by Duffy, Peter
“What? Have you dropped me?” she said.
“No, they have dropped me,” Sebold responded.
A few weeks after Sebold’s final visit with Stein, Assistant Secretary of State Adolf Berle summoned Oggie Hammond to his office and told him that he knew all about the relationship. (Hammond had also mimicked the president “in a reprehensible manner” in front of eyewitnesses during a summertime party in Newport, another tidbit passed along by J. Edgar.) “This is nasty business,” Berle said, according to Hammond. “We might as well get it over quickly. You had better resign.” Incensed, Hammond refused. He assembled the lawyers and swore under oath that “at no time did I live with . . . or have intimate relations” with Lilly Stein. He was just returning the gold watch! The $100 was a repayment for a loan! With Berle unwilling to budge, Hammond took the unusual step of suing the State Department, which resulted in newspaper stories about the high-society scion’s allegedly disloyal dealings with a “female agent of a foreign power,” prompting Sebold to send a radio message notifying Ast Hamburg that one of its spies had been partially exposed.
Yet even without Sebold’s cooperation, Stein continued to seek material on behalf of the Reich, often discussing her work with Else Weustenfeld, a secretary for the law firm representing the German consulate who had been brought into the spy business by her boyfriend, Hans Ritter, the affable younger brother of Nikolaus Ritter. The newspapers would later describe her as the “Blond Spy Mistress of Nazi Chief’s Brother.” In one of a handful of German-language conversations between Stein and Weustenfeld recorded by the microphones of the FBI, Weustenfeld complained of the way Sebold spoke to Stein “about her immoral conduct.” Weustenfeld said she knew Lilly was “not clean, but that Harry had no reason for making such a great point” of it. Indeed, the FBI seemed to be mostly occupied with cataloging her love life. When she attended a prizefight at the Bronx Coliseum featuring Romuald Wernikowski, a heavyweight from Vienna who went by the ring name Rex Romus, G-men noted that Stein was “accosted” by Rudolph C. “Rudy” Schifter, another European with connections within elite athletic circles. A short time later, Romus (who knocked out his opponent in the first round) was recorded as a visitor to Stein’s new apartment on East Seventy-Ninth Street in Yorkville. Another guest, Georg von Birgelen, a Zurich-born skating champion known for his daredevil jumps over card tables and the like, was described by the Bureau as Stein’s Swiss boyfriend in an apparent attempt to distinguish him from the multinational pack. Still another companion, Hans Ruesch, a prominent driver on the European racing circuit who was beginning to make a name for himself as a writer, was thought by the New York office to have mailed letters on her behalf in Europe.
“Oh, I just look for them and they fall in love with me,” she said.
During a discussion between Weustenfeld and Stein on October 18, the FBI learned that Stein thought of Sebold as a “swine” who had absconded with her money. “I always told you that you could not have any faith in that man,” said Weustenfeld, who never met Sebold. In another conversation twelve days later, Weustenfeld broke the news that she’d heard a rumor about Sebold making “false statements over there.” Stein responded by expressing further doubts about him, saying she was “certain” that “Harry had embezzled some money.” She recalled that he had made “very unusual remarks concerning political affairs,” an attempt at “shaking her,” she believed. And now that she thought about it, he refused to look her square in the eye “as though he had a clear conscience.” She “should have known that he was a dangerous man.”
“So he made false reports—how could he do that?” Stein added.
“He’s an American—it’s no wonder,” responded Weustenfeld.
Stein then brought up the possibility that Sebold was working for the British or the Americans.
Weustenfeld dismissed the suggestion. She didn’t think Bill Sebold had “enough courage to do that.”
▪ ▪ ▪
Following his summertime interlude in Hempstead, Sebold was again based in the city, allowed by the FBI to live with Helen in an apartment on the top floor of 226 East Eighty-Fifth Street, in the heartland of German New York. In the midst of an investigation that was growing ever more hectic, he was able to cope with his anxieties in close communion with his wife, who was by now aware of his secret life in the spy underground. By the evidence of Dr. Goodhardt’s statement that Sebold was susceptible to “considerable nervous strain,” he was in need of occasional fortification. While the FBI files and Ellsworth’s writings mention nothing about the nature of their relationship, the couple’s relatives say they enjoyed a quiet bond. “They seemed to understand each other,” a niece said. To their neighbors, the Sebolds couldn’t have seemed more ordinary. Helen continued her work as a domestic with the rich Park Avenue family, a few blocks’ walk to the west. And Bill, well, they weren’t sure what he did, but he seemed nice enough.
