In the same month, Franklin D. Roosevelt became the thirty-second president of the United States. The country was still mired in the Depression. America’s focus turned inward as President Roosevelt launched his “New Deal” with a raft of legislation and executive orders to promote jobs for the unemployed and recovery for the economy. Germany followed suit with a program of public works, including the construction of an extensive arterial highway system known as Autobahnen. The autobahns also had a significant military purpose, as they greatly enhanced the vital process of rapidly moving supplies and equipment from the interior of Germany to support military forces on the country’s frontiers in time of war. However, because rearmament was the major priority in German industry there were very few automobiles on the new highways, despite Hitler’s pledge to manufacture a car for the people—the Volkswagen.
The Ford Motor Company and General Motors were happy to fill the gap in the market. Henry Ford greatly expanded the supply of components sent from America to the Ford Motor Company AG in Cologne, and between 1934 and 1938 its revenues soared by 400 percent. The Nazi regime was so impressed that the company was officially recognized as a German rather than a foreign-owned firm; as Ford-Werke AG it became eligible for government contracts. Since 1936, when Hermann Göring was appointed head of the Four-Year Plan to prepare the German economy for war, rearmament had shifted into high gear. Just prior to the occupation of the Czech Sudetenland in October 1938, when Ford-Werke AG was unable to meet the demands of the Wehrmacht for military trucks, Ford Motor Company dispatched vehicles from America to Cologne in kit form to be assembled during extra night shifts. Hitler was a great admirer of Henry Ford. For his services to Nazi Germany, in 1938 the American magnate was presented with the Grand Cross of the Order of the German Eagle, the Third Reich’s highest civilian award for which foreigners were eligible, of which only fourteen were ever awarded.
Another recipient of the German decoration in 1938 was James Mooney, the chief executive of overseas operations for General Motors, who was awarded the Order of the German Eagle, First Class. In 1931, General Motors had acquired Opel, Germany’s largest automobile manufacturer, in its entirety. By 1935, Opel AG of Russelsheim was producing more than 100,000 cars a year and almost 50 percent of the new trucks in Germany at a plant in Brandenburg. The most important of these products was the range of trucks known as the Opel Blitz (Lightning)—which would in fact be the Wehrmacht’s most numerous workhorse during the victorious years of blitzkrieg. By the late 1930s, car production for the masses was no longer a priority. In addition to truck production, many Opel factories were converted to the production of Junkers Jumo aircraft engines and the complex “pistol” detonators for naval torpedoes such as those that sank the ships of convoy SC-107.
FORD AND GENERAL MOTORS were only two of the foreign companies that invested heavily in Germany and thus ultimately aided the Nazi war effort. Oil was always to be the Achilles’ heel of Hitler’s war machine. During the 1930s, the British-owned Anglo-Persian Oil Company (later British Petroleum, or BP) and the Royal Dutch Shell conglomerate were extensively involved in oil refining in Germany, while the British tire company Dunlop had extensive investments in the German rubber industry. There was already a fine line between taking advantage of sound business opportunities and aiding the possible future enemy. The Ethyl Gasoline Corporation (owned jointly by General Motors and Standard Oil) developed a critical additive to increase the octane rating of aviation fuel. It was against the specific wishes of the U.S. War Department regarding the transfer of strategic materials and technical knowledge that an agreement was reached between IG Farben and Ethyl Gasoline; production began in 1935 at a jointly owned factory, IG Ethyl GmbH. This product was of immense value to the Luftwaffe (German air force) in boosting the performance of its aircraft engines—some of which were built by a subsidiary of General Motors, fitted to airframes made of metals manufactured by Alcoa, in aircraft using radios and electronic equipment built by ITT, and flying on fuel derived by the hydrogenation process funded by Standard Oil of New Jersey. These were the aircraft that would devastate Guernica, Warsaw, Rotterdam, and Coventry.
As Britain fought for her life in 1940, some 300 American companies continued doing business as usual with Germany, and they did not automatically stop even after Germany declared war on the United States on December 11, 1941. In that year, 171 U.S. corporations still had over $420 million invested in German industry. It was only after the promulgation of the Trading with the Enemy Act of 1942 that most companies ceased direct business with Germany, but the profits to be made from the trade in oil and other strategic materials were still too tempting for some. The cartels created in the aftermaths of World War I and the Great Depression were now more powerful than many governments, and these international corporations were so deeply intertwined that national identity became increasingly opaque. This would be a major factor in the later German execution, under the direction of Martin Bormann, of Aktion Feuerland—Project Land of Fire.
