Joseph E. Persico

by Roosevelt's Secret War: FDR;World War II Espionage

  And then Carter would come up with something useful. Early in June 1942 he alerted FDR to a glaring failure in U.S. security. “Gerald Haxton, Somerset Maugham’s secretary [and lover], who has been a source of some value to this unit,” he told the President, “reports that it is possible to pick up a telephone in New York and put a call through to Switzerland (and, it turned out, to Sweden, Spain, Portugal and Vichy France as well).” The significance was immediately evident to FDR. Allied shipping losses in the Atlantic were soaring, 108 ships sunk in March alone. The transatlantic telephone offered a deceptively simple way for an enemy agent in the United States to phone an Abwehr colleague in Bern with intelligence on convoy sailings and sightings. This information could then be relayed to the German navy to guide its U-boat wolf packs to these targets. FDR told Carter, “I see no reason why all trans-Atlantic conversations should not be completely severed with Sweden, Switzerland, Vichy, Spain and Portugal. I see no reason why foreign diplomats of these nations should not also be forbidden telephone communication. This should be a proper exercise of war power.” Sumner Welles, much trusted by the President, suggested he go slow. Yes, shut off personal phone calls to these countries, but allow foreign ambassadors in Washington to call their governments, but have the United States monitor the calls. FDR wanted simply to cut off all foreign calls to neutrals, but went along with Welles. John Franklin Carter had earned his keep for another day.

  The transatlantic phone severance was a small triumph for Carter, who believed that he was now about to pull off a more stunning triumph. That summer, he informed the President that he could produce a man who had been as close to Hitler as Hermann Göring, Heinrich Himmler, or Josef Goebbels, an ex-Nazi who had held a sensitive post in the Third Reich, a figure who could be exploited for Allied propaganda and provide a deep well of insider intelligence on the Nazi regime. The President was instantly interested in this singular person who, along with all his other credentials, had been a Harvard man, graduating six years after FDR.

  Carter’s potential catch was Ernst Franz Sedgwick Hanfstaengl, born in Munich to a wealthy father in the art reproduction business and an American mother, Catherine Sedgwick, of an old New England family. Though he grew to a portly six feet four, Hanfstaengl had been tagged by a governess with the nickname Putzi, from which he never escaped. By upbringing, Hanfstaengl was almost as American as German. He had been sent off to Harvard in 1905, where he mingled socially with T. S. Eliot, Walter Lippmann, Theodore Roosevelt Jr., and the budding Communist John Reed. Putzi was a gifted pianist, and young Teddy invited him to the White House, where he performed for President Theodore Roosevelt’s family. After Harvard, Hanfstaengl remained in the United States, marrying an American woman and managing his father’s branch art shop on Fifth Avenue in New York. There, he sat out World War I while one of his brothers was killed fighting for the kaiser.

  By 1921, Putzi had returned to Munich. One day, a U.S. military attaché told him that he had met an impressive political newcomer who was going to be speaking at a beer hall that night. The two men went together to hear the speaker, who looked to Putzi like “a waiter in a railroad restaurant.” Then the man began to talk, and Hanfstaengl was smitten on the spot by Adolf Hitler. He introduced himself to the fledging leader of the Nationalsozialistische Deutsche Arbeiterpartei, the National Socialist German Workers Party, and they soon became fast friends, especially since the wealthy Hanfstaengl helped bankroll Hitler’s party newspaper, the Völkischer Beobachter. When Hitler fled Munich after his beer hall putsch failed in 1923, he took refuge in Putzi’s country estate at Uffing, thirty-five miles from the city. While there, Hitler fell into a suicidal depression. Only the comforting of Hanfstaengl’s wife, to whom the sexually ambivalent Hitler was attracted, stopped him from taking his life, surely a turning point in world history. Hitler was subsequently caught and arrested at the Hanfstaengl estate. But after his release from Landsberg prison, Putzi was there with his touring car waiting to pick him up.

