The Silvermaster group was a major Soviet espionage organization that operated within the United States Government during World War II. It was investigated by the FBI spanning the years 1945 through 1959. Nathan Gregory Silvermaster was the leader of the spy ring which consisted of 27 principal KGB operatives gathering information from at least six Federal agencies. The group operated primarily in the Department of the Treasury but also had contacts in the Army Air Force and in the White House. Sixty-one of the Venona cables concern the activities of the Silvermaster spy ring.
In 1942 the Silvermaster Group delivered 59 rolls of film to their handler. In 1943, it was 211 rolls, 600 in 1944, and 1895 in 1945.
In November 1945 Elizabeth Bentley, the courier from group based in Washington, D.C. to KGB headquarters in New York defected to the FBI. The KGB had removed Bentley from overseeing at least 80 members of the CPUSA Underground Apparatus in 1944. Realizing she knew too much, was no longer of use to the KGB, and her life was in danger, she told her story to the FBI in a deposition.
The FBI knew of 5 Soviet agents throughout the war, Bentley added at least another 80, some of which were still employed in the US government at that time. Her story at first was incredible and embarrassing to the FBI, but her allegations soon were borne out by information already in Bureau files. By December, no fewer than 227 FBI agents were involved in the case.
The suspects were surveilled throughout much of 1946 in hopes of learning more about the organization and building a prosecutable case. Meanwhile, other information came from Igor Guzenko, a Soviet code clerk who defected in Canada, and the Army Signals Intelligence Service which began secretly reading KGB communications with Moscow.
By December 1946 leaks began to develop, copies of an FBI memorandum entitled "Underground Soviet Espionage Organization (NKVD) in Agencies of the United States Government"  had been disseminated to several government departments and agencies, including the White House, and some were unaccounted for. In late December, a Justice Department prosecutor in the Criminal Division requested of a New York Special Agent in Charge (SAC) field investigator a copy of the Bentley deposition. The SAC telephoned FBI headquarters in Washington to request a copy of the signed affidavit in the presence of the prosecutor sitting at his desk. In a stinging rebuke to the field investigator, FBI Agent Edward Tamm noted in a memo to Director J. Edgar Hoover that the Bureau had gone to great lengths to protect the identity of the informant who was codenamed "Gregory" in the files, and the call in the presence of the attorney was an "an atrocious exhibition of a complete lack of judgment." 
A copy of the Bentley deposition was furnished to the Criminal Division and they then pressed for a personal interview with Bentley to evaluate her ability to testify. Tamm wrote to the Director how he informed the prosecutors that “the Bureau was apprehensive for the life of informant since the informant would probably be killed if [her] identity were inadvertently disclosed” 
An Executive Conference was formed consisting of the prosecutors from the Department of Justice Criminal Division and FBI field investigators to discuss the Silvermaster subjects and how to proceed with prosecution. The United Press began running stories on the case with information coming directly out of the Conference meeting. In a hand written note in the margin of a memo from January 23, 1947, Hoover writes, "in view of all the 'gabbing' done by the Dept to the Press there is little which can be expected from any action now."  The conference concluded with a request of the Attorney General that the FBI recommend which of several possible courses of action be taken. Hoover, in a somber tone, responds, "I am of the opinion...it will be impossible to continue the investigation on an intelligence basis....the subjects...are now all very security conscious...as a result of this premature and ill-advised publicity, the Bureau's key informant ...refuses to continue to cooperate with the Bureau. It is needless to point out that without the cooperation of this informant a real coverage of this case is impossible....any attempt to interrogate them, either by Bureau agents or before a grand jury, would produce nothing. Obviously, this situation leaves only the third alternative; that is, that the Department furnish to the employing departments the basic data concerning the activities of the individual subjects as a possible means of concluding the case. It is assumed, of course, that the employing departments will take administrative action against the subjects who are employed in these departments." 
Edward Morgan of the FBI was asked to make an objective analysis of where the case stood from a legal and investigative standpoint. This document, Morgan's memorandum, sheds much light on what was to follow in the ensuing years. Morgan writes, "there exists a fraternal and intimate social bond" among the group, the subjects are "extraordinarily intelligent, at least they are unusually well educated," and some of the finest legal talent in the country could be expected to be retained for their defense. Without Venona evidence, Morgan declares "the case is no more than the word of Gregory against that of the several conspirators. The likely result would be an acquittal under very embarrassing circumstances." Morgan observes, "Coming in after the event as the Bureau did, we are now on the outside looking in, with the rather embarrassing responsibility of having a most serious case of Soviet espionage laid in our laps without a decent opportunity to make it stick. This very circumstance, however, necessitates pursuing more direct methods" and states, "this case is one of Soviet espionage or it is nothing." Morgan proposes developing one of the "lesser lights" as an informant to corroborate Bentley, but acknowledges the unlikelihood of it occurring. "I doubt if any more can be accomplished of probative value through further investigation apart from the interviews." Morgan refers to the political problem Bentley laid in their lap 10 years after the fact, "I personally am of the opinion that the Bureau would be subjected to possible criticism as being derelict in its responsibility in this instance if the various subjects were not thoroughly and exhaustively interviewed. The odds are not too good that such interviews would terminate successfully; however, it is quite possible that some of the lesser lights among the subjects would crack during the course of a careful and pointed interview."