ON THE SAME DAY THAT CONVOY SC-107 was first attacked by Gruppe Veilchen, a minor diplomat left Washington, D.C., bound for the American legation in Bern, Switzerland. Like the capitals of the other neutral European countries—Lisbon, Madrid, and Stockholm—Bern was a hotbed of espionage and multinational intrigue. The American diplomat’s circuitous journey took him by air to the Azores and then via Lisbon and Madrid to the border of Vichy France; he arrived in neutral Switzerland two days after Operation Torch put Allied troops ashore in Algeria and Morocco on November 8, 1942. The American was the aforementioned Allen Welsh Dulles and his appointment was as the special assistant for legal affairs to Ambassador Leland Harrison. His real role was as the head of the newly formed Special Intelligence branch of the Office of Strategic Services (OSS)—in effect, America’s master spy inside Nazi-occupied Europe. Within weeks, Swiss newspapers were declaring that Allen Dulles was “the personal representative of President Roosevelt, charged with special duties”—a thin veil of euphemism for espionage.
At the outbreak of war in September 1939, the United States had no central foreign intelligence service that reported directly to the executive office of the president in the White House. The original U.S. government code-breaking operation had been run by the MI-8 section of the State Department, but that had been shut down in 1929 by Secretary of State Henry Stimson with the comment that “gentlemen do not read each other’s mail.”
Each of the armed services had its own intelligence branch, as did the State Department, but coordination of information was almost nonexistent before the creation of the Joint Intelligence Committee on December 9, 1941, two days after Pearl Harbor. As a case in point, when American cryptanalysts unraveled the intricacies of the Japanese diplomatic cipher known as “Purple,” neither the U.S. Army’s G-2 Signals Intelligence Service nor the U.S. Navy’s Office of Naval Intelligence OP-20-G section was willing or capable of cooperating in the decryption of this vital intelligence source. Such was the interservice rivalry that the army exclusively decoded material on even days of the month and the navy on odd days. Similarly, the world itself was divided up into spheres of influence that were specific to a particular service. Thus the U.S. Navy was charged with intelligence-gathering in the Pacific region and Far East while the U.S. Army was entrusted with Europe, Africa, and the Panama Canal Zone. The whole of continental America, including Canada, the United States, Central America (except Panama), and South America, was the responsibility of the Federal Bureau of Investigation (FBI) under J. Edgar Hoover.
On July 11, 1941, with war looming, President Roosevelt created the first civilian-run agency tasked with gathering foreign diplomatic and military intelligence worldwide. The first director of this Office of the Coordinator of Information (COI) was one of Roosevelt’s old classmates from Columbia Law School, William J. Donovan. A recipient of the Medal of Honor in World War I, “Wild Bill” Donovan was a successful Wall Street lawyer who had traveled extensively in Europe during the
interwar years, meeting several foreign leaders, including Adolf Hitler. On a mission from Roosevelt in July 1940, he had been given extraordinary access to Britain’s leaders and security agencies, including the secret code-breaking establishment at Bletchley Park.
After America’s entry into World War II, there was a thorough reappraisal of the U.S. armed forces and particularly the intelligence services that had failed to forewarn of the attack on Pearl Harbor. Accordingly, the COI was split. Its propaganda wing, the Foreign Information Service, passed to the new Office of War Information, while the remainder became the Office of Strategic Services, coming directly under the control of the U.S. Joint Chiefs of Staff—a group of high command staff newly formed of necessity but not formally established until 1947. The OSS was created, under Donovan’s directorship, by a military order of June 13, 1942. Now with greater access to military support and resources, the OSS was given equal status to the other armed services. Its principal roles were to gather military, diplomatic, and commercial intelligence, to conduct psychological warfare, to support friendly resistance and partisan movements in Axis-occupied countries, and to launch covert operations, both in Europe and in the China-Burma-India theater.
