Into the Lion's Mouth: The True Story of Dusko Popov: World War II Spy, Patriot, and the Real-Life Inspiration for James Bond

by Larry Loftis

  On February 14 Popov sent the bait. Writing as “John Danvers” from a cover address of 18 Queens Gate Place, Dusko addressed the letter to von Karsthoff’s cover: Paulo Brimoes, Esq., Largo Santar Antoninho, Lisboa. On the front was an innocuous message written in English. On the back, in French with the secret ink, Dusko detailed Montagu’s offer.

  The following day he and Luke left for Scotland. They would embark on an imaginary tour of naval bases, but a real tour of quaint towns, friendly pubs, and fine restaurants. In the span of four days, Dusko visited Glasgow, Strathblane, Lennoxtown, Drymen, Balloch, Loch Lomond, Gare Loch, Helensburgh, Dumbarton, and Edinburgh. While glimpsing coastal ports, he also found time to enjoy cocktails at the American Bar, the Central Hotel, and the Piccadilly. In addition, he visited the Edinburgh Castle, Hollyroodhouse Palace, the Scot Monument, and the War Memorial. He even took in the theater.

  When they returned to London on the twenty-first, Luke summarized his thoughts about Popov:

  I have come to the conclusion that he is definitely working for us and not for the Germans. . . . He is clever, versatile and firm of purpose. He knows what he wants and it will not be his fault if he does not get it. . . . He is fond of the society of attractive women [and] . . . his amorous exploits would provide good material for Maurice Dekobra.* . . . He has personality and charm and would feel at home . . . in society circles in any European or American capital, being much the usual type of international playboy. . . . SKOOT is an ingenious, cheerful and amusing companion of whose sincerity and loyalty I, personally, am satisfied.

  With Luke’s confirmation, Dusko was cleared as a full-time double agent, and Robertson and Marriott recorded for the MI5 file Popov’s physical attributes: light gray eyes; receded and brushed back hair; high cheekbones; white even teeth; full lips; loose, sensual mouth; broad shoulders; athletic carriage; long-strided gait; and well-manicured hands. His complexion, Tar noted, depended upon the previous night’s activity.

  Even with Luke’s assurances, however, Robertson continued to monitor Popov’s daily movement. Within days Tar discovered that the Scotland tour was just a foretaste of Dusko’s lifestyle; in London, MI5 tags shadowed him on the bachelor treadmill. Between meetings with Luke and Montagu, and appointments at the American, Portuguese, Spanish, and Yugoslav embassies, Dusko dined at the Berkeley, Haslemere, Savoy, Mirabel, L’Ecu de France, Claridge’s, Dorchester, Hyde Park, and the Bachelors’ Club. Before or after dinner, depending on the company, he enjoyed cocktails at the 400 Club, Grosvenor Square, the Mayfair, and the Coconut Grove.

  Running at a frenetic pace, however, was when Popov’s mind was sharpest; he suggested to Luke a bold idea for an Allied escape route. On February 27 he and Bill lunched with a Major Isham of MI9, the SIS section charged with aiding resistance fighters and POWs in occupied territories, and rescuing Allied soldiers trapped behind enemy lines. Isham mentioned that most British prisoners were held in Salzburg, and Popov said he could orchestrate—through his brother—an escape line through Yugoslavia. There was a hotel in Austria near the frontier, Dusko explained, which was owned by a Jew. So long as he was compensated for the rooms, the proprietor was sure to cooperate. Ivo, who was pro-British and had probably guessed what Dusko was doing, could bribe officials at the Yugoslav border.

  Isham liked the idea, Luke noted, but did not know that Popov was a double agent. What Bill Luke didn’t know was that Dusko was going to tell the Germans.

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  The following day Tar introduced Dusko to Friedl Gaertner, a striking thirty-four-year-old Austrian, with thoughts of having Popov pitch her to von Karsthoff as a sub-agent. Gaertner was perfectly suited to double because her mother and sister lived in Germany, and her father had been a member of the Nazi Party. In addition, after the Anschluss in 1938, MI5 had had her send the German Embassy a note of congratulations. Most importantly, as Menzies’s brother’s sister-in-law, she was considered safe.

  Friedl Gaertner’s note of March 1, 1941, thanking Dusko for flowers and a “charming evening.”

