The Bedbug (28 page)

Their suspicions would have been confirmed by a meeting in Rome on 11 August 1947 between Lt Col. George F. Blunda of
US Army Intelligence and two British officials. An account of this meeting only emerged under US Freedom of Information rules in 2001. The British representatives were David Vere Bendall, Third Secretary at the Rome embassy, ex-Grenadier Guards, previously attached to Allied Forces HQ; Caserta and Wing Commander Derek Hugo Verschoyle, pre-war literary editor of
The Spectator
magazine and appointed in 1946, without previous diplomatic experience, as embassy First Secretary. Blunda was in no doubt that Verschoyle was there to represent British Intelligence and both men were well aware, as was Blunda, that Pavelić was now being harboured by the Vatican.

Blunda was clearly irritated that the British had already missed an opportunity to arrest Pavelić during a search for war criminals in Genoa and acutely conscious that to arrest a man under the nominal protection of the Pope was a politically explosive operation. So he flatly refused the proposal by the two Britons that the Americans should go ahead and do the deed unaided. If there was going to be controversy then Britain could share in it, especially since he discovered that Verschoyle knew the exact location of the room within the Vatican grounds where Pavelić was holed up. He even had a report, from a month earlier, of their quarry being seen beyond the Vatican’s protective cordon, walking in the Via Corso Umberto with a solitary bodyguard. His hair was cut short, he had a beauty mark on his left cheek and he was clothed in a monk’s habit.

In the face of Blunda’s obstinate refusal to go it alone, Mr Verschoyle proposed a splendid compromise: Italian police should carry out the arrest, without knowing exactly who their suspect was, with American and British agents on hand to ensure all went smoothly. Even better, Verschoyle agreed to devise a scheme to lure Pavelić from his lair and to make the phone call that would trigger the arrest.

As Blunda observed phlegmatically in a report to his superiors in November 1947, which he warned must not be seen by any British authorities:

To this day the British have not called on us to put this plan into effect. They have indicated that they are unable to get Pavelić out of the Vatican grounds.
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Pavelić remained in Italy, staying at a monastery near Castle Gandolfo, the Pope’s summer palace, until November 1948 when he was smuggled away, by now disguised with a heavy beard and moustache, in an Italian merchant ship to Argentina. He continued his campaign on behalf of the Ustashe movement until his death in 1959.
²⁴³

He remains one of the most notorious war criminals to escape retribution. He was the beneficiary of the dramatic realignment that was taking place in attitudes among British and American politicians towards the Communist menace that had preoccupied them before Hitler’s rise to power. Behind the scenes Allied intelligence services were forging new alliances and re-establishing old ones in anticipation of that realignment. Pavelić had been smart enough to recognise that trend and as early as October 1944 had sent an emissary to Allied Command in Caserta in southern Italy pleading that Croatia could only exist with the support of Great Britain.
²⁴⁴

Klop would have a part to play later in MI6’s construction of a Cold War apparatus in Eastern Europe, particularly through his connections with the Czech secret service.

CHAPTER 13: MAX KLATT

T
he mystery of Max Klatt tested some of Britain’s finest minds and found no convincing answer. Among those puzzling over its complexity were Gilbert Ryle, Waynflete Professor of Metaphysical Philosophy at Oxford University, the historian Hugh Trevor-Roper who officially investigated and recorded
The Last Days of Hitler
, and Klop Ustinov.

Professor Ryle, who had been recalled from Oxford in February 1946 to continue his wartime MI6 duties, teamed up with Klop to conduct the interrogations. They made an unlikely combination: the tall, slim, scholar and the short, pugnacious spy. Ryle had taught himself German well-enough to read the major philosophers in their own language but preferred to conduct the interviews in English with Klop adopting the more neutral role of interpreter, usually purporting to be a born and bred Englishman using his usual pseudonym of ‘Mr Johnson’ rather than giving away his original German nationality.