  After coming to power in 1933, Hitler made Hanfstaengl, with his flair for languages and cosmopolitan suavity, the Reich’s foreign press chief. In the evening, Putzi entertained the Führer and his coterie with renditions of Wagner, and Harvard football marches and pep songs. But Putzi apparently had too much flair for the political henchmen around Hitler. He sensed their jealousy and feared they were plotting to kill him. He fled Germany for Britain, taking with him his young son, Egon. Hanfstaengl was interned when the war broke out and subsequently sent to a Canadian POW camp in Kingston, Ontario.

  John Franklin Carter had known Putzi in the latter’s Nazi heyday. Carter had been in Germany working as a freelance journalist in the mid-thirties, trying to get a line on the Hitler regime. A friend told him that the man to see was Putzi Hanfstaengl. Carter looked up Hanfstaengl in Munich and the chemistry was instantaneous. They came from the same crowd. Putzi’s mother was the daughter of Ellery Sedgwick, a close friend of Carter’s father. Putzi tried to get Carter an interview with Hitler, who, at the time, was seeing no one. But he did arrange for Carter to see Hitler’s anointed successor, Hermann Göring.

  Just after Pearl Harbor, while Winston Churchill was staying at the White House, Carter received disturbing news from Henry Field, the member of his ring whom Bill Donovan had tried unsuccessfully to recruit. Carter’s operatives were keeping an eye on a woman named Viola Ilma, suspected of being a German spy. “She’s staying at the White House!” Field had informed a stunned Carter. Ilma had run into Mrs. Roosevelt and said she was having a hard time finding a hotel room in war-crowded Washington. Eleanor Roosevelt, always tenderhearted toward strays, had said, “Well why don’t you come and stay at the White House? There’s nobody there but Franklin and the Prime Minister.”

  Distressed to discover that a possible Nazi spy had penetrated America’s innermost sanctum, Carter began to track down Putzi Hanfstaengl, who had known Viola Ilma in Berlin. He learned, through the FBI, about Putzi’s internment in Canada and managed to visit him there. He concluded from what Hanfstaengl told him that Ilma was not a Nazi, but more likely a British agent. More important, Carter discovered that Hanfstaengl was eager to work for the Allies against his old Nazi pals.

  Carter went to see the President about bringing Hanfstaengl to America. Roosevelt airily claimed that he had known Hanfstaengl at college, though it is doubtful since he had left Harvard six years before the German. “What do you think on earth he could do?” FDR asked Carter. Carter pointed out that Hanfstaengl “actually knows all these people in the Nazi government; he might be able to tell you what makes them tick.” “Yes. Go ahead,” the President said, and then added something that impressed Carter with his sense of the enemy’s culture. “You can tell [Hanfstaengl] that there’s no reason on God’s earth why the Germans shouldn’t again become the kind of nation they were under Bismarck. Not militaristic. They were productive; they were peaceful, they were a great part of Europe. And that’s the kind of Germany I would like to see. If he would like to work on that basis, fine.”

  Carter left the White House, fired by FDR’s support and determined to find a way to bring Putzi under his wing. The task did not prove easy. Churchill, the Foreign Office, and the British embassy in Washington all balked. As one English diplomat put it, they were not inclined toward “confusing anybody’s mind … into the belief that there are good and bad ex-Nazis.” Carter realized that he would need Roosevelt’s personal intervention to spring Hanfstaengl from captivity in Canada. On June 24, FDR, with Churchill’s reluctant acquiescence, authorized an Army plane secretly to fly Hanfstaengl to Washington. His presence in the country was not to be known. He was to be quartered at Fort Belvoir near the capital under twenty-four-hour guard. Putzi was to be treated as a paroled captured officer and known as Ernst Sedgwick.

