Nazi Gold

by Douglas Botting

  A German ringleader and other members of the gang were able to operate due to ‘close connections’ with a former US Army officer now civilianized and reported to be a member of Bavarian Military Government, evidence indicates.

  This official, acting as ‘protector’ of the gang, first contacted the ring in the capacity of a narcotics investigator, according to information.

  Investigators have also checked the activities of another former officer now believed living in Switzerland with his German girlfriend on proceeds of the black market. Informants said this former major may be able to solve the mystery of cached gold bullion estimated at $750,000 [equivalent to 50 bars weighing over half a ton], as well as an additional $2,500,000 worth of US dollar notes.

  A third former officer, who is reported in possession of information relating to the gold and bullion caches, is said to have returned to the US, where he is now living.

  These hoards are reported to have been discovered shortly after the war’s end by the US Army.

  Ed Hartrich had filed a similar story with the same dateline in the New York Herald Tribune. At the request of the Army both had been withheld for eight months for fear of prejudicing the investigation. But it was as a result of the original leads that General Clay first became personally acquainted with the more alarming aspects of the Garmisch affair. On 28 May 1947, less than two weeks after Colonel Smith had opened the IG investigation, a message from European Command Headquarters in Frankfurt confirmed that ‘all possible influence’ had been put on Hartrich and Agoston to prevent their publishing the story. On 2 June Clay discussed the situation in Garmisch with his Chief of Staff and acknowledged that ‘the original tip on the conditions reported to be existing in Garmisch was given him by a newspaper man’. On 3 June Colonel Smith travelled to Stuttgart to talk with General Clay personally about certain aspects of the Garmisch case and to clarify his initial directive. Clay reiterated that he wanted the investigation into conditions in Garmisch to be conducted in such a way that ‘no person guilty of a major improper action . . . shall escape identification, location, apprehension and prosecution’ (authors’ italics). It was now clear to Colonel Smith that the case was a matter of the utmost seriousness, and that he had the Commander-in-Chief’s complete support in his efforts to clear it up.

  Colonel Smith was operating at Theatre level, which meant that no boundaries or local echelons of rank would interfere with his investigations. This not only implied the existence of what were described as ‘serious and extensive irregularities’ in the area within his scope of investigation, but also the possibility of US military involvement, since the Inspector General’s Division was primarily an internal examining body of the US Army – the equivalent of the present Army’s Internal Affairs Division or Scotland Yard’s AlO (the police who watch the policemen).

  The IGD investigation conducted in Garmisch-Partenkirchen by Colonel Smith lasted from May to July 1947. Smith was directly assisted by Lieutenant Kulka, from ICI’s Special Squad, who on this, his second assignment in Garmisch, was to act as Smith’s interpreter (in several languages). After a bugging assignment in Garmisch the previous summer, Kulka had returned to his counter intelligence duties on Operation Tobacco the investigation of the Soviet Repatriation Commission and the fate of the Russians who were forcefully repatriated by it. After a fracas at a Russian refugee camp, during which Kulka had placed the Soviet officers of the Commission under arrest for usurping their authority in American territory, Kulka had been taken off Operation Tobacco and assigned to Colonel Smith’s IG investigation in Garmisch instead. Walt Snyder from the CID in Frankfurt, who had already worked on aspects of the case a year and a half previously, also joined the team, and further backup assistance came from the CIC Special Agents and CCD wire-tap censors in Garmisch.

  It soon became apparent to Colonel Smith that there was something particularly untoward, even sinister, about this particular investigation. ‘I could not help but sense from the very beginning,’ he told a subsequent inquiry, ‘difficulties which did not belong in the ordinary routine investigation, and which caused me to suspect that some interference was being imposed.’ In his report to General Clay, Smith spoke of ‘widespread perversion of the truth’ and ‘conflicting testimony’ which was caused by ‘a state of fear on the part of many of the witnesses’. The. Colonel laid the blame for this on a particular American whose reputation in Garmisch, Smith wrote to Clay, ‘has been such that only the bold were willing to openly risk incurring his enmity’. Even in his own interrogation this individual displayed a belligerent manner towards the Inspector General, and always tried to shout him down. Smith had never experienced anything like it in his life. His senior rank and the status and aura of the position of Inspector General were normally sufficient to command military respect and compliance. Not so in Garmisch-Partenkirchen. It seemed that he was opposed by shadowy forces intent on eavesdropping on his investigation and sabotaging it by every means at their disposal. These means were not inconsiderable. Money was one. Fear was another. Duplicity another. Smith’s suspicions pointed in the most unlikely directions and in the end he grew frightened for his own security.

