Krueger's Men (11 page)

For any prisoner, a visit to the doctor or dentist was both an ordeal and a risk: an ordeal because prisoners were not permitted anesthetic lest they unconsciously spill their secret; a risk because they never knew whether a medical injection was intended to cure them or kill them. In the prison parlance of Block 19, any shot in the arm could turn out to be a
Himmelfahrtspritze,
an injection to a heavenly journey.

In the end, Marock and Weber proved more dispensable than the prisoners themselves. On leave in Berlin, where they bedded the lonely wives of officers at the front, they made the foolish mistake of boasting about their work. Two Gestapo agents in civilian clothes appeared at the camp, roughed them up, and stripped them of their insignia before taking them away. Krueger reported that they had “shown themselves unworthy of the confidence placed in them.” Marock was shot, Weber sentenced either to fifteen years in prison or to duty on the Russian front. The prisoners’ first reaction to their tormentors’ fate was not personal relief, not even classic German schadenfreude, but anxiety that such a gross violation of secrecy might bring Operation Bernhard to a halt. Krueger assured them it would not.

The prisoners viewed virtually every event, even the good news of the D-Day landings, through the single prism of whether it might induce Himmler to shut down the operation that was prolonging their lives. Incentives to stretch out the work became stronger as the tide of battle turned and liberation seemed possible. The lenient treatment may also have encouraged the few active saboteurs, but no one talked much about such things lest they be overheard. Chief engraver Felix Cytrin’s dogged pursuit of perfection was his preferred form of rebellion: adhering closely to Krueger’s orders in the engraving shop and at the inspection section — to print and pass only the very best notes. Countinghouse manager Oskar Stein found fault with the paper deliveries for minor imperfections. Prisoners in the print shop also performed small acts of sabotage, fouling the rollers to stop the presses temporarily, chipping at the printed letters, or damaging the engraved plates. Abraham Jacobson, who had managed a printing plant before he was arrested as a Dutch underground leader, said his fellow-prisoners were seized by a spirit of resistance, but not to the point of refusing to work. “We agreed, however, to sabotage the orders as much as possible because by doing so we would lengthen our own lives,” Jacobson said. “If the process were shut down, for whatever reason, we knew absolutely for sure that it would be our end.”

During working hours, the prisoners’ minds were too fully engaged to think of their bleak future, but after they left the hurly-burly of the print shop or the intense concentration of the inspection tables, they were enveloped by a melancholy that was difficult if not impossible to shake. Some diverted themselves with newspapers and magazines; others played practical jokes. Max Bober commandeered the public address system (the guards were in on the prank) and, declaring, “This is England,” announced that the Bank of England knew all about Sachsenhausen and two of the principal counterfeiters, Leo Krebs and Hans Kurzweil. When the two section chiefs heard their names, they paled, and even the guards joined in the laughter at their expense.

The lugubrious Cytrin declared such stunts were “a mere pretense to drive us completely crazy.” He was certain that one day Berlin would decide it had enough pound notes, and that would be the end of them. Bober’s view was more sanguine: “That won’t happen so soon, so you can rest easy. It’s a long way to Tipperary, as it goes in the song. Plenty can happen before Hitler gets to that stage.” Cytrin could only hope that “if a collapse happens quickly, maybe we here in this block will have a chance, too.”

If not a constant visitor, death was always a presence. Max Groen, the Dutch newsreel cameraman, thought of Krueger without rancor as “the big chief, a very nice man, softly spoken, but in the back of my mind, I knew that even with his nice undertone, he would send me to the gallows if necessary.” By consensus they looked up to him as
“Der Alte”
— the Old Man — or sometimes “Uncle Krueger” upon whom they were totally dependent. So life was a presence, too, by the mere chance of their continued survival, even if by a thread. The prisoners confronted an exquisite dilemma in short, emotional bursts, and the debate engaged them all, each in his own way. The intellectuals among the group tended to be more pessimistic and attempted to console themselves by organizing after-hours discussions of classic German authors such as Goethe and Schiller, but the guards put a stop to that. Avraham Krakowski, reproached for not extinguishing his light box lest he violate a prohibition of the Jewish Sabbath, stabbed his knife into a stack of bills out of frustration and anger but also a profound declaration of faith. Krakowski and Isaak Glanzer, another observant Jew, discussed the Torah and prayed together. Glanzer told his younger companion that “we will need divine mercy to get out of here alive. So let’s stick together.”

