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November 1, 1953
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STATINTL STAT Approved For Release 2008/04/09: CIA-RDP70-00058R000100080035-4 ? ii ^ ups .oca.r cad ur wrurru Aar Eli, ARGOSY Magazine November, 1953 What was the deal Mussolini made with Churchill? What did Tito promise Stalin? Who sabotaged the Long Island saboteurs? What "friend" tipped off the Allied landings? Read this story of history's most amazing double crosses by WILHELM HOETTL as told to LADISLAS FARAGO ANI a marked man. hunted I and harassed- but. I'cii not saying this for effect. A\'hether I like it or not. my lift- is fall of melodrama. Complete strangers ? linger me on the streets and secret agents trail nic all the time. They watch illy house. search illy files. rifle my mail and photograph lily visitors-because for 11) hectic years of illy life I was one of ililler's master spies. Those who know the story of Illy life--the strings I pulled, the nxen I united and the evcnis I helped to shape-rcfnse to bclicac acn no longer in the espionage racket. A man like him. they say. can meter retire! Ile must be up - or down to something.'uo they keep after me and link my name with every spy plot in Europe. Only a few months ago, when two American spies were caught in Vienna. they picked me up again. '[hev %%eiit through my pa- pers and carted Inc off to jail. I didn't know thy. Neither did they. I was promptly released. But just as I was leaving the jail, a headline hit inc with illy name in it. The article "exposed" me as Europe's most mysterious mystery man. and n millionaire to boot. I was called "the keeper of the fab- ulous slush fund of Hitler's secret service that disappeared without a trace" if it etel existed at all. III Europe it is enough to men- lion my name to make certain people scurry for cover. I am "Ex- hibit A." a kind of uiusetrnr piece. because I ani Gcrmaoy's only hig- tiuce spy echo is still alive. The strange nren who headed German Inlelligenee during its turbulent decade between 19:15 and 191.5 are all dead, and 0111v ooc ccf them died in bed. I ICinhard I Ievdrich. I I ctler's personal slit, chief. was the first Io go. He was killed by British agents hear the Czech town of Lidice. Ife was fol- I'Mcd by his greatest adversary. Admiral Wilhelm Canaris, whom the Nazis hanged with piano wire. Then went Heinrich Ilinnhler, the Big Boss, and Ernst Kalten- brunner, ileydrich's successor. Ilimruler committed suicide and kaltenbrunner was hanged by the Allies inAurenilerg. Shortly aft- erward, the Jugoslavs hanged Ilernianu Behrens, Ileydrich's right-hand mail. My last boss was Werner Schel- lenberg, the genius of the. German secret sertice who masterminded the biggest plots of World War I I lie died a few nwnths ago. at the age of 10. under obscure circum- stances in exile in Italy. But I'm still alive. a freak by that very fact alone. But then. I was a freak. anyway. throughout my career in the secret service. I f we should meet by chance. I don't think you would recognize me as a spy. I don't look the part. al- though I don't really know how spies are supposed to look. I am still a Young man today. not quite 41). And I was nothing but a kid. just out of Vienna 1'11i- tersity as its youngest graduate. when I was sucked into the game. In the University, I was a kind of prodigy because of illy somewhat precocious preoccupation with po- litical science. 11 semis that peo- ple who looked for budding spy masters. the way baseball scouts look for rookies, noticed me as a "Since Allan Dulles was the chief U.S. spy in Eu- rope, it was fortunate we could read all his cables." Approved For Release 2008/04/09: CIA-RDP70-00058R000100080035-4 Approved For Release 2008/04/09: CIA-RDP70-00058R000100080035-4 2. "The Russians' purge of Tukachevsky was com- pletely engineered by the German Intelligerice." boy who would hear watching. Then I went down to the Bal- kans, the hotbed of Kurope, to gather material' for illy doctor's thesis. When it caure out in print, 1 got a call front someone who said lie was lily friend. "Belot your paper," lie said. "I think it's darned good. Would you he in- terested in working for us?" At first I didn't quite get who "us" were. but lily friend quickly enlightened lire. It was the Ger- man Intelligence Service. lie said. At that little. in the middle Thir- ties, it was just getting hack into the business again. I told the man who recruited me that I wits if sort of intellectual who had 'cry little to offer by way of brawn. But Ire scoffed at inc and said. "Hic spies of today are no muscle men or buccaneers. We need people with brains. and you secrnr to be filling the bill... The German secret service which I culered was an untidy or- ganization functioning on two 1e - els. f:acli t%-as more or less inde- pendent of the oilier and even op- crated at cross purposes. On one leo,el was Ibe actual Intelligence Scrvicc called. niislcadingly. ;1ns- lands-Ahwchr or Foreign Defense. to canuonflagc its real actin ilies. The over-all Intelligence Service of [he armed forces, it was headed by Admiral Wilhelm Canaris, a shorlish, graying, soft-speaking dreamer to whom espionage was but a means of anti-Nazi activities. The Abwchr was organized in three Ucpartnterits. I )eparlmenl I was Secret. Intelligence Service. Department II was Sabotage un- der another biller anti-Nazi named Erwin von Lahousen-Vivreinont. Department Ill was Counteresli- onagc. The Abwchr, I found. had in- structions in slay away from po- litical intclligcnce. This job was assigned to Bureau VI of the Nazis' own IISA. or Foreign Political Intelligence Service. This Bureau VI was organized in nine sections, of which Section I) was spying on the United States. When, in 1994, the Nazis assumed total power in Germany. this dual- ism was abolished and all Intelli- gence work was centralized under the IISA. But when I joined [lie service, this fateful reorganization was still eight years away. Because of the political nature of the work for which I was slated, I was as- signed to Bureau VI of IISA. At that time, in the middle Thirties, it was in personal charge of Rein- hard Ileydrich, the notorious "hangman." To learn lily trade I was first ordered to spy on German church- es and then was shifted to the Central and Southeastern Europe section where, after several years, I rose to acting head of District VI there. My first, job was a shocking one. It turned out to he the plot of the decade. that weird overture to World War 11, the Sudeten crisis in Czechoslovakia. Much has been written about this but the truth has timer been told. 'I'he truth often isn't pretty; in this case it is ugly. But now the time pus come to tell it since it provides it vital footnote and les- son to the history of our time. here is the true story of the Sude- ten crisis. (Continued on. page 72) "Mussolini was ambushed by the Partisans-after he was put in their hands by the Duce's own chiefs." Approved For Release 2008/04/09: CIA-RDP70-00058R000100080035-4 the British Intelligence Service. at its ~~ In popular memc Approved For Release 2008/04/09: CIA-RDP70-00058R000100080035-4 man crisis is rememucieu a~ a err. this was my naprism of fire. It was Nazi plot. In reality it was a conspiracy a fascinating spectacle to watch, if only hatched within the British Intelligence because ewas done with the Service as far back as 1933 when Adolph cold precision everything a surgeon operating, he Hitler was still more or less an unknown cold body. Far from the con- tip by Sir ventional cloak-and-dagger stuff of the quantity. It was thought Gilbert Vansittart who. as the perma- >py yarns, this was a brainy operation. nent under-secretary of the Foreign Of- We Set the Pace it yeah battle this wits. fice, was the ex-officio chief of the PID, Try battle, yourself in my place. Britain's own Political Intelligence Di- From then on we called the tunes and 1 was a mere kid. an apprentice spy. vision. the British danced. Men like William but I was permitted to assist nn a work Vansittart tried to kill two birds with Strang. brilliant chief of the British For- of art the way one of Celli on a was one stone when he developed the gigan- sign Office's Eastern European division. Billowed to help with a precious piece of 11 tic plot. With the settlement of the Lord Rothermere of the Daily Mail, and metalwork. The men with whom I old Sudeten-German conflict, Vansittart even Lord Halifax. did, unbeknown to woked