Double Agent : The First Hero of World War II and How the FBI Outwitted and Destroyed a Nazi Spy Ring (9781451667974)

by Duffy, Peter

  The next big German American Bund meeting was advertised as an “Anti-Fifth Column Rally,” which brought a few hundred members to a meeting hall in Astoria, Queens, where they heard President Roosevelt denounced as the chief traitor who was seeking to betray America by involving it in a war on behalf of global monetarists. The new Bundesführer, Wilhelm Kunze, urged his fellow Germans “to have more guts and be proud of the blood in their veins and speak up for their rights as American citizens because we are only interested in the welfare of this nation,” according to an NYPD detective conducting surveillance. Kunze spoke “about himself as a boy being beaten up in public school during the last war because his name was Wilhelm.” The police report said that an unnamed Bundist attacked a photographer for the liberal daily PM, punching him in the ribs and breaking his camera.

  In the meantime, Belgium’s King Leopold III agreed to Hitler’s demand for an unconditional surrender, and the Luftwaffe was accorded the honor of finishing off the Allied forces that were evacuating from Dunkirk in an improvised flotilla of eight hundred vessels ranging from Royal Navy destroyers to civilian fishing boats. By the time the port fell on June 4, the British Admiralty’s Operation Dynamo had succeeded in rescuing 338,226 British and French soldiers, a justly celebrated “miracle” that was facilitated by the ability of the RAF’s single-engine fighters to prevent German fighters and bombers from achieving control of the airspace during the few days when the cloud cover lifted, an embarrassing (first) defeat for the Luftwaffe that was a hopeful intimation of things to come.

  “All of our types—the Hurricane, the Spitfire, and the new Defiant—and all our pilots have been vindicated as superior to what they have at present to face,” Churchill said that day in his “We Shall Fight on the Beaches” speech in the Commons. “When we consider how much greater would be our advantage in defending the air above this island against an overseas attack, I must say that I find in these facts a sure basis upon which practical and reassuring thoughts may rest.”

  On the following morning, the German armies began the campaign to capture the rest of France, sending the blitzkrieg against an ineffectual French army and a decimated Armée de l’Air. On June 10, Mussolini saw his chance and announced from the balcony of the Palazzo Venezia that Italy was joining the war against the “plutocratic and reactionary democracies of the West.” (“The hand that held the dagger,” President Roosevelt told the graduating class at the University of Virginia that afternoon, “has struck it into the back of its neighbor.”) On the next day, Paris was declared an open city to forestall a repeat of Guernica, Warsaw, and Rotterdam. On June 14, the City of Light fell to German troops, who hoisted the swastika from the Eiffel Tower and the Arc de Triomphe. On June 22, French general Charles Huntziger signed the armistice on behalf of the new collaborationist regime of Marshal Philippe Pétain in the old railway dining car where the French High Command accepted Imperial Germany’s surrender twenty-two years earlier. The battlefield losses of World War I had been avenged. Hitler was at the height of his powers, with a claim to being the greatest German of them all. It was “so unbelievable as to be almost surely unreal, and if not unreal then quite immeasurably catastrophic,” wrote the British foreign secretary, Lord Halifax.

  On July 4, the war seemed to come to New York City when an actual ticking time bomb was found in an upstairs ventilation room at the British Pavilion at the World’s Fair in Queens. The buff-colored canvas bag was taken from the crowded building by the NYPD and carried to an isolated spot on the edge of the grounds behind the Polish Pavilion. An hour and a half later, it exploded, killing two Bomb Squad detectives and gravely wounding two other detectives. A livid Commissioner Lewis Valentine sought no assistance from the FBI in mobilizing the entire police force to round up every known Nazi, Fascist, Coughlinite, Christian Fronter, and Irish Republican in town. Investigators eventually focused on a Bundist employed by Sperry Gyroscope who resided in a furnished room on the West Side stocked with tear-gas pistols and cartridges and “littered with Nazi pamphlets, a swastika flag, and anti-Jewish banners and posters,” reported the Times. But charges were never filed in the bombing. Colonel Duquesne, who boasted to Sebold that he had been questioned for two days, was probably the only one in the city who thought the perpetrator was a Frenchman angered over Britain’s recent forcible seizure of the French fleet to keep it out of German hands. The FBI heard Duquesne telling two visitors to his apartment that he was regarded as the leader of the fifth column. He joked that he was “only a three and one-quarter column.”