They did.

Nachtstern, surprising himself with his frankness, asked Springer one day whether he thought they would ever leave the camp alive. Springer looked equally surprised at the question and replied, “You don’t think, Mr. Nachtstern, that the Germans will let you go back to Norway and tell about what happened in this block? No, only a miracle can save us. But anything may happen in this crazy world. For you young folks’ sake I hope the miracle will happen. As for myself I don’t expect much more in this life. I’m too old to start anew, sick and penniless as I am.”

Nachtstern was depressed by the exchange until Glanzer, Richard Luka, and Fritz Schnapper called him over for a hand of cards. They joked that theirs was a very exclusive club, and since Schnapper was the oldest, he should be elected president. Glanzer extended the gallows humor: “We can also safely make him a member for life.” Schnapper growled in Yiddish:
“Kish mir im tuchus”
— Kiss my ass.

A few months later, Dr. Rojzen, like most good doctors a man of some equanimity, succeeded in taking the edge off a similar, occasionally despairing exchange. “Luck or miracle, what’s the difference?” he concluded. “What counts is that I had already given up when I was saved. It’s the same with all the others who came here with me. We have a pretty good chance to survive, as I see it. Remember, we are the geese who lay the golden eggs. Don’t worry, they won’t get rid of us until the very end. Before that happens, a lot of things may come to pass.”

They did.

Chapter 8

“T
HE
M
OST
D
ANGEROUS
E
VER
S
EEN
”

T
o inspect the bound ledgers of the Bank of England’s transactions is to enter a lost world. Until World War I, some clerks, shabby in top hats and tailcoats, still used quill pens. Even when they modernized with steel nibs, copperplate script remained the norm, elegantly recording the exchange of notes in and out, true and false. From the slump of the early 1930s until the early 1940s, barely a dozen large counterfeit notes had reached Threadneedle Street instead of being stopped in commercial banks by tellers who were trained to spot them. In April 1941, new forgeries started appearing. They had been skillfully photographed and then printed by lithography, but were easily detected by their limp paper. Relatively few of these Type Z forgeries (as the Bank designated them) passed through the Note Office in the following months, and they caused little alarm. They were traced to the occupied territories of Belgium and France; the neutral transfer point of Switzerland; and to Palestine, then under British rule, having probably originated in occasional distributions by Operation Andreas.

Then on September 21, 1942, just as Operation Bernhard was gearing up, nine forged ten-pound notes were accepted by banks in Tangiers, a colonial city of international rogues and smugglers at the northern tip of Morocco, just across the straits from Gibraltar. They were forwarded to London for credit and zipped right past the Bank of England’s own inspectors before the Bank’s Note Office bounced them. They were similar to but far more expert than the Type Z forgeries; the batch and serial numbers showed that real notes with those designations had already been cashed at the Bank by someone else. Craftsmen at the Bank’s St. Luke’s printing works studied them and declared them counterfeit. The new fakes were designated Type BB, and the deputy chief of the Note Issue Office reported they were “the most dangerous seen for many years.” Someone above him in the Issue Department, which supervised the offices handling the notes, upped the ante and wrote in the margin that
“
BB is the most dangerous ever seen
.”
Confirmation came from viewing the paper under a quartz lamp, which terrified Bank officials had sent one of their number rushing out to buy: the reproduction and printing were so close to perfect that flaws appeared only when a microscope was trained on the bills. According to the Bank’s own war history: “After prolonged microscopic examination of many specimens only one small consistent irregularity in the printing was found in this type (in the reproduction of the hair falling to the right side of the face of Britannia).”