  Though admitted to the country, Putzi had one more test to pass. As Carter put it, the British “warned me that Hanfstaengl was a homosexual,” a compromising condition particularly for someone engag
ed in intelligence work. After all, the huge German had sung falsetto soprano in a Hasty Pudding show at Harvard. Carter went to New York to seek the advice of Clare Boothe Luce, the playwright and wife of Time magazine’s publisher, Henry Luce. The beautiful Mrs. Luce suggested using Gerald Haxton, Somerset Maugham’s beau, as bait. Haxton, then in America, could speak good German to the lonely Putzi, since he had spent two years as a POW in Germany in World War I. Carter arranged for Haxton to visit Hanfstaengl at Fort Belvoir. As Maugham’s wife once said of Haxton, “If he thought it would be of the faintest advantage, he’d jump into bed with a hyena.” The day after Haxton’s visit, Carter went to see Putzi. The German’s first remark was, “I wish you’d get rid of this man. One of the things I couldn’t stand about Hitler was all the fairies he had around him. I don’t like fairies.” Putzi’s sexual orthodoxy was confirmed.

  Putzi soon appeared to demonstrate his use to his new keepers. During a visit to an Army base, he and Carter were studying a wall map when Hanfstaengl suddenly put his finger on Casablanca. “Of course, there’s where you ought to land,” he said. Army officials were stunned. He had pinpointed a major target of Operation Torch, the pending invasion of North Africa, which was to be America’s first campaign on the Atlantic side of the war. Army officials feared there had to have been a leak. An investigation was ordered. The investigators concluded that the closely guarded German could not have learned of Torch. “It was just Hanfstaengl using his brain,” Carter assured the Army. All the effort and trust the President had invested in bringing Hanfstaengl to America, Carter was now convinced, had been justified. This man would earn his way.

  Chapter XV

  “We Are Striking Back”

  WHAT JAPAN would do that summer of 1942 became a burning quandary. If the Japanese chose to attack Russia, as Hitler wanted, the move might relieve pressure against America and Britain in the Pacific. More directly, it would mean that the Russians would have to divert troops engaging the Nazis on their western front and send them east to battle the Japanese. To both FDR and Churchill, the primary objective of the war remained to destroy Hitler first. A Japanese attack on Russia would delay that end. In his private musings, the President revealed to Adolf Berle how far he was willing to go to appease the Russians and keep them fighting. In a May diary entry, after lunching with FDR, Berle wrote, “He said that he would not particularly mind about the Russians taking quite a chunk of territory; they might have the Baltic republics, and Eastern Poland and perhaps the Bukovina, as well as Bessarabia.” Such concessions, giving away half of Poland and rubber-stamping Russia’s grab of Latvia, Lithuania, and Estonia, if known outside FDR’s circle, would have represented a contradiction of the President’s publicly professed support of self-determination for nations. Berle tried to steer FDR away from overly accommodating Stalin, arguing, “The Atlantic Charter might have something to say about this.” He added, only half joking, that he hoped Roosevelt “would not be getting generous with Scandinavia” as well. FDR laughed off the gibe. But Berle was sure the President was overfeeding the Russian bear.

  On July 27 disturbing word reached Roosevelt from the American minister in Bern, Leland Harrison. Since the German conquest of Russia had not gone according to schedule, Hitler had reportedly put out a peace feeler to Stalin through the Japanese. Worse still, the Russians had proved receptive. Such a peace would release the full might of the Wehrmacht against the West. Fortunately for the Western Allies, a suspicious Hitler came to distrust his Japanese intermediaries and decided instead to go ahead with his summer offensive against the Soviet Union.