With help from the marine spies, who appeared to have no suspicion of him, Sebold recruited two additional couriers following his break with Stein. The first was the chief steward on one of the other American Export Lines ships on the Lisbon run, the SS Excambion. A haughty ladies’ man with relatives high up in the Nazi Party, he refused to meet Sebold in Columbus Circle or Central Park, forcing him to come to the steward’s room at the Hotel Governor Clinton. The second was a Paris-born flight attendant for the wealthy and well connected on the only transatlantic airline service offered between Europe and New York, the Pan Am Clipper, the whale-shaped seaplane that took twenty-four hours to hop from Lisbon to the Azores, from the Azores to Bermuda, and from Bermuda to the Marine Air Terminal at La Guardia, where newsmen were waiting to see who was worth quoting.
At the suggestion of the butcher and the baker, who sought him out whenever they returned from their Caribbean cruises, Sebold began holding conferences at a Viennese restaurant on Second Avenue in Yorkville, Zum Schwarzen Adler, which they all agreed was much better than standing in the cold in Columbus Circle. The talks often “concerned inconsequential matters, such as women and the rewards that they were to get in Germany when the war is over,” the FBI noted. Later at trial, the waiter (Erich Strunck) recalled an evening there when the butcher boasted of a new girl he had met in Havana. “She was a Hungarian fan dancer in the Eden Cabaret next door to Sloppy Joe’s,” Strunck testified. “So I told him that I had met a Spanish singer and dancer in the Arcadia Cabaret in Lisbon. And then he said, ‘I think I know her, too.’ Harry Sebold laughed—‘You fellows are certainly having a good time.’ ” The butcher liked to brag that he was “the biggest whoremaster in Hamburg.”
After weeks of trying, Sebold reestablished regular contact with the still-wary Paul Fehse, whose method was to wander the docks picking up information about British merchant ships that were being loaded with goods in preparation for running the U-boat gauntlet, submitting such detailed reports that Sebold admonished him to provide only the most essential information for transmittal to Germany. During a ride around the East Side in Fink’s brown Ford coupe, Sebold was comfortable enough to laugh off Fehse’s worries about being beheaded if he sought to return to Germany through Russian territory: “He told Fehse that would be all right; that the Germans would erect a monument and put his head on it in stone,” according to the FBI report. Later in the conversation, Fehse spoke of his concern that he would be put into an American concentration camp if war broke out. Sebold scoffed, “About all you’ll have to do is play football for three years.”
“Yes, this is a pretty good country after all,” Fehse conceded.
Sebold failed to glean much additional information from Hermann Lang, who remained hesitant about leaving the country even after Ast Hamburg agreed to his request to deposit $3,000 in a German bank for him. Sebold continued to indulge the spy theatrics of Colonel Duquesne, who wanted to send his reports via invisible writing and/or wax-paper impressions. After Sebold told him that Ast Hamburg was opposed to the latter—“Dunn should not use the wax
system,” according to the radio message—Duquesne wondered if “perhaps the British had gotten wise to it.” And Sebold resumed taking the 7:17 from Penn Station out to Baldwin to see Ed Roeder, who was supplying a steady diet of air-gadgetry plans, production reports, informed rumors, and even service-issued incendiary bullets, earning such trust from Ast Hamburg that Roeder was asked to confer with a Japanese agent at the Nippon Club on West Ninety-Third Street, the first evidence that the Tripartite Pact was being observed in New York. Roeder did as he was told, meeting with “an elderly Japanese wearing glasses” who quizzed him about oil burners for fifteen minutes. Later, Roeder and Sebold were put in contact with a more senior Japanese operative during an evening that included a traditional Japanese meal in a brownstone on East Nineteenth Street. The man would be identified by the FBI as Takeo Ezima, a lieutenant commander in the Imperial Japanese Navy with connections to the Japanese consulate, another boon for the case.
