Nazi Gold

by Douglas Botting

  We shall hear more of this ‘opportunist of the worst order’ again before long. The fourth and final member of this quartet of ex-Nazis was a 42-year-old Berlin-born SS man by the name of Helmut Groeger. Groeger had travelled in the United States before the war, and spoke fluent English (and French). He joined the SS in 1932, rose to the rank of sergeant, and in 1943 served as a construction official in the German occupation government of Lithuania, one of the Baltic States which had previously been annexed by the Soviet Union. In the summer of 1944, just before the start of the Soviet offensive, Groeger formed a special unit for the construction of houses and other buildings and allowed many Lithuanians to register as volunteers in this unit. The panic caused by the Red Army advance led many more Lithuanians to register with Groeger’s unit in order to escape a second Soviet reign of terror and flee to the Reich with the retreating Germans. When Groeger’s unit came to rest in Austria, Groeger himself turned the adverse military situation to a profitable personal advantage by selling releases to Lithuanian workers for a bribe of 1,000 marks a time. When the Austrian front in its turn collapsed, Groeger fled with his money and his wife to Rottach on the Tegernsee where, soon after the end of the war, he was employed for a time as the manager of an American recreational centre.

  Not long afterwards Groeger was stopped at a checkpoint by an officer of the Texas Division, Third US Army; and when it was discovered that he spoke fluent English he was commandeered to serve as an interpreter for Third Army, Bad Tölz. By the end of June 1945 Helmut Groeger was working in this capacity for the Commanding Officer of the 512th Military Police Battalion. This was the same outfit for which Helmut Schreiber worked as interpreter. But whereas Schreiber was employed in Munich, Groeger was employed at Bad Tölz. He was thus very close to the heart of Third Army and it was he who was chosen to act as Rauch’s ultimate contact with the Americans – the crocodile clip that would complete the circuit.

  Shortly after Captain Neuhauser gave himself up to the Americans, Colonel Rauch set in motion the elaborate process of turning himself in – though unlike Neuhauser this much more subtle character made sure he would do so only on conditions that would be favourable to him. On or after 23 June Rauch gave the word to his friend Karl Warth, who passed the word on to Helmut Schreiber, who passed it on to Helmut Groeger, who passed it on to 2nd Lieutenant James F. Niederpreum, of B Company, 512th Military Police Battalion in Bad Tölz, who passed it on to Lieutenant Jack Murphy, who passed it on to his Company Commander Captain Russell C. Rockwell, who on 27 June finally passed it on to his Commanding Officer, Major Robert M. Allgeier, at the end of the chain. In his report on the incident written a few days later, Major Allgeier described the scenario which Rauch had contrived:

  Captain Rockwell came to me with a report to the effect that Groeger was in contact with German civilians who knew the location, within 100 miles south of Munich, of a buried cache of gold and currency reserve, quantity unknown. These civilians desired certain favours in return. They were informed that this could be taken up with proper authorities later. Groeger requested transportation and escort to bring back proof of existence of the cache and an inventory of same. Desiring such proof, I arranged for the request to be granted. It was my intention to place the evidence, if available, in the hands of the proper authorities for recovery.

  During the course of the day the four members of the German ‘chain’ were rounded up. At his interrogation Rauch was asked why he had not reported to the US authorities about the Reichsbank treasure sooner. His reply was duly noted down by his inrerrogaror, Major Lionel C. Perera, Chief of Military Government Finance Office at Third Army.

  He declared that he had considered it for some time and was waiting for the political situation to clear, and, also, he wished to turn it over to the proper authorities without endangering his own position. Further questioning revealed that Rauch wished to relieve himself of responsibility in the matter, to preserve the treasure for the German government, and to provide funds in the event of conflict with Russia. Rauch wishes to record that he was only a middleman obeying the orders of higher authority, that he was not responsible for the allocation of the treasure, and was not a party to plans to use these resources to fight the Russians.

