The Irregulars (10 page)

On his return to London, Stephenson argued in favor of forming a much broader intelligence and security system than had hitherto existed to assist with the war. After hearing his report, Churchill appointed him the new head of British secret operations in the United States. He would replace Sir James Francis Paget, a debonair and socially well-connected officer. The time had passed for gentlemanly agents and their tried-and-true methods. The pressure of war now demanded that they do far more in the field than the collection of enemy intelligence, and this necessitated a changing of the guard. The SIS would have to rise to a new level to defeat the Nazis. Churchill agreed with Stephenson that the only truly effective form of intelligence was counterintelligence, and to carry out this work they needed new blood—dynamic and innovative men who could confront the challenges ahead with new ideas, organizations, and action.

Stephenson was a master of subversive technology, ruthless in his dedication, who understood that in order to drag the reluctant American people into the war, it would be necessary to engage in all-out political warfare. He was at heart a bandit, who could be counted on to execute difficult orders that might give the best-schooled officers pause. Churchill also recognized that as a North American industrialist—who spoke with almost no trace of an accent—Stephenson would have a far easier time persuading the Americans, who sometimes resented the plummy tones of British government ministers. Moreover, Stephenson’s widespread connections in the financial community could prove extremely useful, especially as his people would be thin on the ground for the first few months. “Realizing what a task he was faced with, and knowing Stephenson, as he did very well, he picked the right man,” recalled Colonel Charles (Dick) Ellis,
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a highly experienced intelligence officer whom Stephenson chose to be his second in New York. “He had a sort of fox terrier character, and if he undertook something, he would carry it through.”

Churchill’s powerful spymaster, Stewart Menzies, took a dim view of the appointment. He objected to Stephenson both as an unprincipled outsider and as an independent operator who seemed to feel he was answerable to no one. Menzies was Stephenson’s opposite in almost every respect. Groomed for the job almost from birth, he was an upper-class product of Eton, who had begun his long SIS career as head of counterespionage in France in his early twenties. He had spent the entirety of his adult life in the secret service of the state. While the enterprising Canadian’s industrial and economic information had been appreciated, Menzies disliked his methods and the brash vulgarity of his style. He cautioned Churchill that it would be unwise to entrust a job that was so delicate, and of such ultimate importance to the country, to someone who had no background in military intelligence or diplomacy and was so far removed from the halls of the SIS and the Foreign Office, the pool from which senior field personnel were normally recruited.

Stephenson had formed an equally unfavorable opinion of Menzies and the cumbersome, rigid bureaucracy he oversaw. As a social upstart from the backwoods of Canada, he chafed under “C”’s aristocratic authority and had little time for his cherished old-boy network. Accustomed to a high degree of freedom, he also balked at the idea that he would have to receive his directives from Menzies and “that gang at Broadway,” a derisive reference to SIS’s London headquarters at 52 Broadway. He asked Churchill for time to consider the appointment, to be certain this was the best way to serve his country. He conferred with a great number of colleagues, both old and new, pushing to sweep aside the “thumb-twiddlers and military dinosaurs” and make way for new methods of warfare and more aggressive tactics.

In the end, it was Hitler who would decide his course of action. Early on the morning of May 10, Germany’s armies marched into Holland and Belgium. Later that same day, Chamberlain resigned, and Churchill was summoned to Buckingham Palace and asked to assume leadership of the wartime government. In his first day as prime minister, Churchill totally reorganized the government, installing a list of new cabinet ministers he hoped would reinvigorate the war effort. He was adamant that Stephenson go to New York, and his wishes prevailed.
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As director of British Security Coordination, Stephenson’s assignment, as set down in the official history of the BSC, was “to do all that was not being done, and could not be done by overt means, to assure sufficient aid for Britain and eventually to bring America into the war.”

