Hitler's Lost Spy

by Greg Clancy

Annette could only have gained residential access to The Manor through a special invitation, and this was her pathway subsequent to meeting Jean Morton at Alliance Francaise.

  But was this simply a coincidence? Could Annette’s Sydney accommodation have been arranged on her behalf? Did her German contacts in Sydney know she was travelling to Australia, and that she would be requiring housing in Sydney? But it had to be suitable accommodation to provide her with maximum assistance for her future responsibilities. Being lodged out in the suburbs would increase the likelihood of suspicion, as communication with her contacts would be more exposed. Living on the edge of the harbour with a short ferry ride to the city offered an ideal location for those who preferred to live in relative obscurity. Also, shipping movements on the harbour could only be observed, first-hand, from the foreshores and vantage points in the immediate area. Gerald Healy’s The Book of Sydney Suburbs describes how the harbour may be observed from an area close to The Manor.

  A short walk from Clifton Gardens is Bradleys Head, which commands unsurpassable views of the harbour and North and South Heads.

  From Bradleys Head, a ship entering the Heads may be visually tracked to the Harbour Bridge – an immense range.

  Another consideration for Annette was her gender, and with it she carried both an attractiveness and respectability. The lady travels first class and this was the late 1930s, an era when social conventions ensured that women, unlike today, did not usually have to command respect from men – it was automatic. Her gender warranted an added effort to ensure Madame Wagner was housed appropriately. Had ‘she’ been a male, a ‘rough area’ quarters in the harbour vicinity may have been acceptable, but not for a woman. Female spies often possessed gender advantages over their male counterparts, but having a broad range of suitable foreign residential options was not one of them.

  However, an espionage advantage such as Annette’s accommodation occasionally tenders a benefit to both the spy and the other side. While The Manor offered Annette an ideal housing setting, it also provided the agents assigned to her surveillance an equally ideal location for monitoring her movements and visitors. The Manor is the first property on the street overlooking Taylors Bay. The dense bushland adjoining the property would have provided excellent cover for an agent assigned to survey Annette. This bushland afforded an effective observation point for both the front and rear of the building, including Annette’s room. The normal observation choices of remaining in a parked vehicle that would attract unwelcome notice from neighbours, or commandeering a nearby property as a base, were therefore avoided.

  While the agents checking on Annette may have enjoyed excellent observation sites, they would also have experienced exposure to the elements, and rain during a winter’s night would not have been welcome.

  Mixed Company at The Manor

  Annette developed few friendships at The Manor. Her working hours may have contributed to this, but the reports on her movements and social activities suggest she had a limited number of friends and shared little in common with other residents. But there may have been unrelated reasons why Annette kept her distance from most others. An intelligence report dated 1 March 1939 includes:

  … Another resident at The Manor is Mrs Eula Maddocks a fanatical Communist and a worker in the Party offices in Sydney.

  A few more residents sharing Eula Maddocks’ political beliefs would undoubtedly explain Annette’s disinterest in mingling with too many others. But fewer close friends equated to fewer disruptions, ineffective diversions and time-wasting idle chatter. Annette did not have any interest in unproductive socialising – and there were always possible risks in meeting people with unknown backgrounds. The spy’s domain may be very lonely, but for a good reason.

  Friendly Neighbours

  During her residency at The Manor, Annette received very few visitors who entered through the front door. At night, and through the back garden, was another matter. But two friends who knocked on the front door to regularly visit Annette had both received attention from security officials prior to their association with her.

  Dinah Marshal was a languages teacher who lived in David Street, Clifton Gardens, a short distance (about 400 metres) from The Manor. She travelled to Germany in 1937 and returned with an apparent enthusiasm for the Nazi regime. Putting aside the less palatable of Hitler’s policies moulding the new Germany in that year, it was not unusual for foreign visitors to return home with a glowing admiration for the Third Reich. Dinah subsequently caught the attention of Military Intelligence due to her friendship with Arnold Kaemper.

  Arnold Kaemper was born in Westphalia, Germany, in 1907. A hairdresser by trade, he arrived in Sydney in August 1937 and established a ladies hairdressing salon (‘Ceciles’) in King Street, City. There is no evidence that he had any Nazi affiliations in Germany, but his associations with known Nazis in Australia placed him on the Military Intelligence watch list. He was interned in September 1939, released five months later and re-interned in June 1940, possibly as a consequence of Hitler’s invasion of France.

  The security assessments of Kaemper do not provide a consistent portrayal of what suspicions existed in his connection with known Nazis – but there was a link. For example, in a report connecting him to Annette:

  He apparently had unhealthy interest in oil tanks and makes notes of oil storage and supplies and was apparently a friend of Skerst.

  In a September 1944 report by the Commandant of Kaemper’s internment camp in Tatura, Victoria:

  He has never shown any interest in political affairs or expressed any opinion thereon as far as is known. Carries on his trade in the compound barber’s shop. Does not mix to any great extent with other Internees. He is considered however to have Nazi persuasions. His behaviour during internment has been very good. Does not appear as being very reliable or trustworthy.