  His suspicions were aroused almost as soon as he arrived in Garmisch on 13 May 1947. Initially the plan had been for the team to live in a hotel – Clausing’s Post Hotel – and do their work at the Post headquarters. This proved impossible. ‘The first time we left our hotel room,’ he wrote later, ‘my interpreter and I each unobtrusively placed a match stem between one entry door and the jamb, breaking the stem of it flush with the jamb so that it would be inconspicuous. If it were not in place on our return we would know our rooms had been surreptitiously entered. When we got back the match stems were gone,’ Not only was the hotel insecure, but it was also blindingly clear that the identity of any witnesses arriving for interrogation at the army headquarters would instantly become a matter of public knowledge. Colonel Smith asked for a separate building, away from the headquarters, where some semblance of confidentiality and security might be maintained. He was allocated an attractive Bavarian chalet hidden by a screen of conifers at 40 Kleinfeldstrasse on the outskirts of the town. Two secretaries (one a WAC, the other a civilian girl from the States) and a German cook and driver completed the complement. In addition, Lieutenant Kulka laid on some special services via contacts of his own. Through a Polish contact (who was wanted for murder and robbery in the French Zone) he arranged for a detail of former Polish prisoners of war, organised into security troops, to provide an armed guard and to patrol the outside perimeter of the house. And he arranged for his own personal informant, a former SS man who had a police record of convictions for forgery, fraud and embezzlement, to work as a technician on the case and handle the document photography in the cellar laboratory under the house. By ordinary standards the IG team in Garmisch was a very large and elaborate one.

  ‘Once physically installed,’ Colonel Smith recalled, ‘I set about opening a rudimentary office. The most important item, clearly, was a safe for holding the documentary evidence I collected. An Army field safe was supplied and a chain by which it was padlocked to a cast-iron radiator. Removal of the safe would have meant tearing out part of the heating system. The weak link was the fact that the safe opened not by a combination but a key.’

  Obviously if any of the nosier inhabitants of Garmisch felt impelled to look at Top Secret documents inside the safe they would have to get hold of the key. Since the key was always in the possession of Colonel Smith, this was no easy matter. But it seems there were people in Garmisch with nerve enough to give it a try. The Colonel’s bedroom was on the first floor of the house in Kleinfeldstrasse, at the front. Very early one morning shortly after he had moved in, he was awoken by a squeaking sound in his room. It was a very quiet sound, barely more than a rustle, but it persisted and it was probably the persistence of the sound which disturbed his slumber. The Colonel rolled over and, as he did so, he heard in his half-comatose state a soft Bavarian fema
le voice whisper, ‘scuse me, please,’ and then she was gone.

  Colonel Smith sat up in bed and switched on the light. He looked around the room. Nothing had gone. He cocked his ear for some tell-tale sound, but nothing disturbed the deep tranquillity of the Alpine night. He noticed that the drawer of the bedside table was half open. Had he left it like that? Then he realised. ‘Accustomed to the German habit of placing the contents of one’s trousers in the night-table drawer,’ he wrote afterwards, ‘she had obviously gone there looking for the keys to the safe. And all that time they were in the pocket of my trousers, lying on a chair at the other side of the bed! Need I say I am happy she did not know! And profoundly thankful her visit did not have a more sinister motive and disastrous ending – for me!’

