Joseph E. Persico (47 page)

As the war progressed, FDR learned, through the OSS, that Allied attempts to block neutral countries from aiding Germany were having all the effectiveness of a sieve. On July 10, 1944, Bill Donovan sent the President a report, one of nine that day, obtained from “a high German official in Switzerland.” Donovan's source revealed that while the Allies had been negotiating with its officials urging “that the Swiss should halt gold transactions between the Swiss and Reichsbank,” the president of the country's National Bank, a man named Weber, was simultaneously making secret deals to accept German gold for over forty million Swiss francs per month. In effect, the deal amounted to money laundering. Certain suppliers of war matériel to Germany refused to accept gold in payment, rightly suspecting the Nazis had stolen it. But they would accept Swiss francs. The Germans had, in fact, looted gold from the central banks of France, Belgium, the Netherlands, other occupied countries, and Italy. Their rapacity surfaced in a message sent from the Irish minister in Rome to the foreign office in Dublin, a cable intercepted by Magic. “Roman Jews were obliged to furnish 50 kilogrammes of gold within 24 hours,” it read. “Otherwise 200 of their young men would be sent as hostages to Germany.” The communication sheds further light on the checkered record of the Catholic Church regarding the plight of the Jews. If the Roman Jews could not raise that much gold, the Irish diplomat reported, the Vatican offered to help them pay. A cryptic intercept from Tokyo to Berlin suggested a surprising additional source of gold for the Third Reich. “At our last meeting,” Japan's foreign minister informed Ambassador Oshima in Berlin, “it was decided informally to send about 2 tons of gold at the next opportunity. The Navy has no doubt already studied this and made provision for transportation.”

The President and his informants did not then know the most unspeakable source of Germany's bullion, gold stripped from the Jews in concentration camps, from their jewelry, from gold teeth and fillings pulled from the mouths of the murdered. The Swiss would later deny knowledge of this source, and likely told the truth, since the Germans did not trumpet their barbarism. However, that the gold ingots traded for Swiss francs and other currencies were stolen had to be known by Europe's bankers. The Germans had entered 1940 with approximately $200 million in monetary gold, yet during the war somehow acquired $909 million worth.

Five days after Donovan's July 10 report, FDR had another message from the general. “We would like to warn you especially about using this material,” Wild Bill cautioned, “for it could be easily traced back to the source.” Allen Dulles had been tipped off that the Germans were using a loophole in Swiss customs regulations to buy an additional three million Swiss francs' worth of ball bearings for their combat aircraft. Twice in 1943, the U.S. Eighth Air Force had conducted raids targeted at German ball bearing production in Schweinfurt. The cost had been frightful, over 120 bombers lost, which meant 1,200 American fliers dead, captured, or missing. And here were the Swiss, taking up the slack, trading ball bearings for Nazi gold.

The Swiss had a rationale for their conduct. Switzerland occupied a geopolitical position as precarious as the peaks of its Alps. The country was completely surrounded by Nazi-controlled territory. A Wehrmacht that had subdued most of Europe could surely have overrun tiny Switzerland. The Swiss saw themselves as a small creature in the embrace of a great beast that could devour it at will. Their objective was to comply with the beast's wishes and do nothing to goad it to rashness. Furthermore, war or no war, the Swiss were tied economically to the Germans. Switzerland sold electrical power to Germany, and in return received the coal and fuel that the Swiss lacked. Actually Switzerland had a foot in both camps. While it was selling Germany weapons, ammunition, aluminum for aircraft and locomotives, and even allowing bombed-out German plants to rebuild on Swiss soil, it also traded with the Allies. Switzerland exchanged more gold with Germany's enemies than with the Reich, the distinction being that the Allied gold was not stolen or yanked from people's mouths. The Swiss had also been evenhanded in allowing their nation to become an espionage hotbed for all sides, including the OSS operation under Allen Dulles. They had allowed American fliers who crash-landed in Switzerland to stay in Dulles's compound, where they were put to work radioing to Washington the bundles of intelligence that Fritz Kolbe smuggled out of the foreign office in Berlin. The unspoken Swiss attitude was, spy if you must, but do so discreetly. Don't let us catch you and have to intern you.