  Marshal and Kaemper had met in Germany, and Kaemper had lived at the Marshal family home in Clifton Gardens prior to his internment.

  The association between Marshal and Kaemper may be accounted for, but what was the relationship that brought them together at The Manor? Apart from meeting Annette, we don’t know – for sure. What we do know is that Annette and Kaemper, who both worked in the city across the harbour, often travelled by ferry from Clifton Gardens to Circular Quay. When observed travelling on the same morning ferry together they acted as complete strangers – each ignored the other. So why the secrecy? What was it between them that remained so utterly private?

  Notes in Annette’s file confirm the relationship:

  Wagner and a German claiming to be a Socialist refugee named Kaemper are closely acquainted but do not admit this acquaintanceship in public, as for example, although they used the Clifton Gardens ferry, they never recognised each other. She has been seen to visit his shop (Hairdressers business in King Street).

  The Kaemper connection with Annette had a further link. A Military Intelligence report dated 1 March 1939 stated:

  The definite tie up between Wagner and Kaemper is now definitely established. During the weekend February 18th to 20th, Kaemper twice visited The Manor and had tea with Wagner. Dinah Marshall was with him on the first occasion, and Jean Morton was also present. This was February 18th. As far as is known on the 19th he went alone.

  Three German sailors from the ‘Alster’ are believed to have visited Kaemper on Sunday night and also Wagner (whose rooms are accessible at night). The sailors left by the 8:30 a.m. Clifton Gardens ferry on Monday morning. They may have spent the night with either Kaemper or Wagner.11

  The two paragraphs quoted above prompt the question, ‘How did Military Intelligence know these details, particularly information from The Manor only obtainable from within? ’ The second paragraph is not very difficult, as an agent could spend an uncomfortable night in the bushes but have sufficient visibility to identify movements of individuals. The first was more complex, but this is explained in the opening sentence of an agent’s report on Annette dated 14 February 1939
:

  At long last I have a contact living at ‘The Manor’ …

  It would appear that for some time the agent had been attempting to secure an insider for information on Annette, and had now succeeded. The individual’s identity is unknown, and the motivation for providing the service may only be speculated upon, but the surveillance of Annette had now become very intimate indeed. We know that one female agent was on Annette’s case, and there may have been others. A male agent would have had greater difficulty than a female in obtaining a contact from within The Manor. Negotiating through the dynamics of the various layers of female politics and personalities was women’s business.

  A Visit to the Steelworks

  During the weekend of 10 and 11 June, 1939, Annette visited the largest employer in the city of Newcastle – the BHP Steelworks. The strategic significance of the steelworks was referred to earlier in this chapter, and this raises the puzzling question as to why a lady, with personal, social and professional interests seemingly incompatible with steel furnaces and coal dust, would have the interest in sharing a part of her limited spare time strolling through a large industrial complex.

  There was another significant element in the visit to BHP – Annette did not go alone. She was accompanied by two German photographers. What access she had to the plant, and what opportunities were available to the photographers, cannot be determined. One likely consequence of the visit however, would have been an increasing suspicion attaching to Annette. This was not a ‘normal’ exercise in enhancing Annette’s general information portfolio. Her radio broadcasting would not have benefitted, and serious questions would have been raised about the intentions of the photographers. The BHP mission also added a further ‘unbecoming’ ambiguity – an uncharacteristic interest in a strategic asset. The participation of the German photographers was something from which Annette would later unsuccessfully attempt to distance herself.

  So why the BHP visit? The heart of German spy activity in foreign countries was the acquisition of comprehensive information, shrouding itself, to the point of overkill in any opportunity to obtain data of potential benefit. A significant emphasis was placed on commercial activity, much of which was not necessarily covert. Obtaining details on the inner workings of the steelworks may have been regarded by the Germans as ‘routine foreign data collection’, but did BHP have something that Krupp Steel was missing?

  In the 1930s, BHP steel production was supported by the development and application of cutting-edge technology, with a remarkably flexible organisational expertise. These facts were probably known to the German agents responsible for organising the BHP tour. Any information of value Annette and the photographers succeeded in obtaining in Newcastle would be remitted back to German intelligence, retained for future reference in the economic section, then passed on for close examination by Krupp, or any other steelmaker in the Reich.

  A further distinguishing feature of the BHP Steelworks was efficiency. Output per blast furnace was the highest in the world, well ahead of the German levels of steel production. BHP was also capable of effectively regulating output for demand. Annette made her visit when the steelworks were preparing for the needs of war, and shell production had commenced. Later, Owen guns, Bren guns and aircraft engine blocks were produced.

  In the pre-war period it was difficult for industry to preserve secrecy on successful product development. The manufacturer needs to sell the product, and this usually means that buyers, or potential buyers, will be informed of the improvement – without the necessity of revealing the technical details behind the development. But commercial news has a history of travelling quickly, even in 1939. As competitors learn about it, efforts are made – by stealth if necessary – to gather data on new developments. Annette was called on to assist this process.

