Double Agent (21 page)

The
New York Times
reported that refugees, “from Queen Wilhelmina down, have told amazing stories of the manner in which thousands of apparently innocent Germans turned out to be advance agents of the Nazi regime.” On the same day as the Rotterdam bombing, the fate of European democracy was all but sealed when the panzer forces that had navigated through the supposedly impenetrable forests of the Ardennes north of the Maginot Line smashed through a French Army force that had been tormented by Stuka dive-bombers and began the rapid dash to the Channel that would trap a sizable Anglo-French force (including the whole of the British Expeditionary Force) in a pocket at the northern French port of Dunkirk. In statistically the worst moment of Royal Air Force history, seventy-one RAF light bombers were sent in to swoop low and destroy the pontoon bridges over the Meuse River that were facilitating the advance. At least forty of them were shot down by antiaircraft fire and Messerschmitt fighters, a national disgrace that caused the air marshal commanding the British air fleet in France to break down in tears when he heard the news.

On May 16, with the Allied armies in disarray and French diplomats burning documents in the gardens of the Quai d’Orsay, President Roosevelt spoke before a joint session of Congress, requesting a massive increase in rearmament spending (eventually pushing defense appropriations to $2.2 billion for the year) to fund the creation of a “two-ocean” Navy and a US aerial fleet of fifty thousand planes, pointedly asking legislators “not to take any action which would in any way hamper or delay the delivery of American-made planes to foreign nations.” In surveying the “brutal force of modern offensive war” that was currently on display, he made a point of highlighting “the use of the ‘fifth column’ by which persons supposed to be peaceful visitors were actually a part of an enemy unit of occupation.”

Four days later, Treasury Secretary Henry Morgenthau learned from Hoover that the FBI was still unable “to listen in on spies by tapping the wires” and so brought his concerns to the president, who on the following day ordered Attorney General Jackson to ignore the Supreme Court and “authorize the necessary investigative agencies that they are at liberty to secure information by listening devices . . . of persons suspected of subversive activities against the government of the United States, including suspected spies.” The FBI would rely on this authority to conduct wiretaps for the next quarter century. During a fireside chat on May 26, FDR pledged the government’s vigilance in combating the foe that everyone believed was hiding in the shadows. “The Trojan horse,” he said over the crackling connection. “The fifth column that betrays a nation unprepared for treachery. Spies, saboteurs, and traitors are the actors in this new strategy. With all of these we must and will deal vigorously.”

The country was gripped with panic. “Now, just a minute,” began a column by Westbrook Pegler. “Wait a minute!” Rural Pennsylvanians were plotting how to defend against parachute troops, National Guardsmen in western New York started patrols along the Canadian border, Mayor Frank Hague of Jersey City announced that he would “exterminate all un-American plots and plotters,” and Washington politicians secured easy passage of the Alien Registration Act of 1940 (or Smith Act), which set severe penalties for advocating the overthrow of the government and required data on all 3.6 million noncitizens thought to be living in the country, 1.1 million of them estimated to reside in New York City. One of the fifteen questions on the registration form, to be filled out at the nearest post office and forwarded along with fingerprint samples to the FBI, asked whether the foreign national had been “affiliated with or active in” any organization “devoted in whole or in part to influencing or furthering the political activities, public relations or public policy of a foreign government.”

The next big German American Bund meeting was advertised as an “Anti-Fifth Column Rally,” which brought a few hundred members to a meeting hall in Astoria, Queens, where they heard President Roosevelt denounced as the chief traitor who was seeking to betray America by involving it in a war on behalf of global monetarists. The new Bundesführer, Wilhelm Kunze, urged his fellow Germans “to have more guts and be proud of the blood in their veins and speak up for their rights as American citizens because we are only interested in the welfare of this nation,” according to an NYPD detective conducting surveillance. Kunze spoke “about himself as a boy being beaten up in public school during the last war because his name was Wilhelm.” The police report said that an unnamed Bundist attacked a photographer for the liberal daily
PM,
punching him in the ribs and breaking his camera.

In the meantime, Belgium’s King Leopold III agreed to Hitler’s demand for an unconditional surrender, and the Luftwaffe was accorded the honor of finishing off the Allied forces that were evacuating from Dunkirk in an improvised flotilla of eight hundred vessels ranging from Royal Navy destroyers to civilian fishing boats. By the time the port fell on June 4, the British Admiralty’s Operation Dynamo had succeeded in rescuing 338,226 British and French soldiers, a justly celebrated “miracle” that was facilitated by the ability of the RAF’s single-engine fighters to prevent German fighters and bombers from achieving control of the airspace during the few days when the cloud cover lifted, an embarrassing (first) defeat for the Luftwaffe that was a hopeful intimation of things to come.

“All of our types—the Hurricane, the Spitfire, and the new Defiant—and all our pilots have been vindicated as superior to what they have at present to face,” Churchill said that day in his “We Shall Fight on the Beaches” speech in the Commons. “When we consider how much greater would be our advantage in defending the air above this island against an overseas attack, I must say that I find in these facts a sure basis upon which practical and reassuring thoughts may rest.”

On the following morning, the German armies began the campaign to capture the rest of France, sending the blitzkrieg against an ineffectual French army and a decimated Armée de l’Air. On June 10, Mussolini saw his chance and announced from the balcony of the Palazzo Venezia that Italy was joining the war against the “plutocratic and reactionary democracies of the West.” (“The hand that held the dagger,” President Roosevelt told the graduating class at the University of Virginia that afternoon, “has struck it into the back of its neighbor.”) On the next day, Paris was declared an open city to forestall a repeat of Guernica, Warsaw, and Rotterdam. On June 14, the City of Light fell to German troops, who hoisted the swastika from the Eiffel Tower and the Arc de Triomphe. On June 22, French general Charles Huntziger signed the armistice on behalf of the new collaborationist regime of Marshal Philippe Pétain in the old railway dining car where the French High Command accepted Imperial Germany’s surrender twenty-two years earlier. The battlefield losses of World War I had been avenged. Hitler was at the height of his powers, with a claim to being the greatest German of them all. It was “so unbelievable as to be almost surely unreal, and if not unreal then quite immeasurably catastrophic,” wrote the British foreign secretary, Lord Halifax.

On July 4, the war seemed to come to New York City when an actual ticking time bomb was found in an upstairs ventilation room at the British Pavilion at the World’s Fair in Queens. The buff-colored canvas bag was taken from the crowded building by the NYPD and carried to an isolated spot on the edge of the grounds behind the Polish Pavilion. An hour and a half later, it exploded, killing two Bomb Squad detectives and gravely wounding two other detectives. A livid Commissioner Lewis Valentine sought no assistance from the FBI in mobilizing the entire police force to round up every known Nazi, Fascist, Coughlinite, Christian Fronter, and Irish Republican in town. Investigators eventually focused on a Bundist employed by Sperry Gyroscope who resided in a furnished room on the West Side stocked with tear-gas pistols and cartridges and “littered with Nazi pamphlets, a swastika flag, and anti-Jewish banners and posters,” reported the
Times
. But charges were never filed in the bombing. Colonel Duquesne, who boasted to Sebold that he had been questioned for two days, was probably the only one in the city who thought the perpetrator was a Frenchman angered over Britain’s recent forcible seizure of the French fleet to keep it out of German hands. The FBI heard Duquesne telling two visitors to his apartment that he was regarded as the leader of the fifth column. He joked that he was “only a three and one-quarter column.”

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American popular opinion was broadly sympathetic to the Allied cause but resolutely opposed (86 percent) to declaring war on Germany and Italy with many believing “that the money we have spent on our military and naval forces during the last few years has gone down the rathole,” as FDR colloquially put it. Even his own (isolationist) secretary of war opposed Roosevelt’s decision to flout the neutrality laws by ordering the military to declare six hundred freight-car loads of guns and ammunition as “surplus,” which enabled the munitions to be sold to U.S. Steel, which resold them five minutes later to the Allied purchasing commission hoping to rearm a British nation that had left everything behind on the beaches of Dunkirk.

In such a moment as this, the Sebold investigation represented America’s only significant battle with Nazi Germany. And the good guys were winning. On May 15, a letter with several enclosures was discovered in Sebold’s PO box at the Church Street Annex. It was not mailed by any of the four spies working directly with him but by the chief butcher of the SS
Manhattan,
the United States Lines ship that had arrived two days earlier from Genoa with 811 passengers, including 350 refugees from Central Europe. “Dear Harry,” the butcher wrote in German, “I would like to speak to you.”

On the following day at the entrance of Pier 59, Sebold met Erwin Siegler, a thirty-year-old American citizen of German birth in a snap-brim hat with a “swaggering, rolling walk” and “large, bulging chest,” wrote the FBI. He would later explain that the scar on his cheek was the result of a violent encounter with a beer glass. He was “a brute in strength,” wrote Ellsworth in his diary. Over drinks at a waterfront bar and grill, Siegler revealed that he was a novice courier assigned to procure secrets for the Kriegsmarine, part of the efforts of Referat I-M of Ast Hamburg, which signified that Sebold had stumbled upon
another
ring operating out of New York. The butcher said he was delivering the materials to Sebold (of Referat I-L) on behalf of “a man named Gerhoff” based in the Hotel Britannia in Genoa and was working with a fellow spy on the
Manhattan
’s kitchen staff who had access to large sums of money.

Fully cognizant of the next logical move of a skilled double agent, Sebold requested to see Siegler’s friend, which led to a meeting on the following day in Columbus Circle at the southwest corner of Central Park, a favorite location of the soapboxers of the Fascist right, a brown version of Union Square. There Sebold met with Franz Stigler, the
Manhattan
’s chief baker and confectioner, its head
Zuckerbäcker,
who was a naturalized German American with a “heavy build” known by the code name of Aufzug. As agents in a Bureau truck filmed the proceedings from a distance, Sebold explained that he needed money to pay a disgruntled agent, not mentioning that he was referring to Ed Roeder. The pastry man handed over $240 in reserve notes and silver certificates, agreeing with Sebold that it was important to “try to get the material for Germany.” Sebold asked the
Manhattan
duo to contact him when they returned from their next trip to Italy, providing the address of his summer residence, a rented room in Mrs. Allen’s house at 144 Washington Street in Hempstead, the Nassau County village that kept him in proximity to Ellsworth (who received Bureau permission to bring his wife and two children out from California), the most valuable producer (Roeder), his dummy job (as a ladies’-stocking salesman for Real Silk Hosiery Mills of Jamaica), and the location selected for the radio outpost that Hamburg had assigned him to establish.

One of the letters in the butcher’s envelope to Sebold outlined the technical specifications necessary to make Morse code contact with Ast Hamburg’s Wohldorf station. Using the funds given to Sebold in Germany, Bureau agents obtained two receivers (a Hallicrafters Sky Champion and a Hammarlund Super-Pro), a refrigerator-size hundred-watt Hallicrafters HT-9 transmitter (later used to power a more powerful five-hundred-watt transmitter), and various antennas, cables, supports, and feed lines, which (after failed tests in the static-heavy New York office) were installed in a rented two-room cottage in a hilly area among the trees near Centerport on Long Island Sound. “As the last solder connection was made and the blowtorch silenced it was noted that the time was a few seconds before 7 p.m., the next regular calling time of the German control station according to information given to Sebold,” wrote Richard L. Millen, a special agent flown up from Washington to help set up the system, of the evening of May 20. “The receivers were tuned to the designated frequency and the HT-9 warmed up. Very shortly, Morse code dots and dashes were heard. At first, they were copied as ‘RAORAORAO’ in that they were too closely spaced and run together. Realizing this fact, the engineers soon separated the dots and dashes into the desired call of ‘AOR AOR AOR.’ When the control station stopped sending, the Bureau’s undercover station began sending a series of dots and dashes in accordance with Sawyer’s instructions. The transmitter was stopped after five minutes and the receivers turned on. The German control returned briskly with congratulations and instructions for the next contact. A working link had been established. Groundwork had been laid for the case to evolve.”

Given the task of delivering and receiving the Morse code signals was a special agent from the Milwaukee office with a ham license, Maurice Price, who worked with Sebold to learn his particular manner of tapping the telegraph key, which can be as recognizable to a skilled cryptologist as a written signature. The messages themselves were encoded and decoded by Ellsworth and Sebold based on the system that had been taught to the double agent by Uncle Hugo in Germany. “That code is a complicated thing,” the federal prosecutor who tried the case later told jurors. “It takes you a good while to study it out.”