The following article is from our March 2006 issue.

An Operation Called 'Rosenholz' - How the CIA bought the Stasi files for $75,000. By Robert Gerald Livingston

In the 1980s, fearing a nuclear attack from the U.S., the East German State Security Service (Stasi) intensified its espionage in West Germany. After the collapse of the GDR, the CIA was able to purchase the complete files of Communist East Germany's foreign intelligence service. Now historians in Germany can also study these artifacts of the Cold War.

Only once in the long history of spying did one state capture the entire list of another state's foreign agents. That was in the early 1990s, when America's Central Intelligence Agency (CIA) secretly bought the complete files of Communist East Germany's foreign intelligence service. The service had been part of the Ministry for State Security, known as the Stasi. For three decades, it was led by Markus Wolf, the most successful spymaster of the 20th century.

Secrecy still shrouds a few episodes of Operation "Rosenholz" (Rosewood), the code name of the project to examine the files by West Germany's counter-espionage agency, the Office for the Protection of the Constitution (Bundesamt für Verfassungsschutz). Most of the story has gradually become known over the past 15 years.

To a greater extent than either the Bonn or Washington government realized at the time, in the early 1980s, the Soviet Union and satellite states like East Germany began to fear that the United States was planning a nuclear attack on communist Eastern Europe. This scare led the East German government's spy service, whose main target was always West Germany, to intensify its operations there, searching for signs of an impending attack. It also caused the then-minister in charge of the Stasi, Erich Mielke, to order that the list of his agents in the west be organized so as to distinguish those essential in wartime from those useful only in an escalating situation and those whose services could be dispensed with altogether.

Microfilming of three sets of agent file cards was intensified: a file of pseudonyms, one with agents' true names, and so-called statistical sheets, which carried information about an agent's background, access and operations. The microfilm was kept in metal canisters in Mielke's own office.

In 1990, the East German civic rights activists who helped bring down the communist regime made sure that the Stasi's huge files on domestic spying against East German citizens would be preserved. However, they permitted an exception for the Stasi's foreign espionage service, which argued to the civic rights activists that it was not part of the Stasi's repressive domestic apparatus; so they allowed the agency to take charge itself of destroying the files of its agents abroad. In the spring of 1990, these card files were shredded or burned. Neither the activists nor the Stasi officers who destroyed the card files realized that microfilmed copies existed in Mielke's office.

The chiefs of his espionage service were already concerned in late 1989 that the civic activists, who then were storming and occupying Stasi office buildings throughout East Germany, might grab the microfilm. Somebody in Mielke's ministry arranged for at least one set to be taken to the Berlin headquarters of the Soviet spy service, the KGB, located in the suburb of Karlshorst, from where it went to Moscow. Although other parts of Stasi foreign espionage files did fall into the hands of the CIA during the next year, the crown jewels, the foreign agent lists, did not, for the card files had been destroyed and the microfilmed versions shipped away.

According to retired CIA officers, the CIA was contacted in mid-1991 by a KGB archivist, who was a "walk-in" to the U.S. Embassy in Warsaw and who offered the microfilmed files for sale. After checking some samples of the offer, the CIA purchased them all for the astonishingly low price of $75,000. They were packed off to the agency's headquarters in Langley, Virginia.

How long the agency perused them before informing the West German government remains unknown. A good guess is about a year. Finally notified in early autumn of 1992, the Bonn government arranged for a team of counter-espionage experts from the Office for the Protection of the Constitution to visit Langley in March 1993 to take notes of what turned out to be a treasure trove for the counter-espionage service.

More than 1,500 active agents working in West Germany were identified; several hundred were indicted by federal prosecutors there; and convictions secured in more than 60 cases. Most notable among the convicted were an influential Social Democratic (SPD) parliamentarian, a staff member of NATO's Nuclear Planning Committee, the top Soviet analyst in the Federal Intelligence Service (Bundesnachrichtendienst, BND) and several high-ranking officials of the Office for the Protection of the Constitution. Media speculation about spying by top West German politicians, mostly on the SPD side, could not be substantiated in the "Rosenholz" files.

What the files did show, however, was that over the four decades of the Cold War, at least 30,000 West Germans had worked at one time or another for Markus Wolf's agency as agents, couriers, owners of safe houses or in other capacities. The microfilm remains in Langley today. After periodic badgering by Berlin, the CIA finally had CD copies burned and sent them to the German commissioner for the Stasi files, where historians can now study these unique artifacts of the Cold War.

- Robert Gerald Livingston is a Senior Visiting Fellow at the German Historical Institute, Washington, D.C.