Wild Bill Donovan Page 19

  Roosevelt tried to smooth Donovan’s ruffled feathers. He asked him to join him at a Sunday service at St. John’s Church on Lafayette Square across from the White House. More importantly, he made Donovan an Army brigadier general on March 24. But as everything was with Donovan, his promotion came with controversy. He had expected and wanted to be made a major general, a rank higher, but the Army balked. In fact, the Army would have preferred his being named an admiral so the Navy would have to deal with him. Doering suspected that Roosevelt and the Joint Chiefs wanted the boss back on active duty as a general so he could be subject to court-martial if he got out of line with his operations.

  Donovan told old friends to keep calling him “Colonel”—but that was an act. He liked being a general. The War Department issued him a black leather general officer’s belt with two holsters for pistols. Donovan went to Wetzel tailors in New York to have his uniform custom-made with silver stars embroidered on its epaulets. He also knew how to manipulate his new wardrobe before military rivals. He would show up—often late—for meetings with generals and admirals with only the ribbon designating the Medal of Honor he had won pinned to his chest. It subtly reminded the flag officers adorned with their rows of ribbons that he had the only award that counted.

  Chapter 16

  The Neutrals

  WAR RATIONING DID not crimp Donovan’s fondness for dinner parties, which always had a business purpose to them. He had choice cuts of beef from the Chapel Hill farm sent to the Georgetown home for his guests. Donovan had no concept of the logistics behind feeding large numbers (he was clueless about food ration coupons until Ruth finally explained them to him) and he was constantly springing parties on her. His aides who came to the dinners also soon began to notice that Ruth seemed more distant during these functions, more grim-looking while others were having a gay time. Mary always enjoyed the parties. At Chapel Hill she kept the books for the farm business, helped Ruth with the vegetable gardens and while David was at sea bought and sold livestock. But as Ruth grew less interested in entertaining Donovan’s guests, Mary, who looked stunning with her hair dyed blond, began driving to Washington more to replace her mother-in-law as his hostess.

  On Wednesday, March 10, however, Ruth and Mary arrived at Georgetown with a rib roast, this time thankfully for a small gathering Bill was hosting for Harold Guinzburg, the founder and publisher of the Literary Guild. But as Donovan carved at the table, a plot was unfolding inside Germany that would later hearten the OSS director. Dissident German officers were planning their first assassination attempt on Adolf Hitler. Three days later on March 13 they planted a pair of limpet mines on a plane flying the führer to Rastenburg, but the devices did not explode. A suicide-bombing attempt a week later also failed as Hitler inspected a cache of captured Russian weapons in Berlin. The OSS had nothing to do with the conspiracies, yet Donovan remained keenly interested in assassinating not just Hitler but anyone in his inner circle. Putzi Hanfstaengl even prepared for him a detailed report on four old Hitler cronies who remained relatively unprotected; if they were kidnapped or killed it would upset the dictator as much as losing Goebbels. One of Hitler’s closest confidants was Heinrich Hoffmann, his hunchbacked personal photographer, who “has no bodyguard, drinks heavily, is constantly involved in homosexual scandals and goes out a great deal in Munich,” Hanfstaengl wrote. Kill him and “Hitler would go to pieces.”

  Among the small but growing number of restive German officers who wanted to eliminate Hitler, Donovan became particularly intrigued by one suspected conspirator who also happened to be his professional opposite: Wilhelm Canaris. Fairly fluent in English, prematurely gray, an insomniac and a pessimist by nature, the Abwehr chief also was aggressive and cunning, with a nasty side. The OSS and the State Department monitored practically every step the furtive admiral took overseas. By 1943, he realized it was only a matter of time before Germany would be defeated and began sending out peace feelers to the Allies. Canaris, whom Dulles gave the code number 659, could relay messages to the OSS through Gisevius and later Eduard Waetjen, a Berlin businessman who also was one of Canaris’s agents operating undercover in the Germans’ Zurich consulate. But since the previous September, Donovan had secretly given the green light to one of his other agents to try to set up a direct meeting between Canaris and the OSS.