Morgan concludes with the recommendation "That one of the subjects of this case, probably the weakest sister, be contacted with a view to making him an informant...Failing in this respect, that immediately the other subjects be exhaustively interviewed. Since an interview with one would virtually amount to putting all of them on notice, it would seem logical to conduct such interviews as nearly simultaneously as possible....That failing to break any of the subjects, serious consideration be given to exposing this lousy outfit and at least hounding them from the Federal Service. Several possibilities exist in this regard but this would seem to be a bridge to cross when we get to it."
- Nathan Gregory Silvermaster, Chief Planning Technician, Procurement Division, United States Department of the Treasury; Chief Economist, War Assets Administration; Director of the Labor Division, Farm Security Administration; Board of Economic Warfare; Reconstruction Finance Corporation Department of Commerce
- Helen Silvermaster (wife)
- Schlomer Adler, United States Department of the Treasury
- Norman Chandler Bursler, United States Department of Justice Anti-Trust Division
- Frank Coe, Assistant Director, Division of Monetary Research, Treasury Department; Special Assistant to the United States Ambassador in London; Assistant to the Executive Director, Board of Economic Warfare; Assistant Administrator, Foreign Economic Administration
- Lauchlin Currie, Administrative Assistant to President Roosevelt; Deputy Administrator of Foreign Economic Administration; Special Representative to China
- Bela Gold, Assistant Head of Program Surveys, Bureau of Agricultural Economics, United States Department of Agriculture; Senate Subcommittee on War Mobilization; Office of Economic Programs in Foreign Economic Administration
- Sonia Steinman Gold, Division of Monetary Research U.S. Treasury Department; U.S. House of Representatives Select Committee on Interstate Migration; U.S. Bureau of Employment Security
- Irving Kaplan, Foreign Funds Control and Division of Monetary Research, United States Department of the Treasury Foreign Economic Administration; chief advisor to the Military Government of Germany
- George Silverman, civilian Chief Production Specialist, Material Division, Army Air Force Air Staff, War Department, Pentagon
- William Henry Taylor, Assistant Director of the Middle East Division of Monetary Research, United States Department of Treasury
- William Ullman, delegate to United Nations Charter meeting and Bretton Woods conference; Division of Monetary Research, Department of Treasury; Material and Services Division, Air Corps Headquarters, Pentagon
- Anatole Volkov
- Harry Dexter White, Assistant Secretary of the Treasury; Head of the International Monetary Fund
- ↑ FBI Silvermaster file, Ladd to the Director, November 12, 1945, Vol. 8, pg. 3 pdf.
- ↑ FBI Silvermaster file, Ladd to the Director, November 12, 1945, Vol. 8, pg. 6 pdf.
- ↑ Hoover to Frederick B. Lyon, 24 September 1945, Central Intelligence Agency, Igor Gouzenko file. 5 pages.
- ↑ FBI Silvermaster file, Memorandum for the Attorney General, December 20, 1946, Vol. 81, pgs. 55 - 56 pdf. In transmitting a summary of the investigation on Harry Magdoff, Hoover urges the Attorney General to give consideration to the overall facts of the case before making the information available to any other government official. Hoover complains that a summary report prepared for the Secretary of the Treasury had been "lost" and a copy furnished to the White House was found in a desk drawer at the War Assets Administration -- the agency Greg Silvermaster had been working in.
- ↑ FBI Silvermaster file, Underground Espionage Organization (NKVD) in Agencies of the United States Government", Vol. 23, pgs. 55 - 272, February 21, 1946.
- ↑ FBI Silvermaster file, Vol. 83, pgs. 72, 73 pdf.
- ↑ FBI Silvermaster file, Tamm to the Director, January 6, 1947, Vol. 83, pg. 56 - 57 pdf.
- ↑ FBI Silvermaster file, Tamm to the Director, January 23, 1947, Vol. 93, pgs. 20 -22 pdf.
- ↑ FBI Silvermanster file, Memorandum for the Attorney General, January 27, 1947.
- ↑ FBI Silvermaster file, Morgan to Clegg, January 14, 1947.