On April 11, 1944, the American Eighth Air Force accidentally bombed the Swiss city of Schaffhausen in a raid on southwest Germany, damaging the railroad station, factories, a museum, and homes, and killing numerous civilians. Rumors whispered in the Bern diplomatic circle had it that the raid had been deliberate, to knock out Swiss ball bearing production going to Germany. Yet, so determined was the United States to respect Swiss neutrality, that FDR secretly paid $1 million out of the President's emergency fund to mollify the Swiss and downplay the blunder.

“Safehaven” was a Roosevelt strategy to block German leaders from smuggling their stolen riches into comfortable exile, as well as to deny Germany the wealth to start another war, and to keep its plunder in Europe for the Allies to use to rebuild a shattered continent. The approach was simple: Gain control of gold and currency transactions conducted by the neutrals. Donovan's OSS was assigned to track down the flow of gold from Germany to Switzerland and through it to other nonbelligerents. As FDR put it to Wild Bill, “We ought to block the Swiss participation in saving the skins of rich or prominent Germans.” Few enterprises expose the moral contradictions of war more nakedly than Safehaven's fate. While the OSS did succeed in preventing some ill-gotten German wealth from leaving Europe, it hardly succeeded in blocking all of it. One story had it that a gold-laden U-boat made its way to Nazi-friendly Argentina. The most gaping holes in Safehaven, however, were punched, not by the Germans, but by an ally, even by rival U.S. agencies working at cross-purposes. Britain, already looking toward postwar commerce, wanted to expand trade with the neutrals, not punish them. Henry Morgenthau Jr., on the other hand, wanted his Treasury Department to deal harshly with any neutral nation helping Germany, particularly Switzerland. But the State Department, respecting Switzerland's rights as a neutral, valuing the country as an intelligence bonanza, and appreciating Swiss leniency toward American fliers crash-landing there, opposed forcing Safehaven strictures down Swiss throats. Safehaven's leverage was not even used to end the Swiss trade in munitions with Germany. And while most Swiss loved democracy and favored an Allied victory, the bankers of Zurich paid lip service to Safehaven while profiting from trade and gold exchanges with the Nazis to the very end of the war.

In dealing with Nazi Germany, Switzerland could point a we're-not-the-only-one finger at other neutrals, most notably Sweden. After the American raids on Schweinfurt, Swedish technicians came to the city to rebuild the damaged ball bearing plants, since 60 percent of all ball bearings produced there were made by a subsidiary of Svenska Kullager Fabriken (SKF), a Swedish firm. FDR's Board of Economic Warfare estimated that without the export of high-grade Swedish iron ore for steelmaking, the Nazi war machine would grind to a halt. British war economists branded Swedish iron exports to Germany “the most valuable of all of the contributions of neutral countries to the German war effort.” While Sweden's aid to Germany angered the Allies, it at least produced one espionage dividend. According to an OSS report, “. . . [R]ush orders given to SKF by the Germans [made] it possible for bomb damage experts to gauge the harm done to German ball bearing factories by Allied attacks from the air.”

Sweden's flouting of neutrality went beyond economic profiting. The Swedish navy escorted German troopships crossing the Baltic Sea to embarkation points in the East. Over 250,000 of Hitler's forces sent to occupy Norway were transported on the Swedish railway system. More egregiously, the Swedes had allowed German troops to cross their territory as part of the buildup for the invasion of Russia. Swedes fell back on the same rationale as the Swiss. Theirs was a small country with a population less than that of New Jersey trapped in a triangle, with Germany on the south, Nazi-occupied Norway on the west, and Finland, Germany's ally, on the east. Cut off by the Allied blockade from other sources of oil and rubber, the country depended on Germany for these essentials. Thus Roosevelt's representatives made a secret deal with the Swedes. The Allies would permit oil and rubber destined for Sweden to pass through the blockade; in return, the Swedes must stop enemy forces from using their country as a German highway and start reducing their shipments to the Reich. Before 1944 was out, Swedish trade with Germany had halted completely.

Besides Switzerland and Sweden, Generalissimo Franco's Spain, its heart with the Nazis, stretched neutrality almost to bursting. Spain's Blue Division, forty thousand strong, fought alongside the Wehrmacht in Russia. Spain at one point was providing 30 percent of Germany's wolfram, indispensable for making the tungsten used in producing hard metals. Portuguese businessmen were getting rich, supplying twice as much wolfram as Spain through a secret deal with the Reich. All told, 90 percent of Germany's reliance on this material was supplied by neutrals. By the spring of 1944, Allied trade negotiators thought they had a deal. They would allow Spain to receive gasoline through the blockade; in exchange, the Spanish would stop all wolfram exports, both to the Allies and Germany, by the end of the year. But the Japanese ambassador in Madrid unwittingly revealed Spain's continuing duplicity. In a message decrypted at Arlington Hall, the ambassador repeated a conversation he had had with a Spanish official regarding wolfram shipments during which he was told, “. . . [W]e Spaniards and Portuguese are, to tell you the truth, going to cooperate and keep sending more of it to Germany. For that purpose the Portuguese Finance Minister came here and has concluded with Spain a secret understanding to that effect.”