Stephenson made another quick, flying trip to Washington at the end of the month, reportedly making a surreptitious call on the president at the White House. While it is less than clear just how and when Stephenson’s liaison with Roosevelt was effected, Robert Sherwood, FDR’s speechwriter, in one of the more reliable statements about the behind-the-scenes machinations during this period, wrote: “Six months before the United States entered the war…there was, by Roosevelt’s order and despite State Department qualms, effectively close cooperation between J. Edgar Hoover and the F.B.I. and British security services under the direction of the quiet Canadian, William Stephenson.” That Roosevelt would agree to something that ran counter to his country’s own policy and flirted with the idea of a secret sphere of war provided the tacit permission that Stephenson needed to begin his mission. Roosevelt’s dedication to the anti-Nazi cause was such that it drove him to risk impeachment by taking steps to aid England’s survival, according to the official history of the BSC, even to the point of allowing Sherwood to show important foreign policy speeches to Stephenson before they were delivered.

Traveling under the standard diplomatic cover of “passport control officer,” Stephenson arrived in New York for the second time on Friday, June 21, 1940. This time he was accompanied by his wife, Mary French Simmons, the pretty, soft-spoken daughter of a rich tobacco exporter whom he had married in 1924, after falling in love with her on the voyage back from his first business trip to the United States. Before disembarking from the SS
Britannic
, the couple filled out immigration forms listing their address as the Waldorf-Astoria. In the blank corresponding to the purpose and length of their intended stay, Stephenson scrawled “indefinite.”

Despite what he wrote on the immigration forms, Stephenson and his wife put up at Vincent Astor’s hotel, the St. Regis, eventually taking a spacious apartment in the Dorset House, a luxury building overlooking the East River. Appalled to discover that his predecessor had worked out of a small room in the British Consulate that was both “cramped and depressing,” not to mention all the way downtown in the Cunard Building, Stephenson made it clear from the start that he needed something considerably larger and more centrally located for the complex underground apparatus he envisioned. He worked temporarily out of a suite at the Hampshire House, on the south side of Central Park, before settling on a large suite of offices on the thirty-sixth floor of the International Building in Rockefeller Center, at 630 Fifth Avenue, in midtown Manhattan. Stephenson managed to rent the place for a negligible sum from the owner, Nelson Rockefeller, who, like Astor, was an ardent Anglophile and fellow member of the Walrus Club. For the same reason, a British intelligence front group, Fight for Freedom, was housed on the twenty-second floor of the same building, along with a number of other British propaganda agencies. That Rockefeller Center also happened to include the famous RCA tower, home to NBC, and was a stone’s throw from CBS and a slew of other major news organizations, was an added bonus.

In less than six months, Stephenson totally rewrote his job description and extended his influence to include the Security Division, Naval Intelligence Division, and Special Operations Executive (SOE)—which covered censorship, codes and ciphers, security, and communication—and was soon running nine distinct secret organizations in the United States and throughout North and South America, controlling what Hoover complained was an army of British secret agents. Stephenson had extraordinary power and license to direct his organization as he saw fit, deploying the organs of subversion, propaganda, and political warfare. His first order of business, according to Sherwood, was the “detection and frustration of espionage and sabotage activities in the Western Hemisphere by agents of Germany, Italy and Japan, and also of Vichy France.” Initially, Stephenson was supposed to concentrate his efforts on enlarging American material aid to Britain, and on tightening security at the ports, railroads, and storage areas to protect British shipments from American factories, but he wasted no time engaging in offensive, as well as defensive, operations against the enemy.

His primary directive, coming straight from the lips of the PM, was that American participation in the war had to be secured. It was the single most important objective for Britain. Defeating Nazism was the surest route, the only route, to victory. The BSC agent John Pepper, a good-looking young businessman who had worked for Stephenson’s London corporation and accompanied him to New York, clearly outlined their mission to a potential new recruit named Betty Thorpe:
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Our best information is that the forces of isolationism, a front here for Nazism and Fascism, is gaining, not losing ground…. We feel there is German money and German direction behind the America First movement, though many of its followers may not know it and would in fact be shocked to know it. If we can pin a Nazi contact or Nazi money on the isolationists, they will lose many of their followers. It might be the deciding factor in America’s entry in the war, if the American public knew the truth.

