http://forward.com/articles/209167/inside-the-fbis-shameful-battle-to-shield-nazis/?p=all

Inside the FBI's Shameful Battle To Shield Nazis

Federal Agent Stepped in To Aid Her Propagandist Father

By Josh Nathan-Kazis
Published November 17, 2014, issue of November 21, 2014.

It was October of 1990, and the Nazi hunters at the United States
Department of Justice were furious at the FBI.

The Nazi hunters, led by an attorney named Neal Sher, were tasked with
finding and deporting former Nazis and other World War II-era
persecutors. They had just tracked down a former pro-Nazi propagandist
named Ferenc Koreh and sued to strip him of his U.S. citizenship. But
the FBI seemed to be trying to sabotage the lawsuit.

A 46-page memorandum written on FBI letterhead had landed on the desk
of Sher’s boss, claiming that the Office of Special Investigations,
which he led, had been hoodwinked by the intelligence services of
Romania’s communist government.

The conflict between OSI and the FBI is a shocking untold chapter in
the Justice Department’s long history of trying to sweep up former
Nazis — and of the interference of that same department’s fabled
enforcement arm with that effort.

Sher knew the FBI was wrong. More than that, he also knew that Koreh’s
daughter was an FBI agent stationed in the bureau’s New York field
office. Even worse, the agent who wrote the 46-page memo was her
supervisor — and her live-in boyfriend.

“I was outraged,” Sher said. “I thought it was scandalous. Those
people, in my mind, should have been fired on the spot.”

They weren’t. One agent was suspended for a week, another was
censured. The boyfriend remained a senior official at the FBI’s New
York office through at least 2001, when he played a major role for the
office in the aftermath of 9/11.

The incident is described briefly in New York Times reporter Eric
Lichtblau’s new book, “The Nazis Next Door: How America Became a Safe
Haven for Hitler’s Men.” It’s also recounted in a secret official
history of the OSI leaked to Lichtblau that was posted online by The
Times in 2010.

Still, it remains largely unknown. Two and a half decades later, Sher
is still angry. “It was absolutely one of the most egregious breaches
of ethics for someone in the FBI,” Sher told the Forward.

The two FBI agents, who married in 1991, did not respond to letters
sent to their house seeking comment.

By 1990, the OSI’s investigations of former Nazis had begun to make
major waves — and major enemies. Three years earlier, on OSI’s
recommendation, Austrian President Kurt Waldheim had been banned from
entering the United States due to his wartime collaboration with the
Nazi SS. Waldheim was furious, Austria recalled its ambassador, and
Sher was personally banned from traveling to Austria.

It wasn’t just former Nazis who were angry at OSI. Pat Buchanan, the
right-wing gadfly and Republican White House staffer, argued
throughout the 1980s that the KGB was leading Sher’s unit by the nose,
providing forged evidence to frame opponents of the Soviet regime as
Nazis.

It was an old charge. In “The Nazis Next Door,” Lichtblau shows how,
from the 1950s onward, the powerful FBI director J. Edgar Hoover
blocked investigations into former Nazis working as FBI informants,
claiming they were victims of Communist propaganda.

According to Lichtblau, who reviewed OSI’s work over decades for his
book, they never were. “There’s not a single case that I could find
where the KGB was doctoring evidence,” he told the Forward. “There is
no evidence [the KGB was] manufacturing cases.”

OSI’s campaign against Ferenc Koreh started with a libelous newspaper article.

According to the secret history of OSI, prepared internally at the
Department of Justice in 2006 and kept under wraps for four years,
Koreh came to the attention of U.S. authorities after two small New
York newspapers published articles accusing Koreh of various war
crimes. Koreh sued for libel, and the papers retracted most of the
charges.

At the time, Koreh was working for Radio Free Europe, the American
propaganda station that broadcast Western-slanted news into the Soviet
bloc. Koreh was vocally anti-Communist, and had been active in
activist groups that opposed the Romanian regime since moving to the
United States in 1950. He became a U.S. citizen in 1956.

U.S. investigators came across the libelous newspaper articles and
started looking into the radio broadcaster. They found that the
Transylvanian-born Koreh had been editor of a Hungarian newspaper in
the early 1940s that ran articles calling for the persecution of Jews.
The newspaper blamed Jews for murders, rapes and World War II itself.
In 1943 and 1944, Koreh worked for the Hungarian information ministry,
and then, during the German occupation of Hungary, as editor of a
government-owned newspaper. After the war, a Hungarian court jailed
him for seven months for running that paper.

In 1989, OSI filed a lawsuit in federal court in New Jersey to strip
Koreh of his citizenship, on the grounds that he had been naturalized
on the basis of a visa that he could not have obtained if he had been
forthright about his wartime activities.

“I will certainly fight it,” Koreh told the Associated Press when
reached for comment at the time.

Soon after the suit was filed, someone threw a bottle through the
window of his home in Englewood, New Jersey, bearing a threatening
note that read, “Dog — You Will Die.”

OSI investigators hadn’t known before they filed the suit that Koreh’s
daughter Veronica Koreh was an FBI agent in the agency’s New York
field office. They soon found out.

