Fighting to Lose (27 page)

By this time, Canaris had Britain’s interests very well looked after. Major Ritter could filter out any really dangerous intelligence that passed through Ast Hamburg, while von Karstoff — also an especially trusted Canaris loyalist — could keep an eye on things at KO Portugal. He was shortly to have the help of another agent especially trusted by Canaris: Paul Fidrmuc, later to be notorious to the Allies as OSTRO.

Fidrmuc was the best. He had been a spy for the Abwehr since 1934, and had operated in Canada, the United States, and Britain before the war. He was sitting in a jail in Denmark awaiting trial for espionage when German troops marched into that country. He was forty-three, sly, well-travelled, and a capable writer in both English and German. He arrived in Lisbon just as Popov made his approach to MI6 in Belgrade.

It may have been coincidence, of course, but if Popov was to operate against England from Lisbon, he needed a case officer. While MI5 might be satisfied to believe that von Karsthoff ran his spies hands-on, it was Abwehr practice — like any espionage organization anywhere — to have staff members of an Ast or KO manage the agents. It would seem Fidrmuc was sent to Lisbon to work in that capacity with Popov.18

Indeed, the three men — von Karsthoff, Fidrmuc, and Popov — had much in common. The first two were vintage Austrians, left over from the aftermath of the First World War and the breakup of the former Austro-Hungarian Empire. This had involved the realignment of Austria’s borders and the creation of Hungary, Czechoslovakia, and Yugoslavia. Following the breakup, Fidrmuc found himself suddenly a Czech, and von Karsthoff would have been an Italian had he stayed in Trieste after it was chopped off and handed to Italy. No Nazis these two.

Popov, for his part, told the British he was born in Titel, Serbia, but when MI5 tested him on his language proficiency, it was found that along with Serbo-Croat, German, and a smattering of English, he was fluent in French and spoke excellent Italian with a Viennese accent, a considerable achievement for a young man from the Balkan backcountry. The language profile — especially the Viennese accent — better fit a Croat from Dubrovnik, as the Germans understood him to be. If that was the case, then he probably shared the fierce anger of Croatians at being lumped in with the Serbs in the new Yugoslavia, rather than being given independence. That would have made him partial to the Germans, not to the British.19

In any case, it was not intended that Popov work through Portugal for long. Major Ritter planned to put his gift for languages to use by getting the British to take him on in Egypt as a double agent attached to the counter-espionage agency there — Security and Intelligence Middle East (SIME).20

North Africa, up to the beginning of 1941 a backwater of the war, had suddenly burst into view with Indian and English troops under General Archibald Wavell, trouncing three times their number of Italians. Over 115,000 were captured and the rest were thrown back from the threshold of Egypt almost to Tripoli. It was the British army’s most brilliant accomplishment of the war.

Mussolini was devastated. The Italian dictator was noted for his bombast, but there was nothing to puff about now. The new Roman legions of the 1940s had been humiliated. Hitler took pity and offered a modest German force to help prop up the Italians. German troops and panzers began landing in Tripoli in January. Then someone on Hitler’s staff — maybe Hitler himself — had a very good idea. General Wavell was highly regarded by the Germans. During the interwar years he had been a prominent theorist on the principles of mechanized warfare. He was a tank man, and defeated the Italians by sending his armour around and between and behind them, the parched plains of Libya being perfect for a battle of movement. Against such a commander, one must put a leader of like qualities. Hitler chose General Erwin Rommel.

It was an inspired choice. The fifty-year-old Rommel had once commanded Hitler’s personal guard and had made a name for himself during the invasion of France, when his panzer division had been first across the Meuse and had led the dash for the Channel. He had caught Hitler’s eye, and to all appearances was a loyal follower of the Führer.

It is testimony to the speed with which Canaris could act that he had Popov aimed on Egypt within weeks of Rommel being named to Africa. If Popov could be properly set up as a double agent for SIME in Cairo, he could fish for intelligence on Rommel as well as on Wavell.

When MI5 switched off SNOW’s wireless transmissions on April 13, 1941, Major Ritter was deeply involved in paving the way for Popov in Egypt, and in developing Abwehr espionage capacity in the eastern Mediterranean generally. If dropping Owens meant MI5 was losing confidence in its other double agents, it could affect Popov. Months of planning and preparation could be destroyed just when Rommel had gathered sufficient forces to strike at the British. It was a crucial moment for Major Ritter and undoubtedly the reason why the Germans now proceeded to show tokens of their continuing faith in TATE.

The XX Committee, for its part, must have breathed a collective sigh of relief when Popov returned from his third trip to Portugal at the beginning of May. He told of being congratulated on the excellent intelligence he had been obtaining. He reported no trouble selling Plan
Midas
to von Karsthoff, and his phantom sub-agents, BALLOON and GELATINE, were to be put on the Abwehr payroll. As the FBI was later to observe suspiciously, “von Karsthoff showed very little curiosity about Popov’s activities in England, his means of entering or leaving the country, or his sub-agents, but left the impression that he was to manage everything.”21 He was given £300 for BALLOON and GELATINE and US$2,000 for himself.

By the end of May in England, the bombers had largely stopped coming as Hitler switched his Luftwaffe resources to the east for the invasion of the Soviet Union. Britain’s scorched and smoking cities were to get a reprieve. Imminent invasion was no longer to be feared. The raison d’être of the Wireless Board, the XX Committee, and Major Robertson’s wireless double agents — now reduced to two, TATE and DRAGONFLY — had ceased to be. For the XX Committee especially, finding something new to do was crucial.