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  American popular opinion was broadly sympathetic to the Allied cause but resolutely opposed (86 percent) to declaring war on Germany and Italy with many believing “that the money we have spent on our military and naval forces during the last few years has gone down the rathole,” as FDR colloquially put it. Even his own (isolationist) secretary of war opposed Roosevelt’s decision to flout the neutrality laws by ordering the military to declare six hundred freight-car loads of guns and ammunition as “surplus,” which enabled the munitions to be sold to U.S. Steel, which resold them five minutes later to the Allied purchasing commission hoping to rearm a British nation that had left everything behind on the beaches of Dunkirk.

  In such a moment as this, the Sebold investigation represented America’s only significant battle with Nazi Germany. And the good guys were winning. On May 15, a letter with several enclosures was discovered in Sebold’s PO box at the Church Street Annex. It was not mailed by any of the four spies working directly with him but by the chief butcher of the SS Manhattan, the United States Lines ship that had arrived two days earlier from Genoa with 811 passengers, including 350 refugees from Central Europe. “Dear Harry,” the butcher wrote in German, “I would like to speak to you.”

  On the following day at the entrance of Pier 59, Sebold met Erwin Siegler, a thirty-year-old American citizen of German birth in a snap-brim hat with a “swaggering, rolling walk” and “large, bulging chest,” wrote the FBI. He would later explain that the scar on his cheek was the result of a violent encounter with a beer glass. He was “a brute in strength,” wrote Ellsworth in his diary. Over drinks at a waterfront bar and grill, Siegler revealed that he was a novice courier assigned to procure secrets for the Kriegsmarine, part of the efforts of Referat I-M of Ast Hamburg, which signified that Sebold had stumbled upon another ring operating out of New York. The butcher said he was delivering the materials to Sebold (of Referat I-L) on behalf of “a man named Gerhoff” based in the Hotel Britannia in Genoa and was working with a fellow spy on the Manhattan’s kitchen staff who had access to large sums of money.

  Fully cognizant of the next logical move of a skilled double agent, Sebold requested to see Siegler’s friend, which led to a meeting on the following day in Columbus Circle at the southwest corner of Central Park, a favorite location of the soapboxers of the Fascist right, a brown version of Union Square. There Sebold met with Franz Stigler, the Manhattan’s chief baker and confectioner, its head Zuckerbäcker, who was a naturalized German American with a “heavy build” known by the code name of Aufzug. As agents in a Bureau truck filmed the proceedings from a distance, Sebold explained that he needed money to pay a disgruntled agent, not mentioning that he was referring to Ed Roeder. The pastry man handed over $240 in reserve notes and silver certificates, agreeing with Sebold that it was important to “try to get the material for Germany.” Sebold asked the Manhattan duo to contact him when they returned from their next trip to Italy, providing the address of his summer residence, a rented room in Mrs. Allen’s house at 144 Washington Street in Hempstead, the Nassau County village that kept him in proximity to Ellsworth (who received Bureau permission to bring his wife and two children out from California), the most valuable producer (Roeder), his dummy job (as a ladies’-stocking salesman for Real Silk Hosiery Mills of Jamaica), and the location selected for the radio outpost that Hamburg had assigned him to establish.

  One of the letters in the butc
her’s envelope to Sebold outlined the technical specifications necessary to make Morse code contact with Ast Hamburg’s Wohldorf station. Using the funds given to Sebold in Germany, Bureau agents obtained two receivers (a Hallicrafters Sky Champion and a Hammarlund Super-Pro), a refrigerator-size hundred-watt Hallicrafters HT-9 transmitter (later used to power a more powerful five-hundred-watt transmitter), and various antennas, cables, supports, and feed lines, which (after failed tests in the static-heavy New York office) were installed in a rented two-room cottage in a hilly area among the trees near Centerport on Long Island Sound. “As the last solder connection was made and the blowtorch silenced it was noted that the time was a few seconds before 7 p.m., the next regular calling time of the German control station according to information given to Sebold,” wrote Richard L. Millen, a special agent flown up from Washington to help set up the system, of the evening of May 20. “The receivers were tuned to the designated frequency and the HT-9 warmed up. Very shortly, Morse code dots and dashes were heard. At first, they were copied as ‘RAORAORAO’ in that they were too closely spaced and run together. Realizing this fact, the engineers soon separated the dots and dashes into the desired call of ‘AOR AOR AOR.’ When the control station stopped sending, the Bureau’s undercover station began sending a series of dots and dashes in accordance with Sawyer’s instructions. The transmitter was stopped after five minutes and the receivers turned on. The German control returned briskly with congratulations and instructions for the next contact. A working link had been established. Groundwork had been laid for the case to evolve.”