Donovan immediately set about obtaining new recruits for the OSS. As happens so often with elite organizations, among the many highly motivated men and women attracted by the prospect of adventure were a significant number drawn from the higher echelons of society. These volunteers included Morgans, Mellons, Du Ponts, Roosevelts, and Vanderbilts—indeed, the OSS soon achieved such a cachet that it was dubbed “Oh So Social, Oh So Secret.” The service also attracted several left-wing sympathizers, such as the German immigrant and Marxist philosopher Herbert Marcuse. When challenged, however, Donovan responded forcefully, “I’d put Stalin on the OSS payroll if I thought it would help defeat Hitler.” One of the first recruits was Donovan’s old friend and collaborator Allen Dulles, who had formerly been his head of operations in the COI.
ON OCTOBER 30, 1942, a week before Allen Dulles arrived in Bern, the badly damaged German submarine U-559 (Lt. Cdr. Hans Heidtmann) was abandoned by its crew under the guns of the Royal Navy destroyer HMS Petard off the coast of Egypt. A British officer and two seamen swam across and risked their lives to clamber down inside. Two of them were dragged down to their deaths when the U-boat sank, but a sixteen-year-old canteen assistant named Tommy Brown survived—and with him, vital operating manuals for the latest four-rotor Enigma machine. This act of sacrificial courage won for Bletchley Park the means to begin breaking, on December 13, 1942, the Shark codes that had defied the cryptanalysts since February. Their success was far from immediate and for months they could only decrypt U-boat signals after long delays, but by September 1943 they would be producing Ultra intelligence at their former speed. At the outset, the British were reluctant to share such sensitive information with their American counterparts in the OSS, but in time their cooperation gave birth to a massive signals intelligence-gathering organization that became one of the great Anglo-American achievements of the war.
Chapter 2
THE TURNING TIDE
ALLEN DULLES ONCE WROTE, in a letter to his mother, “Bern is the diplomatic and spy center.… I now hobnob with all sorts of outlandish people—Czechs, Yugoslavs, Albanians, Montenegrins, Ukrainians.… There is a chance to do as much here as if one were shooting personally a whole regiment of Bosche [sic].” That letter was dated Christmas 1917, when Dulles was twenty-four. A quarter of a century later Dulles was once again in Bern at Christmas, back in the business of cultivating “all sorts of outlandish people.”
He had reached Switzerland just in time. On November 11, 1942, the Germans retaliated for the halfhearted French resistance to the Allied landings in North Africa by occupying the remainder of France, previously ruled by Marshal Pétain’s Vichy government. Thereafter, all France’s borders were sealed. Switzerland was now a vulnerable island, surrounded by Nazi and Italian Fascist territory. This made the task of communicating with London or Washington much more difficult. All diplomatic mail ceased, all telephone lines and radio communications were monitored, and Dulles lacked the staff for efficient encryption of messages.
Originally, “Wild Bill” Donovan had asked Dulles to go to London to coordinate between the OSS and British intelligence. Dulles had demurred and instead suggested that he set up a Special Intelligence station for the OSS in Switzerland. His motives were mixed. Obviously, he knew the city and the country well and he spoke very passable German. On a personal level, Bern held much more attraction than blitzed London for a bon vivant who enjoyed fine food and wines and the company of young women. Furthermore, Switzerland was the nexus of clandestine business and banking activities in occupied Europe. As a successful lawyer for Sullivan & Cromwell, Dulles was well qualified to monitor such activities both for the U.S. government and for his corporate clients. But above all, Bern was the ideal location to conduct espionage. It provided Dulles with what he later described as his “big window” into the Nazi world.
Dulles was often to be found taking lunch at the Theater Café or dining at the Hotel Bellevue Palace, where foreign diplomats and Swiss officials liked to congregate and exchange gossip or intelligence. At the age of fifty, he had the air of a college professor, with his tweed jackets, bow ties, and briar pipes, and his easy charm made him congenial company. He had time for everyone, whatever the time of day. In his own words, his open attitude had the result of “bringing to my door purveyors of information, volunteers and adventurers of every sort, professional and amateur spies, good and bad.” At night, he held court in the book-lined study of his comfortable residence at Herrengasse 23, offering a discreet welcome to any furtive visitor wishing anonymity.