belong to the most obscure pages hoped to undermine the Soviet's influence themselves, exactly what we wanted r age o[ history. l Their names are forgotten. in Prague, while at the same time he them to do. It was, in a sense. on our Most of them are dead. But then, during i expected to take the wind out of Hitler's initiative that Lord Runciman was sent hose perilous days, they dominated the sails. As long as the Sudetens were an to Prague "to settle the crisis." Through- srcene. They were the unseen masters of "oppressed minority," Vansittart felt that out his mission. Runciman was our un Iene. . And I was one of them. the Germans had a case against Czecho- witting tool. We listened to his phone Probably because of the lsur- h, last a name tegrated But once they were firmly in- conversations. read his mail. overheard vfvi obaably bly b tc of am tegrated into the federation of the repub- his conversations through concealed mi- is now used as a synonym for all the i name lie, Hitler could not properly ask for a crophones, decoded his cables. planted isinoc that legend pegged onto Hitler's revision of their status and mingle in the advisers on him. and in fact, ar- spy system. The chances are, Hough- internal affairs of the Czechs. ranged his weekends in the homes of that y have Tnever he even chances heard t name. An obscure member of the British In. nobility sympathetic to our cause. But I sure you have seen some of the telligence Service named Colonel Gra- It seemed to me that the British were things I did, because they made the ham Christie was chosen to develop the plot. And he in turn picked an unknown so hell-bent on appeasement that they front pages of the newspapers through- gymnastics teacher and anti-Nazi, Kon- actually wanted us to lead them around out the world. rad Henlein. to head this British-inspired by their noses. The only man wise to Do you recall Stalin's bloody purge of and in part British-financed Sudeten- our game was Jan Masaryk, son of the 1937 when he killed Marshal Tuka- German movement. Right at the outset. founder of Czechoslovakia, then serving chevsky and destroyed the commanders Colonel Christie took Henlein to London as his country's ambassador in London. of his own Red Army? Or the last day of and introduced him to men like Vansit- He chanced to meet Konrad Henlein dur- Benito Mussolini and the famous picture tart, Harold Nicolson. Alfred Duff- ing his periodic visits to England and that showed him hanging upside down Cooper, and even to Winston Churchill didn't seem to bear a grudge. On the with the limp body of his mistress at and his son-in-law. Duncan Sandys. Hen- whole, lie watched the unfolding events his side? lain soon became it favorite figure in with melancholy resignation and said so I was there in the background of both to Henlein. dramas. I watched them from the wings London's dnow whether rawitheng British "You, sir," said Masaryk, "may tell and helped move those marionettes. ank ever I don't know realized how delicate and dangerous them as you please. It's quite During the war itself, while you were their game really was. By the time I immaterial what you desire or what I impressed with the struggle of Mikhailo- got into it, they had already lost all want. Whether or not we'll slide into a vich and Tito, I used to buy from them control over the conspiracy of their own war one of these days, you and I have no trainloads of military supplies which control. The decisions are made else- your High Command had smuggled into making. At that time Neville Chamber- where." Yugoslavia. Men under me forged the lain had replaced Stanley Baldwin at During the height of the Sudeten cri- English pound notes with which a 10 Downing Street and appeasement of sis, when lie was on his way to 10 Down- strange spy we called Cicero was paid Hitler became the official policy of ing Street, Masaryk was accosted by for his betrayal of the Allies' most close- Whitehall. Sir Gilbert Vansittart was reporters. He told them: "Gentlemen, I ly guarded secrets. You have probably removed from political intelligence and am merely the envoy of Czechoslovakia. seen this quaint adventure in the motion men like Graham Christie w-tre quaran- Who cares?" picture "Five Fingers." tined. The bewildered Henlein was left In the chaos that followed, the British It was a monumental case of espio- to shift for himself. Inflamed with the suddenly realized that their plot had nage which still makes British diplo. dream of a German federal state within backfired. In a last-minute effort to re- mats and counterspies blush. The per- Czechoslovakia. and deserted by the gain control over it, they took Christie sonal valet of the British Ambassador British, he decided to risk a deal with off the shelf, dusted him off and sent to Turkey, with unexplained access to Hitler. him to Czechoslovakia to re-establish the diplomatic strongbox in His Excel- We in Section E had our own agents contact with Ilenlein. But by then, in lency's bedroom, was an ordinary spy within the Henlein movement and learned the summer of 1938, it was too late. working regularly for its. He was a immediately of this major change in "I'm sorry, Colonel Christie." Henlein shiftless Albanian who knew no loyalties Henlein's plans and fortunes.- We lost told him. "I followed your advice for and owed allegiance to no one. When no time in bringing Hitler and Henlein building a German state and then tied he discovered with what ease he could together, and from then on the con- myself to Herr Hitler body and soul. gain possession of the most secret docu- spiracy which the British Intelligence There is nothing more you or' I can do. ments of the Allies which his boss used Service had launched became our own Czechoslovakia is doomed!" to keep in his private safe, he set him- undisputed plot. I became one of the Chamberlain made a last desperate self up in business. He stole those docu- behind-the-scenes managers of the Su- effort to stop the march of events by go- ments. photographed them and sold deten crisis that was soon rocking the ing to Godesberg and then to Munich in them to us for $250,000 in cash. the high- entire world. September. 1938, but we in German In. est price we ever paid to a common. telligence had nothing but pity for his garden-variety spy. naive endeavor. For the first time in But it was worth it. because through obtained copies history, the young German Intelligence this tricky of the we Service had beaten its great opponent, the P Approved For Release 2008/04/09: CIA-RDP70-00058R000100080035-4 Approved For Release 2008/04/09: CIA-RDP70-00058R000100080035-4 CQAfilt;n4 J and ii draft of Operation Overlord, the A~,l.lied invasion of Europe scheduled fur June 191.1. It was espe- cially worth it if we consider that we paid him every penny of his price in money we ourselves had forged just for such an eventuality. Whatever I did, I was merely doing a job. I was one of the directors of LISA. the Haupt Sicherheits Amt. whose Sec- tion VI was German)', super-secret es- pionage service. I was assigned to the Balkans and Italy. traditionally the most fertile fields of intrigue. I was working on the home grounds of history's most intrepid and ruthless spies. Even when Germany was on the brink of defeat, l was still fighting on the secret front. Ask our own spynnrster. Allen W. Dulles, about tine. He knows me because he dealt with me when the German secret service emerged as hit- ter's most dangerous enemy. What cruel irony of fate! The fantastic secret force which Hitler hiniself created. the pow- erful system of espionage. not only speeded his downfall but made his vic- tory impossible front the very beginning. Today it is a matter of historical record that instead of aiding Hitler in his war, his own secret service aided the Allies. Front the first day of the war. treason was rampant within the German Intelligence Service. Its supreme chief, a peculiar old admiral named Wilhelm Canaris. betrayed Hitler at every step by faking information to mislead him or by withholding from him decisive bits of intelligence. Hitler's personal orders. to kill and sabotage. were thenlsglves sabotaged. Very often the German Intelligence Serv- ice worked directly for file Allies. For instance. it warned the Dutch that their country would he invaded. it also leaked information to the Russians about Oper- ation Barbarossa. lilt- inn anion of the Soviet Union. The Allies could invade North Africa. Sicily. Italy and France with relatire