  A check next morning showed that the Colonel’s nocturnal visitor had somehow evaded the Polish guards and got in and out of the house through a basement coal hole. ‘My conclusion,’ Smith told an official inquiry later, ‘was that this was not an ordinary housebreaker, as food and valuable photographic equipment in the house was passed up and not touched.’ A sentry had actually seen the woman leave the house but he jumped to the conclusion that she had been paying the German chauffeur in the house a nocturnal visit and made no effort to arrest her. Later Smith suspected that the intruder was none other than Zenta Hausner, the notorious racketeer from the White Horse. To be on the safe side the original guard detail were dismissed and a new Polish guard posted in their place. Two days later the new guards were forced to open fire on a gang of three men trying to break into the house for a second time. No one was hit but it seemed advisable to stiffen the defences still further and the guards’ pistols were replaced with US Army issue sub-machine-guns. And so, under siege inside the makeshift stockade of a requisitioned private house in Garmisch-Partenkirchen, the American colonel and his Czech-born lieutenant, fed by a German and guarded by Poles, sat down to unravel the misdeeds of certain American officers and their Bavarian friends in this small but iniquitous town in southern Germany.

  Colonel Smith carried through his assignment in Garmisch like a man under siege. He was not the sort to be easily intimidated but in Garmisch he continued to feel a genuine concern for his personal safety. What he remembered most about that time, he admitted in later years, was ‘being cooped up in one house, not being able to go anywhere, working night and day, trying to get the reports out, trying to keep the people at top headquarters satisfied that things were progressing and not making the progress I ought to be making and wondering when things were coming to a head. I didn’t know a thing about the town, I didn’t get around it. I wouldn’t know one street from another.’

  For Lieutenant Kulka the memory of those days was even more traumatic than it was for Colonel Smith. ‘Several attempts were made on my life,’ Kulka explained when first contacted in the course of research for this book. The investigation and its aftermath led to all kinds of accusations being levelled against him and was allegedly to result in his forcible severance from the service. For years afterwards he struggled to bury the past, to suppress the bitterness, paranoia and fear he experienced as a consequence of the part he played in the Garmisch investigation. ‘I decided that the way to sanity for me would be to completely forget and to dissolve into my subconscious all the happenings that had transpired in the previous years,’ Leo Kulka told us in the spring of 1979. ‘I buried myself in a new career and became a workaholic, if you will. The first time that this entire matter cropped up again was when you called. I must confess that I was more than just shocked. I was absolutely flabbergasted. You caught me so completely unaware.’

  In Kulka’s memory the centrepiece of the IGD investigation, though not its original cause, was Ivar Buxell. Buxell, it will be remembered, had been consigned to the Rathaus gaol on 24 February 1947. He was still in the gaol when the snow stopped failing and the spring flowers came into bloom on the alpages and the skiers finally abandoned the ski slopes. He was still in the jail when a high summer sun beat down on the copper roofs of Garmisch and the hikers roamed, bare-kneed and feather-hatted, through the greenleafed woods, and the Queen Elizabeth set sail for the Americas without him on board. The vision and the dream – of a new start under the palms in some tropic Shangri-La on the opposite side of the world – sank from sight and finally vanished from Ivar’s inner eye. As the days went by he grew uncharacteristically pessimistic and distressed. What did the Americans want with him? When would they bring him before a court and get this thing over?

  By the standards of the US Zone in 1947 Ivar Buxell and his brother were kept in imprisonment without trial for an inordinately long period. In Summary Military Government Courts in the larger cities, such as Munich, a case was normally tried within five days of arrest, and in smaller towns, such as Garmisch, within three days of arrest, unless the person in question was released on bail. In more serious cases tried at the Higher Military Government Courts, the person was usually tried within 15 days of arrest and almost always within 30 days. But Buxell was held for five months, an exceptional period of detention indicating the exceptional circumstances of the case. The Americans were to turn their attention on Buxell soon enough. As the IGD investigation proceeded and leads opened up in various directions Buxell’s name began to crop up with sufficient frequency to indicate that the incarcerated Pole merited closer scrutiny. But Buxell presented a special problem. ‘I knew through CIC channels,’ Smith confirmed afterwards, ‘that this man was able to send communications in and out of the Garmisch city jail at will. I concluded it was unwise to interrogate him and let him remain in the Garmisch jail.’