  The National Archives of the UK

  Dusko was smitten by Friedl and immediately set sparks to the kindling. They went out that night and again on March 4, 5, 7, 8, 9, and 10. Mixing business with pleasure, they dined and drank about town in service to His Majesty’s Secret Service. One day, Popov recalled, he and Friedl had a busy schedule: a lunch appointment, a cocktail party in the afternoon, and a dinner engagement that evening. Driven by a passion that had become addiction, Dusko admitted, he showed up at Friedl’s cottage early. It went largely as planned. Gaertner had just emerged from her bath and answered the door in a short terry-cloth robe.

  They missed the luncheon.

  And the cocktail party.

  And the dinner.

  8

  DEATH IN THE AFTERNOON

  On March 4 Popov and Luke met again so that Bill could get a full understanding of the escape plan. In the afternoon, Luke met with Major Robertson, Major Lennox, and Captain Masterman to go over details. It would be expensive and dangerous, they realized, but the payoff was tremendous. Popov was to move forward.

  That evening Dusko met Bill again to help evaluate a potential spy MI5 was considering for the operation. He said he thought the candidate was an excellent choice if Luke was confident the man was absolutely loyal; Bill confirmed that he was. Taking his leave to make a dinner date at the Mayfair, Dusko quietly reminded Luke that he still needed help sneaking something back to Lisbon.

  A revolver.

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  Over the next two weeks Dusko met with Major Robertson several times to discuss overall strategy with von Karsthoff, and how to lead the major to accept sub-agents. Assuming Popov could sell it, Friedl would join Dusko’s network as his source for political information, and Dickie Metcalfe, an MI5 officer, would be pitched as Popov’s source for technical and military information. Friedl would be code named GELATINE—because Luke thought her a “jolly little thing”—and Metcalfe would be BALLOON, due to his ample girth. With a network of three, Dusko’s code name was changed from SKOOT to TRICYCLE.*

  Before leaving, Popov requested a meeting with J. C. Masterman. As chairman of the Double-Cross Committee, the Oxford don was Dusko’s ultimate supervisor, but it was more than that. Masterman possessed a temperance, objectiveness, and fatherly wisdom that Popov knew counterbalanced his own alacrity and adventurism.

  Dusko, it turned out, was having second thoughts about his game of deceit. As Johnny had warned, Popov was developing a genuine friendship with von Karsthoff, and Dusko’s conscience was gnawing at him. Ludovico was charming, and, in spite of the shadow clouding their consanguinity, Dusko much enjoyed his company.

  “TRICYCLE . . . had some slight moral scruples about the part which he was playing,” Masterman recorded at the time. “I tried to explain to him, I think with success, that the strictest moral censor ‘having regard to his motives’ would not cavil his conduct.”

  Dusko was relieved. With his moral sextant at peace, he returned to Lisbon on Saturday, March 15, anxious to expand his network. The following evening he met with von Karsthoff and Elisabeth at the Estoril villa. Ludovico was all business. Before delving into Dusko’s answers to the questionnaire, however, he checked bona fides: At what London station had Popov arrived? At what hotel had he stayed? What did the wallpaper in his suite look like?

  Dusko responded accordingly and von Karsthoff moved on to the written answers, after which he asked Popov to recount every day in England—where he went, people he saw, topics discussed. When Ludovico asked about sources, Dusko parroted the Double-Cross crafted stories for Gaertner and Metcalfe. Von Karsthoff appeared to know about Friedl and inquired about the origin of military information. His source, Popov told the major, was a former army officer who had been bounced for passing bad checks. The man was terrible with money, Dusko said, always spending more than he made. He was bitter about his
army experience and desired a playboy lifestyle, which he couldn’t afford.

  The major nibbled at the bait and told Dusko to sound them out. As Ludovico continued with the questionnaire answers, Dusko filled in gaps with whatever seemed plausible. The major nodded. Everything looked fine, and he asked Popov to return on Tuesday, March 18.

  When Dusko arrived, Elisabeth had already typed out his verbal responses, which they had sent to the Tirpitzufer* with his written answers. Abwehr headquarters had cabled back, Ludovico said, stating that Dusko was to go to Madrid to meet “some gentlemen from Berlin.” Dusko agreed, having no idea what the meeting was for, or why he needed to see them. The important thing was that he and Johnny had planned to meet in Madrid about this time, and the trip would allow a discreet rendezvous.