The existence of Max Klatt had been known to British intelligence since 1941, thanks once again to the cryptographers at Bletchley Park. In June that year, they began to decipher radio traffic picked up between the Klatt organisation in the Bulgarian capital of Sofia and the Vienna office of German military intelligence, the Abwehr.

It was immediately clear that this was a major intelligence asset for the German army. Daily reports flowed in from all over the Soviet Union and British operations in the Middle East and
North Africa. By the end of the war Bletchley had dealt with more than 5,000 Klatt communications. Not only did they appear to come from many locations, they were extraordinarily up-to-date, sometimes reporting events on the day they happened. That implied that reports must be transmitted by radio yet the listeners could find no evidence of incoming radio messages from agents in the field to the collator at the centre of the web in Sofia. There was the additional mystery of why the network was based in Sofia, transmitting information huge distances, only to relay it back as a package to Vienna and then back to Berlin.
²⁴⁵

The traffic was split into two main groups: Max and Moritz. Max appeared to have agents everywhere from Leningrad, 1,300 miles to the north, down to Batumi on the eastern edge of the Black Sea, on through Azerbaijan to the Iranian capital, Tehran, and then on to Baghdad in Iraq, 1,300 miles to the south. Initially MI5 and MI6 were more concerned with Moritz, whose sphere of operations extended from Syria and Palestine down through Egypt into Libya.
²⁴⁶
It appeared that the Germans had a mole inside General Bernard Montgomery’s Eighth Army as he sought to turn the tide against the Panzer divisions of Field Marshal Erwin Rommel in the Western Desert.

Gradually the analysts came to the conclusion that the Moritz material was low-grade intelligence, often inaccurate and capable of being compiled by any well-informed observer.

The Max traffic, however, gave the appearance of being genuine, detailed and immensely valuable to the German high command. It provided information about shipping convoys and troop movements, planned offensives and situation reports from the siege of Stalingrad. With some trepidation, the Joint Signals Intelligence Committee, with representatives from MI5, MI6 and GC&CS (the Government Code and Cipher School) decided to alert the Russians to what looked like a horrendous security failure on their part. Their representative in Moscow, Cecil Barclay – Sir Robert Vansittart’s stepson – was authorised to give a guarded
account of the intercepts. This carried the risk that the Klatt operation would quickly realise the Russians had been tipped off. The code-breakers were not about to share the secret of Enigma, the German encryption method that they had broken, with their Communist allies. They were not to know that Russia’s own double agents, Kim Philby and Anthony Blunt, were assiduously filing every detail back to Moscow anyway.

Additionally, a suspicion was forming in the minds of some in MI5 and MI6 that what they were seeing might be a huge deception operation by the Russians, deliberately feeding false intelligence, laced into genuine information, back to Germany. Britain was already doing the same thing. Cecil Barclay got a surprising response: bitter complaints that the British had been holding out on their allies. More surprising still, nothing happened. The Klatt operation carried on as before; apparently the Russians had done nothing to plug the leaks.

When President Yeltsin ordered the partial release of Russian Intelligence Service archives in the early 1990s it emerged that the NKVD and the counter-intelligence service Smersh had investigated Klatt but had not produced a final report until 1947. They concluded that the Klatt reports contained only 8 per cent genuine intelligence, that the agent names were fictional and that no radio network existed. They did not explain where the genuine intelligence had come from.
²⁴⁷

Nevertheless, at the time the British concluded that the Klatt operation was genuine. This belief was fuelled by interrogation of captured German agents, in particular Mirko Rot, a Yugoslav Jew whose parents were among those massacred by the Hungarians in Novi Sad in 1942. He and his wife had narrowly escaped the same fate and he had trained as a German agent with the deliberate intention of getting sent undercover to an Allied country where he could defect. His opportunity came when he was posted to Lisbon and made contact with the First Secretary in the British Embassy, Peter Garran. He was able to identify some of the Klatt
agents, among them Willi Goetz who was based in Turkey, and Elie Haggar, the 23-year-old son of an Egyptian policeman. Haggar had been recruited while studying chemistry at university in occupied France and was tracked by MI5 as he made his way home via Sofia, where he was briefed by the Klatt team. He was intercepted by the British in Palestine and interned. But the Moritz traffic continued. MI5 suspected that it might be the work of the correspondent of Tass, the Russian news agency, attached to the British forces.

