Nazi Gold

by Douglas Botting

  This investigation was inaugurated when a Request for Investigation from Special Agent Coopman came to this agent accompanied by a memo alleging that Groeger had helped in recovering foreign currency originally owned by the Wehrmacht, that somehow he had retained large quantities of American dollars for himself and that he had been involved with an American soldier in illegal currency dealings. Current investigations have revealed that these allegations are true in substance.

  And at the end of a later report Marshall added a final comment: ‘Notify FBI to work on case in States.’

  That was as far as the matter seems to have got. At this point, for reasons which will become more readily apparent at a later stage in this story, further proceedings were blocked by some powerful hand from on high. Three investigative agencies had maintained eight files on Helmut Groeger, the associate of Colonel Rauch and plumber of the Reichsbank currency holes at Walchensee. All eight files were now destroyed. If Groeger ever did go to trial the results of his hearing are no longer a matter of public record. What is strange is that a man under the gravest suspicion of having played a significant part in the greatest robbery in history should have proved such an embarrassment to certain elements among the US Army occupation authorities that his case was suppressed and his trial hushed up – if indeed it even took place at all. Helmut Groeger, we must conclude, was a pawn in a greater game. Who the other players were, and what form the great game took, is a matter for a later chapter in this book.

  A former Gehirgsjäger officer who knew Garmisch in the uncertain days before and after the end of the war remarked recently:

  You will never, never find out now exactly what happened to the gold and the money. Someone – one of the main participants – would have to be on the point of death and decide to confess and tell the truth before it is too late. Too many people are involved. It will never come out into the open. Even then I doubt if anyone would confess under oath on his deathbed, as too many relatives would be harmed. One does not have to be a super detective, a Sherlock Holmes, to see what was going on. To my way of thinking – and this was what I could not stomach at the time – it’s all been covered up. There have been investigations here in Germany and in the United States. I’ve been asked over and over again. But nothing comes out. It’s all been covered up.

  Part Two: Corruption and Cober-up

  14. The Collapse of a Great Army

  At the end of the war more than 150 small Military Government detachments had fanned out into the towns and villages of Bavaria to carry through the unprecedented experiment of American occupation. It had always been thought that after the German surrender all that Military Government would have to do would be to take over intact an existing system of German government and control it from the top. It had not been envisaged that the Germans would fight to the last, that in the process the entire system of government would be destroyed and that the occupying powers would have to run the whole of the country themselves from the bottom to the top. The occupation developed into one of the most extraordinary regimes in modern history. ‘The world had never known before a situation in which four peoples lived and tried to co-operate in a country inhabited by a fifth,’ wrote one historian of this bizarre episode. ‘Although backward peoples have often come under foreign rule, there are few precedents for civilised industrial nations actually taking over the governments of another (instead of giving orders to a puppet regime).’

  The problems confronting Military Government amid the ruins of Germany and amongst a morally and economically shattered population were enormous. Its success in solving them depended (in part) on the abilities of the individuals who composed the Military Government teams. In the American Zone these were often looked down on by the men in the tactical echelons of the Army and were often impeded in their duties by the prejudice and incomprehension of their commanders-in-chief. Often this was because Military Government consisted of personnel who were unfit for combat service, because they were either over-age, or wounded, or surplus to their units’ requirements. The average age of officers, in the early days of American Military Government was 46, but many were well over that age, and some of the most able and energetic were 55 or more. Many of these officers were highly qualified, successful and wealthy men in civilian life, and included lawyers earning $100,000 a year (in 1945), editors of large newspapers and presidents of major universities. These men had volunteered for Military Government while the war was still being fought in the expectation that their special skills as engineers, agronomists, teachers, bankers, public health workers and so forth could be put to good use in the task of post-war reconstruction in Europe. Such men approached their difficult tasks with almost missionary fervour and in Germany often achieved miracles in getting things working again, restoring some kind of rough-and-ready order out of the chaos and establishing a firm foundation for the new Germany of the future.