  Ulius Amoss was a hyperactive Army Air Force officer with a conspiratorial bent who had spent twenty-one years traveling in and out of Greece before he transferred to the OSS. Amoss came across a “sinister Greek magnate” in the United States who knew Canaris well, he wrote Donovan, and “convinced me that he could be used by our organization to contact and pervert Canaris.” After the magnate arranged the secret approach, the OSS could always “eliminate him if it is then necessary in the interests of our country,” Amoss added.

  Donovan never responded to the suggestion that the tycoon might have to be murdered, but before he left the office for his dinner party on March 10, he read an interesting cable from Amoss: Canaris had delivered a message through his intermediaries that he wanted to meet the OSS agent in a neutral country. The meeting never came off, however. Amoss assumed it was because Hitler had sacked Canaris, as the press was reporting. That was not the case, but Canaris was snarled in a fierce bureaucratic war with rivals who suspected he was contacting the Allies. Perhaps he thought a meeting with the OSS too risky at the moment. Donovan, however, never gave up hope that one day he would recruit 659.

  BY THE END of May the Joint Chiefs had given Donovan more freedom to dabble in unconventional operations like reaching out to Canaris. Strong still looked for ways to sabotage him, but many lower-ranking officers in Strong’s own command admired Donovan’s daring style. Some even pulled OSS agents aside and whispered that they wished Wild Bill would replace George the Fifth as the Army’s intelligence chief. With the freedom, however, came dangers for Donovan. He set up stations in three other neutral countries important for spying on the Third Reich—Turkey, Portugal, and Spain—but their operations proved far more troublesome than Dulles’s in Switzerland.

  In April, Donovan sent Lanning “Packy” Macfarland to Istanbul. An Illinois savings and loan executive, Macfarland had been one of Donovan’s early hires; the two men had known each other from Republican Party work. Two deputies flew with Macfarland on the plane to Turkey: Archibald Coleman, a former journalist who had been one of Wallace Phillips’s spies in his naval unit, and Jerome Sperling, an America archaeologist who had been on numerous digs in Turkey. Their mission: to make Istanbul the base for a bold espionage and subversion operation Donovan wanted to mount into Axis-controlled Bulgaria, Romania, and Hungary.

  Macfarland and his men, one of their OSS colleagues recalls, were “bright-eyed Americans in a very complex place.” Throughout the war, Turkey professed neutrality but had wavered back and forth from the Axis to the Allies depending on which side she thought had the upper hand at any moment. Hitler wanted Turkey, with her large army and strategic location on the southern flank of the German front with the Soviet Union, to remain neutral and to continue shipping him chrome, which was critical for making steel alloys. Britain and the United States wanted Turkey allied with them and the chrome shipments halted. At least seventeen spy services operated in Istanbul. (Turkish police tolerated foreign agents prowling about as long as they didn’t target the Turkish government.) The British had more than two thousand diplomats, military officers, and intelligence agents in the city. The Axis countries had some 1,500 secret operatives. Also mixed in were large colonies of German businessmen, Vichy French, White Russians, hundreds of thousands of Eastern European refugees, and a seemingly endless supply of professional international informants. It made Istanbul a cauldron of snoops, snitches, fabricators, and con men. As Macfarland brought in more OSS staffers the next couple of months, Axis agents had their informants apply for jobs in his office as janitors and drivers.

  State Department officials were uneasy about Donovan expanding his espionage operation
in Istanbul, fearful it would upset delicate diplomacy to nudge Turkey toward the Allies. They had reason to be nervous. The American spy team was noticeably green. Macfarland was popular among his OSS colleagues, but he had no espionage experience to speak of and soon became laughably casual about his cover. He would stroll into Istanbul nightclubs waving his hands over his head and the band would strike up “Boo Boo Baby I’m a Spy.” But the Midwest S&L executive had ambitious plans to make his fledgling network in Turkey as big as his competitors. He gave his agents flower code names. Macfarland became “Juniper.” A. V. Walker, an oilman Donovan had recruited in New York, headed the “Rose” chain of informants, who vacuumed bits of information from Istanbul’s foreign community and travelers who passed in and out of the city. Archie Coleman, who filled his quarters with Turkish antiques and tended to be a braggart, was put in charge of overseeing another chain of agents code-named “Cereus,” after a night-blooming cactus in the American West. Cereus operated out of a front business called Western Electrik Kompani.