  Enquiries at the Post Office

  Using the Post Office for sending and receiving secret information would have suited Annette in the period prior to the beginning of the war. The transit time to the recipient may have been slow, but urgency was not entirely essential before hostilities dictated otherwise. Disregarding the slow transmission rate, the mailing of handwritten or typed coded messages offered an excellent system for a spy’s communications. The security interception and examination of mail, as occurred with Annette’s, may not yield any hint as to the real meaning of the contents where coded messages are produced with sufficient effort to resemble routine correspondence. However, it appears that Annette went a step further.

  A summary report to Military Intelligence on Annette’s history and associates while living in Australia includes:

  It is understood that Annette is under close scrutiny by the Post Office on account of improper enquiries made by her.

  We can only ponder on what the improper enquiries were. As she was placed under close scrutiny because of them, it is reasonable to suppose that whatever she asked was touching on the boundary of being illegal, or it was simply suspicious.

  The monitoring of Annette’s ‘unbecoming’ conduct yielded a pattern markedly inconsistent with that of her ‘other side’. Adding to these security concerns were other questionable episodes, varying in degrees of importance, recorded in her file. One disturbing incident recorded by Military Intelligence occurred seven weeks prior to her BHP visit. The implications of this affair were far-reaching, and considerably more dangerous for Australia than unknowingly sharing some steelworks technology.

  For this important assignment, Annette needed an aeroplane and a trusted pilot. It was time to call on her friend, Jack Clancy.

  FOOTNOTES

  * * *

  9 Dr Ian Pfennigwerth – The Naval Heritage of Port Stephens, The Australian War Memorial 124, Item 3/59 Henderson Report Action Taken.

  10 Dr Ian Pfennigwerth - National Archives of Australia B197, Item 1851/2/17 – Port Stephens, Jervis Bay Remarks by 1st Naval Member.

  11 The impact of the Wagner-Kaemper relationship is detailed in Chapter 9.

  8

  A Flight for the Emperor

  At 11:00 am on Thursday, 20 April 1939, Annette Wagner commenced her weekly fifteen-minute program to listeners of the Australian Broadcasting Corporation through radio station 2FC. Sitting in a studio within the ABC’s offices in William Street, Sydney, she began her prepared talk on extracts from the book The Elephant’s Child by the English writer, Rudyard Kipling.

  The title of her address was Kipling’s Great Green-Grey Greasy Limpopo, referring to the book’s description of the Limpopo River in north-eastern South Africa, an area with which Annette would have been familiar. It was another of the diverse and unique subjects Annette offered her listeners. At 9:30 that evening, on 2FC’s sister station 2BL, she delivered her dialogue on A Visit to Zululand. This was another commentary on her experiences in southern Africa, a destination many Australians could only relate to through knowledge of the Zulu wars with the British, and the Boer War. The previous week Annette’s subject was At the top of Europe’s highest mountain – Mont Blanc12, a further illustration of the variety of themes and locations she presented to her audiences.

  Rudyard Kipling’s vigorous description of the Limpopo River may have generated a mixed level of audience excitement, but the same could not be said for the lady behind the microphone. Annette Wagner, a suspected Nazi spy, had established a privileged reputation in a foreign land to the remarkable level that she now sat in a radio studio, with complete freedom of script preparation, within the Australian Broadcasting Corporation’s radio network. While most spies operating in ‘target’ countries could only dream about the possibility of manipulating public radio for conveying coded information, Annette was actually doing it. Further, she was positioned on that day to do this from the government-owned radio stations. So while Annette was wooing the management of one government enterprise, she was being closely monitored by other government enterprises due to the accumulating suspicions of her secretive endeavours.

  We don’t know the intelligence agency to w
hich Annette passed information, and it is likely she did not know either. But if this were the German military intelligence branch, the Abwehr, one can imagine its chief, Admiral Wilhelm Canaris, sitting in his Berlin headquarters, and saying to his two dogs (which usually accompanied him to the office), If only we had a few more in a position like the one she is in.

  Annette’s mood that day was probably more elevated than usual. She would have listened to broadcasts from Berlin detailing the preparations for the massive military parade to commemorate the Führer’s 50th birthday to take place later that same day, European time. A public holiday had been declared in Germany for the occasion. As Annette was delivering her Kipling talk, prime viewing positions on the parade’s route in Berlin were already being occupied by the early arrivals of the huge crowd that would number some hundreds of thousands. Hitler was Time magazine’s Man of the Year for 1938. She would have known that the current weekly edition of that same international magazine featured Heinrich Himmler on the front cover. Germany’s rise from the ashes appeared unstoppable and Annette’s contribution to the cause was sanctioned by substantial, and on balance, favourable media reviews in most Western countries. While the civilised world shuffled uncomfortably from the less attractive features of Nazi politics there was, nevertheless, from those same nations, a reserved envy when observing the economic and social progress in Hitler’s Germany.

  Annette’s public logo was exceptional for her time. Extensive travel and work experiences in England, Switzerland, Egypt, southern Africa and Madagascar all enhanced her apparent outer shell – attractive, tastefully dressed, intelligent, well-mannered all with a pleasant temperament. To those who met her, she almost certainly would have presented as an unusually interesting lady. To French-speaking Jack Clancy, also well-travelled for his age and era, Annette would have been cast as a unique discussion partner.