Ring of Spies

How MI5 and the FBI Brought Down the Nazis in America

Rhodri Jeffreys-Jones

• Publisher: The History Press
• Year: 2020
• Print ISBN: 9781803990361, 9780750994705
• eBook ISBN: 9780750995481
• Topic: Politics & International Relations
• Subtopic: 20th Century History
• Index: Politics & International Relations

In 1935–37 America passed several Neutrality Acts, vowing never again to take sides in a European conflict. In 1938 public attitudes changed, with the American people beginning to favour Britain and turn against Germany – but what caused this shift of opinion?

One reason was a tip-off received by the FBI on the eve of the Second World War, which led to the exposure of a Nazi spy ring operating right there in America. The FBI was able to bring the group to justice and launch a campaign to warn the American people about the Nazi threat to their shores and society.

In Ring of Spies, Rhodri Jeffreys-Jones reveals how this case helped to awaken America to the Nazi menace, and how it skewed American opinion, thus spelling the end of US neutrality. Using evidence from FBI files he uncovers a story straight out of a detective novel featuring honey traps, fast cars and double agents.

1

LONKOWSKI’S LEGACY

The time was mid-evening, 27 September 1935, the place Pier 86, on the Hudson River in New York City. The man wearing Customs Guard badge No. 572 was Morris Josephs. His gaze fell upon a familiar scene. Passengers, relatives and friends milled around in an excited throng anticipating the departure of the North German Lloyd steamship Europa.

Just after 8.30 p.m., Josephs, a keen musician, spied a smooth-faced man in a dark hat carrying on board what appeared to be a violin case. Citizens of that mobster-ridden era knew how Thompson submachine guns fitted snugly into such receptacles, and the customs guard stayed alert. After a short while, the smooth-faced man left the ship and walked back down the pier, having failed to deposit the object still tucked under his arm. At 8.50 p.m., Josephs arrested him. Upon closer inspection, the parcel contained neither a gun nor a Stradivarius, and was not even a violin case. It did, however, contain copies of military plans.¹

The man in the dark hat was Wilhelm ‘Willy’ Lonkowski, code name Sex. When the American press belatedly found out about him, one journalist declared that he was ‘the cream’ among spies. Lonkowski certainly had one useful attribute, a talent for obscurity. After months of intensive if belated investigation, an FBI special agent finally lamented, ‘little is known concerning the personal history of Lonkowski’.²

No FBI agent ever knowingly encountered Agent Sex. Yet over the years a partial picture emerged of this most secretive of secret agents. Lonkowski was slender and tall, with brown hair and blue eyes. He had a long nose and floppy ears. He suffered from stomach ulcers exacerbated by the anxieties of years of espionage. His heavy drinking did not help his medical condition, though it was an operational advantage that he was a cold soak – he could remain sober while plying the keepers of secrets with drink that loosened their tongues.³

Like several spies in our story, Lonkowski came from contested territory. He was born in 1896 in Worliny (in German, Worleinen), a village Prussia claimed following the eighteenth-century partition of Poland, and which then passed to the unified state of Germany in 1871. In the First World War he served as an airman in the German Army and suffered grievous injuries when a French pilot shot him down. Just before the end of hostilities, the recovering aviator married Auguste ‘Gunny’ Krüger, the daughter of a barber from Obernik, also in East Prussia.

After the war, Lonkowski tried to carve out a career as an aircraft designer. He never explained why he became a spy. The embittered patriotism of a wounded and defeated soldier no doubt played its part. The patriotism had a special twist for a man who came from the German–Polish borderland with its threatened identities. Adolf Hitler would promise a greater Germany under Teutonic control, an aspiration that appealed to ethnic partisans. Like other German spies, Lonkowski may have felt aggrieved with America for its role in helping to defeat his country, as well as in the subsequent peace settlement that punished Germany on the ground of war guilt.

