Joseph E. Persico

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

  “Safehaven” was a Roosevelt strategy to block German leaders from smuggling their stolen riches into comfortable exile, as well as to deny Germany the wealth to start another war, and to keep its plunder in Europe for the Allies to use to rebuild a shattered continent. The approach was simple: Gain control of gold and currency transactions conducted by the neutrals. Donovan’s OSS was assigned to track down the flow of gold from Germany to Switzerland and through it to other nonbelligerents. As FDR put it to Wild Bill, “We ought to block the Swiss participation in saving the skins of rich or prominent Germans.” Few enterprises expose the moral contradictions of war more nakedly than Safehaven’s fate. While the OSS did succeed in preventing some ill-gotten German wealth from leaving Europe, it hardly succeeded in blocking all of it. One story had it that a gold-laden U-boat made its way to Nazi-friendly Argentina. The most gaping holes in Safehaven, however, were punched, not by the Germans, but by an ally, even by rival U.S. agencies working at cross-purposes. Britain, already looking toward postwar commerce, wanted to expand trade with the neutrals, not punish them. Henry Morgenthau Jr., on the other hand, wanted his Treasury Department to deal harshly with any neutral nation helping Germany, particularly Switzerland. But the State Department, respecting Switzerland’s rights as a neutral, valuing the country as an intelligence bonanza, and appreciating Swiss leniency toward American fliers crash-landing there, opposed forcing Safehaven strictures down Swiss throats. Safehaven’s leverage was not even used to end the Swiss trade in munitions with Germany. And while most Swiss loved democracy and favored an Allied victory, the bankers of Zurich paid lip service to Safehaven while profiting from trade and gold exchanges with the Nazis to the very end of the war.

  In dealing with Nazi Germany, Switzerland could point a we’re-not-the-only-one finger at other neutrals, most notably Sweden. After the American raids on Schweinfurt, Swedish technicians came to the city to rebuild the damaged ball bearing plants, since 60 percent of all ball bearings produced there were made by a subsidiary of Svenska Kullager Fabriken (SKF), a Swedish firm. FDR’s Board of Economic Warfare estimated that without the export of high-grade Swedish iron ore for steelmaking, the Nazi war machine would grind to a halt. British war economists branded Swedish iron exports to Germany “the most valuable of all of the contributions of neutral countries to the German war effort.” While Sweden’s aid to Germany angered the Allies, it at least produced one espionage dividend. According to an OSS report, “… [R]ush orders given to SKF by the Germans [made] it possible for bomb damage experts to gauge the harm done to German ball bearing factories by Allied attacks from the air.”

  Sweden’s flouting of neutrality went beyond economic profiting. The Swedish navy escorted German troopships crossing the Baltic Sea to embarkation points in the East. Over 250,000 of Hitler’s forces sent to occupy Norway were transported on the Swedish railway system. More egregiously, the Swedes had allowed German troops to cross their territory as part of the buildup for the invasion of Russia. Swedes fell back on the same rationale as the Swiss. Theirs was a small country with a population less than that of New Jersey trapped in a triangle, with Germany on the south, Nazi-occupied Norway on the west, and Finland, Germany’s ally, on the east. Cut off by the Allied blockade from other sources of oil and rubber, the country depended on Germany for these essentials. Thus Roosevelt’s representatives made a secret deal with the Swedes. The Allies would permit oil and rubber destined for Sweden to pass through the blockade; in return, the Swedes must stop enemy forces from using their country as a German highway and start reducing their shipments to the Reich. Before 1944 was out, Swedish trade with Germany had halted completely.

  Besides Switzerland and Sweden, Generalissimo Franco’s Spain, its heart with the Nazis, stretched neutrality almost to bursting. Spain’s Blue Division, forty thousand strong, fought alongside the Wehrmacht in Russia. Spain at one point was providing 30 percent of Germany’s wolfram, indispensable for making the tungsten used in producing hard metals. Portuguese businessmen were getting rich, supplying twice as much wolfram as Spain through a secret deal with the Reich. All told, 90 percent of Germany’s reliance on this material was supplied by neutrals. By the spring of 1944, Allied trade negotiators thought they had a deal. They would allow Spain to receive gasoline through the blockade; in exchange, the Spanish would stop all wolfram exports, both to the Allies and Germany, by the end of the year. But the Japanese ambassador in Madrid unwittingly revealed Spain’s continuing duplicity. In a message decrypted at Arlington Hall, the ambassador repeated a conversation he had had with a Spanish official regarding wolfram shipments during which he was told, “… [W]e Spaniards and Portuguese are, to tell you the truth, going to cooperate and keep sending more of it to Germany. For that purpose the Portuguese Finance Minister came here and has concluded with Spain a secret understanding to that effect.”

