Lt. Col. Duncan Chaplin Lee (1913 – 1988) was confidential assistant to Maj. Gen. William ("Wild Bill") Donovan, founder and director of the Office of Strategic Services (OSS), World War II-era predecessor of the CIA, during 1942-46. Lee is identified in Venona as the Soviet double agent operating inside OSS under the cover name "Koch," making him the most senior alleged source the Soviet Union ever had inside American intelligence.
OSS career and investigation
As an OSS officer, Lee served as head of the China section of SI, the Secret Intelligence Branch. While an officer, according to Soviet courier Elizabeth Bentley, Lee—reportedly a descendant of Confederate Gen. Robert E. Lee—covertly furnished her with information on “anti-Soviet work by OSS” and other topics of interest to Moscow, which was technically an ally (in Europe) following the collapse of the Nazi-Soviet pact.
In November 1944, Anatoly Gorsky reported to Moscow that according to Elizabeth Bentley, Price had begun a sexual relationship with one of her sources, Duncan Chaplin Lee. "(Price) established an intimate relationship with (Lee), and she did not tell us about it until recently." Gorsky was concerned that this affair might result in Lee's exposure as a spy because his wife, who was also a member of the Communist Party of the United States (CPUSA), knew about his spying. "(Lee) and (Price) met in two places, at her flat and at his. The meetings were held in the presence of (Lee's) wife, who was aware of her husband's secret work." Lee's wife discovered her husband's love affair and complained in a series of jealous scenes. The NKVD became worried about these developments and ordered her to stop serving as his courier.
Lee's wife discovered her husband's love affair and complained in a series of jealous scenes. The NKVD became worried about these developments and ordered her to stop serving as his courier. Earl Browder told Iskhak Akhmerov that Price's "nerves had been badly shaken" by these events. However, as Kathryn S. Olmsted has pointed out: "Mary Price... continued the love affair, hoping that Lee would divorce his wife and marry her. Distraught over his deteriorating marriage, the pressures of the love affair, and intensified security probes at the OSS, Duncan Lee, by late 1944, had become an extremely reluctant Soviet source. Moreover, he distrusted Elizabeth Bentley, who now acted as his primary courier and contact with Soviet intelligence." 
In her August 1948 appearance before the House Committee on Un-American Activities (HCUA), Bentley testified that Lee furnished her “various types of information,” which she then turned over to her Soviet handlers, including, in Bentley’s words, details on “whether the OSS had spotted any of our people [Communists]” in that organization. As the Germans were retreating from Eastern Europe and the Balkans, Bentley reported Lee as identifying groups working with the OSS to keep Soviet troops out of their countries. Lee also told her, she said, that “something very secret was going on” at Oak Ridge, Tenn., an apparent reference to the Manhattan Project.
Lee, a former Rhodes scholar who attended Oxford University with fellow OSS staffer Donald Niven Wheeler (identified in Venona as the Soviet agent operating in OSS under cover name "Izra"), repeatedly denied Bentley's allegations, under oath, but acknowledged he and his wife knew Bentley as a family friend (albeit under an assumed name) and that he had met her several times while an OSS officer in various locations, as well as with Mary Price (identified in Venona as the Soviet agent operating in the office of columnist Walter Lippmann under the code names "Dir" and "probably" "Arena"), and veteran NKVD rezident Jacob Golos, identified in Venona as Zvuk ("Sound"). Lee said he eventually realized that Bentley held "communistic" views and terminated their relationship, but never reported these meetings as regulations would seem to require.
Lee’s testimony elicited from one HCUA member, Rep. John McDowell (R-Penn.), the comment: For the first time “since the conspiracy of Aaron Burr, a high officer of the Army has been accused publicly of the violation of the Articles of War, which he must certainly realize the penalties and the punishment.” Lee was in fact never indicted much less convicted of perjury or any other crime despite the accusations of his alleged co-conspirator Bentley. According to Bentley, Lee refused to meet with her in the presence of others when divulging classified information to her and refused to give her any classified documents; there was as a consequence virtually no credible evidence to corroborate Bentley’s accusations. Bentley herself was not an effective witness. Only one of the dozens of people she denounced was ever convicted of any crime arising out of her accusations, but only a few were even prosecuted. Many freely admitted their espionage in public hearings once the statute of limitations had run, and most of those she named were independently proved guilty by the testimony of other eyewitnesses, if not eventually by the Venona files.
