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In the aftermath of the second world war, during a period of tension between the United States and Russia known as the Cold War, President Dwight Eisenhower found himself at the center of controversy after the Soviets shot down a US spy plane and captured its pilot. It wasn't so much that the US was spying on its adversary; the Russians knew that was going on and were doing the same thing to the USA. It was the embarrassment of being caught in a lie trying to cover up the incident that left Eisenhower with presidential egg on his face.

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With advances in surveillance plane technology, and concerns about Soviet nuclear capability, the United States embarked on a program of spying on the Soviets using the U-2 airplane. In July 1957, President Eisenhower requested permission from Pakistan's Prime Minister Huseyn Suhrawardy for the U.S. to place a secret intelligence facility inside of Pakistan and for the U-2 spyplane to fly from Pakistan. The U-2 was a smal plane which flew at altitudes that could not be reached by Soviet fighter jets at that time. The Americans thought (wrongly as it turned out) that the plane also flew too high to be struck by Soviet missiles. A facility established in Badaber, Pakistan, known as the Peshawar Air Station. This was a secret communications intercept operation run by the United States National Security Agency (NSA). The plan was for the US to covertly monitor Soviet missile test sites, and communications. The U-2 was able to gather photo intelligence in an era before satellite technology.

Eisenhower was opposed to using American pilots flying over the Soviet Union because he was worried that if one of these pilots was shot down, crashed, or was captured, it would be taken to be an act of aggression. The idea was considered of having British pilots from the Royal Air Force fly these missions in order to maintain some sense of plausible deniability. Two successful missions were flown using British pilots. Eisenhower was convinced to authorize two more missions to determine the number of Soviet intercontinental ballistic missiles more accurately. This took place just ahead of the Four Power Paris Summit, scheduled for May 16, 1960, at which Eisenhower and Soviet Premier Nikita Khrushchev were to meet. It was decided that the final two missions before the summit would be flown by American pilots.

On April 9, 1960, a U-2C spy plane, piloted by Bob Ericson, crossed the southern national boundary of the Soviet Union in the area of Pamir Mountains and flew over four Soviet top secret military installations. The flight obtained valuable information. But the plane was detected by the Soviet Air Defense Forces when it had flown more than 250 kilometres (155 mi) over the Soviet national boundary and avoided several attempts at interception by a MiG-19 and a Su-9 during the flight. The U-2 left Soviet air space and landed at an Iranian airstrip at Zahedan.

The next flight of the U-2 spyplane was planned for late April, 1960 from Peshawar airport. On April 28, a U.S. Lockheed U-2C spy plane was transported from a base in Turkey to Peshawar airport. Francis Gary Powers was selected as pilot for the mission, with Bob Ericson as the back up pilot. The mission was delayed for several days because of bad weather. The weather improved and on May 1, 1960, fifteen days before the start of the East–West summit conference in Paris, Captain Francis Gary Powers left the US base in Peshawar on a mission code named "Grand Slam" to fly the U-2 into the Soviet Union, photographing targets including the ICBM sites at the Baikonur Cosmodrome and Plesetsk Cosmodrome, then land at Bodø in Norway.

All units of the Soviet Air Defence Forces in the region were on alert, expecting another U-2 flight. Soon after the plane was detected, Lieutenant General of the Air Force Yevgeniy Savitskiy ordered the air-unit commanders to attack Powers' plane. Soviet attempts to intercept the plane using fighter aircraft failed due to the altitude of the U-2. But the U-2 was brought down near Kusulino, Ural Region, by the first of three surface-to-air missiles.

Powers was able to bail out of the plane, though he neglected to disconnect his oxygen hose first and struggled with it until it broke. He landed in Soviet territory and was captured soon after. Powers carried with him a modified silver dollar which contained a lethal, shellfish-derived saxitoxin-tipped needle with which he was capable of taking his own life, but he did not use it.

One of the Soviet MiG-19 fighters pursuing Powers, piloted by Sergei Safronov, was also destroyed in the missile salvo.

On May 5, four days after Powers disappeared, NASA issued a very detailed press release noting that an aircraft had "gone missing" north of Turkey. The press release speculated that the pilot might have fallen unconscious while the autopilot was still engaged, even falsely claiming that "the pilot reported over the emergency frequency that he was experiencing oxygen difficulties." Believing that the pilot had died and that the plane had been destroyed, the Americans decided to use the NASA cover-up plan. Nikita Khrushchev knew otherwise, though the Americans did not know that he knew.