More significantly, Mirko Rot gave MI5 Klatt’s real name: Richard Kauder. He had met Kauder’s mother, visited his flat at 15 Skobelev Boulevard, and knew about his mistresses in Sofia and Budapest. Klatt managed to operate independently of the local Abwehr office, which treated him with suspicion. Instead he made himself the most valuable supplier of intelligence to the Abwehr in Vienna. Rot was aware that the Klatt signals were highly valued. The Stalingrad reports had been of enormous help to the air force and led to the Russians suffering great losses. Rot also revealed that one channel of communication was a White Russian – someone who would be willing to see Germany triumph in his homeland to rid it of the scourge of communism.
²⁴⁸

He identified this source as General Anton Turkul and was later able to describe how, in July 1943, Kauder had personally flown to Rome, accompanied by Turkul’s head of intelligence Ira Lang, to persuade Turkul to flee to Budapest before the Allies invaded Italy. Klop was briefed at an early stage on the Rot revelations so that he could run them past agent Harlequin – the German Major Richard Wurmann – whom he had interrogated at his country home in Gloucester and who was now conveniently located in a neighbouring flat in Chelsea Cloisters. Wurmann could not help but Klop kept in close touch with developments and sought the help of his old friend Eugen Sabline for background on General Turkul.

Turkul, born in 1892 in Odessa in the Ukraine, was the son of an engineer and had enlisted as a private in the Imperial
Russian Army at the outbreak of the First World War, rising to the rank of captain. Promotion came even more rapidly with the 1917 Bolshevik revolution. Turkul joined the White Russian resistance army in Poland and so distinguished himself that he was appointed general of an infantry division. When it became clear that the rebels were doomed to fail, Turkul, like 160,000 of his countrymen, fled to Turkey. As they then dispersed around Europe during the 1920s, he had eked out a living as a clerk in a sugar factory in Serbia, spent some time in Sofia and then become part of the exile community in Paris. He struggled to make ends meet, running a petrol station and a restaurant and taking in lodgers. He remained active in the many anti-Communist movements, wrote a book about his military experiences and, as he later confessed, was paid money by the Japanese – who were in constant conflict with the Soviets in the east – to infiltrate anti-Communist agitators back into Russia.
²⁴⁹

All of this made some sense. Here was a right-wing White Russian intelligence organisation with extensive contacts still inside the Soviet Union. Their concern was not to rid Europe of Adolf Hitler; it was to rid Russia of Joseph Stalin, almost at any price. The opportunity to test this theory came with end of the war and the arrest of Kauber, Turkul and Ira Lang.

On 24 May 1945, Kauder was arrested by the Americans in their control zone in Vienna and the remains of his network were rolled up by the simple expedient of sending out a coded message to them in Kauder’s name summoning them to a meeting. As they arrived they were arrested. British intelligence regarded him as a priority target but for more than a year they were prevented by the Americans from seeing him.

Kauder was questioned at length at the American interrogation centre in Salzburg. The master spy was only 5ft 6in. tall and weighed nearly 13 stone (82 kilos); he was stout, slow-moving, with a round, friendly face and smooth grey hair. He was Jewish by birth but had converted with his parents to Roman Catholicism under the
pressure of rampant anti-Semitism in turn-of-the-century Vienna. His motivations for working for the Nazis were thought to be money and fear. He was paid large sums of money to meet the expenses of his supposed agent network but he still faced discrimination because of his background. At one point the Abwehr were forced to stop using him because of an order from Hitler that they should not employ non-Aryans. Kauder’s mother was living in Vienna at the outbreak of war and he was anxious that she should be protected from persecution. His father, who had been a medical officer in the Austro-Hungarian Imperial Army, was dead.