  Given the task of delivering and receiving the Morse code signals was a special agent from the Milwaukee office with a ham license, Maurice Price, who worked with Sebold to learn his particular manner of tapping the telegraph key, which can be as recognizable to a skilled cryptologist as a written signature. The messages themselves were encoded and decoded by Ellsworth and Sebold based on the system that had been taught to the double agent by Uncle Hugo in Germany. “That code is a complicated thing,” the federal prosecutor who tried the case later told jurors. “It takes you a good while to study it out.”

  Each message was assigned a page of Rachel Field’s All This, and Heaven Too, which was determined by adding the date (10 for the tenth day of the month, 12 for December, for example) to an agreed-upon third number (20). Turning to page 42, Ellsworth and Sebold would look to the upper left-hand corner of text, along the left margin, and copy down the letters that began the first twenty lines of text. “That will be a mere jumble of letters, you see,” the prosecutor said. “Because it won’t form any sentence—A,X,L,R, and so forth.” The letters would be written horizontally across a sheet of paper. Below each of the letters, they would jot a number corresponding to the letter’s position in the alphabet. The first A among the twenty letters would be assigned the number 1. The second A would get a 2. If there were only two As, then the first B would be assigned the number 3. If there was only one B, then the first C would get the number 4.

  Below the horizontal list of numbers, Ellsworth and Sebold would draw a rectangular grid of squares, twenty across and five down, with each vertical column corresponding to one of the twenty numbers determined from the twenty letters from page 42 of All This, and Heaven Too. They would write the message they wished to code into this twenty-by-five grid, one letter per box, working left to right horizontally. The resulting grid of letters would then be given to Price—not as horizontal rows, but as vertical columns, taken out of order and starting with the column marked 1, and continuing then with the column marked 2, then the column marked 3, and so on.

  Ellsworth said of the procedure, “If the message was to be sent, I used the date of the sending of the message or the day we expected to send the message as the basis for preparing the code, and then prepared the square system, as explained by Mr. Sebold, and entered the message to be sent into that system of squares, and from that extracted a series of code groups of letters which I handed to Mr. Price for transmission.”

  To decode Ast Hamburg’s messages, Ellsworth and Sebold would again turn to that day’s specified page of All This, and Heaven Too, draw a twenty-by-five rectangular grid of empty squares, and run the process in reverse. “Agent Price would hand us a series of code groups, letters arranged under a code system at that time existing, on the date of the receipt of that message,” Ellsworth said. “I would prepare a graph or chart using the system explained to me by Mr. Sebold. That series of code groups of letters which Mr. Price handed to us, I would then arrange into that system, and from that system extract the code message, and set it out either in German or in English, in whichever it was received. If it was received in the German language, I would work with Sebold on the translation of the German into English.”

  In the first message tapped to Hamburg, “H.S.” told Station AOR that he had received $240 from the Manhattan. “Meet Roeder Monday. Shall I give him this money since he will not work longer without money.” The response came three days later, a veritable instant in the transatlantic spy business: “The money is for Roeder.” After Roeder received the cash during a ride-around in which he showed off a .357 Magnum and said he would “do a real job” if he ever decided to kill somebody, Roeder promised Sebold he would keep the secrets coming, soon producing a stream of intelligence that included the blueprints for the Lockheed Hudson, a light bomber and coastal reconnaissance aircraft that was being manufactured for the Royal Air Force.