In October of 1990, while OSI’s lawsuit against Koreh was in its
discovery phase, a memorandum on FBI letterhead by a special agent
named Kenneth Maxwell was sent to Deputy Assistant Attorney General
Mark Richard, who oversaw Sher’s unit. The memo claimed that OSI’s
case against Koreh was based in part on forgeries, and that Koreh was
under attack by the Romanian intelligence services for his
anti-Communist activism.

Maxwell’s line was strikingly similar to the attacks on OSI and its
predecessors leveled for years by figures like Buchanan and Hoover.
The FBI agents in New York, said Lichtblau, “seemed to be buying into
the whole Soviet propaganda argument that really didn’t have much
merit.”

OSI staffers were furious over the memo. They knew their proof of
Koreh’s past had not been forged by the Romanians — Koreh himself had
admitted to much of it in depositions at his earlier libel case. The
rest was based on records from Hungary, not Romania. Even so, they
knew they would need to reveal the memo’s existence to the defense,
slowing their case.

Even more infuriating, though, was the memo’s provenance. Maxwell was
dating Veronica Koreh. They lived together at the time, and were
married a year later.

In the internal war that ensued within the Justice Department, OSI
officials interviewed Maxwell and Veronica Koreh. Sher claims he
learned that Veronica Koreh helped Maxwell write the memo. She saw
drafts, recommended sources for him to use, and even gave him
documents.

At the same time, Sher discovered, Maxwell had given Ferenc Koreh
advice about his lawsuit and gone to meetings with Ferenc Koreh,
Koreh’s lawyer, and Veronica Koreh.

“It was absolutely one of the most egregious breaches of ethics,” Sher
told the Forward.

According to its internal history, OSI complained to the FBI about
Koreh and Maxwell in 1992, raising questions about conflicts of
interest and whether they had sought to sabotage the Nazi hunting
unit’s lawsuit. Maxwell brought his own charges against OSI: In a
letter to the Justice Department’s Office of Professional
Responsibility, he accused Sher and another OSI attorney of behaving
in a “reprehensible, professionally unethical” manner when they
interviewed him about his letter.

It took four years for the competing claims to be sorted out.

Meanwhile, OSI’s denaturalization case slogged on. It included lengthy
fights over Maxwell’s memorandum, and how it would be disclosed to the
defense.

Koreh eventually lost his suit in 1994. The district court decision
noted that the case was complex, in that Koreh was not accused of
personally committing any atrocities, and that the activities for
which he was being denaturalized would have been protected speech
under the First Amendment. Still, they held that he should be
denaturalized for his untruthful affirmations to gain entry to the
United States and to obtain U.S. citizenship. The circuit court, which
ruled in 1995, agreed.

“We conclude that the undisputed facts of this case demonstrate that
Koreh’s activities at [the Hungarian newspaper] Szekely Nep during
1941 and 1942 constituted both assistance in the persecution of
civilians… and the ‘advoca[cy] or assist[ance] in the persecution of
any persons because of race, religion, or national origin,’” wrote
Judge Dolores Sloviter, chief judge of the United States Court of
Appeals for the Third Circuit. “Koreh’s visa, and his citizenship was
thus ‘illegally procured.’”

Ferenc Koreh died in 1997 still living in the United States, having
admitted to various charges in return for being allowed to stay in the
country due to his poor health.

The infighting between OSI and the FBI, in the meantime, continued
unabated. In 1994, after leaving his job at OSI to become executive
director of the American Israel Public Affairs Committee, Sher sent an
angry letter to FBI director Louis Freeh asking why no action had been
taken against Maxwell and Veronica Koreh.

The FBI’s general counsel responded within weeks. The agency had held
off on investigating the agent’s actions until the Koreh case and all
appeals were over, he said. In 1995, after the district court’s
ruling, Sher wrote again. “The time to rectify this scandal has long
since passed,” he told the bureau.

The general counsel again responded quickly, saying that the FBI’s
Office of Professional Responsibility was already looking into the
incident. It took until June of 1996 for the FBI to conclude its
probe. The general counsel’s final letter to Sher, sent that month,
was vague, saying that one special agent had been suspended without
pay “for a period of time,” another was “censured.” Other FBI
personnel, the lawyer wrote, would also have been punished, but had
already left the agency.

The secret OSI history leaked and posted by the New York Times in 2010
provided more details: It was Maxwell who had been suspended — for a
week — and it was Veronica Koreh who had been censured. The Department
of Justice’s own Office of Professional Responsibility also finished
its investigation into Sher, set off by Maxwell’s charges against him,
at around the same time, according to the OSI history. He had been
cleared.

“Some of Sher’s comments may have included words or phrases that could
be colorful, [but] his overall ‘message’… was clearly one that needed
conveying,” the probe concluded.

Maxwell, for his part, was hired as vice president of security for
JetBlue in 2003, after rising at least to the level of assistant
special agent in charge of the FBI New York Field Office. A
representative of JetBlue said that Maxwell had recently retired.
Neither Maxwell nor Veronica Koreh have a listed phone number.

The tensions that pitched the FBI and the unit once known as OSI into
bureaucratic war have faded. Eli Rosenbaum, who succeeded Sher at OSI
and continues to hold an equivalent position at the Justice
Department, told the Forward, “I have no complaints [against the FBI]
in my own experience.”

But Sher still steams at the memory. “It stuck in my craw,” he said.

Contact Josh Nathan-Kazis at [email protected] or on Twitter,
@joshnathankazis

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