Turkey, which the Allies had long been trying to enlist in the war on their side, was Germany's prime supplier of chromite ore, which was converted into chromium. Albert Speer, the German armaments minister, feared that without chromite supplied to the Reich by Turkey, German arms production would be shut down in ten months.

With the successful invasion of France and the Nazis retreating from Russia, the hovering shadow of a once omnipotent Germany should no longer be so fearsome to European neutrals, FDR believed. He was determined that their aid to Germany not prolong the war by a day. But the course of wisdom was not always clear. The American ambassador in Madrid, Carlton Hayes, sent FDR a confidential communication urging him not to be too harsh with the Spanish. Hayes pointed out that “65 percent of Allied intelligence—and 90 percent of American—concerning German military dispositions in France are derived from our intelligence services in Spain while the Spanish looked away.” The Spaniards had allowed over nine hundred downed American airmen coming out of France to pass through their country to rejoin the fight. Hayes added a sentimental argument to the case for leniency. He told the President how Spanish authorities had allowed full military honors at the burial of an American flier whose body washed ashore on a Spanish beach. As for wolfram exports to Germany, Hayes pointed out, “We certainly want to cut down. . . . But the means of doing this must be realistic also.”

Ultimately, the shipments of Portugal's wolfram and Turkey's chromite ore to Germany were ended through pragmatic capitalism. The United States simply bought up these strategic commodities to keep them out of the Nazis' hands.

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Field Marshal von Rundstedt was just one of a growing number of Germans who saw perpetuation of a lost cause as a policy of nihilism. In late January 1944, Allen Dulles sent Donovan a message from Bern using a new code word, Breakers, to refer to a “German oppositional group . . . composed of various intellectuals from certain military and government circles.” Dulles's chief source of information on anti-Hitler movements within the Reich was Hans Bernd Gisevius, a hulking forty-year-old Prussian and agent of the Abwehr working undercover as a vice consul in the German consulate in Zurich. The six-foot four-inch Gisevius, whom Dulles referred to behind his back as “Tiny,” presented an anomaly of strength and vulnerability. His vision was so poor that he could not drive a car or use a typewriter. He had joined the Gestapo almost at its creation, thinking it a legitimate police force. He quickly became disillusioned, and asked a colleague, “Tell me, please, am I in a police office, or in a robbers' cave?” By 1943, Gisevius had become active in anti-Nazi circles. In one of his clandestine meetings with Dulles, Gisevius dropped a bombshell. He told the Bern OSS chief that a plot was under way in Germany to assassinate Hitler and overthrow the Nazi regime. He cited a date for the coup, March 13, 1943. But when that day came and passed, Dulles's doubts deepened that conspiracies could escape the all-seeing eye of the Gestapo. Still, he continued to send messages to Washington bearing the Breakers code name to report dissent inside the Reich, some 146 such dispatches by May 1944.

Several weeks before D-Day, Dulles had informed Donovan that Rundstedt, at the time still commanding German forces in the West, would, if given certain assurances, allow the Allies to land in France unopposed, thus avoiding carnage on both sides. The plan envisioned an orderly retreat from the West, and the transfer of crack divisions to face the Russians on the eastern front. Three weeks before D-Day, the conspirators informed Dulles of what they would expect in exchange from the Allies—three divisions to be parachuted into the Berlin area and amphibious landings near Bremen and Hamburg. The principal fear of the anti-Nazis was echoed in another communication that Dulles relayed to Washington after D-Day: “The Breakers group wishes [to] keep as much as possible of the Reich from falling into the hands of the Russians.” Still another dispatch out of Bern reported that the leadership of the conspiracy “. . . is especially concerned that they should not have to negotiate with Moscow. . . . The chief reason for such a request on their part is their ardent wish to keep Central Europe from coming under the sway of the Soviets. . . . They feel certain that in the latter case democracy and Christian culture . . . would vanish in Europe.”