Frank Coe - Allegations and Evidence of Espionage

Allegations and Evidence of Espionage

The evidence against Coe stems from his being named by two defected spies and ex post examinations of his career.

In 1939, former Communist underground courier Whittaker Chambers named Coe to then-Assistant Secretary of State Adolf Berle as a communist sympathizer who was providing information to the Ware group.

In 1948, former NKVD courier Elizabeth Bentley, testifying before the House Un-American Activities Committee, mentioned Coe, whom she remembered as one of several important Treasury officials who passed on information to Silvermaster.

Called before the HUAC (chaired by Congressman Karl Mundt), Coe denied under oath having ever been a member of the CPUSA. Subsequently, he was questioned intensely in the IMF about his activities, but he was not sanctioned or removed from his duties. In late 1952, he was called before a Grand Jury in New York (presided over by Senator Herbert O'Conor) and then before the McCarran Committee on December 1, 1952, both of which were investigating alleged Communist affiliations of U.S. citizens working for the United Nations and other international organizations. On the latter occasion, he declined to answer the question whether he was a member of the Communist Party on Fifth Amendment grounds, citing the example of Alger Hiss's conviction for perjury.

His final appearance before McCarthy's Permanent Subcommittee on Investigations (PSI) came on June 5 and 8, 1953, chaired by then Senator Karl Mundt.

Nominally, the investigation was into interference with negotiations to devalue the Austrian schilling in November 1949 as the Soviets had apparently been profiting from the black market. U.S. officials with the European Cooperation Administration (the Marshall Plan aid agency) reported that a command came via a ticker-tape telecon to break off negotiations at the last minute. The telecon, which was with an anonymous person at the State Department, cited Coe in his capacity as Secretary of the IMF as the source of the order. (In truth, the devaluation had been discussed by and was supported by the Executive Board of the IMF.)

The PSI ascertained that Coe could not have been the source of the communication as he was in the Middle East at the time, and quickly turned to investigating Coe's alleged Communist activities. Coe, who consulted constantly with his lawyer Milton S. Friedman, maintained his fifth-amendment plea, stating at one point that he did not want to see the blacklist extended to include those who had helped him in his search for work.

The subsequent report of the Senate Sub-Committee on Internal Security stated: "Coe refused to answer, on the grounds that the answers might incriminate him, all questions as to whether he was a Communist, whether he was engaged in subversive activities, or whether he was presently a member of a Soviet espionage ring. He refused for the same reason to answer whether he was a member of an espionage ring while Technical Secretary of the Bretton Woods Conference, whether he ever had had access to confidential Government information or security information, whether he had been associated with the Institute of Pacific Relations, or with individuals named on a long list of people associated with that organization."

Regarding his policy actions, it is often mentioned that Coe, together with Treasury Secretary Harry Dexter White, opposed President Franklin Roosevelt's gold loan program of $200 million to help the Nationalist Chinese Government stabilize its currency in 1943. However, White's documents indicate while he favored giving economic assistance, he had concerns that cash assistance might be misused or fall into enemy hands.

Arlington Hall cryptographers identified the Soviet agent designated "Peak" in the VENONA as "possibly" Coe, but there is no clear reason for the identification (one secondary sources suggests it was because there was no additional information on Peak). The decrypt in question reports that five reels of Peak's documents concerning U.S.-British Lend-Lease negotiations were en route to Moscow.

A recent investigation into the KGB archives claims that files show Coe to have been a Soviet agent. However, the authors do not quote or reproduce the documents in question, and at least one scholar argues that their testimony should be suspended until the primary sources become available.