impunity. despite the fact that we knew well in advance the exact dates and spots of the landings. The information about the landings in Norl li Africa came to its from two specific sources. One was a highly placed Hungarian. stationed in Stockholm. who fooled the Allies by working for us. But more important was an unexpected source in London which had knowledge of Iltese impending land- ings because of his own direct interest in them. He was the Spanish Ambassador- tile allegedly pro-British Duke of Alba. who was frequently an important source of information for its, 1?ren during the blitz when our communications intelli- gence people proved incapable of break- ing the rapidly c-hang n_ British codes. we learned the success of our operations from the reports which the Duke eras sending to the Foreign Minisirv in Ma- drid. We actually read leis reports. as if they had been prepared for us. on many an important development in the Allied world. Because of the arrangements the Allies had to make for their operations in the iuuuediate vicinity of Spanish posses- sions, the Duke of Alba had learned more about them than proved healthy for the Anglo-American armada. This infor- nuation was passed on by the Duke to his people in Madrid and front there it came into our possession. This was, too, how we came into possession of information about D-Day in Normandy. although it was but uric of several of our reliable sources. We had our agents planted inside the French and Dutch undergrounds and learned from their instructions virtually every de- tail of the Normandy landings. A final clue came from Cicero. the A'banian valet of the British Ambassador in Ankara. who supplied the date and the place of the impending landing front the inexhaustible safe of his employer. although we could never figure out why such information had ever been for- warded to a diplomatic officer in faraway Ankara. Confuting Intelligence But whatever information the Abivehr managed to collect about the intenliotis of the Allies, it was either kept from Hitler or supplied with confusing con- tradictors intelligence. leaving it fo the Fuelirer's intuition to make the choice. In the case of the North African ]and- ings in Novunnber. 1942. Admiral Carl- at-is accepted the misleading information put out by London as fact and served it up to Ilitler. According to drat. the AMC,- were planning to invade Norway. When ]his balloon was pnctured. Ca- naris set till an elaborate intelligence conference in Paux in Southern Franc,' at which Alliednit,'ntions were exam- ined from all angles. While he had defi- nite information on file that the landings would be staged off Casablanca and Oran. he persuaded the Welirmacht that they would be at Dakar and Bengazi. many hundreds of miles front tilt' spols where the Allies actually came off their boats. As a result. the major German air force was shifted from the Western Med- iterranean and Southern France to Italy and I.ibya and tlrc bulk of the U-boats concentrated off Dakar. All that was left to them was to listen in on their radios to tine Allied conununiqucs which de- scribed Ilse landings. It Normandy. German Intelligence sold Hitler on the idea that if was but a feint and that the real landings would come oil sonu^- where else. Thereby German Intelligence became instrumental in holding back the main Lerman defensive forces in the Atlantik Wall until it became too late to throw their weight against tine Al- lied tide. German intelligence was among the best in the world, Throughout the war. we read every word in the cables which the American Legation in Berne. Switz- erland. was sending to Washington, and every bit of Tito. coded communica- tions. In November. 1939, Ave smashed Britain's most important spy nest in Europe. For almost four years we ac- luall% managed a whole British spy net- work from the Netherlands by operating 18 secret "underground" radio transmit- ters. This story has just been told in the new book by II. J. Giskes, "London Calling Non lipole," which has rocked Britain. We maintained brilliant spies in Brit- ain whose identities are still unknown to M1-5, the British counter-intelligence service which is supposed to know every- thing. And there are a few secrets which we managed to keep even from the FBI. We read the protocols of the Tehran and Cairo conferences virtually the day after they were signed and knew in ad- vance every move the Allies were plan- ning to make. We knew them all-but hiller didn't know them. Information that could have helped him win the war was not allowed to reach him. He was left groping in the dark. blinded by his own intelligence service. I entered this house divided against itself on the ground floor. At that time Hitler was playing his game pretty close to his chest. so there wasn't a need vet for a big espionage organization. But the world was full of stories about the omnipresent German spies. I myself heard it British politician say that in Britain alone we had more than 70.000 spies. I looked around in our office and laughed. At that time. in 1938. we had about 50 full-Inns operatives. Even at the peak of our work. during the war itself. rile permanent staff of our polit- intelligence service had only 200 nteni- hers. This doesn't mean that we didn't have informers at large in the world: V-men for f'crhvnrensntrmn. or confidential in- formers. as rvc used to call them. We had people everywhere who synnpill hized with Miler and supplied information to us. They often even volunteered it against their own gmerttntenls and armies. if rot could read tilt, roster of our V-mcn you would be surprised by some of the big Haines on our list. But the agency that co-ordinated and directed Ilieni. which evaluated and dis- seminated their reports. wasn't big at all. The victories we scored were not due to any lavish expenditures or to the effi- eienc- of a super-organization. As a mat- ter of fact. we had to operate on a slure- slring. Whenever we had Io pay out big sums fur the real stuff. we had to get the money ourselves by counterfeiting it. And insofar as the organization was concerned. the much r:snared German eflicicncy was nowhere evident in our secret service. Tile whole network was split by hickerings. duplications. inter- deparlnu-nfal jealousies. There was intle- cision at the top. Orders were given only to he countcrnranded. Operation- were planned and abandoned ahitust in file same breath. Once during the war. for reason- known only to him. Hitler decided to liquidate the venerable French General Maxim Weygand. Ile ordered Section Il of the Abwehr to assassinate Weygand. Approved For Release 2008/04/09: CIA-RDP70-00058R000100080035-4 Approved :.`foul; 11th plot extreurely ui l vus i and assigned Field Marshal \\'ilhelm Keitel to stage;vise its execution. But General Lahouseu. in chaige of Section II, decided to defy Hitler and sabotage Weygand's assassination. In this daring insubordination. Lahousen was aided by Canaris himself. Hitler was growing impatient and kept inquiring about tiisella. the cover name by which the plot was known. And Keitel dutifully called Cunaris from time to time, asking. "\\ ltat about this Gi- sella? lIow long do we have to wait?" "For hearen's sake. Keitel, be patient . my man! ' Canaris answered. "These things are not as simple as you think there at the headquarters of the Ftteh- rer. Finally the pressure became so great that sontellung; had to be done. Canaris decided to go to Paris to settle Gisella once and for all. lie was accompanied by Admiral Leopold Buerkner. Ili,,; sec- ond in command. and General Lahousen. the unhappy chief of the sabotage sec- tion of the Abweltr. B) the time they reached Paris. they had their counter- plot all ready: they planned to tip off I Weygand and actually organize Itis escape from their own assassins. But just then \\eygand managed to escape on his own, leaving Canaris in a pickle. .Ltd. as usual. Keitel was on the phone the moment Weygand's escape became known at the Fulurer's head- quarters. "Hitler is very angry." he said rather ominously. "lIow could you botch up Gisella so badly?