The VENONA decrypts that refer to Koch only confirm that Bentley passed on to Moscow the information she claimed to have received from Lee and do not in themselves provide independent evidence to corroborate Bentley’s accusation that Lee was the source of that information. A 1944 Venona decrypt confirms that Lee tipped off Bentley about Donovan sending him on a secret mission to China.
Career after OSS
Lee went on to have a successful career as a lawyer in the private sector. Lee continued to represent clients such as Claire Chennault and Whiting Willaurer. In 1949, following the fall of China to the communists, Lee represented a CIA-front company in the Hong Kong and UK courts in a successful effort to keep a large fleet of transport aircraft in Hong Kong, once owned by the Nationalist Chinese government, from being turned over to the new communist Chinese regime after its recognition by the British. Lee joined insurance giant American International Group in 1953, rising to serve as AIG’s chief in-house lawyer in New York City prior to his retirement in 1974. He subsequently moved to Toronto with his Canadian wife, Frances Lee Smith, where he died in 1988.
- 880 KGB New York to Moscow, 8 June 1943, p. 1
- John Witeclay Chambers II (2008). "10: Postwar Period". OSS Training in the National Parks and Service Abroad in World War II. U.S. National Park Service. p. 483.
- Bentley, Elizabeth (1951). Out of bondage: the story of Elizabeth Bentley. Devin-Adair. p. 181. Retrieved 21 August 2010.
- FBI Silvermaster file, Vol. 6, p. 35 (PDF page 36)
- Anatoly Gorsky, report to Moscow (2 November 1944)
- Elizabeth Bentley, report to Iskhak Akhmerov (28th July, 1944)
- Elizabeth Bentley, Out of Bondage (1951) page 179-180
- FBI Report, Underground Soviet Espionage Organization (NKVD) in Agencies of the United States Government, October 21, 1946, p. 163 (PDF page 181)
- “Testimony of Elizabeth T. Bentley,” Hearings Regarding Communist Espionage in the United States Government, Committee on Un-American Activities, House of Representatives, Eightieth Congress, Second Session, Public Law 601 (Section 121, Subsection Q ), Washington: United States Government Printing Office, 1948, p. 727
- KGB NY Reports on new Agents from ACP working in US Govt, Venona 769, 771 KGB New York to Moscow, 30 May 1944, p. 3.
- Testimony of Duncan C. Lee
- 868 KGB New York to Moscow, 8 June 1943
- 588 New York to Moscow, 29 April 1944, p. 3
- Testimony of Duncan C. Lee, p.733
- Testimony of Duncan C. Lee, p. 735
- Testimony of Duncan C. Lee, p. 749
- Bentley Statements to the FBI November 30, 1945.
- Athan Theoharis, “The FBI and American Democracy” (University Press of Kansas, 2004). John Earl Hynes and Harvey Klehr “Early Cold War Spies” (Cambridge University Press, 2006).
- See Athan Theoharis, “The FBI and American Democracy” (University Press of Kansas, 2004).
- 1353 KGB New York to Moscow, 23 Sept. 1944, p. 1
- Report of the Commission on Protecting and Reducing Government Secrecy, 1997, Senate Document 105-2, Pursuant to Public Law 236, 103RD Congress(United States Government Printing Office, Washington : 1997) Appendix A: 7. The Cold War
- “A Register of Rhodes Scholars 1903-1981” (Rhodes House, Oxford, 1981)
- David McKean, “Tommy the Cork, Washington’s Ultimate Insider from Roosevelt To Reagan”, (Steersford Press, 2004); William McLeary, “Perilous Missions, Civil Air Transport and the CIA’s Covert Operations in Asia” (Smithsonian Institution, 2002); Letter from Major General (Ret.) Claire L. Chennault to Adjunct General, U.S. Army, May 27, 1951 and Affidavit of Whiting Willauer, May 15, 1951.
- “A Register of Rhodes Scholars 1903-1981” (Rhodes House, Oxford, 1981).
- New York Times, Obituary, 1988.
- Mark A. Bradley, A Very Principled Boy. The Life of Duncan Lee, Red Spy and Cold Warrior (New York: Basic Books, 2014)
- Allen Weinstein and Alexander Vassiliev, The Haunted Wood: Soviet Espionage in America—The Stalin Era (Random House, 1998)
- Testimony of Duncan C. Lee, U.S. Congress. House. "Hearings Regarding Communist Espionage in the U.S. Government", 80th Congress, August 10, 1948.
- FBI Venona FOIA
- The Cold War International History Project (CWIHP) has the full text of former KGB agent Alexander Vassiliev's notebooks