This same paradox allegedly kept Churchill from warning the city of Coventry that it was about to be attacked during WWII: if he had done so, it would have been a clear signal to the Nazis that their famous ‘Enigma’ encryptor had been understood. However, there is insufficient evidence that Churchill, or anyone else in England, knew of the Coventry raid before it happened.
While the urban legend’s narrative about Churchill facing the painful decision about Coventry might be fiction, it is a document datum that U.S. officials made similar difficult decisions.
The ‘Venona’ project allowed U.S. intelligence agencies to decrypt Soviet messages in the 1940s. These intercepted cables documented that there were hundreds of communist spies operating inside the federal government.
An editor at the University of Michigan’s Michigan Law Review writes that “the Soviet cables indisputably proved the guilt of” a group of suspects investigated by the FBI: “Alger Hiss, Harry Dexter White, and Julius and Ethel Rosenberg.” That was merely the beginning. The Soviet communications yielded many other names. But in court, the FBI did not release the Venona decryptions, even though that would have given them “slam dunk” convictions. Instead, more lengthy and difficult cases, sometimes using bits of circumstantial evidence, kept the Venona project a secret:
Because of Venona, the FBI and certain top Justice Department officials were absolutely sure “they were prosecuting the right people.” But throughout the trial of Julius and Ethel Rosenberg, J. Edgar Hoover risked acquittal rather than reveal that the U.S. had cracked the Soviet code.
Some news reporter derided the FBI’s apparently weak cases, not knowing that the defendants were guilty, and that the FBI had a surplus of evidence, not a dearth of it. In addition to the Venona information, the FBI had statements from former Soviet spies who'd defected and agreed to help the Americans. These defectors, Chambers and Bentley, independently confirmed the Venona data. “Without realizing that the U.S. government had confirmed the accounts of such informers as Whittaker Chambers and Elizabeth Bentley with Soviet cables,” the anti-FBI media
smeared ex-Communist informers as lunatics and perverts. Now the world knew what J. Edgar Hoover knew at the time: The informers were telling the truth.
Hiss was convicted and sentenced in January 1950. The two Rosenbergs were convicted and sentenced in 1951. Harry Dexter White died before he could be tried. The Venona transcripts were not released until 1995.