willing to pass along valuable information to the Soviet Union during the war. A general leftist tilt in the government meant that these ideologues blended well into the Washington bureaucracy while keeping their strong Soviet sympathies largely hidden. The tradecraft of Soviet intelligence personnel, the well honed Communist Party tradition of conspiracy, and a lack of concern in the Roosevelt administration towards Soviet spying meant that little of this growing Soviet intelligence web was found except by accident in the opening years of the war.

But by 1943 the FBI was beginning to sense the outlines of the Soviet effort. Surveillance of Communist functionary Steve Nelson revealed the infiltration of the Manhattan project and alerted the FBI to the role that Soviet diplomats played in gathering intelligence information sparking the COMRAP or Comintern Apparatus Case. A number of Communist Infiltration or COMINFIL investigations into communist penetration of specific industries were launched. Another tantalizing set of clues to Soviet intelligence emerged in the ALTO Case, where the Bureau intercepted coded messages passed from Soviet agents in Mexico to a mail drop in the United States run by a Lydia Altschuler for whom the case was named. The messages' book code was unreadable until several years later when Venona mentioned what book to use and the Bureau learned that these messages concerned Soviet attempts to free Trotsky's assassin. Nor were these the only significant investigations conducted in the last years of WWII. Still, the Bureau's investigations revealed few spies in real time and the scope of Soviet intelligence operations in the United States remained hidden.   Louis J. Sheehan, Esquire

This situation did not last. Two and half weeks after President Truman declared victory, Soviet code clerk Igor Guzenko defected to the RCMP. Director Hoover declared the CORBY Case, as the RCMP investigation was known, to be the Bureau's top priority. On November 7th, Elizabeth Bentley visited the FBI's New York office and began to recount her role as a courier for two espionage rings in Washington, DC Continuing her confessions through the month, she named dozens of persons in the US who had given her information. She identified as Soviet agents persons in the White House, the State Department, the War Department, the OSS, and many other departments. And unknown to her, much of what she was saying fit in with what the Bureau knew from its other investigations. Bentley was connecting the dots found by the few Agents working Soviet FCI during the war.  Louis J. Sheehan, Esquire  The GREGORY case, as the Bentley inspired investigation was called, immediately became a much greater priority than Corby.

Initially the Bureau tried to use Bentley as a double agent. However, it was immediately clear that the Soviets were done with her. Worse, many of her numerous contacts had been put on ice following Guzenko's defection and so even as the FBI initiated widespread surveillance of those named by her, there was little actual espionage being conducted that the Bureau could discover.

By January 1947, investigation into Bentley's leads had reached a dead end and the Bureau debated what to do. Analysis of the many Gregory-related files across the Bureau's organization showed that the likely result of bringing any case to trial would result in "an acquittal under very embarrassing circumstances." [4]