- At that moment Lahbusen handed Canaris a slip of paper on which a few words were hastily scribbled: "Heydrieh has just been killed in Czechoslovakia. This is definite." Canaris read the paper and a broad smile came upon his face, "This is one case for which you won't be able to blame us, Keitel," he said. "This whole Gisella business was taken away from us; we were overruled as usual by Heydrieh. Ile actually forbade nie to handle the case. If you want to. you may ask him personally about it." Ready for Sabotage At another time, orders came direct from Hitler's headquarters to sabotage the planes of Pan-American Airways plying between New York and Lisbon, Portugal. When Admiral Canaris learned about the plot, it was advanced to the Joint where a time bomb had already been placed in one of the planes. The admiral rushed to Lisbon and supervised in person the removal of [lie bomb, only afterward thinking up an excu?;e to Hitler. The famous mission of the saboteurs who went to the United States in sub. marines was deliberately bungled in Ber- lin even before they left. Orders to kill Churchill and Roosevelt were dismissed with scorn the moment they were re- ceived. Part of this was undoubtedly due to Approved For Release 2008/04/09: CIA-RDP70-00058R000100080035-4 Approved For Release 2008/04/09: CIA-RDP7O-00058ROO0100080035-4 Some of them were lifted from the ar- chives of the Lerman War Ministry, and their stationery, rubber stamps and sig- natures duplicated. Heydrich even man. aged to procure a typewriter that re- sembled the one on which Tukachevsky's letters were written. Dossier Goes to Hitler By April, 1937. the documents were ready. They were bound in a red leather dossier and submitted to Hitler. All that remained to be done was to smuggle the dossier into Stalin's hands, At first Ifeydrieh planned to let it fall into the hands of the Czechoslovak General Staff because lie was certain that Ihey would forward it promptly to Moscow. But on second thought, when Behrens was already in Prague with the dossier, he canceled the plan. He felt sure that such a find would gain for the Czechs Stalin's eternal gratitude. And he wasn't particuarly anxious to deepen the bonds of Russo-Czech friendship. Heydrich decided to make a direct deal with the Russians. Ile instructed Behrens to contact an attache of the Soviet Embassy in Berlin and to play the dossier into his hands. A secret meeting was arranged and the attache was ac- quainted with the existence of the docu- ment. Ti ---L' " le t.,. a..,u?g rue which Heydrich cow with the news `and "returned 1 to manity, Ca one in naris proved a dismal failure shrouded this plot. He isolated part of Berlin with Genera] Lev Mekhlis, chief -no matter ]low glorious this failure the dreaded cellars in Gestapo head- of the Communist Part 's military ad- now may appear from the viewpoint of quarters in Berlin's Prinz Albrecht ministration. the Allies. Strasse and established an office there Mekhlis was empowered by Stalin Aside from an insatiable curiosity, his whose sole function was the preparation himself to acquire the dossier by all love of travel and an uncanny knowledge of the conspiracy. s, ut wen middle- of the world, there was nothing in Ca- There were only six men who knew man bow much] e wanted art the papers, naris that qualified him for his job. He about these preparations. They were lie found that the agent was not ready was a hopelessly had organizer and a Hitler, Himmler, Heydrich himself, and to discuss a price. Ieydrich never ex- mystic who wrapped himself up in esot- three aides. One of them was Hermann petted to get money for his dossier, so eric thoughts which had little relation Behrens, Heydricli's personal aide, who he failed to give instructions to his agent to reality, directed the technical apparatus. An- that would have covered just such an other was a controversial Russian named eventuality. The Spy Master Nikolai Skoblin, a former Czarist gen- eral living in Paris. Ile acted as a kind price. It was 6.000.000 pubes ginucashhis . The man who was the real spy master of technical adviser. The third was an- The horsetrading began. After a few of Germany was Reinhard Heydrich, other Russian who deserted to us from days of hard bargaining, Mekhlis paid known in the west as "the Hangman" the Soviet secret service. He prepared 3,000,000 rubles and left Berlin with the He, too, was a former Naval officer, but the necessary texts and forged the docu- dossier in the diplomatic pouch. he was Canaris' junior by more than merits Heydrich needed. 30 years. A fanatical Nazi despite his The consequences of the plot soon At be- partly By the strange whim of history, none came evident to the whole world. At Jewish origin, and a born prat- of these men is alive today. Hitler, dawn on June 5, 1937. Heydrich was titioner of intrigue. this young nian at- Himmler and Heydriell are dead. So is called by the Foreign Office and told tracted Hitler's attention even before his Behrens. Skoblin and the other Russian that Marshal Tukachevsky had been ar- seizure of power. disappeared without a trace in the wake rested the night before. Then events fol- With nothing but determination and of time plot. I suspect that Heydrich had lowed with machine-gun rapidity. The zeal to offer at first, Heydrich inched his then killed to wipe out the only outside great Red military purge was on. way into Hitler's admiration and confi- witnesses to leis scheme. Even on the At 10 a.m. on June 11, Tukachev- denee. He was about to arrive on top, to Russian side. nobody actively involved in sky's trial began. At 9 of the same replace Canaris, when lie was killed. lle the plot is alive today. There is no eye- day lie and seven other generals were died at the end of his titanic fight against witness anywhere in the world. But the sentenced to death by a special military Canaris---a plot by itself within the documents survived. I probably was one tribunal. It was not yet midnight when greater plot. of the few omen alive who ]tad a chance the flash came that all of them had been When I joined the German secret serv- to see them before they were finally de- executed by firing squads. ice, his struggle against the admiral was stroyed. just beginning. Even so, it was a breath- Heydrich set out at once to produce his setDupiiIiis townr~monitor nglservice innlifs taking experience to watch their fight. "evidence": letters which Tukachevsky office and listened to Moscow Radio. He It started in Ilse winter of 1937 with a was alleged to have sent to his German remained at the set to the bitter end- plot that led to the bloody purge of that "friends." It wasn't particularly difficult to Tukachevsky's hitter end. that is. year and paid enormous dividends years to forge these papers. There was plenty The backbone of the Red Army was later when Hitler decided to crush of bona fide correspondence between the 1??"t ; ._ ,__ Russia. ifs liquidated Approved For Release 2008/04/09: CIA-RDP70-00058ROO0100080035-4 ' ~ Strti c Il t was ratnpant in th : . e or- During those winter days in 1937, we tll~at}oIlut. Part of it was du e to a observed that Ieydrich had a particu- delThg, ale, qrganized effort to sabotage larly mysterious air,about him. Ile had Hitler's plots. 11 wasn't as easy as it just lift on an idea that was so fantastic sounds to do thus-and probably it would that it staggered even Hitler's imagina- have been altogether impossible had not tion. It was to become the spy plot of the British succeeded with a decisive plot the century. of their own. With that one single blow Heydrich suggested that "evidence" be to our solar plexus, the British destroyed produced for Stalin himself that the top- the effectiveness of our organization, a]- ranking generals of his Red Army were though I doubt if they planned it that plotting the overthrow of the Communist way or if they are aware even today of regime. There were some rumors abroad the fantastic egnsequences of their oper- that some of the Red generals did, in anon, fact, think along those lines. It is en- This plot involved the liquidation of tirely possible, too, that some of them. Reinhard Heydrich at the very height had actual contacts with their German of his enormous powers. Ile was am- opposite numbers. bushed and killed on his way to the But Marshal M. N. Tukachevsky, the Reich just when lie was about to take best brain in the Red Army General over direction of the whole spy system. Staff, had nothing to do with this grop- Heydrich is the most misunderstood ing design. He was loyal to Stalin and and underrated figure in the espionage a bitter enemy of Germany. This made history of World War II. Due to the in- him a marked man in IIeydrich's eyes, evitable legend which springs up in the who aimed his plot against him. Hey- wake of every war, it is not Ieydrich drich told Hitler: "I have an