Lonkowski operated within a German tradition. Prussia had a history of espionage – Frederick the Great (1712–86) once dismissed a military foe with the words, ‘Marshal de Soubise is always followed by a hundred cooks, [whereas] I am always preceded by a hundred spies.’ Defeat in the First World War threatened to end that tradition. According to the Versailles peace settlement, German military activity was supposed to be confined to specified units and that excluded spying. But old ways returned. In 1921 Friedrich Gempp, who had been deputy to the wartime intelligence chief Walter Nicolai, took charge of a group of ten officers together with support personnel in the newly formed Abwehr, which literally meant ‘defence’ but soon expanded its mission. By 1935 staff numbers had reached 150 and three years later 1,000.⁴

The Abwehr sought technical data to enable Germany to rebuild its military. In September 1926, Gempp singled out Lonkowski for a mission to the technologically advanced United States. For while Germany was hitherto renowned for the quality of its technical education, such education was stagnating for want of money and because of resistance from the nation’s traditional elite.⁵ By comparison, America had by the mid-1920s demonstrated it had the prowess and the means to outstrip its European rivals. On 27 March 1927 the secret agent arrived at Hoboken, New Jersey, carrying a passport in the name of Wilhelm Schneider. This was one of a string of aliases that included ‘William Sexton’, the mundane origin, through abbreviation, of his mid-1930s operational code name ‘Sex’.

Lonkowski and his wife were gifted individuals. Gunny knew about hats and, once they had both settled in Long Island in 1929, managed a millinery shop and then a dress emporium in Queens Village. Willy could repair and tune practically any musical instrument. He worked at this trade for the Temple of Music store in Hempstead, Long Island. More significantly for his mission as a spy, he worked between 1929 and 1931 as a mechanic at the Ireland Aircraft Corporation at nearby Roosevelt Field, and then at Fairchild Aviation Corporation in Farmingdale, New York.⁶

According to Willy’s cover story, the childless Lonkowskis accumulated enough capital in the United States to permit him to return to Germany in February 1934 and engage in wire manufacturing in Berlin. His cover story held that he then sold up and arrived back in America on 18 January 1935 with considerable funds. That would have been a remarkable feat, given the brevity of his stay in Germany. The truth is that the money came from the German foreign intelligence service. The time had come to reinvigorate Abwehr spying operations in America.

Lonkowski built up a formidable spy network. He was able to recruit German–Americans working in the defence industry. Managers in that industry had been glad to hire well-trained workers and, perhaps reassured by the supposed demilitarisation of Germany, did so with scant regard to security checks. While working at the Ireland Aircraft Corporation, Lonkowski secured work there for the future secret agent Otto Hermann Voss. A native of Hamburg who had trained as a machinist and served with the German Army’s Company of Engineers in the First World War, Voss was an aeroplane mechanic and keen yachtsman who worked for a succession of American defence industry businesses after his arrival in the United States in October 1928. He and his wife Anna, whom he married in 1934, socialised with their neighbours, the Lonkowskis.⁷

On one such occasion, Willy introduced Voss to Karl Eitel, a German agent who worked as a steward on the steamship SS Bremen. Built for North German Lloyd and launched in 1929, the Bremen achieved a cruising speed of 27 knots and until 1932 held the Blue Riband for the fastest transatlantic crossing. It was the pride of a resurgent German maritime industry. However, the Bremen and its sibling ship the SS Europa served as vehicles for propaganda, censorship and espionage. When the Nazis gained power, they installed ‘stormtroopers’, or political bosses, to enforce totalitarian discipline on these and other German ships. There was a ban on magazines such as Harper’s and Life that expressed free American opinions and the atmosphere became so poisoned that passengers began to shun the shipping line.

In July 1935, just two months prior to Lonkowski’s arrest, the Bremen took centrestage in the international fight against fascism. Communist-led members of the International Seamen’s Union in New York wanted to protest against the imprisonment of Lawrence Simpson, an American sailor whom the German authorities had arrested for distributing anti-Nazi literature in Hamburg. The protesters looked for a target and found one close at hand. Activist Bill Bailey described the great German ship that dominated the waterfront: ‘Her bow jutted up, looming over the street. Large, powerful floodlights in various parts of the ship directed their beams at one spot: the jackstaff that held the Nazi swastika.’

Demonstrators boarded the ship and Bailey was one of those who tore down the swastika, casting it into the cold, black wetness of the Hudson River.