The answer was to shift emphasis to general deception. RAINBOW, and the handful of other non-wireless double agents that had been run separately by Major Sinclair, were turned over to Robertson’s newly minted B1A section. The XX Committee similarly expanded its mandate to all double agents, although still only in an advisory capacity. Robertson retained actual command. It meant that if he and Masterman were going to make names for themselves in their new roles, Popov, with his rich promise of fooling the Germans in the United States and Egypt, was their best bet.

For Major Ritter, June 1941 was a black month, and it got even blacker. Twelve days after breaking his arm when his plane ditched in the Mediterranean, he lost his American triple-cross operation, and with it his job with the Abwehr. His fault had been to assume that what he was getting away with in Britain could be duplicated in the United States. Not so.

William Sebold — TRAMP to the Germans, Harry Sawyer to the Americans — had enjoyed an easy run of it for over a year. His FBI operators at Centerport, New York, had faithfully radioed to Hamburg whatever he gave them, in readable cipher or not, and were sending on his behalf daily weather reports that included barometric pressure that even the FBI acknowledged was useful to German U-boats prowling the Atlantic.

Ritter, however, had over-extended himself. With the FBI looking after the transmitter, he allowed Sebold to become the centre of a small network of spies who sent their information as actual documents smuggled aboard ships bound for Europe. To facilitate this activity, the FBI was enticed into setting Sebold up in a dummy business. Unfortunately, unlike MI5 and Arthur Owens in Britain, the FBI did not leave Sebold to his own devices. When Sebold’s spies came calling at his office, it was with the whirring and clicks of FBI cameras behind a two-way mirror on the wall.

It must have seemed low risk at the outset. The United States was not at war, so even if Ritter’s agents were eventually arrested, at worst the penalties would only be a few years in jail. And even if the FBI caught on, why should it break up the party when there was no need to? The British had let Owens collect intelligence and obtain it from sub-agents for years without interfering. However, FBI director J. Edgar Hoover had made his reputation and that of the Bureau’s by spectacular show trials during Prohibition. The movies and photos were for the press as well as for the courts.

There was indication of what was to come. Earlier in the spring, in a mighty blaze of publicity, the FBI took to the courts with the breakup of the “Joe K” spy ring, a Nazi security service enterprise that went sour when British postal censorship in Bermuda turned up and turned over one of his invisible-ink secret letters. The lucky break of an automobile accident and some good detective work had led to the capture of Kurt Ludwig, a.k.a. Joe Kessler, and his confederates.

On June 29, 1941, the FBI again pounced. In a lightning roundup, twenty-nine agents associated with Sebold were arrested. There were lurid headlines in newspapers across the United States and the world, and fabulous cinema footage of spy-to-spy meetings. It was thrilling stuff and captivated the American public for weeks on end, but it was the last thing Hitler wanted. Having attacked the largest country in the world just the week before, he did not want to give offence to the most powerful. There was hell to pay in Berlin.22

It was tremendously embarrassing to Canaris. A furious Hitler was deaf to any explanations, including that Sebold had been deliberately planted on the FBI. Major Ritter had to take the blame, and the punishment was swift. He was kicked out of the Abwehr, and Abt 1 Luft Hamburg was closed down and its staff dispersed. Ritter wound up in an anti-aircraft unit for the rest of war.23

The FBI scoring a double-agent triumph did not bring much cheer to MI5 either. The Bureau was good about it, giving details of its investigation to British Security Coordination, the MI6 office in New York, to pass along to its MI5 colleagues in London.24 MI5 could claim nothing like it. The minor German agents and sympathizers it had so far arrested had led to no spy rings. All had been individuals, or very small group efforts that had failed at the outset. Yet it was the British who were at war, not the Americans.

MI5’s only riposte was to promote its prowess with double agents. Thus Popov — TRICYCLE — slated shortly to pass through the United States on his way to Egypt, was touted to the FBI as a kind of espionage superstar, a deeply cunning professional who had penetrated to the heart of the German secret service apparatus in Portugal and Spain,25 without giving the Americans any details, or any hint that there were still fears he had been blown by Owens.

Then something really exciting occurred. RAINBOW, a.k.a. George Eibner, the young man who roamed England with a small dance band, and who occasionally exchanged secret-ink letters with the Germans under Major Sinclair’s direction, received a letter from Portugal bearing instructions on a piece of film negative posing as a period at the end of a sentence. This was amazing. For more than a year, Eschborn had been struggling at Hamburg’s direction to reduce spy-photos to the size of postage stamps. This was new technology light years beyond his best efforts. Major Robertson was hugely impressed.26

It wasn’t new. To realize this, Robertson had only to read page 214 of Colonel Nicolai’s book
The German Secret Service
(London, 1924). Germany’s chief spymaster of the First World War wrote:

Finally the use of photographic reduction in the service of espionage deserves mention. It is accomplished by the reduction of documents as large as a sheet of typing paper to the size of a leaflet a millimetre square. In this way agents could receive almost indiscernible instructions which they could read with the help of magnifying glass.27

But Robertson had not read it; nor had the FBI told its British counterparts that Sebold had arrived in the United States sixteen months earlier with four microphotographs stuck to the back of his watch. The FBI had even gone on to make them for him.28