Nazi Gold

by Douglas Botting

  On 27 December Frau Rouselle was driven through a snowstorm to Munich. At a prearranged rendezvous she met a Polish smuggler who was to act as the Paris courier, to whom Frau Rouselle handed over three diamonds worth 7 carats. A few days later the diamonds arrived in Paris. They were soon sold, and from the proceeds Ivar and Erhard were at last able to put up the money to pay their bail. On 2 February 1947 they were released from prison.

  Ivar Buxell did not waste a moment of his new-found freedom. Much of his energy in France was devoted to acquiring yet more travel documents – this time for the next and biggest stage of his private exodus from war-torn Europe. All the identification papers he and his brother had brought to Paris had been confiscated by the French authorities when they were committed to prison. All they had now were their prison discharge papers. Their first move, therefore, was to visit the Cité (Hotel de Ville). There, simply on the basis of their personal statements, they obtained provisional birth certificates which enabled them to obtain all the other visas they needed. On 4 February the Polish Military Mission in Paris issued Ivar with a military demobilisation certificate. On 12 February 1947 the French authorities granted him an exit visa: Titre d’Identité et de Voyage No KA00698, destination Venezuela via Switzerland. On 13 February the Venezuelan Consulate in Le Havre issued him with Immigration Visa No 616 valid for an indefinite period of residence in Venezuela. On 15 February the Swiss Legation in France granted him Visa No 713 for one more trip to Switzerland. On 20 February ‘a very nice captain’ in the Military Permit Office in Paris gave him an entry permit to the American, French and British Zones of Germany to enable him to return to Garmisch, where he needed to wind up his affairs and pick up his wife-to-be, Nora Rouselle. When everything had been arranged satisfactorily, Ivar and his brother returned to Garmisch by train, leaving their BMW in Paris as a bond with the French authorities pending their return with proof of proper ownership. In his pocket Ivar carried a ticket from the Paris office of the Thomas Cook Travel Agency for a second-class passage on the luxury Cunard liner Queen Elizabeth. Unfortunately for Ivar he was destined never to set foot on board that splendid vessel and his well-laid plans were soon to come to nought.

  Ivar Buxell and his brother chugged into Garmisch railway station on 24 February. Garmisch was as beautiful as ever, deep in snow under a clear blue sky. But it was not nice to be back. For Ivar had barely set foot inside Nora’s house before he was seized by a bevy of policemen (German ones this time), and thrown into the Rathaus gaol on Military Government orders – ‘no charge’, Ivar complained later, ‘no explanation, nothing’. The next day the same disaster overwhelmed his brother Erhard. Nora Rouselle, too, was arrested and her house searched by police.

  Clearly a lot had happened in Garmisch in Buxell’s absence. A new and very stiff broom was sweeping through the town and no one, it seemed, could count on being left to get on with their own business in peace any more. The arrests caused a flurry of commotion and gossip in certain quarters of the town. The tireless telephone censors of the CCD picked up some of the ripples. Two days after Ivar’s incarceration his ex-landlady, Fräulein Loyal, received an excited call from a friend.

  ‘Fräulein Loyal!’ exclaimed the incredulous caller. ‘Have you heard that the man who had been living in your house has been arrested? And the woman, too!’

  ‘I know,’ Buxell’s landlady replied. ‘And he has become a French citizen! He even had the papers.’

  ‘He showed them to me. He paid a quarter of a million for them. I’ve seen these papers with my own eyes and he’s told me everything. It’s really incredible. Here’s a person who’s been in prison – and now he comes back as a French citizen! He’s certainly accomplished something.’

  ‘Why has he been arrested?’ asked Fräulein Loyal.

  ‘Not on account of this,’ her friend replied. ‘For something else.’

  ‘Well,’ commented Fräulein Loyal, with more than a grain of percipience, ‘the Americans are bound to have their own ideas about a man who changes his colours so quickly.’

  It was obvious that things were coming to a head. What was not yet clear was when and how the boil would be lanced, or who would wield the scalpel.