 

One of Stephenson’s first priorities when he assumed control of the BSC was to spread propaganda designed to strengthen the interventionist cause and undermine the isolationists. Since the beginning of the European war, the British ambassador, Lord Lothian, had repeatedly voiced his concern over the strong isolationist sentiment in the United States and warned that nine in ten Americans were determined to keep their country out of the war. A BSC survey done in 1941 found that nearly one million Americans were members of isolationist organizations such as America First, which had as many as seven hundred chapters across the country; some, like the American Nazi Party, were committed to aiding the Axis powers. While most Americans hoped for Allied victory, far fewer believed that providing military support to Britain was necessary to achieve it, and they were reluctant to become involved because of their memories of World War I. As a consequence, the Lend-Lease Act was hotly contested for months and was barely passed by a bitterly divided Congress.

To sway public opinion in favor of aid to Britain, Stephenson declared a covert war on the isolationists. He aggressively propelled the BSC into a vast array of aggressive new initiatives, from producing propaganda that portrayed Germany as an enemy of democracy and capitalism and a Nazi victory as a “threat to the American way of life,” to monitoring and reporting on isolationist groups and harassing and publicly humiliating their leaders. When Senator Gerald Nye gave an anti-British speech in Boston in September 1941, the BSC littered the area with handbills accusing him of being an appeaser and “Nazi lover.” After Representative Hamilton Fish gave a speech criticizing the interventionists, he was presented with a card that read, “Der Fuhrer thanks you for your loyalty,” just as the pool of photographers began snapping photos. Not all of the BSC’s ploys succeeded. An attempt to disrupt one of Lindbergh’s America First rallies at Madison Square Garden backfired when counterfeit tickets, created by the BSC with the idea that his fans would be turned away in droves, ended up only further packing the hall. As a consequence the pro-German flying ace ended up preaching his pacifist doctrines to an enthusiastic audience of 20,000, with almost as many cheering for him on the streets outside.

To shake Americans out of their complacency, the BSC went to fantastic lengths. They even hired the Hungarian astrologer Louis de Wohl, whose prognostications had once caught the fancy of the Führer himself, to prophesy Hitler’s imminent doom and undermine public confidence in the invincibility of the Nazis. Stephenson staged a press conference on August 6, 1941, at which the astrologer unveiled his predictions to the astonished reporters: Hitler’s horoscope showed that his fall was certain. Stephenson arranged for de Wohl’s revelations to become regular tabloid fodder over the next several months and saw to it that his forecasts were echoed by shamans in other parts of the world, including an eminent Egyptian astrologer in Cairo and a Nigerian priest in a remote village. Stephenson even went the extra mile, making sure that one of de Wohl’s prophecies—that an ally of Hitler’s would soon go mad—was fulfilled ten days later, when a French naval officer who had escaped from Martinique reported that the island’s Vichy French governor had gone insane. With his fateful vision legitimized, the newly celebrated “astro-philosopher,” as the papers dubbed him, toured the country, declaring Hitler’s coming defeat at meetings, over the air, and in widely syndicated newspaper columns. According to the BSC history, the British found the Americans surprisingly easy to manipulate: “It is unlikely that any propagandist would seriously attempt to influence politically the people of England, say, or France through the medium of astrological predictions. Yet in the United States this was done with effective if limited results.”

Running a large intercontinental intelligence network required building up a significant staff, and new personnel were recruited from Canada, England, and the United States. Stephenson’s BSC agents were an unorthodox group, but then it was unconventional duty. They were, to his mind, insurgents, fighting a guerrilla action in a foreign country. He recruited people from every walk of life and favored enthusiastic amateurs, whose names and faces were unknown to the Gestapo and other enemy intelligence agencies, and had no ties to the British SIS. They were hired for their background, education, and originality—any formal training in the tradecraft of spying was secondary and came later, if at all. They included all sorts, from Dick Ellis, the professional intelligence officer Stephenson had brought from London to be his deputy; to Louis Franck, who was in charge of liaison with the Americans on technical matters such as the manufacture of radio equipment and other devices, as well as the management of the newly founded sabotage-training school in Canada, among other things; and Connop Guthrie, an Englishman with extensive experience in shipping who led the industrial security division. Among the British businessmen and financiers who handled key executive jobs were Richard Coit, who served as propaganda chief; John Pepper, who became intelligence chief; and Bickham Sweet-Escott.