  Others, however, were misfits seconded from their regular Army units because they were not wanted, or because they were eccentrics and adventurers, larger-than-life men who found in the dislocation of normal civilised life in Germany – certainly in Bavaria – a new frontier lifestyle reminiscent of the days of the Old West to which in spirit they now returned. Often these kind of men were harmless self-indulgers, like the young captain who ‘liberated’ an immensely powerful pre-war Porsche racing motor and could be heard, in the small hours of each night after curfew, roaring up and down the Munich-Augsburg autobahn at stupendous speeds like some supernatural, supercharged demon night-rider. Or like the billeting officer they called ‘King James’, who held sway over his requisitioned properties like a petty medieval monarch and with two pearl-handled Colt 45s at each hip reigned over his subjects from a Bavarian castle on whose high flanking walls he had had painted a giant yellow Texas rose. Or like the Military Governor of the small Bavarian town of Eichstätt, a seigneurial young American captain of rich Bostonian Catholic descent, who ruled his domain dressed in the papal court costume of the Vatican (of which he was a genuine member), complete with sword, chain and robe.

  American Military Government attracted not only the oddballs and misfits, but men from the ranks of rascals and rogues. These were the ones who were destined to take advantage of their privileges and power in Germany to perpetrate some of the most outrageous rackets and biggest robberies in history.

  There had been early-warning signals in the American Army well before the end of the war. During the fighting in the Ardennes in December 1944, when the last great German counter-attack had threatened to throw back the Allied advance, the Americans had been hampered by the activities of an estimated 19,000 US Army deserters engaged in large-scale robbery, gangsterism and black-marketeering in occupied territories. Indeed the whole American effort was put in jeopardy by the criminal, not to say treasonable, conduct of certain members of the US Army Corps of Transport, who devised a profitable scheme which involved rerouting whole train-loads of gasoline tankers away from the Ardennes front, where the gasoline was urgently needed for American tanks, southward into liberated France, where it was siphoned off and sold for a fortune on the French black market. In Italy, too, a small section of the American Army, mostly soldiers of recent Italian origin and probable American Mafia affiliation, gravitated into organised crime with remarkable alacrity, linking up with their local Italian Mafia cousins and indulging in gang warfare and Chicago-style shoot-outs in the cafés of Rome. With the end of the war and the collapse of morale and discipline that the end of the fighting inevitably entailed, serious crime amongst the military soared.

  It was not only the Americans who turned to crime after the German surrender. In Berlin armed gangs of deserters and DPs – Russians, Poles, Frenchmen, Spaniards (from the former Spanish volunteer battalions of the Waffen-SS) and some Americans – terrorised the city. In May 1945 one such gang, a hundred strong, attacked a train at the Anhalter Bahnhof railway station. Other gangs moved out into the Zones. Convoys of British Army trucks approaching
Berlin were held up at gunpoint by armed men, and on one occasion British troops were engaged in a running gunfight with American train bandits who had earlier shot their way out of an ambush. Even the soldiers of the Red Army deserted in untold numbers and roamed the countryside in predatory packs.

  Booty and women had been the perquisites of conquering armies from time immemorial. This was so in 1945 almost as soon as the first foreign soldier crossed the German frontier, and it went on being so long after hostilities had ceased. Not even the highest-ranking service chiefs were exempt from the general rule of vis victis (rights of conquest). At the last great conference of the Allied war leaders at Potsdam in July 1945, several of the supreme British military chiefs – including the Chief of the Imperial General Staff, Field Marshal Sir Alan Brooke, Marshal of the Royal Air Force Lord Portal and Admiral of the Fleet Viscount Cunningham – were seen to loot rare antiquarian books from the Royal Library in the Cecilienhof Palace; and President Truman’s special aide, Brigadier General Harry Vaughan, quickly discovered the Berlin black market and while his colleagues were otherwise engaged in sorting out the world proceeded to dispose of his spare clothes for brisk profit amounting (he was to boast later) to ‘a couple of thousand bucks’. There was no accounting for tastes. In Bavaria one official of OMGB made off with the Reichspost stamp collection, another purloined a death mask of Napoleon, and a third stole the large collection of lead soldiers from the War Museum.