  The agent who managed the Cereus network for Coleman was Dogwood, a Czech engineer the British spy service turned over to Macfarland in July who had lived in Istanbul for a long time and who claimed his real name was Alfred Schwarz—although the OSS always thought it was an alias. Schwarz, who had passed information to MI6, recruited from scores of disgruntled Germans or well-connected foreigners he told Macfarland and Coleman he knew in Istanbul. They could establish contacts not only in the Balkans but also in Austria and Germany. Dogwood ended up with twenty-nine flowers of all kinds in his garden, such as Begonia (a thirty-eight-year-old Austrian arms buyer in Istanbul eager to eject the Nazis from his country), Hibiscus (a dapper Greek technician to operate their radio sets), and Primrose (a Hungarian pharmacologist expert in Budapest’s chemical industry).

  Seven months after arriving in Istanbul, Macfarland sent a secret memo to OSS headquarters predicting spectacular results with Cereus. Schwarz’s agents had made contact with the Hungarian Army’s General Staff, which planned to send a senior intermediary to Istanbul to explore the possibility of Hungary breaking from the Axis. Cereus would soon infiltrate agents into Romania and Bulgaria “to stimulate widespread sabotage” and spark a “revolution.” What’s more, “we have been successful in developing an elaborate system of espionage, penetrating well into Germany,” Packy boasted.

  It sounded too good to be true. But Macfarland left important details out of his reports to Donovan. Exactly who were his agents in Cereus? Macfarland didn’t tell Donovan because he didn’t know. Dogwood, who could be temperamental and intimidating, never told Macfarland the real names behind the flowers he recruited, insisting it had to be kept secret to protect them. That made it impossible for the OSS to vet their intelligence. Who was this Hungarian intermediary? The British had warned Macfarland to beware of Hungarians bearing peace offers. They could well be Nazi plants.

  But in the summer of 1943, Donovan had other things on his mind. He was dealing with two crises on the Iberian Peninsula. One was fabricated. The other was real.

  THE FABRICATED CRISIS began with crumpled pieces of paper an informant brought Francis “Tony” Di Luca from the Japanese embassy in Lisbon one April day. A former Treasury Department narcotics agent who had joined the OSS, Di Luca was not particularly excited with the find. It was just one more scrap of a blizzard of information that had come into his station the past four months. Stealing secrets also was a cottage industry in Portugal. The Japanese alone had some two hundred undercover agents there, many posing as tie salesmen. Di Luca’s informant, a messenger for the naval attaché at the Japanese embassy, was code-named “Z” and he had sticky fingers. The messenger had already purloined Japanese intelligence reports on British mobilization plans and Allied battle strength on the Tunisian front. But as he strolled by a trash can in the naval attaché’s office one day, Z noticed two curious-looking pieces of paper balled up in it, which had numbers and Japanese characters written on them that he thought might be some kind of code. Di Luca had not told him to hunt for code material, but Z decided to fish the papers out of the can when no one was looking and stuff them into his pocket.

  Di Luca sent his trash can find to Washington and asked headquarters to cable him back on the papers’ value so he would know what to pay Z for his troubles. When the sheets arrived, Whitney Shepardson, now the agency’s chief of Secret Intelligence, walked into Donovan’s office and laid them on his desk. The papers, he told Donovan, “may prove to be of enormous value.” The OSS already knew that the Japanese naval attaché was actually the embassy’s senior intelligence officer. These scraps of paper may offer “the key to a Japanese code,” Shepardson said. Donovan ordered them sent to the Army’s cryptoanalysts, hoping to score points with their discovery.

  Four days later, he got a disappointing answer from them. The code was for low-grade Japanese naval attaché traffic that the Army Signal Corps had known about for a long time and wasn’t interested in. Shepardson cabled Di Luca to tell Z not to grab any more of the sheets; they were not worth the risk. The scraps of paper were filed away—another lead that had not panned out—and Donovan forgot about them. Until a month later.