A flood of counterfeits soon followed. In January 1943, the Bank’s clerks wrote their litany in stately copperplate. “On 19th January 1943 a forged £5 note was discovered in the Sorting Office…” “On 21st January 1943 a forged £10 note numbered 20.740 and dated 19 April 1938 was presented by Nat. Pro. [The National Provincial Bank] Bishopsgate in their charge received No. 154 and paid. The forgery was not discovered until…” “On 27th January 1943 a forged £5 note numbered
12.783 dated 5 May 1938 was detected in the sorting office.” “On 27th January 1943 a forged £10 note
17.644 dated 19 April 1934 was detected by Miss Strong…” And so on. The Bank quietly stopped issuing all notes over five pounds, ostensibly to prepare for postwar controls on the international use of sterling. The real reasons were discreetly hidden. The chancellor of the exchequer, Kingsley Wood, gave a brief reply in writing to a prearranged question in Parliament about forged notes, reporting that the number circulating in the country was both decreasing and insignificant. Even in the Bank’s own archives, extracts from the minutes of its senior management committee are completely silent on forgeries of any kind, from Sir Kenneth Peppiatt’s presentation of a memorandum on one-pound forgeries on January 10, 1940, until his first damage assessment after the war, more than five years later. The Bank had taken it virtually as an article of faith that its notes could not be counterfeited, just as Germany was certain that its Enigma machine made its codes unbreakable. Both, of course, were wrong. Although the British level of hubris reached only that of David Low’s famously pompous cartoon character, Colonel Blimp; the Germans’ misjudgment proved fatal. Once the flood of Bernhard notes became so great that it started lapping at English shores, the Old Lady actually got a look at her illegitimate German progeny. Like any well-bred matron facing scandal, she slammed the front door and kept a stiff upper lip.

Wood was narrowly correct in his statement to Parliament that forged pounds were causing few problems in Britain. But the war raged in the rest of Europe, and by this point enough Bernhard forgeries were circulating to buy large amounts of gold, other valuables, and scarce raw materials, or to be used in SS espionage operations. Inside Sachsenhausen, the exact number and sum of the forgeries — 8,965,085 notes with a total value of £134,610,945 — were recorded meticulously by Oskar Stein in his secret diary. That would be $545 million at the official rate of exchange; in today’s money at least $6 billion. Less than 10 percent — only £10,368,445 — were top-grade notes actually forwarded to Berlin, but even this was more than $40 million at the wartime rate of exchange, enough to build a small flotilla of submarines.

This is Stein’s summary of the total Sachsenhausen production:

Of that total, the following amounts were sent to RSHA (Reich Central Security Office), Berlin:

Stein kept no record of how many millions more of almost indistinguishably lower quality notes were plucked from the Sachsenhausen safe and passed into the market.

On September 15, 1943, almost a year to the day after the BB forgeries were first detected, a Yugoslav officer named Dusko Popov arrived in London, opened his bags in front of his British handlers, and dumped out a large cache of silk stockings, a sealed radio set, various written reports, and two packets of money, twenty $100 bills and £2,500 in five-pound notes. Popov was a double agent, and one way he diverted suspicion was to demand hefty payments from his German masters so they would believe his motive for spying was purely monetary. For the British, Popov operated under the code name Tricycle in Lisbon to establish a secret escape route through neutral Portugal for Yugoslavs supporting the Allies, but things had gotten too hot for him. He had flown to London and put himself under the protection of his spymasters. The British found Popov a perch at the Yugoslav legation in London, from which they sent him on missions back to Lisbon. They also sent 500 of his five-pound notes to the Bank of England for inspection and were promptly told that 152 of the notes were counterfeits, which were immediately mutilated. Popov’s espionage handlers were nonplussed by his declaration that he had obtained them from a bank in Lisbon. They suspected he had won the pounds and dollars gambling in Portugal’s seafront casinos and obtained them on its black-market exchanges, and as one handler scrawled beneath Tricycle’s financial statement, “I do not think it worthwhile to pursue further up the trails of the payments.” After all, spies also know how to fiddle their expense accounts.