The New York seamen’s protest sparked imitation anti-swastika demonstrations across the world. What had started as a communist-inspired movement soon won wider sympathy. When the case against the flag vandals went to court in September, a New York Jewish magistrate, Louis B. Brodsky, dismissed the charges and condemned the swastika as a piratical emblem. Hitler reacted. At the annual Nuremburg Party rally that month, he declared that the swastika would replace the imperial tricolour as Germany’s official national standard.⁸

Ships such as the Bremen supported not just the Nazi apparatus, but also Abwehr operations. The commanding officers of German passenger ships knowingly facilitated the transport of spy couriers with their letters, as well as bulky documents. The British Royal Navy had intercepted Berlin’s messages and broken its codes in the First World War and transatlantic cables remained an unreliable means of sending secret data. Sea transport in Party-disciplined ocean liners was slower, but more secure.

Karl Eitel agreed to courier for Lonkowski, for example by delivering a letter asking Berlin for more money. By way of reverse traffic, Eitel relayed to Voss the German authorities’ desire for specified US military technical secrets. In the course of six subsequent meetings, Voss supplied Eitel with design details and photographs of Army training planes under construction at the Seversky Aircraft Corporation, covering the wings, fuselage, engines and landing gear – Voss had himself re-engineered the landing gear to make it stronger.⁹

Germany paid Lonkowski generously. He received $500 a month, with bonuses for particularly useful intelligence. With his expenses paid, Willy was able to reward his informants handsomely. He claimed to have dispensed to a single group of spies as much as $30,000 in one year – perhaps an exaggeration, but the material benefits of the advanced technology that his agents purloined were of great value to his employers. Neither industry nor government in America was prepared for such an espionage onslaught and Lonkowski had a sharp eye for opportunities. From Johannes Karl Steuer, an inspector at the Sperry Gyroscope Company, Brooklyn, he solicited information on bombsights. Johann Koechel, a foreman at the Kollmorgan Optical Corporation in Brooklyn, supplied him with data on periscopes.¹⁰

Another of Lonkowski’s recruits at the Ireland Aircraft Corporation was Werner Georg Gudenberg. A native of Hamburg and a trained coppersmith, Gudenberg first stepped ashore in the United States on 22 October 1928, having arrived in New York on the SS Deutschland. By the end of the year, he was foreman of the fuselage and fitting department at Ireland Aircraft. Under Lonkowski’s tutelage, he would obtain secrets from a contact in the Boston Navy Yard and scheme to lure German-born technicians to return to the Fatherland, where they would be induced to divulge the secrets of American military technology. In still another venture, Lonkowski set up an agent in Montreal, first as a means of forwarding rolls of film to Germany and then to spy on the Canadian aviation industry.¹¹

Lonkowski was the Abwehr’s main man in America, yet he was not in overall control of German espionage operations in the United States. The Abwehr abided by what was a valued principle of good security, compartmentalisation. The left hand was not allowed to know about the right hand, lest the right hand had fallen under the control of a rival agency making it liable to betray the secrets of both hands. For such security reasons, Willy was not directly in control of Abwehr operations in California.¹²

For the same reason, he may not have known about the Abwehr’s effort to get hold of a code-deciphering machine developed for the US Navy Department by the gifted American code-breaker, Agnes Meyer Driscoll, née Meyer. Together with Poland and Germany, America was in the early stages of progress towards computer-driven encryption and decryption. Driscoll – a later FBI report noted drily that she was ‘of German ancestry’ – obtained a secret appropriation of $6,250 from the US government in recompense for her contribution. But that was less than she had claimed. Furthermore, she suffered a car accident at this time that temporarily incapacitated her and she may have felt aggrieved when the Navy Department stopped her salary during the period of her recuperation. According to FBI sources, the woman who is today remembered as a pioneer of US cryptography sold th...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of Illustrations
• Preface
• 1 Lonkowski’s Legacy
• 2 A Spy from Scotland
• 3 Murder in the McAlpin
• 4 Enter Leon Turrou
• 5 Crown Identified
• 6 Tales of Hofmann
• 7 Avoiding an Edinburgh Trial
• 8 What Griebl Knew
• 9 Miss Moog Says No
• 10 A Season of Inquiry
• 11 The Flight of the Spies
• 12 Blame Games
• 13 Dismissed with Prejudice
• 14 Seeking the Evidence
• 15 The Nazi Spy Trial
• 16 Of Propaganda and Revenge
• 17 Spy Sequels
• 18 The Case Named for Duquesne
• 19 MI5’s Special Guest
• 20 Diplomatic Consequences
• Notes
• List of Abbreviations
• Bibliography