by Larry Loftis
With his shadow in tow, Popov made his way to the baccarat area, pausing at one table. The man holding the bank* was an annoying gambler whom he’d seen previously. Writing some thirty-two years after the event, Dusko recalled him as a wealthy Lithuanian named Bloch. During this time, however, Estoril hotels show no registrations for a Bloch from Lithuania. In all probability, the man was one of two brothers from Liechtenstein—Dr. Lippmann Bloch or Dr. Albert Bloch—and Popov confused the countries. Wealthy Jews who were co-owners of an Amsterdam trading company, the Bloch brothers had fled to Lisbon when Germany invaded Holland. Upon arrival, they had lodged at the Palácio.
Dusko checked into the Palácio on June 29 and departed August 10, 1941.
Cascais Archive
Whether Lippmann or Albert, the Bloch gambling this night loudly and arrogantly proclaimed unlimited stakes. The gesture was an ostentatious disregard of accepted custom—discreetly providing the croupier with a stated limit—and out of place. Popov took exception to the man’s boorishness.
Dusko was a Dostoyevsky gambler—gentlemanly and above passions of the game. A gentleman, the great Russian had said, plays for love of the sport and never because of any vulgar desire to win. The true aristocrat, he wrote, “must look upon the gaming table . . . as mere relaxations which have been arranged solely for his amusement.” Even if he were to lose his entire substance, Dostoyevsky said, the gentleman “must never give way to annoyance. Money must be so subservient to gentility as never to be worth a thought.”
Bloch, while rich, was no gentleman, and Dusko saw a double opportunity. “I don’t know what prompted me,” he said later, “perhaps I just wanted to shake Fleming up.” He took a seat and reached into his pocket.
“Fifty thousand dollars.”
Dusko spread the cash on the felt for recognition by the croupier. Players and onlookers gasped. The amount was more than ten times what most people made in a year. The casino fell silent. Dusko glanced at Fleming, thinking he might be pale. He wasn’t. His face was green.
Bloch squirmed, unable to meet the bet, and Popov asked the croupier if the casino was backing him. The croupier said, no. Feigning irritation, Dusko swept the money off the table.
“I hope the management will not permit such irresponsible play in the future. It is a disgrace and an annoyance to the serious players.”
Bloch cowered and Dusko peeked back at Fleming.
A smile creased his lips.
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Years later Ian Fleming would re-create the scene in Casino Royale, his first novel. In the fictional version, Casino Estoril became Casino Royale. The Palácio and Parque hotels became the Splendide and Hermitage, complete with gardens, palms, and fountains identical to those seen by Fleming and Popov in 1941. In both the Estoril reality and the novel re-creation, the game is baccarat and the villains are “holding the bank.” In both scenarios the villains are fleeing ruthless enemies (Bloch the Nazis in 1941, LeChiffre the Russians in 1953). In both cases, the hero is a charming and courageous British secret agent (Popov in 1941, Bond in 1953)—who happens to be a gallivanting playboy. In both instances, the hero throws down an outrageous bet with MI6 money. Even the amount of the bets is roughly identical, adjusting for currency exchange rates and inflation. Finally, in both scenes, a second intelligence officer is watching with keen interest (Fleming from British Naval Intelligence in 1941, Mathis from the Deuxième Bureau—French Intelligence—in 1953).
Fleming’s description of Bond in Casino Royale also seems to match Dusko—blue-gray eyes, bon vivant disdain, and a likeness to Hoagy Carmichael. In 1957, three years after the release of Casino Royale, the Daily Express approached Fleming about creating a James Bond comic strip. While initially reluctant, Fleming agreed and commissioned an artist to sketch James Bond as Fleming saw him. Ian’s authorized sketch bears a striking resemblance to the MI6 man he watched at the Estoril tables in 1941.
Like Fleming’s hero, Dusko was an incorrigible playboy who dated enough women to make even Bond blush. In virtually every city visited he had girlfriends. In Lisbon, his female companions were Maria Elera and Ljiljana Bailoni; in Madrid, Martha Castello; in London, Friedl Gaertner, Gwennie, and Nani; in New York, Terry Richardson and Simone Simon.