  Turkey, which the Allies had long been trying to enlist in the war on their side, was Germany’s prime supplier of chromite ore, which was converted into chromium. Albert Speer, the German armaments minister, feared that without chromite supplied to the Reich by Turkey, German arms production would be shut down in ten months.

  With the successful invasion of France and the Nazis retreating from Russia, the hovering shadow of a once omnipotent Germany should no longer be so fearsome to European neutrals, FDR believed. He was determined that their aid to Germany not prolong the war by a day. But the course of wisdom was not always clear. The American ambassador in Madrid, Carlton Hayes, sent FDR a confidential communication urging him not to be too harsh with the Spanish. Hayes pointed out that “65 percent of Allied intelligence—and 90 percent of American—concerning German military dispositions in France are derived from our intelligence services in Spain while the Spanish looked away.” The Spaniards had allowed over nine hundred downed American airmen coming out of France to pass through their country to rejoin the fight. Hayes added a sentimental argument to the case for leniency. He told the President how Spanish authorities had allowed full military honors at the burial of an American flier whose body washed ashore on a Spanish beach. As for wolfram exports to Germany, Hayes pointed out, “We certainly want to cut down… . But the means of doing this must be realistic also.”

  Ultimately, the shipments of Portugal’s wolfram and Turkey’s chromite ore to Germany were ended through pragmatic capitalism. The United States simply bought up these strategic commodities to keep them out of the Nazis’ hands.

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  Field Marshal von Rundstedt was just one of a growing number of Germans who saw perpetuation of a lost cause as a policy of nihilism. In late January 1944, Allen Dulles sent Donovan a message from Bern using a new code word, Breakers, to refer to a “German oppositional group … composed of various intellectuals from certain military and government circles.” Dulles’s chief source of information on anti-Hitler movements within the Reich was Hans Bernd Gisevius, a hulking forty-year-old Prussian and agent of the Abwehr working undercover as a vice consul in the German consulate in Zurich. The six-foot four-inch Gisevius, whom Dulles referred to behind his back as “Tiny,” presented an anomaly of strength and vulnerability. His vision was so poor that he could not drive a car or use a typewriter. He had joined the Gestapo almost at its creation, thinking it a legitimate police force. He quickly became disillusioned, and asked a colleague, “Tell me, please, am I in a police office, or in a robbers’ cave?” By 1943, Gisevius had become active in anti-Nazi circles. In one of his clandestine meetings with Dulles, Gisevius dropped a bombshell. He told the Bern OSS chief that a plot was under way in Germany to assassinate Hitler and overthrow the Nazi regime. He cited a date for the coup, March 13, 1943. But when that day came and passed, Dulles’s doubts deepened that conspiracies could escape the all-seeing eye of the Gestapo. Still, he continued to send messages to Washington bearing the Breakers code name to report dissent inside the Reich, some 146 such dispatches by May 1944.

  Several weeks before D-Day, Dulles had inf
ormed Donovan that Rundstedt, at the time still commanding German forces in the West, would, if given certain assurances, allow the Allies to land in France unopposed, thus avoiding carnage on both sides. The plan envisioned an orderly retreat from the West, and the transfer of crack divisions to face the Russians on the eastern front. Three weeks before D-Day, the conspirators informed Dulles of what they would expect in exchange from the Allies—three divisions to be parachuted into the Berlin area and amphibious landings near Bremen and Hamburg. The principal fear of the anti-Nazis was echoed in another communication that Dulles relayed to Washington after D-Day: “The Breakers group wishes [to] keep as much as possible of the Reich from falling into the hands of the Russians.” Still another dispatch out of Bern reported that the leadership of the conspiracy “… is especially concerned that they should not have to negotiate with Moscow… . The chief reason for such a request on their part is their ardent wish to keep Central Europe from coming under the sway of the Soviets… . They feel certain that in the latter case democracy and Christian culture … would vanish in Europe.”

  Gisevius informed Dulles that another date, not far off, had been set for Hitler’s assassination. On July 12, Gisevius left Switzerland for Germany, and on the same day Dulles sent a cryptic telegram, relayed to FDR, reading, “There is a possibility that a dramatic event may take place up north, if Breakers courier is to be trusted.”