idea the but Admiral Wilhelm Canaris whose pie- success of which would certainly end ture is etched on the imagination of the with Tukachevsky's liquidation. It would world as Germany's master spy. start a purge in the Red Army that Despite his top position in the service, would not only destroy the morale of Admiral Canaris was merely a minor the Russian officers' corps but a great character. Called to }mead military es- number of file officers themselves." pionage on the eve of his retirement. Hitler was fascinated and told Heyd- never trusted by Hitler, and himself torn rich to go ahead. I was never to see between his loyalty to the Fu h c rer and secrecy in any secret service even ap- what lie regarded as his (]lilies to I,,,_ 6. Approved For Release 2008/04/09: CIA-RDP7O-00058ROO0100080035-4 ing it) war or sending even a -single oper- ative it) Moscow. Canaris was not in on the plot and, in fact, elaborte measures were undertaken to keep it from him. But somehow the admiral found out about it and recog- nized that a formidable opponent ap- peared on tile scene in the person of young IIeydrich. lie turned his own spy organization to the task of collecting information about IIeydrich. In the es- tablished tradition of the Continental intelligence services. Canaris believed that the rattling of a few skeletons in Ileydriclt's private closets would keep his adversary quiet. And he proved right. His agents succeeded in discovering evi- dence that Hcydrich, the fanatical Nazi. was partly of Jewish origin- a crime far worse than murder in Hitler's eyes. Then, spying on Canaris just as Cana- ris was spying on him, Hcydrich got word of the admiral's discovery. Realiz- ing that the great secret of his life was out, lie decided to conclude a tenuous alliance with Canaris, although his first impulse was to destroy him. Yet Heydrich continued to onlsmarl Canaris. While the admiral was busy with relatively minor assignments, sur- veying Czechoslovakia and Poland in preparation for the Blitzkrieg, IIeydrich moved about boldly where the admiral feared to tread. chiefs, Then suddenly Hcydrich decided to go after the whole organization. Late in the afternoon of November 8, 1939, Heydrich called us into his pri- vate office and I heard him instruct Schellenberg to bring in Best and Stev- ens alive. A plan was worked out. The two British agents would be lured to if rendezvous at Venlo, the Dutch town on the German border. then kidnaped and taken across the frontier. "I ant sick and tired of this cat-and-mouse game," IIeydrich said. "I'll feel much better when I have Best and Stevens piles of other currencies. The operation that yielded such enormous results was based on a monumental ruse. In Sep- tember, 1940. we succeeded in penetrat- ing an important branch of the Dutch underground, taking it under our wing and operating it as if nothing had hap- pened. We masqueraded as British spies and Dutch patriots, and while we had to supply at least some information to our enemies, we received far more in return. Foreign Agents Fall locked up in the Reich instead of pulling During lite climactic days of this oper- their legs long-distance." ation, we had 18 radio transmitters in With confidence in Schellenberg's lion- contact with headquarters in London and orable intentions, Payne Best and Cap- operated 14 landing grounds. More than lain Stevens showed up in Venlo as 50 British and Ditich agents fell into our agreed. The moment their car reached hands. Some decided to co-operate with the rendezvous, agents of Heydrich, us. but others defied us and preferred the dressed in the uniforms of Dutch frontier gallows to treason. guards, rushed at them and dragged them In the end, three such young into Germany. Like the famous Cicero forced its to abandon , this eesp otnage case, the Venlo incident remains a soft bonanza just when we needed it most- spul with the British Intelligence Serv- on the eve of the invasion of Europe. ice and I atn reluctant to open up old They escaped from us and returned to wounds. Yet the fact remains that we England with word about the England- again triumphed where others failed, this spiel. After three years and seven months tittle against our most formidable op- our great secret was out. We decided ponent. to call it a day. But somehow we couldn't Soon afterward we were to add insult suppress the urge to send a last parting to injury with still another plot that re- message to Messrs. Blunt, Bingham & Co. mains in the annals of espionage second "W " e are aware of the Fact, the Lines- only to the action against the Red Army sage read, "that you are doing usiness British Secret Service General Staff. Holland was the scene of in Holland without our help lrsenng Havi this plot as well, and the British Intelli- been, as we were, your sole rep resenta- lie decided to challenge Cite arch- genet Service was again its victim. lives for a considerable period of time, enemy, the British secret service itself. This particular operation went under we regard We were on tile very eve of tile second tile code name Englandspiei or England Yet this will not prevent sus, should fyou World War and large-scale preparations Gant. It began in September 1940 and ever decide to pay us a visit oil a far were made to gear our work to new lasted until April 1944. During that greater scale, from receiving you with tasks. Just then we discovered that flue period the German secret service ac- file hospitality which we showed your British had beaten us to the punch. They tually dominated file major British es- agents." had an intricate spy net all ready for pionage activities in Western Europe. This last message was dated April 1. the war, established in The Vague the We directed British spies at will. We 1944. After that the 18 fake transmitters Netherlands, with tentacles reaching ordered supplies fronrBritain, called for went off the air and never opened up deep into the Reicli. This net was sup- agents and information, as if we were again. posed to conduct espionage and sabotage operating within the offices of Messrs. By then, IIeydrich, too, was buried and during the war. so it became imperative Blunt, Bingham & Co-the phony first forgotten. But in his place appeared a for us to Best goy it before it could Ire- which served as the cover for this branch still greater genius, although lie lacked come dangerous, of Britain's wartime secret service. Heydrich's bitter determination and British spy headquarters in The Hague A few figures might indicate the nag- ruthless zeal. He was Werner Schellen- were in charge of two rallier lipoid- nitude of this operation and especially its berg, the man who Lured the British looking mein. but we knew that they were success. While it lasted, we called for agents to their dooni and who, in effect, ace operatives of the British Intelligence 190 parachute drops and received 95 of controlled the Englan.dspie(. Service in fact. members of Britain's them. 1Ve obtained from our British At the head of the German secret serv- professional intelligence officers, corps. "friends" 570 containers and 150 parcels ice. Werner Schellenberg knew that lie One was a "civilian" or political agent with urore liras 7.000 pounds of explo- was representing a lost cause. His activi- nanted Payne S. hest. The other was an sixes, 3.000 Stun guns. 300 Brett gums, ties were devoted to an effort to bring old-timer in military intelligence, (.all- 2.000 hand grenades, 75 radio transmit- the war to an earlier end. In the end, lain Stevens. Hcydrich decided to sirikt' tors, over half a million bullets, 5.000 lie was a failure. Although lie was only at tlfent and to destroy their whole net- revolvers. bicycles, raincoats, rubber 33 years old when Germany surrendered work by removing its doable head. }roots, uniform pieces-everything we unconditionally, Schellenberg was an Ile picked one of his deputies, a voting needed ourselves to equip our own secret aged and broken man. with no will to 'intellectual named Werner Schelfell ber R g- anenl.s' live. to prepare the grorurti. Scheilenbergwent We also called for and received sam- It was under Scbellenberg's direction to The Hague and established contact Ales of it weapon which the British and guidance that I moved up in the with Best and Stevens as a representa- guarded as lilt, apple of their eyes: a hierarchy until I became commander in five of a disgruntled anti-Nazi under- special spy grin that could be fired with- chief of that sector of the secret front ground within life German Army. The out making a sound. Our British con- that include the Balkans and Italy. The two Englishmen swallowed the bait and facts were most reluctant to let us have enemies against whom I had to fight were went out of their way to collaborate with this gun, ])fit we coaxed them long the guerrillas of Yugoslavia, the con- Scltellenberg. enough and finally received six of them, spirators of Hungary, Rumania and Bill- Soon we were operating inside the an unexpcelcd gift. the growing anti-Fascist forces British spy network. One of our master We also asked for prone - and of Italy. spies was a trusted agent of its two 500.000 i)~~r,l, .