One might wonder if Popov fashioned his memoirs in 1974 to match Fleming’s story of 1954; after all, the comparison to Bond would have boosted book sales. That possibility, however, must be discounted based on dates and available information. If Popov had not seen Fleming in 1941, as he wrote and testified in interviews, how did Dusko know that Fleming was in Lisbon that summer? If Popov fabricated the story, numerous individuals from Naval Intelligence could have exposed him by reporting that Fleming was with Admiral Godfrey on assignment in the United States, or back in London, at the time Dusko suggested.
Fleming was in Lisbon only twice during the war: his outbound trip to the U.S. in May 1941 and his return trip in July/August. Fleming’s cables to his boss, Admiral Godfrey, reveal that Ian was in Lisbon on this return trip from July 18 to August 12. MI5 records and Palácio Hotel registrations show that Popov was in Lisbon from June 29 to August 10. Writing thirty-two years after the event, how would Dusko have known that he and Fleming were in Lisbon together during the twenty-three days of overlapping schedules?
Yet the question looms: Why would Fleming follow him? Fleming worked for Naval Intelligence, not MI5 or MI6. But Admiral Godfrey would have been intimately aware of Plan Midas and the money Dusko would be receiving from von Karsthoff, possibly even knowing the date. Godfrey could have assigned Fleming to watch after the money or, as Dusko believed, simply informed Ian of the deal. The director of Naval Intelligence and his personal assistant were so close that Patrick Beesly, Godfrey’s biographer and a fellow Room 39* staffer, stated that Godfrey saw Fleming as “the son he never had. He even remarked after the war that Ian should have been the DNI and I his naval adviser.”
If Godfrey was not the link between Popov and Fleming, there is another reason Ian could have been in the Palácio that evening: The hotel was Estoril’s finest and Fleming had stayed there on his outbound trip. He would have been well acquainted with the popular lounge and may have gone to the hotel for drinks, seen Popov in the lobby, and then decided to see for himself what a secret agent did in the hotbed of espionage.
The money, too, is significant. It is unlikely that Popov wrote of making an outlandish bet in Casino Estoril based on Bond’s bets in Casino Royale. The Plan Midas cash that Dusko personally carried—and apparently used to cover most of his bet—was documented at the time by correspondence and memos of several MI5 officers. Likewise, one could hold out that Popov made up his gambling scene but for one lingering detail—Bloch. How, one must ask, if Dusko made up the story when writing his memoirs in 1973, did he come up with the name and details of someone at the casino thirty-two years prior? Popov’s wealthy Lithuanian named Bloch was almost certainly either Lippmann or Albert Bloch, documented to have traveled from Liechtenstein to Estoril at this time.
Finally, Dusko’s playboy lifestyle wasn’t invented to match that of James Bond; MI5 and FBI records from 1940 to 1945 confirmed Popov’s lifestyle long before Fleming penned the first words of Casino Royale. The similarities and record of co-agent flings is also noteworthy: Ian Fleming wrote of Bond’s affair with co-agent Vesper Lynd in 1953; Guy Liddell wrote of Popov’s romance with co-agent Friedl Gaertner in 1941.
Ironically, it was Fleming’s boss, Admiral Godfrey, who may have said it best: “World War II offers us far more interesting, amusing and subtle examples of intelligence work than any writer of spy stories can devise.”
12
PEARL HARBOR WARNING
On December 13, 1940, Winston Churchill sent a letter to Sir Archibald Wavell congratulating the general on his victory at Sidi Barrani. Quoting Walt Whitman, Churchill tempered the cheer with a warning: “From every fruition of success, however full
, comes forth something to make a greater struggle necessary.”
Dusko’s success with the Germans in Lisbon would come at a cost—a greater struggle in the United States. Hearing of the Abwehr’s desire to send Popov to New York, MI5, MI6, and the Double-Cross Committee considered the implications of sending their star spy across the Atlantic. Dusko was having tremendous results with von Karsthoff, and the feedback from German intercepts was that IVAN was highly regarded in Berlin. Why upset a good thing? Yet, as MI6 chief Menzies pointed out, sending the FBI a ready-made counterespionage network would greatly enhance British-American relations. Besides, Popov had no excuse for objecting to the German reassignment.