  Astonishingly, knowing and sharing the President’s taste for strategic rumors, Donovan never sent FDR any of the specific Gisevius intelligence that conspirators were plotting to assassinate Hitler and that the Nazi regime might be overthrown and replaced by a government ready to make peace. What was set before the President from Donovan seemed to point in the opposite direction. On the day that Gisevius departed for Berlin, Donovan relayed another report from Dulles, obtained from a “neutral observer,” that read: “A revolution is not to be expected; the people are too apathetic and too closely supervised by the police. A collapse can only come as the Allied troops arrive… . The opposition are not in any position to take such a step.”

  Three days later, FDR had another appraisal from Bern, this one gingerly questioning FDR’s policy of unconditional surrender. Inside Germany, Dulles reported, “Goebbels has taken and twisted the slogan of unconditional surrender and made the people feel that the slogan means unconditional annihilation.” He went on to predict that “any opposition to the Nazi regime involves the gravest risk of immediate execution.”

  The closest Donovan ever came to advising the President that he had knowledge of a plot brewing was to share the following: “Those opposed to the Nazis realize … that the next few weeks may be their last chance to show that they are willing to take some risks in making the first move to clean up their own house.” Donovan advised, “We must judge whether the encouragement of any effort towards a revolution in Germany will, at this juncture, help to save thousands of lives of Allied soldiers… .” He believed it would. Churchill had already pointed out to FDR “the desirability that the German people themselves should take steps to overthrow the Nazi government. I believe that it would be helpful if a similar and somewhat expanded statement could be authoritatively made on our side at this time.” But FDR remained obdurate in his opposition: no negotiated peace, only unconditional surrender. He wanted the Germany of Adolf Hitler driven to its knees. Only then could a better nation be reborn.

  That summer, Eleanor Roosevelt came across a memorandum that Churchill had written in 1919 during the Russian civil war, describing how the Allies had tried to strangle the Red revolution in its cradle. “Large sums of money and considerable forces have been employed by the Allies against the Bolsheviks during the year,” Churchill wrote. He noted that over eight thousand American troops in Siberia were fighting the Red Army. Further, Japan and Finland stood ready to commit substantial forces to the anti-revolutionary side, and Britain and France were prepared to commit millions in aid lest “the Bolshevik armies are supreme over the whole vast territories of the Russian Empire.” In a cramped scrawl across the top of the memorandum, the First Lady had written, “It is not surprising if Mr. Stalin is slow to forget!” She then passed Churchill’s long ago sentiments on to the President. Here was the seed of East-West distrust that Roosevelt was determined to overcome.

  On the very eve that the anti-Nazis planned their coup, the President received from Donovan another report from Bern stating flatly that “Hitler is still functioning as the Supreme Commander of the Army.” The only hint of restive generals in this communication dealt with the V-1 rockets the Germans had begun dropping on England. The generals opposed the weapon, “not on any grounds of principle… . They felt that the employment of this bomb had little strategic value.”

  Yet Donovan also had the dozens of Breaker messages anticipating a plot against Hitler, and given the boost in his standing if these reports proved accurate, his failure to inform the President is mystifying. In the ten days prior to July 20, Donovan’s memoranda to the President dealt with the possibility of Bulgaria entering the war, profiles of several Chinese generals, a draft Chinese Constitution, and information on the Timor islands, but nothing about an attempt on Hitler’s life. On July 20 the conspirators did strike. Colonel Klaus Schenk Graf von Stauffenberg, missing an eye, one hand, and three fingers on the other hand, planted a briefcase bomb in the Wolfsschanze, Hitler’s East Prussian headquarters. Four of the men in the room with Hitler were killed outright or suffered fatal wounds. Hitler was only slightly injured. The coup had failed.

  A memorandum delivered to the White House two days after the plot suggested that Donovan did not want it to appear that his organization had been caught flat-footed. He sent FDR a transcript of a radio telephone conversation he had had with Allen Dulles which read: “The developments did not come as a great surprise except to the extent that there were reasons to doubt whether any high officers of the German Army, who had remained in positions of power after the successive purges, would have the courage to act… . We had ample advance warning that a plot was in the wind,” the transcript concluded, “if this attempt has failed, the Germans will probably have to wait for the complete military collapse of Germany to rid themselves of the Nazis… .”