--.;IA-, y ? got of Italy. Approved For Release 2008/04/09: CIA-RDP7O-000588000100080035-4 erritory. As 7. Approved For Release 2008/04/09: CIA-RDP70-00058R000100080035-4 a matter of fact. 1 never operated direct- ly against either Britain or America. Few of it, did. My job was to keep the tottering Axis coalition together and ]told Germany's disgruntled allies in line. It proved it super-human job and it failed in the end. but only under the hammer blows of the military defeat. Even -u. for two Ion:: }ears I was the virtual ruler of half of Europe?file part of Europe which proved traditionally the most difficult to rule. When I reached the Balkans as chief of Germany's secret service. I Found all incredible mess in every country there. Conspiracies. intrigues and revolutionary moves were brewing everywhere- Large- scale civil war was raging in Yugoslavia. To make things worse. I found that our own ally Italy, was secretly collaborat- ing with Tito. In Btrlgaria. the pro-German king was in danger, and no matter how I tried. I couldn't. save his life. In Rumania, young King Michael was moving to head a pal- ace conspiracy against its. In Hungary. the gaga old regent. Admiral Nicholas Hortlty. plotted jovially and leisurely with a group of loud-mouthed but weak- knecll patriots, among wlton a beautiful actress. Katalin Karady, appeared to be the only one with a really stout heart. J didn't know what to do first. Then I made it hasty estimate of the situation and decided to take on what appeared to be the most dangerous foe: the Croat peasant. Josip Broz- already calling him- self Marshal Tito of Yugoslavia. It seems that the western world is still puzzled by Tito's gyrations and takes his defec- tion from Moscow with at least it grain of salt. My own personal experience with Tito would indicate that at least sonic caution is advisable in dealing with this shrewd Balkan politician who was made by the fortunes of war. Tito. I found, has three outstanding points 'of strength. One is his absolute faith in himself. The other is his savage determination. learned in Communist ter- ror schools, to press [ionic his own aims by all means, fair or foul. And the third is that lie has no qualms about shuttling his alliances and making deals with anyone who at a given tnourent might serve his purpose. Tito had no secrets from me because I had my agents firmly entrenched in his headquarters and read every scrap of communication that entered or left his radio shack. I studied his coded mes- sages to (1) the Western Allies, (2) to Moscow. and (3) to Mussolini's High Command. I was certain that sooner or later lie would show up in my camp as well. of- fering to do business with Ilitler. I bided lily time, but I didn't have to wait too long. I was most annoyed by the way the Italians were playing ball with Tito. It was the summer of 1942. Our own forces were getting set for a large-scale opera. tion against the Partisans, and the plans called for an Italian army under General Mario Roatta to cover our southern front. But when zero hour came, General Ro- atta was the little man who wasn't there. Without notifying us at all, he moved out of the territory allocated to his forces and allowed Tito to occupy the vacuum. With this sudden move, the German occupation collapsed even be- fore it could be really started. "There was little I could do about it. not even when illy a; ents reported to me that General Boatta was buying arms wholesale from 'Pilo's men. But then something happened that brought nic di- rectly into the picture. Listening to Tito's secret radio. or overheard it fascinating conversation between Moscoty and the marshal in the nunnntaius. First I heard Moscow telling Tito that the Western Allies were planning to in- vade the soft underbelly of Europe, to strike at rite Germans by way of Yugo- slavia. "What do you think of this. Wal- ter?" Stalin asked Tito. using the name by which lie was known in Ilse Komintern. "And what are you planning to do?" Tito answered promptly and indig- nantly, "I will resist than with every- thing I have and throw dent back into the sea." Stalin seemed to like 'fito's truculence because he spurred Itim on. Just as this conversation progressed between Stalin and Tito. an envoy of the Partisans ar- rived at my headquarters in Zagreb. He said his name was Doctor Petrovie. He came to negotiate the exchange of some prisoners. Ifc bore credentials signed by Tito himself and we had no reason to doubt, indeed, that lie was Tito's per- sonal envoy. In the midst of these negotiations. this Dr, I'etrovic suddenly confided to its that lte was neither it doctor nor was his name Petrovic, In fact, lie said. lie was Lyubo Velebit- a general of the Partisans, and Tito's adviser on foreign affairs. Velehil came to us to propose a truce. I refused to believe lily own cars. but Velebit went even fusilier. Ile, told its about the Allied plan to land in Yugo- slavia. and then. in the name of Tito, he invited us to form an alliance with Tito to repel this invasion from the west. Even we. hard-boiled agents of the German secret service, were flabhcr- gasted at such brazen opportunism. Tito volunteered through his envoy to place at our disposal the supplies his Allies were sending in and to collaborate with us in the field. The matter was of such importance that we had to subunit it to Hitler him- self. But Hitler recoiled. "What?" lie shouted. "Make an alliance with bandits and rebels? Never! I won't negotiate with bandits! I'll shoot them!" At about the same time. we made an important catch in Hungary. We cap- tured a Partisan courier on his way to Tito from Moscow. We found on him a crucial document. a letter from Stalin to Tito. In it Stalin formally endorsed Tito's plan. to join the Germans and to 8. Approved For Release 2008/04/09: CIA-RDP70-00058R000100080035-4 Approved For Release 2008/04/09: CIA-RDP70-00058R000100080035-4 fight against the Allies should Britain and the United States try to land in the Balkans. This at a time when the Com- munists throughout the world were clani.- oring for a second front! This episode of the war is not in- cluded in Tito's official biography, but there are enough eve-witnesses still alive today to bear me out. At any rate, it provided us with a different picture of Marshal Tito than the world presently was holding. From then on we dealt with him only clandestinely, as we were forbidden by Hitler to negotiate with him directly. He sold us immense quantities of his sup- plies. But he had an insatiable appetite. He refused payment in marks or lire, the currencies over which we had control. His agents demanded payment in Amer- ican dollars or English pounds, and some of it had to be paid to an account in a Swiss bank. With Hitler's orders to shoot rather than negotiate, my work as an opera. tional secret service chief was concluded in Yugoslavia. Just in 'time, at that, b-- cause I had to turn my undivided at- tention to a tragi-comic plot in Hungary. The leader of llungary. doughty old Admiral Horthy, was discovered to be dealing with Tito and planning to desert the German cause. It was a rash and pathetic course. At dawn on October 16. 1944, old Ilorthy was taken in protective custody by the notorious Colonel Otto Skorzeny, about whom you will hear more later. Ile was carted off to Ger- many, and the floodgates of terror were opened up with his departure. The Hun- garian Nazis who took his place in Buda- pest proved worthy pupils of their Ger- man masters and, if possible, they even outdid them in barbaric cruelty. They murdered thousands of innocent people during the closing days of the war and joined with the Nazis in destroying their homeland in futile resistance to the rap- idly advancing Russians. Disgusted by the consequences of an action I tried hard to prevent, I decided to seek direct contact with the Allies in the West. I refused to become a party to the vandal methods of warfare which a maddened Hitler was introducing dur- ing the waning hours of his power. The man I sought out for contact was a prominent New York attorney by the name of Allan W. Dulles. Ile was estab- lished in a patrician house in Berne's Herrengasse, as all alleged member of the American Legation staff. But I knew that lie was in fact my American oppo- site number, chief of the Eastern Euro- pean outpost of the Office of Strategic Services. As a matter of fact, I knew quite a lot about Mr. Dulles. His ideas about the war were all known to me in detail, not because I read his thoughts, but be- cause I had been reading ' his cables. I am sure Mr. Dulles will be surprised to learn that it wasn't the vaunted German secret service but merely the signal corps of the Hungarian Army which broke his code. But this enabled its to learn a lot about him and to size him tip. Reading those cables, we were an- noyed by the vicious tone of the mes- sages sent by the American Minister. Leland Harrison. Aside from their evi- dent malice, they also showed that Mr. Harrison wasn't too well informed about us. On the other 'hand, Allan Dulles showed a remarkable knowledge of things and a prophetic foresight con- cerning the Russians. No wonder! He was fed accurate information by a con- spiratorial group in the offices of Ad- miral Canaris. It was to Dulles' new mousetrap that I was soon beating my path, armed with certain information that proved of ines- timable value to the Allies. It was in- formation about the Redoubt, the mythi- eal mountain stronghold which Hitler was allegedly preparing for his last-ditch stand in the Alps. But before I could wind up my career as a secret agent, I had a last mission to perform. It was a tragic mission, at that. It was probably the very last in- trigue of the second World War, but it was intrigue on a monumental scale. It was the murder of Benito Mussolini, the pathetic Duce of Italy. By then it was April 1945. The war had but a few weeks to go and Musso. lini, who made all the miscalculations and mistakes a man in his position could make, was sitting on the floor between two stools. He knew that the Germans in Italy were negotiating with the Allies and were about to surrender uncondi- tionally. He also knew that powerful forces within Germany decided to aban- don him to his fate. In his despair, he turned to Winston Churchill with a plea for help. The details of Mussolini's negotiations with Churchill are obscure. But now documents are, produced to prove that the Prime Minister promised definite 9. help to the frantic Duce. The idea was for Mussolini to escape to Switzerland and there to place himself at the dis- posal of British Intelligence, Into these negotiations burst all un- expected time bomb in the decision of certain die-hard, fanatic Italian Fascists to get rid of the Duce on the very eve of his escape. The man who was to supervise the liquidation was Mussolini's own former Minister of the Interior. ,, ruthless adventurer named Guido Buf- farini-Guidi. His plan was designed to remove the Duce without soiling his, Buffarini's. hands with his blood. He approached the panicky Duce with offers of help in his escape, and volunteered to obtain for him the necessary papers and to ar- range for transportation. Grasping at every straw, Mussolini accepted the offer and arranged with Buffarini the route of his escape. All was set. Mussolini, carrying his crated state papers and a substantial treasure with him, was scheduled to leave Italy in the direction of Lonza on April 26. He would make the crossing into Switzerland on April 27. From there, he would contact his new friends, the British in Cairo. Everything seemed in perfect order. As soon as he made the arrangement with Mussolini, Buffarini rushed to the German secret service with the other end of his plot. It was my misfortune to re- ceive the Buffarini plan in all its hideous detail during a meeting at German police headquarters in Meran. Buffarini asked us - to supply the necessary papers to Mussolini and make his flight possible. But at the same time we were supposed to tip off the anti-Fascist Partisans and lead them to Mussolini's trail. In a discussion that was remarkable only for its sound and fury, I refused to be a party to such dastardly a scheme. But we counted without Buffarini. He was determined to see his scheme suc- ceed. When we kicked him out, he went directly to a prearranged meeting with a mysterious Colonel Valerio of the Ital- ian Partisans. He was in reality Walter Audisio, one of the triggermen of the Communist underground. It was to this Audisio that Buflarini carried his lethal plan. From then on everything pro- gressed according to schedule. Benito Mussolini, traveling with his mistress Clara Petacci. left his hideout in Conio as planned on April 26. Near Approved For Release 2008/04/09: CIA-RDP70-00058R000100080035-4 Nesso, at the exact spot where lie was supposed to cross into the safety of Switzerland, his convoy was ambushed by an execution squad of the Partisans led by Colonel Valerio. But a few miles from safety, Mussolini lost his life. While Communist Partisans took credit for kill- ing the Duce, the irony of it is that it actually was his own Fascists who led him to slaughter. Slaughter Continues His end came on April 29-yet still there seemed to be no end to the killing of World War II. Germany's southern front was wiped out. The western Allies stood on the Elbe and in the heart of Czecholsovakia. In Berlin. the Russians were fighting in ? the streets and Hitler was preparing his suicide in the besieged Reichschancellery. Yet the Allies were still worried that a diehard army of Nazi soldiers might entrench itself in the Alps and continue to fight in their im- pregnable fortress for years. By then I was in close and daily con- tact with Allan Dulles in Berne. Not only did I supply him with information about events in Italy and Southeastern Europe, but also served as his interme- diary with the men who were slated to prepare this Redoubt for Germany's last stand. What was the truth about this alleged- ly impregnable fortress where Hitler planned to delay his total defeat? In November, 1944, the Gauleiter of Tyrol. a Nazi named Franz Hofer, sent a mcnun rndnut to Hitler with the recom- mendation that a fortress be built in the Austrian Alps. Ile also outlined the pos- sibilities of its prolonged defense. The plan has seconded by another Austrian Gatileiter. Friedrich Rainer. While no- body in the Wehrmacht seemed to take it seriously, the German secret service recognized in it an opportunity to mis- lead the Allies. Phony blueprints were drawn up and intelligence was leaked to the Americans. who seemed to be most prepared to believe such a romantic military plot. Some of the blueprints themselves were smuggled into Allied hands with the help of double agents. It soon became known in Germany that file Allies were inclined to take the hoax rather seri- ously. Sporadic items in the Allied press indicated genuine apprehension. Spies reported serious concern at General Eis- enhower's headquarters and also in the Joint Chiefs of Staff in Washington. Hitler at first ridiculed Hofer's fan- tastic plan, but when he was told that the Allies were frightened by it, he thought the idea might not be so had after all. Ile ordered Hofer to develop the southern positions of the planned Redoubt as quickly as possible. A team of SS geologists was sent into the region and pupils of the SS Mountain School were alerted to begin large-scale blast. ing. in the Alpine rocks. But the grand design of the Redoubt never passed beyond this stage. Even so, every "move connected with it was leaked 10. to the A11les--the arrival of the geolo- gists. the special exercises of the SS Mountain School. the moves of the Schoerner Army that was slated to gar- rison it. They all added up to feverish preparations where in reality nothing existed. It was at this point that I could re- port to Mr. Dulles the true state of affairs in the Alps. Even during my first encounter with him. I discovered that he was most interested in intelligence about the Redoubt. A plan was worked out to gain as much genuine information as possible and then to win over to our side those who were slated to command Hitler's desperate last stand. An operation plan was evolved and I got busy with its execution. My task was facilitated by the fact that the Redoubt's prospective commanders were, like my- self, all Austraians, themselves anxious to save at least Austria from the inescap- able collapse of the Third Reich. Very soon I was able to assure Mr. Dulles that. first, the planned Redoubt was still in the stage of preliminary plan- ning. that construction did not progress beyond some blastings; and, second, that all the men slated to command the troops in the Alps had expressed their willingness to co-operate with the Allies in frustrating Hitler's last grand design. My report to Dulles brought forth genuine sighs of relief. Mr. Dulles stated quite frankly that my report to him, and the assurances I was authorized to sup- ply, removed the last road bloc the victorious path of the Allies. When Germany's defeated leaders set their signatures under the instruments of total capitulation. my work as Hitler's master spy came to all end. I thought that the past would recede from me rapidly and that I could return to "nor- mal life," to begin my studies where I interrupted them 10 years before. A few months ago, however, this weird past returned to me abruptly for a fleet- ing moment. It came in the form of a strange and embarrassing discovery, re- minding me of the manner in which Hey- drich used to do business. The most secret of his operations. about which we used to speak only in hushed tones, was suddenly exposed by the chance dis- covery of a couple of Austrian fishermen. The secrets o our "Operation Bern- hard" were ou:. The last mysterious plot of World War II tad lost its mystery. Two fishermen on the Austrian lake called Traunsee came upon big green and red patches on the surface of the lake that at first seemed to them a strange variety of water lilies. On closer examination they found that in reality they were pieces of paper, floating by the thousands on the surface of the lake. They picked up an armful of them and returned to their village with their find, You may imagine the surprise of the quiet village folk when the pieces of paper turned out to he-English pound notes.) I am able to clear up the mystery of their discovery and explain the sudden appearance of millions of English Approved For Release 2008/04/09: CIA-RDP70-00058R000100080035-4 Approved For Release 2008/04/09: CIA-RDP70-00058R000100080035-4 Approved For Release 2008/04/09: CIA-RDP70-00058R000100080035-4 potato: in till )avian Ur. It _was mon- ey p7lnte .. 1;lun.Sncret Service on ley driclx a -tit dt ra -dumped into the sea when this; cud of the war found us with caches ,of it still on our hands. Early in our game, and contrary to widespread belief, the Lerman secret service was woefully short of ready rash. What we needed tverc dollars and pounds, the international currency of the espionage business. But neither the Ministry of Finance nor the Rcichsbank had adequate supplies to pay for our quaint operations. Already, in 1939. in the wake of his discovery of the counterfeit rubles. Hey- drich hit upon the idea of printing the money we so urgently needed. At first. the technical difficulties proved almost insurmountable. No matter how hard they tried, they couldn't duplicate the intricate paper design the British usted in printing their five-pound notes. Never- theless. the technical branch of the se- cret service finally succeeded in produc- ing counterfeit pounds which were so good that most of Ilie banks of the world accepted them. But it was not until 1913 that the se- cret service could begin the dissemina- tion of these counterfeit pounds in great- er quantities. We had to devise fantastic methods to hiring this money into circu- lation. A special branch was set tip with- in the secret service which was devoted exclusively to the distribution of the counterfeit notes. A network of special agents was estab- lished in Italy. They sold the pound notes to Italians for genuine lire and then used the lire- to boy genuine pounds on Switzerland's black market. The loss- es we suffered in these transactions were enormous. But what did it matter as long as we were printing 'our own pounds? Soon another method was found to get rid of the millions of pounds on hand. It became known that the Partisans of Yugoslavia were only too glad to sell some of the supplies they received from the Allies-provided they were paid in pounds or dollars. This led to the de- velopment of the most fantastic business in the history of iiartm-e. The secret service appeared on the scent' as the buyer of automatic weapons which Tito received front the Allies. Soon the business was flourishing to the point where whole trainloads of Allied sup- plies came into our hands. They were paid for with forged English pound notes. Our buyers Iraveled freely in the regions controlled by the Partisans even while our troops Itad it hard time fight- in, against tlicnt. The counterfeiting of dollar notes suc- ceeded only inward the end of the war. but cycn then the notes proved to be so primitive that our agents refused to ped- dle them. Only shortly before the sur- render did the Cct-man Secret Service succeed in iniproe ing the quality of these forgeries, but there was no tints left to bring then' into circulation. The British understandably took a very serious view of this operation. 'I'hev discovered the existence of these counter- feit notes when an airman of the lloval Air force was t'ailght at all airport in the act of smuggling French currency into Britain. He had all kinds of money on kiwi. including British pound notes. And on closer scrutiny. more than 10 per cent of them proved counterfeit. The airtuan confessed that Its received them as part of his winnings in it Ilc1- gian gambling casino. This discovery alerted the Bank of England and Scot- land Yard. More and more forged pound notes were discovered and. in the words of one of Britain's outstanding spy ex- perts. "the notes were such perfect forgeries that any British bank would have accepted theta as geniiitie without the sliglitest hesitation." A special forgery squad was formed by Scotland Yard under the famous In- spector Jack Smith. nne of Britain's legendary spy catchers. Squads of Scot- land Yard men were sent out into the world to track down every single note. Chief Inspector Rudkin was sent to South America. Inspector Smith went to France. Belgium and Italy. Inspector Minter moved straight into the lion's den. into Germany itself. Minter discovered the German coun- terfeiting plant in Block 19 in the Such- senhuusen concentration camp. Millions in foreign currency were printed there by slave labor. Most of the men who worked in the plant were expert en- gravers and printers. They were taken from the various camps to this plant. Everybody concerned with Operation Bernhard regarded this as ii top secret and nobody liked to discuss it. The British were the most reluctant to talk about it because currency in excess of ?50.000.000 was found and more than 1100,000.000 was believed to be in cir- culation. When Inspector lllinter raided Block 19 in Sachsenhausen. lie found millions of tiomlds still stored there. Ile also discovered millions of rupees printed specially for a conspiracy in India which. however. never carne oft. The Germans involved in tilt', plot kept their mouths shut hecanse Ibey feared reprisals for something of which inter- national law takes an cxtt?enw'ly serious view. Were it not for that one airman and those two Austrian fishermen on the Trauusee. the whole plot might have re- mained the war's only undisturbed se- cret. But their strange catch created a greater stir than if they bad caught the Loch Ness Munster in Traunsce. With the belated discovery of the counterfeit notes. the se'cret war book of the German espionage service saw its last chapter written, As I look back on my part it) it. I feel it certain pride in our achievements, just its a British or an American who served on the secret front must be proud of what lie did. My pride is enhanced by the fact that in the crucial day's of tilt, war's climax, I found my way to the Allies. contrib- uting a modest share to the termination of tilt- Holocaust before tilt' atomic bomb could make its cataclvsulic appearance on the European battlefield. In slaking the balance sheet of this strange enterprise. I find it lot on bout sides of the ledger. If in the elld we in the Lerman Secret Service failed. it was only because we never wanted to suc- ceed. ? ? ? ill Approved For Release 2008/04/09: CIA-RDP70-00058R000100080035-4