  What distinguished the American Zone from the other three Occupation Zones was the persistence and magnitude of the criminal acts that were committed there. There seems to be no comparable record for such widespread wrongdoing in the British, French or even Russian Zones. Though two million American soldiers had been demobilised and sent home from Germany by the first Christmas after the war, this still left a million or more combat veterans marooned among the ruins – homesick, bored, demotivated and malcontent. Some of these men entertained a very different attitude to their role as occupation troops from that of their European counterparts in the other zones. The French, Russian and British soldiers came from homelands which had been bombed, invaded or blockaded by Hitler’s forces, and instinctively perhaps they had experienced a greater sense of involvement and responsibility in the occupation of the former Nazi state and had a more acute perception of their role. The American troops, by contrast, hailed from a continent on the other side of the world; they had helped win the Europeans’ war for them and many of them felt that they had done enough and that it was time to go home.

  There were other contributory causes. The Americans came from a country where the frontier spirit of the Old West, with its pioneer individualists on the one hand and its renegade outlaws on the other, was still strong; in the frontier-like chaos of post-hostilities Germany this spirit found fresh strength. Coming from a country where, in the dictum of President Calvin Coolidge, ‘the business of America is business’, they found themselves in a country where the spirit of private enterprise enshrined in this dictum could be pursued ad absurdum – and outside the usual rules. Many of the Americans in Military Government were of recent German or German Jewish origin, and once back in Germany their loyalties were torn in a variety of directions, not all of them legal. But perhaps the single greatest cause of immorality and crime on the part of the American occupation was the corrupting ambience of the Germany in which they had to live and function – an ambience which provided daily opportunities for enrichment.

  The occupation forces lived well in Germany. Those at the top lived like kings and ruled like potentates. Generals in the US Zone had their own private trains, fully staffed and under steam 24 hours a day to whirl them from one end to the other of their kingdoms. Junior officers lived like millionaires, and even GIs had German servants to look after them. In their luxurious off-limits ghettoes the victors lived the good life while all around them thousands starved in the rubble.

  ‘We became an “India Service”,’ wrote a former US Chief Information Officer in Frankfurt – ‘poobah Sahibs’ – masters of a conquered people, rulers of an occupied colonial State. Little people from the States haughtily ordered German mayors and governors to appear before them, delivered speeches on democracy, and received homage and presents. Like India Service personnel, in the midst of ruins and near starvation, we lived well. We requisitioned the best houses. We wined and dined as we had never done at home. Like conquerors, we affected fancy uniforms and fancy leather boots. The most beautiful women in Germany we had at our price. There were servants to minister to our every need. For a few packs of cigarettes, we even had music with our meals. And on the streets, before the opera, groups of Germans gathered to fight each other for our cigarette butts.’

  George Kennan, a highly placed adviser in the State Department, formed an even more derogatory opinion of the occupation élite in the US Zone, and wrote in his memoirs:

  Each time I had come away with a sense of sheer horror at the spectacle of this horde of my compatriots and their dependants camping in luxury amid the ruins of a shattered national community, ignorant of the past, oblivious to the abundant evidences of present tragedy all around them, inhabiting the same sequestered villas that the Gestapo and SS had just abandoned, and enjoying the same privileges, flaunting their silly supermarket luxuries in the face of a veritable ocean of deprivation, hunger and wretchedness, setting an example of empty materialism and cultural poverty before a people desperately in need of spiritual and Intellectual guidance, taking for granted – as though it were their natural due – a disparity of privilege and comfort between themselves and their German neighbours no smaller than those that had once divided lord and peasant in that feudal Germany which it had been our declared purpose in two world wars to destroy.