After Khrushchev found out about NASA's false cover story, he set a political trap for Eisenhower. His plan began with the release of information to the world that a spy plane had been shot down in Soviet territory, but he did not reveal that the pilot of this plane had also been found and that he was alive. The Americans believed that they would be able to continue with their cover story that the crashed plane was a weather research aircraft and not a military spy plane.

On May 7, Khrushchev made the following announcement:

"I must tell you a secret. When I made my first report I deliberately did not say that the pilot was alive and well, and now just look how many silly things the Americans have said."

Gary Powers had disclosed what his mission was to the Soviets. The Soviets released photographs of the plane, providing evidence of some of the covert U-2 technologies that had survived the crash. Khrushchev publicly criticized Eisenhower for his lies in furtherance of the attempted cover-up.

Khrushchev specifically laid the blame for the U-2 not on Eisenhower himself, but on DCI Allen Dulles and the CIA. Indirectly, he was saying that Eisenhower had lost control of his own bureaucracy. Khrushchev said that anyone wishing to understand the U-2’s mission should ask Allen Dulles, "at whose instructions the American aircraft flew over the Soviet Union.” On May 9, Khrushchev told US Ambassador Thompson that he “could not help but suspect that someone had launched this operation with the deliberate intent of spoiling the summit meeting.” Thompson also wrote in his diplomatic cable that Khrushchev suspected it was Allen Dulles. Khrushchev also referred to criticism of Eisenhower made by Democratic Senate Majority Leader Mike Mansfield that Eisenhower did not control his own administration.

Eisenhower was quite embarrassed and sheepish as the result of the developments. He facetiously told an aide, “I would like to resign.” Eisenhower briefed the Congressional leadership about the U-2 program. As a result, on May 10, House Appropriations Chair Clarence Cannon revealed the true nature of the U-2 mission to the American people. Cannon told an open session of the House of Representatives that the U-2 was a CIA spy plane engaged in aerial espionage over the Soviet Union.

Eisenhower faced criticism in the press for not controlling his own administration. News reports left the impression that Eisenhower had lost control. Eisenhower felt that this was more damaging than admitting his knowledge and he decided to reveal the aerial espionage program and his direct role in it in a speech on May 11/ The speech talked about the need for intelligence gathering activities. Eisenhower closed by saying of the Soviets “They had better look at their own record” for spying. He also told reporters he was still planning on attending the Paris Peace Summit.

Eisenhower and Khrushchev attended the summit, along with French President Charles de Gaulle, and Prime Minister of the United Kingdom, Harold Macmillan. But any hope for constructive dialogue was dashed by the U-2 controversy. At home, the Soviets cancelled a planned trip to Washington D.C. of a Soviet air Marshal. They invited Chinese Communist leader Mao Tse Tung to Moscow, and they launched an anti-American press campaign. When the summit ended on May 16, both Eisenhower and Khrushchev gave statements to the media. Khrushchev criticized the United States over the U2 plane incident, stating that the American policy of secret spying had doomed the Summit before it even began. Eisenhower did not deny that the plane had been spying on Soviet military installations but said that the action was not aggressive but defensive. Khrushchev withdrew an invitation he had earlier given to Eisenhower to visit the Soviet Union.

Meanwhile, Gary Powers had told his Soviet captors what his mission had been and why he had been in Soviet airspace. This was not unexpected and in fact he had authority to do so in the event of his capture. Powers pled guilty and was convicted of espionage on August 19, 1960 in a Soviet Court. He was sentenced to three years imprisonment and seven years of hard labor. He served one year and nine months of the sentence before being exchanged for a Soviet spy named Rudolf Abel who was being held by the Americans. The exchange occurred on February 10, 1962 on the Glienicke Bridge connecting Potsdam, East Germany, to West Berlin.

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The incident compromised Pakistan's security and injured relations between it and the United States. General Khalid Mahmud Arif of the Pakistan Army later stated: "Pakistan felt deceived because the US had kept her in the dark about such clandestine spy operations launched from Pakistan's territory."

The Senate Foreign Relations Committee held a lengthy inquiry into the U-2 incident. Today a large part of the wreck as well as many items from Powers's survival pack are on display at the Central Armed Forces Museum in Moscow.

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