  17. The Inspector General Calls

  Ivar Buxell, meanwhile, remained in confinement in the Rathaus. Ivar’s detention was to prove a quite extraordinarily lengthy one. The reason the American authorities gave for his arrest was illegal border crossing with forged papers. But this was simply a device for holding him in prison pending his investigation on more serious charges. Ivar himself claimed that his French passport and all the other documents he had obtained in Paris were perfectly authentic and legal – indeed, they were eventually returned to him and he has them in his possession still. To this day he remains unsure what exactly it was the Americans were trying to extract from him, but since he was only half-conscious half the time, this is not entirely surprising. Surviving testimony from the American side gives a less obscure, though not utterly translucent, view of what the Buxell case was really about.

  A week after Ivar Buxell’s arrest the Garmisch CIC filed a secret memorandum on his case to the CIC HQ in Frankfurt. They clearly believed they had got hold of a big fish. The memo concluded with the agent’s comments:

  It is recommended that the proper authorities in France be checked to determine the authenticity of the papers found in Buxell’s possession. Although subject alleges to have obtained them legally, he is known to have mentioned to informant X – 6 – IV – G that he ‘was able to obtain the visa for Venezuela for only 375 dollars, although the normal black-market price is quoted as slightly more than 600 dollars’. Buxell is known to have worked as a double agent for the German Intelligence Service against the Polish Underground, and is strongly believed to have undercover connections to the Polish Warsaw Government. His activities and contacts in this area have been under observation for some time. Interrogation of all arrestees is being continued.

  Three days later, on 12 March 1947, the Munich CIC sent an urgent telegram to other CIC stations. Buxell’s associate on the Paris expedition, Kasimierski, had jumped train while being transferred under guard to Frankfurt. ‘Subject is to be arrested on sight,’ the telegram requested. ‘If apprehended subject is to be transferred to the IG [Inspector General’s] section, USFET, attention Lt-Col. Smith, Room 216, IG Farben.’

  The Lieutenant-Colonel Leonard H. Smith introduced here by the legerdemain of a US Forces telegram was destined, as an Inspector General of the US Forces, European Theater, to prove one of the most significant players in the next act of this unfolding drama. At this point he was at the very beginning of what was probably the most crucial of all the investigations into the many misdemeanours in Garmisch, and Kasimierski, and more particularly his associate, Ivar Buxell, were of more than passing interest to him. For Buxell, by the strangest coincidence, he had met before, not in Germany but in France. Now he was destined to meet him again, not in France but in Germany. ‘The same man turned up in both places,’ Colonel Smith recalled, ‘which is very strange.’ Especially as in both places he was in prison, and in both instances confined on suspicion of illegal border crossing.

  The IG investigation under Colonel Smith began in Garmisch in the early spring of 1947. It took over more or less where the CID investigation had left off and largely as a result of what the CID had stirred up. By now the buzz of rumours circulating in and about the Military Post and US Army Recreation Center of Garmisch-Partenkirchen had become loud enough to have reached even the ears of the Governor of the American Zone, General Lucius D. Clay, in distant Berlin. The rumours reached Clay at a particularly critical time. It had escaped no one’s attention, least of all Clay’s, that the American occupation of Germany was in a shambles. The occupation army, over which he still had no direct control, had got out of hand. Officers and men alike lived for the black market. Bored troops turned to drinking and fighting. Malcontented units rioted through the streets. The New York Times d
escribed the occupation army as ‘an aggregation of homesick Americans shirking their jobs to figure out ways to make money, courting German women, counting up points.’ The occupation élite – the officers and their dependants – lived a life of ostentatious luxury such as few had enjoyed before or would ever enjoy again. The lower ranks, who could not live like feudal lords, behaved like robber barons. Street violence and the molestation of women were widespread. Looting was wholesale. ‘The ragged German,’ the troops were told in a 1946 orientation pamphlet, ‘has a lot in common with a trapped rat.’