  When the Manhattan arrived back in New York from Genoa on June 10, the same day Mussolini’s balcony declaration ended the neutral ship’s journeys to the now-combatant port, it was overloaded with 1,907 passengers, nearly twice the capacity, “a confused and clamorous throng of many languages and diverse views,” wrote the Herald Tribune. “There were men and women who had lived for years on the Riviera, at Cannes, or Monte Carlo, Americans to whom America may seem strange. There were businessmen abandoning commercial claims they had staked out in Europe. There were needy refugees, the women shawled and blank-eyed, some of them Jews from Germany or the lands overwhelmed by Germany. There were nuns and priests and actors. There were refugees from Denmark and from Norway who had traversed the length of Europe to find a port from which an American vessel sailed. There were dogs and cats and canary birds.” And there were pro-Nazi travelers “who grinned and slapped each other on the back when the radio brought word of new German triumphs,” including the chief butcher and head pastry chef on a kitchen staff full of the naturalized Germans who were favored by the dowdy American liners because they added the European dash that sophisticated travelers expected in their ocean passage.

  Over the next three weeks, as the Manhattan prepared to sail to its new destination of Lisbon in pro-Fascist but still neutral Portugal, Sebold met with the butcher (sharing a boozy evening at the Lorelei and Café Hindenburg on Eighty-Sixth Street in Yorkville, which was de rigueur for Nazi spies), the baker, and, during an introductory session partly conducted on the grass opposite the Tavern on the Green in Central Park, a thirty-year-old former fish cook on the Manhattan, Paul Fehse, who was serving as the chief of the “marine division.” Now living over the river in New Jersey with a fellow conspirator, Fehse (code name Fink) had graduated from a four-week training course at Ast Hamburg and returned to the United States via Genoa at about the time of Sebold’s arrival, which means their instruction periods at least partially overlapped. He showed himself every bit the would-be spymaster when he asked to visit the Long Island radio station, a request that Sebold deflected by saying he was working with a native-born American of venerable background who refused to allow anyone on the property “for fear of involving him in trouble and ruining the reputation of his family.” Sebold further asserted his supremacy when he informed the three that arrangements had already been made for the butcher and the baker to rendezvous with an Ast Hamburg contact at the Hotel Duas Nações on Rua Vitória in Lisbon, which would’ve been impossible to set up in the era before the radio. Af
ter uttering the phrase “Sesam greets Franz,” they were to hand over Sebold’s latest collection of micros containing reports from Roeder, Lilly Stein (now serving as a mail drop for a Nazi agent in Detroit code-named Heinrich), and Colonel Duquesne, who, operating out of a new office at 70 Pine Street in the Wall Street area, liked to confer with Sebold as they rode back and forth on the ferry between lower Manhattan and Jersey City. One day the old saboteur gazed upon the Hudson River docks and expressed his fond wish to blow them all up.

  With the aid of the radio, Sebold and his FBI associates were able to gain solid proof that the Germans had stolen what everyone knew as “the secret bombsight,” the miraculous invention that was entering the nation’s folklore (although not yet publicly associated with the name Norden) at the same time that rumors about its theft were becoming widespread among the Washington–New York elite. In the brief period between the Nazi invasion of Denmark and Norway and the start of the operation against France and the Low Countries, Universal Pictures released Enemy Agent, which portrayed initially inept G-men getting their act together to prevent Euro-accented spies from making off with the “Wallis bombsight,” which was “so accurate that a plane can drop a bomb into a pickle barrel from five miles up,” says one character.

  Just before the Nazis’ offensive on the west, President Roosevelt asked a wealthy distant relation, Vincent Astor, to look into cocktail-party chatter that the Germans had gotten hold of the Norden, and Astor responded a few days later by ridiculing “the same old song and dance which has cropped up repeatedly in the past,” a figment of the imagination of “the sort that [pseudonymous gossip columnist] Cholly Knickerbocker calls Café Society.” On May 24, as the Germans were completing the encirclement of Dunkirk, the Toronto Globe and Mail urged the United States to release the sight to the Allies. “The immediate physical advantage to be gained from its possession would be numerous, but the moral effect on the German people, who through their spies have repeatedly tried to steal this bombsight, would be of equal if not greater value,” the paper wrote in a front-page editorial. On the day before the evacuation ended, June 3, President Roosevelt dashed off a note to a supporter who made the same argument, telling her that the problem was “the article mentioned might fall into the hands of the enemy and help them more than our friends.”