Lieutenant-Commander Ewen Montagu, Double-Cross member and special envoy to the BSC, wrote of Popov’s transfer: “After discussions between ‘C’ himself and J. Edgar Hoover, the head of the F.B.I., it was decided that Tricycle should agree to the Germans’ wishes.” The British made clear to Hoover the kind of spy they would be receiving. Montagu explained:
When the offer of Tricycle’s services had been made to Hoover, “C” had briefed him fully and given him a complete picture of Dusko Popov’s background character and way of life—and how he would have to continue to live a ‘playboy’ type of life if the Germans were not to deduce immediately that he had been caught and was operating under control, but that this would not cost the American taxpayer a cent as the Germans were providing him with $40,000 and could be made to continue providing more. He was told how we completely trusted Dusko Popov.
During this time the British courted Hoover through BSC’s William Stephenson,* and the personal visits of Godfrey and Fleming in July. MI5 B Section chief Guy Liddell, who had a good relationship with Hoover, also spoke with the director about Dusko and the possibility of expanding operations in the U.S. Not surprisingly, Hoover insisted that the FBI run Popov; any counterespionage on American turf would be controlled by a U.S. agency, he said. Knowing of Hoover’s policeman mentality and lack of espionage experience, Stephenson and the Double-Cross Committee had strong reservations about relinquishing control. Nevertheless, the British acquiesced; Dusko would have a third set of controllers.
Behind closed doors, however, J. Edgar and his allies were maneuvering to stifle the BSC, OSS, and everything they offered. Kim Philby,* the MI6 administrator who oversaw Section V’s Iberian Peninsula, summarized the problem:
Stephenson’s activity in the United States was regarded sourly enough by J. Edgar Hoover. The implication that the FBI was not capable of dealing with sabotage on American soil was wounding to a man of his raging vanity. . . . He foresaw that the creation of OSS would involve him in endless jurisdictional disputes. The new office would compete with the FBI for Federal funds. It would destroy his monopoly of the investigative field.
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Hoover biographer Curt Gentry noted that J. Edgar secretly backed a bill “which would have greatly restricted the operation of foreign agents—friendly or otherwise—in the United States. Moreover, it would have transferred the monitoring of their activities from the State Department to the Department of Justice, and made them open all their records to the FBI. Donovan, acting on behalf of Stephenson, went directly to FDR and persuaded him to veto the bill.”
In addition, Adolf Berle, assistant secretary of state and a Hoover ally, proposed that the BSC deal exclusively with the FBI. “No one has given us any effective reason why there should be a British espionage system in the United States,” he wrote in his diary.
On his U.S. trip with Godfrey, Ian Fleming experienced firsthand what Dusko was about to encounter: “Hoover’s negative response was as soft as a cat’s paw,” Fleming wrote. “With the air of doing us a favor he had us piloted through the FBI laboratory and record department and down to the basement shooting range. . . . Then with a firm, dry handclasp we were shown the door.”
The cat’s claws would be reserved for Popov himself.
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In Estoril, days before his departure for New York, Dusko received partial news about Ivo’s family. When the death sentence fell on Dragica and baby Misha, Ustaše troops stormed the Popov Dubrovnik home. Dusko and Ivo’s parents, Milorad and Zora, together with Dragica and Misha, fled from a back door, through a garden, and onto a parallel street. Racing to Hotel Zagreb, which was located within the Italian Consulate, they could hear gunfire at their home. Within an hour the Ustaše had surrounded the embassy. Despite diplomatic sanctuary, consular officials told the Popovs they could not be assured protection. If they left, however, the death sentence for Dragica and Misha would have been enacted immediately, and surely extended to Milorad and Zora.
The family waited. Somewhat miraculously, one of their friends contacted Mirko Ucovic, a Croatian who was friends with Ivo and Dusko, and who had been Ivo’s best man at his wedding. Mirko slipped them out the night of August 5–6—under cover of a storm—and had a boat and sailor waiting for their escape. The sailor said he had been instructed to take them to Mljet, a Dalmatian island under sole control of the Italians.
Once on the island, however, they were informed that it was far from safe. They moved several times, eventually finding refuge in a large house occupied by three sibling families. While the hosts were kind, food was scarce and that posed an urgent problem.