By the middle of October, Roeder had again become angry over Sebold’s inability to keep him supplied with sufficient funds. On October 11, Roeder waved two bills, complaining that he owed $200 to a Merrick bank and $320 for his newly overhauled furnace. On October 14, he said, “I have a sneaking idea that the material I am giving you is not getting into the right hands.” Sebold was forced to ask Hamburg for permission to dip into the $1,500 brought over by the butcher for the Sperry bombsight, which FDR had decided to give to the Brits in lieu of the Norden (soon resulting in articles that informed the country of the names of its two bombsights), and which Roeder refused to steal even for $50,000. He told Sebold that if he took the bombsight handbook a “big commotion” would be aroused and “he would have to leave the United States and could never return.”
In response, Hamburg floated an idea that revealed how much the spymasters had come to trust Sebold. “If opportunity presents itself we have in mind to establish a large deposit with a New Yorker bank,” according to the forty-eighth message received in Centerport. “We request recommendations as to how payments can be made unsuspiciously.” For the next five days, the Bureau debated how to take full advantage of the matchless opportunity to control the flow (and thus the dispersal) of spy money into the United States, which would give Sebold an easy excuse to widen his circle of contacts. “We argued this one a great deal in the office,” Ellsworth wrote in his diary. On the eve of Election Day, Centerport sent out its reply. “Since I have good connections in Diesel Lines, I recommend opening a small research office,” the communication read. “Licensed business name and suitable space present no difficulties. As research offices continually need money, you can send me a large amount.” On the following day, November 5, President Roosevelt was reelected to an unprecedented third term. And on November 7, the FBI received its fifty-second message from Germany:
“We are in agreement. Open office immediately. Advise when and where you want the remittance sent and the highest amount possible for you to handle without suspicion.”
The FBI had never before contemplated such elaborate trickery. Thus began what Hoover called “the flytrap method.”
CHAPTER ELEVEN
ROOM 627
Let us no longer blind ourselves to the undeniable fact that the evil forces which have crushed and undermined and corrupted so many others are already within our gates. Your government knows much about them and every day is ferreting them out.
—President Roosevelt, fireside chat, December 29, 1940
The FBI chose the gaudy heart of America: the beaux arts building with French Renaissance ornamentation and copper mansard roof at the southeast corner of Broadway and Forty-Second Street in Times Square. Formerly the Knickerbocker Hotel, it was now an office building known for its most prominent tenant, Newsweek magazine, whose staffers would remain ignorant of the huge story that was taking place on the sixth floor. Dealing directly with the building’s owner, who offered to replace the manager if he wasn’t cooperative enough, the Bureau rented Room 627 and two adjacent offices, 628 and 629. In the days after the deal was reached in late November, agents created a stage set with the largest space occupied by the office of WILLIAM G. SEBOLD DIESEL ENG., the words painted on the door of 627. The setup was centered around a large desk that was expertly bugged and within a few feet of a silver-coated two-way wall mirror behind which a Bureau agent (usually Richard L. Johnson) was operating a spring-wound motion-picture camera in a soundproofed space. “We just barely had enough light to make a picture, and it was necessary to slow the camera down as slow as it would go and open the lens wide-open in order to get a good picture,” Johnson said. Positioned within his line of sight were a clock (encased within a wooden frame whittled by Agent Friedemann) and a flip-page calendar, both of which had numbers large enough to be readily viewable to future jurors. “Well, Sebold had his back turned to me at most times,” said Johnson, “and at some times he had his face, the side of his face, turned to me. Of course, we were more interested in the other person.” The conversations in the room were monitored by headphone-wearing, German-speaking agents (typically Friedemann and Fellner), who could take the stand as eyewitnesses to bolster Sebold’s (likely voluminous) testimony, and recorded onto lacquered aluminum discs by the turntables of the state-of-the-art Presto recording system. By early December, a telephone had been installed (phone number BRyant 9-1609), business cards printed up, and $5,000 in Nazi money wired through Mexico to Sebold’s new account at Chase National Bank, the first of three transfers sent via this method totaling $16,500.
