The Bormann Brotherhood

by William Stevenson

  What chance did a young woman have against such forces, which must appear to wield unlimited power?

  Beata Klarsfeld answered this question late in July in Paris. The banks of the Seine were quiet, the cobbled streets nearly empty. We walked to her apartment, in a new building—one that could be guarded.

  She said her resources were limited, of course. But she had friends. She would even like to believe she had friends in Germany, because this was her whole motive: to oblige her countrymen to face the truth of their actions.

  Was this her only motive?

  She glanced up at me, with eyes that changed color with the light. “My parents were middle-class Protestants,” she said softly. “I have no racial hangups. I was raised in a solid bourgeois quarter of Berlin. I have been arrested in Communist East Europe, so don’t get wrong ideas—”

  “Arrested for what?”

  “Handing out leaflets demanding the release of political prisoners.”

  “Why?’

  She paused, and shrugged. “Someone has to do it, surely?”

  We came back to that answer time and again.

  “You’re German. Why live in Paris?”

  “My husband is a lawyer here. I have small children. I’m not sure yet if I want them to grow up in Germany.”

  “Aren’t you showing prejudice? Isn’t this what you disliked about the past—the prejudice?”

  “You may be right. Willy Brandt understands how I feel. He went into exile, but he had good reasons then. Of course one fights for justice inside society. Willy Brandt could not fight from inside because of the Gestapo.”

  “Are you afraid of something like a Gestapo today?”

  “I know Bormann is protected by men of that mentality. Here, the police keep an eye on me. Why do you suppose I was not killed by that bomb?”

  She turned to face the slight wind that rose with the heat of the sun on the stones and the asphalt. “I’m not some heroine, you know. One day you live quietly, mind your own business, plan to be a contented German housewife in the tradition of Kinder, Kirche, Küche—a few babies, the church on Sundays, the kitchen most of the week. And then by some accident you find yourself in the middle of a situation you don’t like. And nobody else is in the same position you are to do something.”

  Martin Bormann can hardly have expected a woman to run against the wind. Women in his world were for procreation. There was so little place for women in the National Socialist system. There was an official image of the perfect German woman, pure and strong, and there was the reality of women treated as breeders or, among the homosexuals around Hitler, with contempt. Bormann’s decree on “The Safeguarding of the Future of the German Nation” described the fertility of millions of women as the Nazis’ most precious capital. Bormann, a pig grubbing in a potato field, in the eyes of his enemies, applied to the problem the ideas of a small-animal breeder. The war would leave three to four million women unmarried, at an age when they should be reproducing. A special procedure would make it possible for such women to become second and third wives. “All single and married women up to the age of thirty-five who do not already have four children,” echoed the faithful Kaltenbrunner, “must be obliged to produce four children by racially pure German men. Whether these men are married is without significance.”

  Was this why Beata Klarsfeld had gone after Bormann, in some state of righteous wrath?

  She laughed. “Look at me. I don’t need women’s lib to release me from some imaginary bondage. I like men. They have their roles, and we have ours. No, it simply happened that I wanted to know more about my country’s history, and I became stubborn when people kept putting me off. My parents refuse to speak to me because they say I drag their good name in the dirt. My teachers at school always asked: Why bring all that up? And I began to ask questions. How could it be, I asked, that a civilized nation did these things? And always I was told not to ask. It had happened, that was all. Hitler had done it.

  “And then I saw that Hitler was like … like, you would say, an image projected upon the screen. He meant nothing without large audiences. He was nothing except shadows dancing in the mind.”

  “Bormann managed the show?”

  “Exactly. You have to be German to understand how this could happen. This is why I make my countrymen uncomfortable. Still, it can happen anywhere.” She began walking toward a small park. “It can happen anywhere, when the men feel heroic—perhaps a better word is ‘erotic’—about mass parades and exhibitions of power.”

  Her father had been one of the great crusade.

  “All right,” she said. “So naturally I think it’s evil when men form an immense secret society, with smaller societies inside the larger, and exclude the pity and the compassion.”

  “Exclude women, you mean.”

  She smiled. “You are right. To the extent that I am driven by a fear of these things repeating themselves, I have a strong feeling about women. I will admit it, but this is part of the whole. Women’s liberation movements deal with a tiny section of what is wrong.”

  Beata Klarsfeld had discovered that she was considered a nuisance, at best, and an unbalanced fool, at worst, for feeling concern. Yet she had chosen to peer below the surface of a country she believed had too easily dismissed its own guilt.

  She had young friends like herself, students and a new generation of intellectuals, who joined her. They ferreted information from official files, dug through documents, and caught the attention of Interpol.

  Interpol has difficulty dealing with war crimes, which are outside its jurisdiction. In some countries, pressure groups from the Brotherhood developed good relations with the local police. In others, especially in South America, the local security police were indebted to the Brotherhood and to German concerns, which place police chiefs and politicians on the local boards of directorship. