Hitler's Lost Spy (3 page)

The Spy War, Phase One – The Aggression
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The practice of nations spying on their neighbours has been a feature of modern international affairs. When aggression is planned, the intensity and focus of spying conduct changes to redirect resources according to new priorities.

By the late 1930s, the German intelligence branches had developed sophisticated information structures with global operations. They received and processed immense volumes of intelligence facts and figures conveyed to Berlin from internationally based agents. Data flowed into the Abwehr, the German army's intelligence branch, or the smaller bureaus in the navy and air force. In addition, both the Foreign Office and the Nazi Party had intelligence sections gathering information for their own purposes. Collections through these agencies were often shared with commercial enterprises and research institutions.

Within the Abwehr structure, a Foreign Information Division was created for the purpose of worldwide data accumulation. This was the central point for the collection of foreign military and economic information forwarded by German embassy and consular staff, military attachés and the large array of individuals comprising the spy network. The material received could originate from a sensational source such as a compromised foreign government official, or through more mundane activities such as gleaning potentially useful articles from foreign newspapers, magazines and scientific journals.

In addition to the Foreign Information Division controlling foreign espionage activities, the Nazis created the
Auslands-Organisation
to embrace Germans living abroad. The objectives were to encourage, wherever possible, ‘overseas' Germans into the Nazi Party, and to sponsor internationally the marvels of the ‘new' Germany under Adolph Hitler. Programs were devised to work within these communities to ensure that German interests were suitably shored up at every opportunity. Information collected by German foreign offices was regularly dispatched to Berlin. This included reports earmarking Germans as being ‘difficult', i.e. anti-Nazi, and whose families back home may be recorded for possible future harassment.

A problem for the
Auslands
representatives in foreign countries was that many of the German-born residents did not cooperate. Anti-Nazi sentiments were common, and frequently ‘uncomfortable' information suppressed in the Reich was available to German citizens living abroad. The rave reviews from the Western media describing Hitler's economic progress could be seen less enthusiastically by many German residents in foreign countries who understood the background politics hastily neglected by impressionable journalists. But Nazi propaganda would always attract an element of approval and support, and from here the successful recruitment of spies was only a short step away. Spying for the Fatherland was a privilege. Travel prospects plus cash payments to lift one's living standards were a bonus.

Wherever groups of Nazis were formed under the auspices of party headquarters in Berlin, the Gestapo was sure to follow. A Gestapo representative was often found a part-time job within German embassies or consulates, and they reported directly to headquarters in Berlin. If espionage had a gutter branch, the Gestapo held the aces. Spying on other Germans, threats, extortion, physical violence and using intimidation as methods of obtaining information sources were Gestapo specialties.

The Japanese spy services also operated globally, but their methods and structures in Western countries needed to accommodate the difficulties not shared by their German counterparts. In the United States, Canada and Australia, German influences had been enhanced by a history of immigration and the successful integration of broadly common cultural values. The Japanese were relatively new in the immigration experience and culturally were poles apart from Westerners. This necessitated a significant distinction in spying tactics in the West, compared to those practised in Asia. Spying in Australia would be predominately limited to consular officials and employees of Japanese trading companies. But for the Japanese, spying in the West would always be both structurally and operationally different to that of the Germans.

In 1930s Australia, German and Japanese spies were consistently active, and the security services were also vigorous in attempting to monitor them. The Germans presented the traditional challenge of European-style espionage, but the foundation of Japanese intelligence gathering was very different. Japan was the new emerging world power, and by 1935 the country's interventionist plans were not clearly understood in the West. In Australia, the security services had been mistrustful of Japanese expansionism since the formal integration of Korea into the Japanese Empire in 1910.

In the early months of World War I the German Pacific territories were snatched by the Japanese navy, later resulting in a mandate over the islands granted by the League of Nations. In later years, the mandate's requirement for the exclusion of military bases on the islands was simply ignored by Japan. The strategic balance in the Western Pacific had been swiftly and unexpectedly altered – and not in Australia's interests. Japanese aggression in China from 1931 added to fears of Japan's ‘peaceful' intentions in Southeast Asia, and probing by the security services of Japanese activities in Australia increased.

A difficulty for Australia's intelligence services in the 1930s was to differentiate between traditional spying and the less intrusive term, ‘information gathering'. This was particularly so with the Japanese. Entering the twentieth century with its industrial and scientific knowledge far behind the West, Japan encouraged its travelling citizens, including naval personnel, to study, observe and note unknown or vaguely known facts about other nations. Initially this was part of the Japanese initial ‘catch-up' process, but the fact-finding methods inaugurated procedures suitable for future espionage. Consequently, the geographically large and diverse Australian continent received huge attention from Japanese diplomats, businessmen, tourists and sailors from visiting merchant and naval vessels. This ‘information gathering' intensified in the 1930s, and suspicions of Japanese motives grew with it.

The Economic Spy – Stockpiling the Strategy

The popular portrayal of the World War II spy favours the exploration of secret methods to acquire enemy documents, designs and strategic data. However, ‘war economy' espionage played a major role in both German and Japanese military intelligence. This branch of espionage collected information from a broad front. From the agents collecting secret material in foreign countries, to the troops in the field observing the enemy, anything judged to be useful to the war effort was transmitted back to intelligence headquarters. This would then be accumulated into banks of statistics and records and filed away for possible future use.

Understanding the economic potential of the enemy played a crucial involvement in military planning and deployment. To obtain economic data in foreign countries, intelligence networks were structured to absorb a huge range of contributions. These were dispatched not only from spies, but also from economic research institutes, consulates and embassies, and included interesting data from enemy government and private publications. Anyone, anywhere, sympathetic to the cause could forward apparently ‘dreary' information which may well prove to be worthwhile later.

The process began with the assembly of strategic objectives, after which monitoring would begin. The meticulous collection of appropriate information in peacetime may prove to be critical following the commencement of hostilities. Knowing your enemy is vital. But knowing what your enemy is capable of producing is essential.

High Seas Trade – A Wartime Lifeline

During World War II, the Germans and Japanese both applied a significant priority on obtaining detailed information on enemy merchant shipping. For the Germans, the commencement of hostilities meant that the monitoring of international merchant shipping became a major consideration for intelligence work by Nazi spies around the world. A ship's identification, ownership, position, its ports of embarkation and destination, and cargoes were determined where possible by informants operating in ports of trade. Berlin collated the information and monitored the movements and directed, where possible, U-boats and surface raiders to the projected paths of these ships.

German intelligence on shipping movements was particularly active in South America where so-called ‘neutral' countries such as Argentina and Chile allowed almost total freedom of operation for Nazi spies.

Following the surprise attack on Pearl Harbor, the Japanese interest in merchant vessels was more geographically limited, and for a different reason, as a Japanese economic blockade of the United States west coast was not viable. Sinking Allied merchant shipping, where possible, was an obvious objective, but of greater significance was the deployment of naval vessels to assist the safe passage of Japanese merchant ships carrying critical supplies from the conquered territories to the home islands. The German and Japanese strategic priorities in Allied merchant shipping were therefore very different. The Germans consigned importance to the sinking of foreign merchant ships, while the Japanese were primarily concerned with protecting their own.

Sleepers: The Spies-in-Waiting

Moving people into the right places prior to the outbreak of war is a key objective in the intelligence process. Factories, defence establishments, government departments and organisations or individuals deemed as suitable cultivation points were selected as avenues for strategic information or securing influence. Successfully employed agents would be advised to work well, avoid trouble, keep their eyes open, and wait for the time. In a sense, many of these planted agents were anything but ‘sleepers'. The financial benefits they received usually required substantiation, and this would ideally be in the form of knowledge passed on regarding organisational structure, operational contacts, technical developments and susceptible individuals who may potentially offer suitable information on one basis or another.

Occasionally the ‘sleeper' may already be in place. Hermann Lang migrated to the United States from Germany in 1927. In 1937 he worked in the factory producing the nation's most secret military device at the time – the Norden bombsight. Contact with a German field agent resulted in the designs for the bombsight being secreted out of the American factory and into the offices of Herman Goering's Luftwaffe. This was a huge coup for Germany with the end result that the accuracy of future German bombing would dramatically improve.

The Japanese introduction of ‘sleepers' into Southeast Asia during the 1930s was vigorous and widespread. This vast movement of spies accompanied the migrants, trading company personnel and Japanese government agencies as they increased their presence around the products of planned importance – the sources of oil, coal, rubber, tin and food that were destined for Japanese control following the outbreak of the Pacific War.

Annette Wagner was a ‘sleeper'. Her prime role was to remain in Australia, above suspicion, and absorb herself into the local community – which she did amazingly well – and prepare for her role when the war commenced. The spy plan, however, so remarkably successful in most respects, would be neutralised by one event in October 1938.

1930s Spying in Australia – Why?

The German war plan, prepared under Hitler's personal scrutiny, never included an invasion of Australia. The possibility of such a venture was militarily absurd. So why was the planting and nurturing of spies within Australia judged by the intelligence agencies in Germany as important? The case for Japanese spying in Australia is more readily understood. Whatever the Japanese plans were for the upcoming conflict with the West, they included Australia, therefore tactical knowledge of the continent was essential. Hitler's desire to go to war was probably in place prior to his election as Chancellor in 1933. Hirohito's decision to attack the West in the Pacific was almost certainly resolved by 1935. From these dates, international espionage intensified, and there are several worthy reasons why Australia was a spying target.

1. From the mid 1930s Germany's espionage and information gathering processes were based on the simple principle that the net should be cast as far as possible. Any information that fell within dictated parameters and may offer data that could add to similar, and relevant, information from another source was deemed useful. Australia's relationship with Britain meant that Australia would be a source of vital materials for Britain in a time of war. Following this notion, it would be a logical measure for Germany to identify and acquire data on Australia's potential levels of assistance.
   Unlike the German global strategic objectives, Japanese espionage in the 1930s targeted specific  ‘location interests' that were vital components in the overall Australian defence plan.
   

1. Hitler's initial military plans may have been confined to Europe, North Africa and Western Asia, but he knew the conflict would have huge implications for international commerce. From the outbreak of war the stakes would be higher. As a potential troop, food and raw material supplier to Britain, Australia was relevant to Germany's entire military evaluation, and would therefore warrant the planting of agents.
   The Japanese held to the principle that the impending region to evolve as the ‘Southeast Asian Co-Prosperity Sphere' – meaning political control and economic exploitation by Japan – would include Australia and New Zealand. The spying objective, therefore, was a far-reaching evaluation of the continent, unlike the limited German interest.
   
2. Australia's geographic location was a useful focal point for Berlin to obtain data on the Pacific region in general, which Germany could not ignore. Australia also offered the Germans ‘spying assimilation' advantages – they would not ‘stand out' in a crowd – plus it offered space to travel and communicate with greater freedom. The geographical location of Australia meant Japanese spying in the country was inevitable, but the methods employed would need to be unlike those used by the Germans.
   
3. The civilian ‘mood' to a foreign government's political direction was an important yardstick to be determined by spies and foreign embassy staff. Developing a more favourable ‘mood' towards a nation was normal diplomatic behaviour, and Nazi Party supporters were expected to direct propaganda campaigns to politicians, business leaders, media outlets and selected community members. In Australia, the emphasis on Nazi opposition to Communism would usually find an element of sympathetic reception, and the German suggestion that their former Pacific islands be returned did not appear unreasonable.
   As the ‘mood' of the Australian people turned against the Japanese following atrocities committed in China, pro-Japanese organisations in Australia did what they could to appease public opinion by humbly explaining the ‘misunderstandings' of Japanese actions being generated in the Western press.
   
4. Learning of shipping traffic from Australia, plus reliable information on coastal transport movements of ships and cargoes would present opportunities for German U-Boats and disguised merchant ‘raiders'. Events in World War I had demonstrated the importance placed by Great Britain on protecting the sea-lanes for imports of strategic commodities. In Hitler's conflict, Germany would prioritise this requirement to globally assess Allied merchant shipping and strike where possible. Australian and New Zealand shipments of meat, grains, wool and minerals to Britain would be included in the intended targets.
   In this war, Hitler would not wait for merchant ships to reach Europe before attempting to sink them – he would conduct an offensive, where possible, near the voyage origins or en-route. Having a network of spies to monitor the movements of ships in Australian ports was essential to the German objective of winning the battle against British imports.
   From December 1941, the Japanese also had a keen interest in Australian merchant shipping. But this was very different from the information needed by the Germans. The Pacific war was largely a naval war, and cutting supply routes became a policy of both the Allies and the Japanese. Eliminating the Southwest Pacific merchant ship route to Australia would potentially halt American supplies and possibly create a defensive void in Australia, thus directly assisting an invasion of the Australian mainland. This would also inhibit an American defensive build-up.
   
5. The objectives of German and Japanese spies operating in Australia were not limited to secrets and stealth. Promoting their national interests was done at every opportunity. The Germans could fall back on the inequities of the Versailles Treaty and the enviable economic progress under Hitler, while the Japanese, who lacked anything positive to convey about the actions of their government, fought a rear-guard action. occasionally successful, by distortions, propaganda, money, and the long-term benefits to Australia of increased trade with Japan.
   Every spy was a potential ambassador. When circumstances allowed – and this may not have been very often – promoting Berlin's and Tokyo's policies and ‘peaceful intentions' was expected to be the standard political fare.
   In doing this, the basic rules centred on fostering the positive, ‘massaging' the awkward, and ignoring the unpleasant.
   
6. Wars are won and lost on resources. To understand what role Australia could play in a global military conflict was to identify the likely resources the nation could muster, and how those means could be converted into military power. People, know-how, food, mineral and industrial production, ship and aircraft building capacity, and political will are but a few of a nation's significant ‘resources' in times of war. Understanding these elements is imperative, and a competent spy will recognise the signs and pass them on.
   
7. The 1930s spy became increasingly absorbed in the uneasy background of political and military uncertainty. Within this setting, building a constructive awareness of a target country's defence capabilities became the prime intent. During hostilities, knowing the enemy's strength and weaknesses was the immediate goal at military headquarters. When the war commenced in September 1939, the Germans would have possessed accurate details of the military strengths in all Allied countries. Not known, however, was the detailed capacity of the Allied nations to multiply their military capabilities, or what scientific research may contribute to future defence upgrading. Assessing and passing on details of enemy military capacity changes was a crucial role for the spy remaining behind enemy lines. 
   In this environment, the volume of material collected by a spy is an important element in the assessment of the spy's worth. A successful spy will have the capacity to reliably collect a more than adequate volume of suitable information. The spy will also have the ability to move this collection to the next level – from data accumulation to data manipulation. This involves collecting more information than is really necessary, then applying a selective method to remove the debris.