  That same night Rauch and his associates were sent off on an extraordinary expedition. Accompanied only by two American guards and with no officers present, the four Germans – Hitler’s former policeman, his one-time conjuror, an ex-member of the Führungshauptamt of the SS, and a notorious racketeer, each and every one of them a candidate for immediate arrest for one reason or another – were taken to Garmisch-Partenkirchen and there waited while Colonel Rauch drove off to the Walchensee by himself in a civilian car to carry out an ‘investigation’ of the remaining gold and currency caches. It was a bizarre situation and one in which the American authorities were undoubtedly at fault. For here was a prominent member of the SS, ADC to one of the top twenty Nazis of the Third Reich, a man close to Adolf Hitler and responsible for the Führer’s personal security, driving a civilian car to an area where, at his instigation, millions and millions of dollars’ worth of treasure had been buried, whilst the only two American guards were waiting in a town some twenty miles away. Rauch should have been under arrest and in a prisoner of war enclosure. Instead he was rummaging about alone in the woods under cover of darkness among bags and boxes whose contents were so valuable that only a single one, conveniently mislaid anywhere Rauch cared to choose, would have set a man up for life. As it was, the contents of the caches were already considerably depleted, of course, on account of the currency dug up by himself and Pfeiffer in May and reburied in the von Blüchers’ garden and on Klaus Bremme’s farm.

  According to Rauch’s subsequent interrogation report, he visited all six gold and currency caches known to exist on the mountains above Walchensee during the night of 27 June. ‘He found that two of the gold caches had been uncovered and the gold removed,’ the report stated; ‘that the smallest cache remained untouched; and that there was no sign of interference with the caches of foreign paper currency. Rauch then dug up one of the caches of paper currency, loaded it into his car, and returned with it to Garmisch-Partenkirchen.’

  Dawn had not yet broken over the sharp ridges of the surrounding mountains as Rauch drove his cargo of currency bags to Helmut Schreiber’s house in Garmisch. It was barely light when Major Allgeier was called to the house by Lieutenant Niederpreum around 5 o’clock on 28 June. Rauch does not appear to have been at the house when Allgeier arrived, but Groeger was there with Schreiber and they had in their possession 23 bags of currency which they had already opened in order to check the contents. Some of the bags had been sealed, others merely tied loosely with string. All the bags were immediately placed under guard at the Schreiber house.

  For some unknown reason Groeger and Schreiber now claimed that it was they who had recovered the currency, and they gave Allgeier an account of the state of the caches which was in direct contradiction of the one which Rauch was to make in his interrogation report. Rauch was to claim that there was no sign of interference with the currency caches, which was nonsense – as he, of all people, well knew. Schreiber and Groeger not only provided more accurate descriptions but a conveniently misleading explanation as well. ‘Civilians Groeger and Schreiber,’ wrote Major Allgeier in his report on the incident to the Third Army Provost Marshal, ‘informed me that they had brought back as much as possible because some of the cache had already been hauled away and urged that immediate action be taken before the balance disappeared. They assumed the “partisans” in the hills were moving the cache to another location. They further stated that to the best of their knowledge there were twenty 50-kilogram boxes of gold bullion and an unknown quantity of bags of currency. Some gold bullion and currency bags had already been removed.’

  The young Major now made a decision that almost blighted his career as a professional soldier. Instead of going through the usual channels of command, Allgeier took
on himself the responsibility of securing the caches and guarding against possible ‘partisan’ activity while on the mission. ‘I was chagrined at my poor decision’ he was to admit years later. ‘My Adjutant, carelessly or on purpose, had failed to circulate through me a Third Army directive expressly forbidding unit commanders from taking action to recover such funds except in cases of extreme emergency. Otherwise information was to be passed to the nearest Military Government Unit for further action.’ If Major Allgeier was going to take things into his own hands, he might have saved himself some future embarrassment if he had at least gone out on a single mission under his own command to complete the recovery, instead of first sending out a verification party under the command of his subordinates. ‘That would have saved me many interrogations in the days that followed,’ he said ruefully later. ‘Generals Patton and Gay were kind enough to overlook any possible transgression on my part. The CIC and the FBI were not quite so generous.’