The first visitor was the flight attendant on the Pan Am Clipper, who suspected nothing of the ruse, telling Sebold that he was “extremely careful” to ensure that the authorities “had never gotten anything on him.” And he was “going to see to it that they never would.” The second was Ed Roeder, who, now based at Sperry’s Garden City laboratory in the suburbs, would become a less active producer in light of the worrying presence of the FBI around Sperry projects and his son’s recent induction into the US Army. He told Sebold at one point that he only wanted to procure items that would hurt Great Britain and not the United States. But his inactivity was mostly due to money. The Abwehr was unwilling to pay for items that were often prevented by the FBI from reaching Germany. “Why does Carr want money?” according to one radio message. “We have lately received practically nothing from him.” Roeder had to wait until early May to receive his next (and last) payment, a paltry $100. He couldn’t understand why Ast Hamburg, which had once been so generous with him, wouldn’t provide him with just compensation.
The third guest was Paul Fehse’s young sidekick, Leo Waalen, an employee of a boat basin in the Bronx who, like his mentor, was always ready with richly detailed reports on shipping movements. Waalen came bearing a document received from “a girl who is connected with the German Consulate,” probably Else Weustenfeld, which alleged that the Berlin office of an American newspaper syndicate was helping Jews obtain forged documents to flee from Germany.
On the same evening, Sebold welcomed the spymaster of another ring into the snare, Carl Reuper, a technician at an aircraft parts plant in New Jersey who had returned to the United States after graduating from Ast Hamburg’s spy school in April 1940. Like Hermann Lang of Carl L. Norden Inc., Reuper was a member of the Nazi organization of industrial workers, the German-American Vocational League (DAB), which helped him establish a small spy organization that was populated by men with strong ties to ideological circles. His gang included a long-standing employee of the Nazi-centric Germania Book and Specialty in Yorkville; the onetime leader of the Staten Island Ortsgruppe of the German American Bund; a convicted counterfeiter from Düsseldorf with a Bronx apartment full of radio equipment; and the Hamburg-trained brother of one of Fritz Kuhn’s top aides, whose coding system was based on the crime thriller Halfway to Horror by David Hume. It didn’t much matter that Reuper refused Sebold’s offer to join their operations together in common service to Hitler. “He wanted to keep the entire activity for himself becau
se he was instructed by Germany to do that,” Sebold said. “There was nothing personal against me.” E. J. Connelly was free to assign agents to locate and tail the third ring’s members without the double agent’s active participation.
On December 29, 1940, the microphone in Fritz Duquesne’s apartment on the Upper West Side picked up that he and girlfriend Evelyn Lewis were listening to the radio when President Roosevelt delivered the historic fireside declaring America as a “great arsenal of democracy” for the nations fighting Axis tyranny. He named China, Greece (which had been invaded by Italy), and, most especially, Great Britain, which, in addition to fending off Germany over the skies of Britain and in the waters of the Atlantic, was engaged in battles with Mussolini’s forces in North Africa. The president pledged that US industry would produce “the implements of war, the planes, the tanks, the guns, the freighters, which will enable them to fight for their liberty and for our security.” He said, “we must get these weapons to them, get them to them in sufficient volume and quickly enough, so that we and our children will be saved the agony and suffering of war, which others have had to endure.” The talk served as a prelude to his grandiloquent State of the Union address on January 6, 1941, a statement of national purpose that dedicated the country to upholding four essential freedoms—of speech and worship, from want and fear—in the face of aggressive dictatorships and the “great numbers” of “secret agents and their dupes . . . already here, and in Latin America.” He neglected to mention that he had granted Hoover the authority following the fall of France to dispatch FBI agents to Central and South American countries to uncover Nazi subterfuge. Or that the Centerport station had been put in contact with an Abwehr-operated radio outpost in Mexico (call letters GBO or Gustav Bruno Otto), which was discovered near the village of Coatepec by a Bureau agent who had been sent across the border with a backpack. “He told us later that it was a thrilling experience one night to take his equipment out a dirt road and when the broadcast began to follow the sound until looking through some brush across a field he could see an old farmhouse with a directional antenna which was the transmitter,” wrote Ellsworth.