  Smith then took a most unusual step. He went over his immediate superiors’ heads and sought an interview with the Commander-in-Chief and Governor of the American Zone, General Clay. The two met in Stuttgart on 3 June 1947, the day after Clay had first become apprised of the true state of affairs in Garmisch. According to Smith the meeting was arranged ‘because of a peculiar position which required a decision from someone who commanded both military and military government’. The outcome of the meeting was that General Clay gave his permission for Buxell to be transferred from the jail in the Garmisch Rathaus, which was under Military Government control, to the Military Prison in Garmisch, which was under US Army control and therefore within Colonel Smith’s aegis. In the light of what follows it is possible that Clay’s permission was also sought for a much more delicate and controversial matter than the humdrum transfer of a Polish DP from one cell to another – hardly the kind of problem to impose on a Commander-in-Chief under normal circumstances.

  The day after his meeting with General Clay, Colonel Smith requested from CIC Headquarters in Frankfurt a status report on the Buxell brothers. When the CIC in Garmisch were chased on this they pointed out that the papers they had ‘on that gold and dope deal’ had been handed over to the CID during Ward Atherton’s investigation earlier in the year. They were assured that the Buxell report need only contain what had transpired since May, when Colonel Smith had opened the IG investigation.

  Smith and Kulka now began to work on Buxell. ‘All of a sudden,’ Kulka recalled, ‘Colonel Smith came down extremely hard on him. He badgered him, he interrogated him, he did everything he possibly could to make a nervous wreck of the man.’ Kulka himself kept out of the interrogation at this stage, but one day Colonel Smith let it be known to Buxell that he was going away for a few days and a colleague of his would take over the questioning – Lieutenant Kulka. ‘I returned back to the cell of the Polish individual,’ Kulka recalled subsequently, ‘and had a very friendly conversation with him, making him trust me because of my Slavic background – being Czechoslovakian by birth and able to speak both Czech and Polish. I agreed with him what a terrible SOB the Colonel was, and when he complained that be was a complete nervous wreck – which had been totally planned – I mentioned I had a friend in the local hospital and would arrange for him to be taken there for a couple of days while Colonel Smith was away to allow him to
regain his strength and get a sedative for him.’

  One night, it seems, Ivar was picked up from the Rathaus cells and transferred to a special cell of the Military Police. A bright light burned day and night in this cell, and a guard kept constant watch through a peep hole. Buxell was not interrogated, but after a few days an Army Medical Officer with the rank of captain came to ask him how he felt. Buxell admitted to being nervous, so the doctor gave the guard some tablets which he had to issue three times a day to the Pole ‘for his nerves’. Buxell, who was a chemist, became suspicious and did not take the tablets. He put them under his tongue and when the guard was not looking he threw the tablets in the slop bucket. Some days later Lieutenant Kulka came for him in the middle of the night. ‘I arranged for him to be released into my custody,’ Kulka related, ‘and took him in my car to the local Military Government Hospital and got him into a room. They allowed him a beautiful hot bath and a chance to clean up, and I stayed with him all the time, of course, to make sure he was safe. Then he climbed into bed and I told him that my friend, the doctor, would give him a shot which would allow him to sleep a little bit. That was a little ploy of mine. He said, “Fine”, and he really looked on me as a friend.’

  The ‘shot’ which Ivar Buxell was given in the American hospital was sodium pentothal, popularly known as the ‘truth drug’ and then a relatively new tool in the US police repertoire of investigative and interrogatory techniques.

  Pentothal is a barbiturate anaesthetic commonly injected intravenously to induce anaesthesia at the commencement of surgery. Its induction is rapid and pleasant, leading to sedation and calming in smaller doses and to sleep in full doses. Pentothal is cleared from the bloodstream so rapidly that moment-to-moment control of the anaesthesia is possible and a subject can be kept in a twilight state of diminished inhibition for a relatively prolonged period. In subsequent years its widespread use in surgery became a matter of concern for the CIA because of the tendency by CIA operatives to reveal secrets while under its influence during surgery. The CIA got round this by swearing-in the operating theatre personnel under the US Secrecy Agreement. The use of sodium pentothal for non-medical purposes in the USA in 1947, however, was a little unusual, but this did not prevent the substance being pushed into the veins of the unfortunate Buxell’s upper arm in the US Zone of Germany.