  While Captain Rockwell – a rancher and miner in civilian life, and a loner who ‘never wanted to see or hear of war or soldiers again in his lifetime’ – and a squad of soldiers from the 512th MP Battalion were sent up the mountain with Colonel Rauch as guide on the morning of 28 June to check out the state of the caches for themselves, Major Allgeier was hauled up in front of Patton’s veteran Chief of Staff, General Hobert (‘Hap’) Gay, and asked to explain the reasons why he had not gone through channels. ‘I hope you realise, Major,’ Gay reprimanded him, ‘that your procedure was quite unusual to say the least. What you should have done, was to go yourself, Major, inventory this currency right where it was and bring it, together with the gold, to this headquarters where it could have been put under heavy guard.’

  Meanwhile Captain Rockwell and his men had located the remaining gold hole but found only four boxes and two bags of gold, not the 20 boxes they had been led to expect, and the Germans expressed the opinion, based on irrefutable arithmetic but ultimately refutable fact, that 16 boxes of gold were missing. Rauch then led Captain Rockwell and his men to the two remaining currency caches. These were reported as lying ‘in the hills south of Walchensee, 10 kilometres east of Highway 11 (the Mittenwald-Walchensee road) and approximately on the Army Corps boundary’. If this was true it placed the currency caches not only to the south of the Walchensee but well to the east of it, some considerable distance from the original burial holes on the Steinriegel and Klausenkopf. The exact location will never be known. In his official report Major Allgeier noted that owing to the lack of identification points on the map it was difficult to determine whether the caches had been uncovered in either Corps or Army zone of responsibility. But the caches found by Rockwell were so remote from the original scene of operations that the possibility exists that the currency had been reburied not once but twice and the second burial would have required motor transport to shift so many currency bags so far. At any rate 47 bags and six boxes of foreign currency were turned up and the German civilians were again quick to point out that in their view some of the foreign currency was missing too. They were in a good position to know. Major Allgeier was inclined to the same view. ‘I suspect the two German informants, Schreiber and Groeger, had already secured a portion of the cache for their own use,’ he wrote later, ‘before they became frightened and came to Captain Rockwell for protection, turning in the remainder of the cache rather than see others secure a share and involve them if caught.’ Indeed, when the gold and currency recovered by Captain Rockwell was finally handed in at 8.30 on the evening of 28 June at Forward Echelon Command Post, Third Army, it seemed that as many as 19 currency bags had gone astray, since out of the 89 bags that had been buried in April, only 23 had been recovered by Rauch on the night of 27/28 June and 47 during the course of the following day.

  In fact, much to Major Allgeier’s acute embarrassment, two more bags of currency had been recovered, but they had been held back and not handed in with the rest of the bags. Allgeier later explained: ‘Actually one of my better officers and one better non-commissioned officer became greedy and planned to attempt to send the US currency home for personal use. Because of their previous good records and because they came to me and confessed their temptation I chose to minimise the situation, a commander’s obligation to his good soldiers.’

  Allgeier was forced to add a hurried postscript to his official report and blur the truth for the sake of his men. ‘Due to loose handling by the civilians, two bags of currency overlooked in the unloading were delivered to Lt Niederpreum at 0900 hours, 29 June and are in the hands of the Provost Marshal as of 1400 hours, 29 June 1945.’ It looked bad and it was bad. ‘That was what got the Investigative Units on my back,’ Allgeier confessed afterwards. If two of his men had tried to palm a couple of bags, perhaps some of the other missing bags might have disappeared in the same way, too. ‘I discussed the matter with General Gay,’ Allgeier recalled, ‘who then went to the open door to General Patton’s adjacent office and related my explanation of the events. Patton told Gay that I was a damned good soldier and was not to be hurt for making an honest error which was the first one I had made in Third Army.’ Nevertheless, the Major remained under suspicion. ‘A combination of CIC (Counter Intelligence Corps) and FBI people interrogated me and other members of the 512th at some length,’ Allgeier recalled, ‘The investigation must have been quite thorough since the FBI checked on my financial status regularly every month between 1945 and 1951 – and on my wife’s finances and my parents’.’