But how did such sums get into circulation? Enter Friedrich Paul Schwend, man of many aliases and one of history’s great confidence men. Schwend, or Schwendt, or Dr. Wendig, or Major Kemp, or, on rare occasions, Fritz Klemp, had an international financier’s ability to juggle millions casually, which is precisely what he did before World War II. He was born in 1906 in a village near the edge of the Black Forest in Swabia, whose people speak a flat German dialect and know how the world works. Of medium height, blond, slender, hook-nosed, and in his mid-thirties, Schwend was strongly motivated by adventure and risk. In 1929, employed as a mere gas station mechanic, he defied his family to marry into the local aristocracy. His bride was the Baroness von Gemmingen-Guttenberg, a niece of Baron Konstantin von Neurath, a conservative politician who served as foreign minister of the Weimar Republic and continued seamlessly in office under Hitler to help give Germany’s new dictator a cloak of respectability.

Schwend’s new connections catapulted him into wealth and let him circulate on the margins of celebrity. As was the fashion in his right-wing milieu, he joined the Nazi Party in 1932. He moved to Los Angeles to administer the personal finances of his wife’s aunt, one of the Bunge sisters, who had an Argentine grain fortune that eventually grew into an international agribusiness conglomerate. Managing her money earned him $50,000 a year, a huge sum during the Depression. There he also befriended the German consul general, Georg Gyssling, who invited him to parties with Hollywood stars. At the same time, Schwend also sent memoranda to Nazi leaders with unwelcome arguments against the Party line of economic self-sufficiency. Schwend is said to have caught Goering’s attention briefly with his nonconformist views, and no doubt the Gestapo’s as well.

Schwend lived for a short time in New York City (in the comfortable but unfashionable Queens district of Woodside, where there was a small German colony). On the side he also traded arms in China and the Balkans, then moved to Italy in 1938 to represent the interests of his wife’s aunt. He contracted to buy rice, flour, and industrial materials for the Germans; at least half his trades took place on the black market, where he could increase his profits by using Bunge dollars. Schwend based himself at his estate on the picturesque Istrian peninsula in Abbazia, an Adriatic sea-and-ski resort now known as Opatija and part of Croatia. It was then part of Italy, and much earlier was the Riviera of the Austro-Hungarian Empire. There this lover of highborn women and well-bred horses lived a comfortable life at the Villa de Nevoso, “a beach ideal for sun-bathing, my yacht at anchor outside.” Unfortunately for him, the war dried up the flow of Bunge dollars from America, and his titled wife divorced him. He soon found another, Hedda Neuhold, the daughter of a wealthy Austrian engineer whom he joined as a partner in various businesses.

In the summer of 1940, as Hitler conquered France, Benito Mussolini, Italy’s Fascist dictator, joined the war in hopes of a seat at the victors’ table. The Wehrmacht took up Alpine positions peering down on Germany’s new ally, invaded Greece, and thus put Yugoslavia in a pincer by using their Italian allies as the principal occupying force. Croatia became the stronghold of the murderous Ustashe nationalists who allied themselves with Hitler. Resistance began among monarchist Serb partisans known as Chetniks (the word derives from fighters against the Ottoman Turks until an independent Yugoslavia was created after World War I). But the Nazis soon co-opted some of the Chetnik officers, while their Yugoslav peasant conscripts resented being there at all.

Schwend meanwhile plied his trade on behalf of the Abwehr in the section known as the Devisenüberwachtungstelle, literally, the Authority for the Oversight of Foreign Currency. In that job he was supposed to ferret out hard currency from Croatia and deposit it in Switzerland to buy war materiel. Schwend operated among other countries through customs, presumably by giving inspectors a percentage for tipping him off to smugglers. He performed with such zeal that Siegfried Kasche, Germany’s minister in the Croatian capital of Zagreb, bitterly complained to his diplomatic superiors in Berlin. This intruder, Kasche griped, was throwing his weight around to line his own pockets. Kasche reported that Schwend was invoking high but unidentified connections in Rome “very compellingly” to muscle into Jewish businesses and threatening anyone who stood in his way with a transfer to the Russian front. (Each must have recognized the other as a nasty piece of work; after the war Kasche was executed for his zeal in deporting Croatian Jews to the gas chambers.) When the Abwehr told the German Foreign Office that Schwend had already been dumped as “unreliable,” Kasche demanded “energetic measures” to get rid of him and stop him from besmirching the Reich’s good name.