Due to stress from the flight Dragica had lost her milk; she had no way to feed Misha. One of the brothers who lived in the house, however, a peasant fisherman named Antun, worked with Zora to keep Misha alive. As Antun brought in his catch—the little food available—Zora would boil it, chew it into a mash, and feed Misha from her lips.
In Belgrade, Ivo heard of the escape but had no idea where the family finally lodged. From Dubrovnik to Zadar, the Dalmatian coast is a series of archipelagos and they could have landed anywhere. Finding a high-ranking German officer, Dr. Popov paid him one million dinars to find them. The officer dispatched Lance Corporal Gustav Richter to conduct the search. With the assistance of the Italian military, Richter found Vlado, Dusko and Ivo’s brother, and together, after a five-week search, they located the Popov family. Richter requisitioned a boat for a return to Dubrovnik and supervised transit by train to Belgrade.
Surmising details of the limited information he had, Dusko penned a letter to Tar Robertson:
The news from Yugoslavia is very very bad, millions of people are being persecuted and massacred. . . . My family has not been spared, the youngest brother is a refugee at Zara where he is staying with a friend . . . and the oldest with my father has probably gone to Belgrade. The rest of the family is still at Dubrovnik. . . . Jebsen has himself left for Yugoslavia in order to organize the protection of my family. . . . My own life is much less important to me than that of my family. . . . I hope to continue to be useful to our common cause and to be able to help within my modest means to bring the victory which alone will bring me happiness.
All the best, Dusko
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On Sunday morning, August 10, 1941, President Franklin D. Roosevelt stepped aboard the HMS Prince of Wales to offer British Prime Minister Winston Churchill his steadfast support. As he did, British double agent Dusko Popov stepped aboard a Pan American Clipper to offer FBI Director J. Edgar Hoover his counterespionage support. In Popov’s briefcase was a treasure trove worthy of an international spy: a German questionnaire with an English translation, a vial of white crystals for making secret ink, special paper for sending secret correspondence, a copy of Virginia Woolf’s Night and Day for coding messages, a torn half of a business card (the opposite to be presented by a German contact), addresses of mail drops in Portugal and South America, a paper bearing the name and address—in secret ink—for Elisabeth Sahrbach, instructions for operating a wireless radio set, and several files of letters and telegrams, four of which contained eight microdots. In addition, he had a letter, which had been forwarded from the Savoy, written by a girl who claimed to know him but whom he couldn’t place;
he suspected she was a German spy.
He was also carrying a considerable sum of money: $70,000. If he needed more, he was to contact a phony Portuguese company set up by the Germans; the funds would be forwarded as part of a sham transaction involving tin purchased in Spain and shipped to Yugoslavia.
On the layover in Bermuda, Hamish Mitchell, an MI6 agent stationed on the island, joined Dusko’s flight to supervise Popov’s transfer to the FBI. Dick Ellis, MI6 station chief for New York (whose staff had been absorbed by the BSC), would supervise the Bureau’s running of TRICYCLE. While Dusko was en route, Dick called FBI Assistant Director for Counterintelligence, Percy “Sam” Foxworth. Popov might have been watched by the Germans when he left Portugal, Ellis advised, and might also be watched when he landed at LaGuardia.
Four groups, in fact, were candidates to shadow him: the Germans, the FBI, the Military Intelligence Division (MID), and the Office of Naval Intelligence (ONI). At least three did.
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Dusko arrived in New York on August 12, 1941, and had luxury accommodation awaiting—courtesy of MI5 and the FBI—at the Waldorf-Astoria. He and Mitchell shared a taxi to town.
They were followed.
During the drive, Dusko silently slipped Mitchell a document and then jumped out at the Waldorf; Mitchell carried on to the Hotel Westover. After checking in, Dusko set out to explore the amenities of the Big Apple. Park Avenue was bustling, he remembered, and he found the grandeur of shimmering glass and soaring towers invigorating. He opened a bank account and, after a short walk, turned onto Broadway. A gleaming red Buick coupe—complete with sliding roof—beckoned behind polished windows. Within minutes, he purchased the car. New York might live up to its billing, after all. When he returned to the hotel, he noticed something strange—his belongings had been searched.