  Strong’s aides had been receiving regular reports from the OSS on the documents Z and Di Luca’s other mole in the Japanese embassy had been scooping up and they had not been much impressed with the haul. But at the end of June, Strong had on his desk four other intercepted Japanese messages Army code breakers had decrypted. In one of the messages the Japanese embassy in Rome warned Tokyo: “An American espionage agency in Lisbon not only knows to the minutest detail all the activities of the Japanese ministry in Lisbon but is also getting Japanese code books.” The Rome embassy’s revelation, however, was based on vague reports Italian intelligence had passed on from its sources in Lisbon. The Japanese ambassador in Lisbon in another message assured Tokyo that it was a false alarm; the code books were safe. Japanese Foreign Minister Mamoru Shigemitsu agreed and messaged back it was probably just “planted intelligence of the enemy designed to addle us,” but he ordered his embassies to check it out further.

  Strong blew up when he read the Japanese messages. On July 6 he began sending Marshall blistering memos accusing Donovan of launching an “ill-advised and amateurish” burglary of the Japanese code books in Lisbon, which threatened to cripple Magic. Once the Japanese realize their codes had been breached they would change them, which would mean Magic would be no good “for months” until the new codes could be broken. Strong demanded a full-scale investigation of the OSS. “The military consequences of the loss would be incalculable,” the general darkly warned. Donovan’s rogue agents in Lisbon have become “a menace to the security of the nation.”

  Donovan’s aides scrambled to unravel what really happened and get the facts to Marshall. Di Luca wasn’t running a rogue operation; Strong knew about his two moles in the Japanese embassy and had never voiced any objection to them being there. Z had not been instructed to steal codes and the sheets he stumbled across were deemed worthless by the Army. It was highly unlikely the Japanese would decide their codes had been compromised from the vague report they got from Italian intelligence—which turned out to be the case. Tokyo eventually concluded they had not been stolen from the embassy. Magic was safe. But Marshall still believed that Donovan had imperiled it.

  DONOVAN HAD KNOWN Carlton Joseph Huntley Hayes for a long time and was delighted when Roosevelt made him ambassador to Spain in 1942. The spy chief and the envoy had much in common. Hayes had graduated a year ahead of Donovan from Columbia College and had gone on to earn a Ph.D. and to teach European history at the school. Along the way he had also converted to Catholicism, eventually co-chairing the National Conference of Christians and Jews. In World War I, Hayes had served as a military intelligence officer. It made him amenable now to the Office of Strategic Services coming into Spain, particularly its propaganda experts. “The time is ripe” to separate Spain from Germany, Hayes had written D
onovan in June 1942, asking for three psywar agents. “If you can help us in this strategic spot of the Earth’s surface, I know you will and I shall be very grateful.”

  Donovan supplied the agents and many more. His first undercover spy arrived in Madrid in April 1942, renting the second floor of an apartment on the Calle Alcalá Galiano. Within two years, Donovan had about fifty intelligence officers in the Spanish capital, some working under the cover of petroleum attachés in the American oil mission building near the embassy, others under State Department cover out of an attic office in Hayes’s official residence, a palace on the Calle Eduardo Dato. For much of the Allies’ North Africa campaign Donovan’s mission was to watch for signs the Nazis might invade or stage a coup in Spain and to be prepared with subversive operations if they did. As the Allies secured North Africa and fears of an invasion subsided somewhat, Donovan focused more on following Axis agents in Madrid, organizing saboteurs to infiltrate into France, and halting the shipment of Spanish war material, such as tungsten, to Germany.

  It became dangerous work, both in Spain and Portugal. The Abwehr closely tracked Spaniards on the OSS payroll. Donovan’s officers were threatened, robbed, and shot at by German operatives. Marya Mannes, an OSS agent who operated in Lisbon and Madrid, was even raped by a Portuguese parachute manufacturer she was cultivating after he slipped a potion into her champagne that made her groggy. Mannes still let the rapist show off his factory along the Spanish-Portuguese border to her. The OSS wanted intelligence on his parachute production.