  Not until the end of 1946 did this hate policy change. Not until March 1947 did 49-year-old 4-star General Clay finally gain control over the occupation army as well as the military government. The former engineer officer and SHAEF problem-solver, who was once described to President Roosevelt as ‘the most competent man in the executive departments . . . give him six months and he could run General Motors or US Steel’, now wore two hats, one as Commander-in-Chief, US Army and Air Forces in Europe, the other as Military Governor of the US Zone of Germany – thereby becoming very nearly an independent sovereign in the part of Europe under his command. He assumed his new role only just in time to stop the rot becoming a total collapse. Shortly afterwards the Chief of the FED announced the discovery of the disappearance of some $2,000,000 from the foreign exchange reserves of the former German Reichsbank – a loss even greater and potentially more embarrassing to the American occupation authorities than the $1,500,000 robbery of the Hesse Crown jewels at Kronberg in the US Zone in 1945, at that time the greatest robbery on record.

  Clay was aware of the problem, if not yet of the extent of it. He was to write in his memoirs: ‘During this period of unavoidable confusion, charges of almost every kind appeared to be part of the daily fare. Unfortunately many of them had some basis in fact. A victorious army of combat veterans had defeated the enemy in hard fighting. Released from the discipline of combat, it was not ready to accept the more rigorous discipline of garrison and peacetime training.’ Clay was concerned because he knew that, back in the Pentagon, an army commander was judged by the absence of trouble in his command. That was one cogent reason why, shortly after he had assumed supreme command of the American Zone of Germany, he began to take a more than passing interest in the affairs of Garmisch, the worst-run town in Germany and the Dodge City of Bavaria.

  At the end of April 1947 General Clay issued a verbal directive to his Inspector General at European Command HQ, Major General E.P. Parker. ‘On 26 April 1947 General Clay told me personally that he desired an investigation of certain conditions in Garmisch,’ General Parker reported in a memorandum two days afterwards. ‘He had been informed that there were large black-market dealings in jewels and narcotics between Germany and Austria in which US personnel in the Recreation Center in Garmisch were involved. He was told that the local CID had ignored this. Also he desired an audit made of the cost of construction of the skating-rink [nightclub] at Garmisch as he had been informed that much work material had been purchased (for instance some from Italy) which was not used on the job.’

  Colonel Smith was the Inspector General selected to head the investigation in the field. The colonel saw his brief as a rather general, exploratory one. ‘I was just trying to find out what was going on,’ he was to recall afterwards. ‘There were so many rumours reaching the Commanding General. I was working on leads that said gold, on leads that said counterfeit currency, leads that said drugs and leads that said diversion of US Government funds and property. You name it. Across the board. And the leads led me all over the place.’

  The investigation was initiated on 13 May 1947. In the early days one particular rumour dominated all others. This was the matter of the Casa Carioca. This was not in fact a mere skating-rink, as General Clay had thought, but a large and very lavish nightclub for the entertainment of American forces personnel in Garmisch. This sophisticated establishment boasted a sliding roof so that on fine nights one could dine, drink and dance to a live band under the stars, and an ice stage where one could watch spectacular ice shows over champagne and Strudels – and it was built entirely through the efforts of one man, Frank Gammache (pronounced Gamma-shay), formerly the Garmisch Post Engineer. Gammache, 41, a civil engineer and mine inspector by training, had served in the war as a sanitary engineer in the US Army Medical Department and as a mining engineer in the Engineering Corps in the Ruhr and Bavaria. In October 1945 he was transferred to Garmisch to assist in setting up what was to become the Garmisch Recreational Center and continued in this job as a civilian after leaving the Army in September 1946. The construction of the Casa Carioca (now, alas, burned down) was a truly remarkable achievement on Gammache’s part. In building it Gammache was, in Colonel Smith’s view, ‘imbued with a spirit of creating a magnum opus which would rebound to his professional career’. The Casa Carioca was put together out of bits and pieces – materials in short supply in both military and German stocks, including steel from the Ruhr – foraged and scrounged for throughout the German hinterland. ‘It didn’t cost the US Government a penny,’ Gammache remarked later. But Colonel Smith commented subsequently: ‘Where did the money come from?’ Where indeed? Rumours abounded. A former Executive Officer of the European Command CID recalled: ‘I was told that the nightclub was built and paid for with a diverted train of coal.’ A CID agent who later went down to Garmisch remembered:

  The Army to this day has never been able to ascertain whose property this thing was built on or where the money came from to build it. The Army was supposed to be putting up the funds to build the place but the amount of money they put in was about enough to do the bathroom. It cost hundreds of thousands of dollars to put the floor in and the ceiling, even in those days. But a lot of the money for it came from deals. They would send trucks around and they would pick up, oh, maybe a whole flip-side truck of bags of potatoes. Now we’re talking about five or six tons of potatoes, and they would take these potatoes and they’d drive like mad over to Czechoslovakia and bring back Bohemian crystal and glass. All this was really illegal – and that’s the way the whole damn place was built. Several people got rich from these deals, and quite a few of them got caught.

  When the Inspector General’s team began to probe the matter, it was not potatoes and cut glass they turned up but British urinals. US Army trucks, it seemed, were in the habit of driving into the British Zone of Germany to pick up urinals and other fittings for the Casa Carioca and then staying in the British Zone and undertaking other work for the personal benefit of US Army personnel in Garmisch. But when 14 serious misdemeanours were brought to the attention of the Post Commander, Colonel Dodd, his reaction was to say: ‘Forget it, too many people are involved.’ It was soon evident to Colonel Smith that the investigation ought to look into the activities of certain members of the Garmisch Military Post in general and into the activities of Frank Gammache in particular.

  Frank Gammache, not unnaturally, took exception to being singled out for such intensive scrutiny and cast around for the handiest means of airing his grievance. As it happened, the handiest means took the form of two bored journalists who were passing through Garmisch looking for a story shortly after Colonel Smith had moved into town. The two journalists were Ed Hartrich of the New York Herald Tribune and Tom Agoston, an Englishman with the International News Service. According to Agoston, he and Hartrich had been assigned to cover the story of the de-Nazification of the man who was to play the part of Christ in the first Passion Play at Oberammergau since the war. Things were very quiet at the time so they decided to try and scrounge a trip down to Garmisch on one of the liaison planes belonging to the US Constabulary. One of the generals they were friendly with agreed, and in late May they made a somewhat dangerous flight down to Garmisch, the nearest airstrip to Oberammergau, in two planes. Once in Garmisch they checked in at Clausing’s Post Hotel. Agoston’s story continues:

  We were sitting at the bar and somebody, an American chap, said: ‘Are you Mr Agosto
n?’

  ‘Yes,’ I said.

  ‘Would you mind stepping outside for a minute?’

  ‘What do you want to see me about?’ I said. ‘Why don’t you come and have a drink?’

  ‘Oh no,’ he said. ‘I don’t want to go in there. You see, everybody knows me. I don’t want to go in there.’

  We didn’t know what it was all about, so he said: ‘Look, you’re there with a colleague of yours. I don’t know who he is. Can you please come up to my room?’

  So we went up to his room and to cut a long story short he said: ‘Look, the Army are trying to throw the book at me. I am only a tiny cogwheel in this great big crookery. Everybody else is a crook but not me.’

  We didn’t know what the hell he was talking about. He was so scared that something was going to happen to him that he was a bit incoherent. He was afraid of the Judge Advocate General and he told this story about the gold and the drug running and everything else. He was scared to death. And this is how we got the story, you see.

  It was a remarkable story – though Gammache subsequently denied ever giving it. But for reasons that will be presently explained, it was eight months before Tom Agoston was able to file it. When it finally did appear in Stars and Stripes it did so under a banner headline which read:

  HUGE DOPE RING PROBED IN BAVARIA

  The magnitude of the case which has shaken the US community of Bavaria and threatens to have grave repercussions, was revealed by American and German sources first some eight months ago in Garmisch. They said the affair involved a whole series of separate cases, including the high-powered narcotics ring and black market headed by a former German SS officer.