  As critical as Lisbon was, Madrid was the Abwehr’s largest post. Admiral Canaris had been very close to Franco during the Spanish Civil War, and to some extent had influenced Hitler to back the general. At the outbreak of World War II, Germany expected Franco to return the favor. When Hitler and Franco met at Hendaye in October 1940, the Spanish leader signed a protocol pledging Spain’s entry into the war—fighting for the Axis alliance—at an undetermined future date. The slippery general, however, delayed his formal affiliation by coyly asking for significant German armaments, and adding as a prerequisite that Spain would independently seize control of the Iberian Peninsula. Undaunted, Hitler sent Canaris to meet with Franco on December 7, and to tell the general that Hitler wanted to move German forces into Spain on January 10. Franco again demurred. For now Spain would remain neutral, albeit with a wink and a nod to Berlin. In the meantime, the Spanish Air Force would regularly train in Germany.

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  Von Karsthoff warned that the Abwehr’s Madrid chief, Gustav Wilhelm Lenz*—“Papa” as he was known—might try to contact Dusko if for no other reason than to prevent Popov from encroaching on his territory. If possible, the major instructed, Dusko should try to stay clear of him. Ludovico knew as well as anyone that every German organization competed for power, prestige, control, and assets. This was particularly true between the Abwehr and the SD, the Gestapo and the SD, and Abwehr I and III: Canaris competed against Heydrich, Goering against Himmler, Schellenberg against Mueller, and on down the institutional line. At the station level, von Karsthoff’s Lisbon competed with Lenz’s Madrid.

  As with Lisbon, Madrid had two luxury hotels—the Palace and the Ritz—Germans controlling the former, Allies the latter. On March 22 Dusko checked into the Ritz and a day or so later, as von Karsthoff had warned, Lenz called. The Madrid chief simply wanted to pass along a Berlin cable, however, stating that Jebsen would arrive in a few days.

  While Dusko waited, on March 27, Serbian army officers staged a coup d’état and deposed Prince Paul, the pro-Nazi regent of Yugoslavia. In retaliation, Hitler launched Operation Punishment, a three-day bombardment of Belgrade. Since the capital had no anti-aircraft guns, the Luftwaffe dropped their loads at rooftop level, killing seventeen thousand civilians and wounding tens of thousands more. When Dusko heard the news, he was beside himself; if his parents had been at their winter residence, they were likely dead. The ensuing German invasion posed a second problem—the destruction of Dusko’s cover business. Since Germany would now block imports from England to Yugoslavia, he would have to find another excuse for travel between Lisbon and London.

  Days came and went and he heard nothing of Jebsen. Finally, on Sunday, April 6, Johnny arrived and came up to Dusko’s room. A Dr. Warnecke and perhaps two other “specialists,” he said, would be coming from Berlin on the ninth. Popov’s report had been well received in Berlin, Jebsen said, and Johnny was instructed to be “very diplomatic” with him. He added that von Karsthoff was impressed with the mine chart, but Berlin thought it was out of date. Calling Dusko Germany’s top agent, Johnny gave him $10,000, courtesy of Colonel Pieckenbrock. In addition, he said, the Abwehr had agreed to free any of Dusko’s friends or family that were imprisoned in Yugoslavia.

  They continued the discussion in the hotel lounge, where Johnny suddenly slipped into a melancholy languor. There was a flip side to the Abwehr’s courting, he explained. Berlin would work carrot and stick, reward and threat, simultaneously. Johnny’s supervisors had mentioned in passing that they could pressure Dusko by threatening to denounce him to the English, or by imprisoning him. For the time being, Johnny said, he could provide protection.

  “I am not cruel enough, but now I am in a position to get rid of anyone I hate.” Recalling a Freiburg professor that he and Dusko despised, Johnny said: “If I want to get rid of that man all I have to do is to say that Professor Miller said that and that and they will kill him at once without questioning.”

  And yet there was long-term risk which Jebsen couldn’t control, and he grieved over having thrust Dusko into the crucible. “You’re my closest friend,” he said somberly. “If you want to analyze it, you’re an ersatz brother and I wish you were a real one.” He reached for a nut from the bar dish and cracked it in his hands. “You can be crushed like that.”

  Dusko shrugged off the warning. He was a big boy and knew what he had bargained for. Johnny brooded for a moment and then went on to say that Lenz had brought 120 agents to the city, and had another 400 paid informants. Any porter, waiter, or bellman could be his eyes and ears, he said; Dusko would have to be on his toes.