  Details of the failed coup came dribbling in, but little more than could be gleaned from monitored German broadcasts and newspapers reaching neutral Switzerland. “Photographs appearing in the German press of Hitler bidding farewell to Mussolini, after his visit to headquarters,” Donovan reported to FDR, “may indicate that Hitler’s right hand is wounded, since he is giving Mussolini the left hand.” Donovan included one more detail passed along by Dulles to tantalize the President: “I have just heard tonight from a good source that Berger, Hitler’s co-worker, who was the only one who was immediately killed at the time of the attack on Hitler, was Hitler’s double. Possibly Stauffenberg, who probably did not know Hitler well, made a mistake.” Donovan also reported that the assassination attempt had occurred not in East Prussia, but in Hitler’s Alpine retreat at Berchtesgaden in Bavaria. The report was inaccurate as to the site, the number killed, and the supposition that Stauffenberg had been misled by a double. The one accurate disclosure Wild Bill reported was that the blast at Rastenburg marked the fourth failed attempt by these conspirators on Hitler’s life. One OSS prediction proved dead on. “The blood purge will be ruthless,” Dulles cabled Washington. The Gestapo had immediately embarked on a remorseless manhunt, arresting thousands, however remotely traceable to the plot.

  Actually, FDR had little need for the tardy and speculative intelligence on the plot from Donovan’s spies. He had a much swifter, more accurate source, the unwittingly obliging Ambassador Oshima. Days after the failed coup, the ambassador had a long conversation with Joachim von Ribbentrop in which the Reich’s foreign minister revealed the leaders of the plot, their intentions, the collapse of their enterprise, and their fate. Ribbentrop told Oshima, according to the ambassador’s report to Tokyo, “Colonel Stauffenb
erg entered a meeting which was in progress in order to make a report to Chancellor Hitler. After he had placed a bag in which the bomb had been put upon the floor about two meters from where Chancellor Hitler was, he said that he had some other business and left the room.” Ribbentrop next told Oshima, “… [T]he bomb exploded with tremendous force after the lapse of about five minutes… . What was really mysterious was the fact that the Chancellor, who was nearest to the bomb when it exploded, was unhurt with the exception that his clothes were torn to pieces by the blast and he sustained a few burns.” Oshima gave Ribbentrop’s view of the genesis of the coup. “I think that this was a plan for attempting a compromise with England and America after the people involved had secured in this way the real power for themselves. However, while there is some suspicion that the bomb which Colonel Stauffenberg used was of British make, we have not yet secured any proof that Beck [General Ludwig Beck, a plot leader] was communicating with England and America.” Through Magic, this account from the lips of the German foreign minister was available to the President just five days after the coup. Oshima sought credit for warning the Führer. “I as well as others had advised Chancellor Hitler that resolute steps should be taken against this attitude, but the Chancellor is a man who prefers to deal with problems of this kind with forbearing and gentle measures, and therefore, so long as there was no clear proof, he did not consent to the taking of measures such as we suggested.”

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  FDR’s resolve not to provoke Soviet suspicions about a separate peace was matched only by Stalin’s hypocrisy. An OSS agent in Sweden, Abram Hewitt, had managed to penetrate the Nazi SS, through the personal physician of Heinrich Himmler, head of the terror apparatus. Dr. Felix Kersten, a Finn, had developed a promising nerve therapy with which he treated leading Europeans, including Benito Mussolini, Il Duce’s son-in-law, Count Galeazzo Ciano, Prince Henry of the Netherlands, and Himmler, who by now monopolized the doctor’s time. Hewitt had met Kersten on one of the doctor’s frequent visits to Stockholm and found him willing to cooperate with the Allies. Between them, they concocted an imaginary back ailment for the American which Kersten would pretend to treat while briefing Hewitt. Most alarming was what the Finn revealed about peace maneuvering between the Soviet Union and Germany. “The doctor reported,” Hewitt cabled Washington, “that Prince Wied, the German Minister to Stockholm, had come with a peace proposal from the Russians to SS Headquarters about the time of Stalingrad, and that Papen had come with another one from Ankara in May 1943. The outlines of the proposals were that Germany should take about one-half the Baltic countries to the north of East Prussia; and that Poland should be divided along the 1939 lines; that Russia should demand the whole coast to the Black Sea, including the mouth of the Danube, and should go as far as Constantinople and Salonika, and should also have a port on the Adriatic.” Kersten told Hewitt during a subsequent back treatment of the fate of the Russian scheme: “Ribbentrop and Goebbels had been in favor of accepting these proposals, while Himmler and Hitler were against them. Even with the defeat at Stalingrad, Hitler had convinced himself that Russian reserves would be exhausted and the Eastern front would stalemate.” He needed to concede nothing to Stalin.