Despite his talent for being all things to all men, however, Dulles did have considerable antipathy toward the British. After leaving Princeton in 1914, he had briefly worked as a teacher in India, where he had acquired a visceral loathing for the British Empire—a sentiment shared by many in the American establishment. The British intelligence community, for its part, was somewhat suspicious of his casual manner and lavish lifestyle, but, as professionals, both parties were willing to cooperate when their interests coincided. Even so, as Dulles later recalled, he was never averse to “putting one over the Brits.”
DULLES SOON ACHIEVED some notable successes. After the occupation of Vichy France, all the local agents of the Deuxième Bureau (French secret service) agreed to work with him provided that they were financed by the OSS. Dulles thus enjoyed a constant flow of intelligence from occupied France that would be much prized by Allied planners during the preparations for the Normandy landings and the subsequent liberation of Western Europe. He learned of the existence of Hitler’s program to produce “Vengeance Weapons”—the V-1 and V-2 missiles—and when this information was combined with intelligence from Polish and Scandinavian sources and the RAF Photographic Interpretation Unit, it allowed the RAF to bomb the German research and testing facility at Peenemünde in August 1943 (see Chapter 8).
Allen Dulles was a master at cultivating people as potential spies across all sectors of society and nationalities. His sources included diplomats, financiers, clergymen, journalists, and intelligence agents from around the world. At one end of the spectrum, he gained information from the bargemen plying the River Rhine through Germany and Switzerland. At the other, he met regularly with Carl Jung, the famous Swiss psychiatrist who provided psychological profiles of the Nazi leadership and applied his innovative concept of the “collective unconscious” to an analysis of the German people. However, it was Dulles’s contacts with disaffected Germans that proved the most profitable.
Not the least of these was Fritz Kolbe, a senior diplomat in the Reich Foreign Ministry who was code-named “George Wood” by the OSS. Kolbe was rejected by the British as an obvious plant. Dulles cultivated him assiduously and, over time, obtained some 1,600 Foreign Ministry policy documents that gave invaluable insights into Hitler’s
war plans and the Third Reich’s international relationships. Among the intelligence provided by Kolbe was a highly detailed sketch of Hitler’s field headquarters in a forest near Rastenburg, East Prussia (present-day Ktrzyn, Poland)—the Wolfschanze or Wolf’s Lair—including the exact locations of the antiaircraft defenses and the buildings used by Göring and Goebbels. Although Hitler spent a large proportion of his time at the Wolfschanze during the war, the Allies did not bomb it once.
On January 15, 1943, Dulles was visited by an old acquaintance, Prince Maximilian Egon zu Hohenlohe-Langenburg, whose Liechtenstein passport allowed him to travel the world unimpeded. The prince had innumerable contacts with high officials across Europe, especially in Berlin, and most notably with Reichsführer-SS Heinrich Himmler, who orchestrated the prince’s meeting with Dulles. The proposition that the prince wished to float before Dulles was simple, if startling: in the name of civilization, Himmler’s SS would eliminate Hitler, after which Germany would join forces with the Western democracies in a global war against Soviet communism. True to his methods, Dulles allowed himself to appear interested but made no commitment, keeping his options open for future dialogue with the SS and the Nazi hierarchy.
Among his other SS contacts was an Austrian aristocrat, SS Capt. Reinhard Spitzy, who was SS adjutant to Foreign Minister Joachim von Ribbentrop. Spitzy subsequently served with the Amt Ausland/Abwehr im Oberkommando der Wehrmacht (Foreign Affairs/ Supreme Command of the Armed Forces or OKW), or Abwehr—the German military intelligence organization, headed until February 1944 by the formidable Adm. Wilhelm Canaris. However, it was through the German vice-consul in Zurich, Hans Bernd Gisevius, that Dulles gained a channel to the Abwehr. Canaris, known as the “Old Fox,” had been the head of the Abwehr since 1935 and was one of the most enigmatic figures of the Third Reich. Fluent in several languages, he had been involved in intelligence work throughout his long naval career. He was a brilliant spymaster but he also ensured that his closest colleagues were not members of the Nazi Party. Since before the outbreak of war, Canaris had been active in the resistance movement of Germans attempting at first to frustrate and then to overthrow Hitler—a group known to the Gestapo as the Schwarze Kappelle (Black Orchestra) and to the OSS as “Breakers.”
Grey Wolf: The Escape of Adolf Hitler Page 4