  In all probability, Jebsen’s estimate of Madrid agents was conservative. Walter Schellenberg, SD intelligence chief, reported after the war that apart from staff for active espionage and counterespionage, the German Secret Service had posted seventy to one hundred individuals in Madrid solely for decoding intelligence messages. The city was crawling with German agents, operatives, and informants. Once again, Dusko could be followed anywhere, and probably was. Even Samuel Hoare, British ambassador to Spain, was convinced that the Gestapo had bugged his telephone at the Ritz. The hotel, Hoare contended, was swarming with Germans and teeming with espionage.

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  On April 9 the “specialist” from Berlin—Dr. Warnecke—arrived. Short and sallow, he was a strident Nazi with sinister credentials—a saber scar on his right cheek, running parallel with his mouth, and a missing front tooth. The German was no lout, however; he held doctorates in chemistry and law, owned a chemical factory, and spoke French and English. Most importantly, Dusko found out, Warnecke was Gestapo.

  Meeting Popov at the Ritz, the German grilled him for three and a half hours. Dusko had a doctorate in law, too, but Warnecke was well seasoned in carefully and methodically extracting information. Popov parried, postured, and otherwise played the opportunist spy. It worked. When Warnecke concluded his examination, he announced that IVAN was well suited for a new mission—setting up an espionage network in the United States.

  Dusko wondered aloud about German spies already in America; surely the Abwehr had a network in place. Warnecke explained that they had a net, but that it had been broken up by the FBI. The details he didn’t provide were significant.

  On March 17 Germany’s U.S. spymaster, Captain Ulrich von der Osten, a native-born American, had been hit by a taxi while crossing Broadway near Times Square. As he lay on the ground, a second car struck him. He was taken to St. Vincent’s Hospital but died from his injuries the following day. Since he had registered at the Taft Hotel as a Spaniard—Julio Lopez Lido—police had little reason to suspect foul play.

  Two days later Bermuda Censorship,* operating in conjunction with British Security Coordination (BSC), intercepted a letter from a “Joe” to a “Manuel Alonso” in Madrid. At this point “Joe” was well known as a German spy. As early as December 1940 BSC had intercepted a letter from him to a Lothar Frederick in Berlin. In it Joe had detailed Allied ships—movements and armaments—operating in New York harbor. From that point on, H. Montgomery Hyde, the security officer at the Bermuda station, asked his censors to keep a lookout for envelopes with the same hand
writing. All letters to or from Joe were given to Hyde’s best censor, Nadya Gardner, for deciphering.

  After intercepting more than thirty such letters, Bermuda determined that the name “Lothar Frederick”—and ones like it—were covers for Nazi Secret Service and Gestapo Chief Heinrich Himmler. Ms. Gardner also determined that “Joe” often wrote of being in touch with “Konrad,” whom he sometimes called “Phil” or “Junio.”

  In early spring 1941, however, neither the BSC nor the FBI knew the identities of Joe or Konrad/Phil/Junio. Osten’s death and Joe’s letter of March 20 would unravel the mystery. On the reverse side of the correspondence, in secret ink, Joe detailed Phil’s death. Providing the tag number of the second car—SU57-35—Joe warned of a problem: “Phil’s things are still at the Hotel Taft.”

  Bermuda forwarded the information to BSC chief William Stephenson, who passed it on to the FBI. Stephenson’s biographer, William Stevenson, inferred cryptically that the BSC was behind the hit: “Rather reluctantly, BSC indicated [to the FBI] that Lido was known as a German agent using the cover name ‘Phil.’ The spy had been ‘removed from circulation’ . . . Someone had disposed of von der Osten. . . . In this period of neutrality, however, deeper FBI probing would have led to an embarrassment.”

  When the FBI searched Lido’s hotel room, they found a letter addressed to a Carl Wilhem von der Osten in Denver. Carl, who was not involved in the war, acknowledged that Ulrich was his brother and that he had been working for the Abwehr. Following up on other names found among Ulrich’s belongings, the FBI and the BSC determined that “Joe” was Kurt Frederick Ludwig, a forty-eight-year-old American who had grown up in Germany, and whom Osten was running to set up a spy ring. The FBI put Ludwig under surveillance and soon rounded up his entire network—nine men and one woman. All were tried, found guilty of espionage, and imprisoned, Ludwig in Alcatraz.