  Four boxes and two bags of gold and 49 bags of currency were now stacked under a round-the-clock guard in the office of the Third Army Provost Marshal, Colonel Philip C. Clayton, on the third floor of the Flint Kaserne at Bad Tölz. Sixteen boxes of gold were allegedly missing, and 17 bags of currency undoubtedly were. The consignment of treasure caused some considerable commotion among the Third Army brass. When the Provost Marshal rang General Gay to tell him that the consignment had been safely gathered in, Gay could not restrain his excitement. According to an account based on General Gay’s personal diary, the following dialogue ensued:

  ‘Is it there?’ he asked Colonel Clayton.

  ‘What do you mean?’ replied the Provost Marshal, puzzled by Gay’s veiled reference.

  ‘Dammit, Phil, the gold! Have they brought it with them?’

  ‘Well,’ the Provost Marshal answered, ‘I really don’t know. The currency has been brought over and it’s now in my office. And Niederpreum did bring back a number of boxes which are quite heavy. But I don’t know what’s in them.’

  ‘Is the guard heavy?’

  ‘Well,’ said Clayton, ‘it depends on what you regard as heavy. I consider it adequate.’

  ‘Make sure,’ General Gay admonished his Provost Marshal tartly, ‘that your orders to them are also adequate.’ Gay took the matter of the treasure very seriously in all its ramifications.

  ‘Now listen, Phil, listen carefully,’ he told Clayton. ‘The newspaper people must not be notified of this. No leaks, hear me, or you’ll be dead! This is an incident that has serious international implications. It’s a delicate matter and it’s got to be handled at the highest echelon.’

  (This was to avoid any repetition of the unfortunate incident which occurred after the discovery of the Merkers treasure. A few days after the contents of the mine had been transferred to Frankfurt, Patton had involved himself in controversy for firing a SHAEF censor over whom he had no jurisdiction whatsoever – allegedly for leaking the story of the Merkers find to the press without his permission. For this (according to Eisenhower’s aide), ‘Ike had taken Patton’s hide off’. The incident marked the beginning of a deterioration in Patton’s relationship with Eisenhower and the decline of his reputation in the highest levels of the American Army.)

  The following morning General Gay, Colonel Clayton, General Halley G. Maddox (Third Army G-3) and Lieutenant-Colonel John J. Edwards (Provost Executive Officer representing the Finance Officer) went to the room where the gold and currency were being st
ored. Security was so tight that at first the guard refused to let them in and they had to send for the duty officer of the day to give them security clearances. Once they were in the room Gay asked Edwards to open up some of the bags and boxes. Some of the bags contained neatly tied bundles of foreign currency including US, British, Swedish, Swiss and even Turkish bank-notes. Two of the bags were so heavy that Colonel Edwards needed someone to help him lift them on to the table. When their necks were untied these bags were found to contain gold coins of 20 Reichsmarks each. Four of the boxes also contained gold coins, not the bullion that was expected. ‘I was unable to estimate the value of this paper money and gold coins,’ General Gay recorded in his diary. ‘My rough guess was that it amounted to something over a million bucks.’

  In fact, the dollar bills alone amounted to $1,261,717 and the gold coins (weighing 117.16 kilos) to $199,395. Without taking into consideration the non-dollar currency, the total value of the bags and boxes brought into the Provost Marshal’s office in the Flint Kaserne, Bad Tölz, at the instigation of Colonel Rauch, came to almost one and a half million dollars – a huge sum which today would be worth nearly ten million dollars.

  It was at this point that General Patton was introduced to the haul which had so unexpectedly landed up in his headquarters, for the ultimate decision as to what should be done with it fell on his shoulders. According to his Chief of Staff, General Gay, this larger-than-life Army Commander, who had already had the bulk of the Reichsbank reserves fall in his lap in the Merkers mine in early April, approached his second treasure windfall in a typically blunt and forthright manner.