  Some Military Government officers resigned in disgust. ‘In one of the more idealistic decisions of my life,’ one of them explained later, ‘I decided to get out before I was completely demoralised by the rich life, the castles, the women, the drink and black market.’

  The first two years after the war witnessed in Germany a sociological phenomenon without precedent in the history of modern Europe – that of universal concubinage. This practice was widely observed from the lowest to the highest ranks of the Allied armies. Among the lower ranks in the US Zone it was so widespread that German girls were kept quite brazenly in the barrack rooms of the big Army bases, and regular bed checks were necessary to root out female guests who were off-limits. Among the top brass the spate of high-class German mistresses – many of them of dubious Nazi background – threatened to spill over into public scandal. As a consequence of total promiscuity, the incidence of VD reached epidemic proportions. Now the Army posters on the autobahn read: ‘Beware of Veronika Dankeschön.’ But few did. ‘When we came up against our first 19-year-old Rhineland blonde,’ one GI was heard to explain, ‘with blue eyes, pink cheeks, plaits, and very desirable, we were just clean bowled over.’

  For the women of Germany – lonely, hungry, out of work, and greatly outnumbering their own men, millions of whom lay dead on the battlefields of Europe or rotted in prison camps abroad – the Allied soldier was the best short-cut to survival that could be found. In December 1945 a German police report declared: ‘It is impossible to distinguish between good girls and bad girls in Germany. Even nice girls of good families, good education and fine background have discovered their bodies afford the only real living. Moral standards have crashed to a new low.’ The German Fräulein became an item of mass consumption like any other and could be acquired by barter like a commodity on the black market. No Allied soldier need be without female company if he carried a few packs of cigarettes or a can of bully beef or a pair of silk stockings from the PX in his knapsack.

  The principal instrument of corruption was the black-market cigarette. In the German cigarette economy the PX cigarette was the prime source of every American’s wealth over and above his pay. One Camel or Lucky Strike in 1945 was worth more than double a German’s pay for a h
ard day’s work clearing the rubble in the streets. One packet of cigarettes would finance fifty double Scotches. A few cartons would enable a GI to deal in antiques, Persian rugs, Meissner porcelain, Leicas, binoculars, paintings, sculptures, silver and jewellery. With several million cigarettes issued by the PX in the American Zone each week, it is not surprising that a US Army lieutenant could earn as much as $12,000 a year on the cigarette economy and go home with a nest-egg of $25,000 on top of his pay. In October 1945 the American occupation forces in Berlin sent home nearly $5.5 million more than they had been paid. Officers were the biggest operators, often leaving their desks for more lucrative earnings from black-market deals in the streets. ‘Those conditions,’ wrote one American official on assignment from Washington, ‘created an atmosphere so unreal, so nightmarish, so demoralising that official work was almost impossible.’ Since the practice was so prevalent and so many high-ranking officers were involved, it proved virtually impossible to eradicate.

  Even the Military Governor himself, General Clay – or more exactly his wife – was allegedly involved. According to one US Army CID agent, ‘it was common gossip that Mrs Clay was engaged in an extensive black-market trading and that her acquisitions were being sent back to the States by the General’s personal plane’. At first, it seems, General Clay was unaware of the situation, but shortly after it was reported to him by an agent of the CID the black-market situation was declared to be a ‘security threat’ and every effort was made to cover the matter up – a task made more difficult when the US Customs, Florida District, sent a letter of complaint with a long list of landings of Clay’s personal plane in the Miami area. In each case the pilot reported ‘classified mission’ and thus avoided Customs inspections. However, investigation disclosed that none of these overseas flights had been logged in with the Air Force. The Air Force investigation disclosed that all of the Berlin departures had simply been logged as ‘training flights’. Charges were laid against the pilot. ‘I can’t remember if he was actually tried or if he resigned,’ our CID informant reported, ‘but it was pretty obvious that he was taking the fall, as the saying goes.’