  As to whether the Japanese intended to attack Russia, FDR had intelligence coming directly out of Tokyo. On June 17, without identifying Magic as his source, he advised Stalin he had hard evidence that “the Japanese may be preparing to conduct operations against the maritime provinces of the Soviet Union.” However, Russia would not be left in the lurch, FDR assured Stalin. “In the event of such an attack, we are prepared to come to your assistance with our air power… .” In July, Roosevelt informed the Soviet leader that the threat had hardened. The Japanese would definitely attack the Soviet Union in the first ten days of August, he warned. The Russians must have been mystified when, less than a month later, the President sent another secret cable, addressed to “Mr. Stalin,” again based on an unrevealed Magic intercept, claiming, “I have information which I believe to be definitely authentic that the Japanese government has decided not to undertake military operations against the Soviet Union at this time.” A decrypt dated November 29, from the foreign minister in Tokyo to his ambassadors abroad, further confirmed the safety of the Soviet Union’s eastern flank. Classified “strictly secret,” it read: “I believe that we must, at the earliest possible moment, devise some concrete means of contributing our influence to turning the tide in Europe. Nevertheless, we are now involved in trying to swing the situation in the Pacific and in sober truth, to suddenly divert our own reserve strength in sufficient quantity to be of material aid to Germany and Italy in their operations would be impossibly foolish.” Possessed of this intelligence, FDR could tell Stalin to relax. He had it from the horse’s mouth: The Japanese had their hands full in the Pacific and would not be attacking him from the rear. Stalin could keep the bulk of his forces west of Moscow fighting the Germans.

  *

  That summer of 1942, the President half won his argument with Churchill about the time and place to commit American forces in the European war. He accepted Churchill’s and his own service chiefs’ judgment that invading the Continent itself was impractical that year. The Allies were not yet ready. But he did win Churchill’s acceptance of an invasion of North Africa. In pursuing this strategy, Spain would hold a key card. Would the Spanish caudillo, Generalissimo Francisco Franco, allow Hitler to reinforce his armies in North Africa by allowing German troops to land in Spanish Morocco? Would Franco remain neutral and lock out all belligerents? Or, in the worst outcome, would he enter the war on the side of the Axis? One way to plumb the Spaniards’ intentions was to read their codes. This objective had been achieved by Bill Stephenson’s BSC agents, who repeatedly burglarized the Spanish embassy in Washington to obtain keys to the ciphers Spain used. Since the keys were changed monthly, the BSC break-ins became a recurring affair, until passage of the McKellar Act. Thereafter, Stephenson was afraid to continue anything so blatant as burglary, which might cause the BSC to be booted out of the United States. Consequently, Bletchley Park went temporarily blind in penetrating Spain’s intentions. Stephenson sought help from Bill Donovan. Another break-in of the embassy was critical since the Spanish had again changed their code in July. Stephenson’s plea to Donovan to take over the break-ins might have put off a more prudent man. FDR had specifically banned the OSS from carrying on espionage inside the United States. Internal intelligence and counterintelligence, the President had ruled, belonged to Hoover’s FBI. But Donovan spotted a fine crack in the wall excluding him. Technically, he would not be engaged in domestic spying. He would be penetrating what traditionally was considered foreign territory, a nation’s embassy abroad. Donovan thus agreed to Stephenson’s appeal. The assignment to burglarize the Spanish embassy fell to an agent who fulfilled the profile that led critics to characterize the OSS as standing for “Oh, So, Social.” Donald Downes was a forty-year-old product of Exeter and Yale, an intellectual liberal who had previously taught in a private school on Cape Cod. He failed the ideal OSS image only by being unstylishly overweight. Shortly after 11 P.M. on July 29, Downes led a team into the Spanish embassy. They left at dawn the next morning with enough photographs of the ciphers to enable Ultra to resume breaking Spanish documents. Since, however, the Spaniards continued to change the keys every month, Downes and his cohorts continued to break in.

  In October, in the course of their fourth burglary, Downes’s team was startled by sirens audible for blocks. Two squad cars disgorged FBI agents outside the embassy who sealed off any escape. The OSS burglars were arrested.
Downes was allowed to make a jailhouse call to Bill Donovan, who woke up a chief aide, James R. Murphy, and told him to spring his men. While in custody, Downes tried to explain to the FBI that he worked for the OSS. Hoover’s agents were only too aware that they were dealing with Donovan’s poachers on their turf. The bureau already had three agents of its own inside the Spanish embassy.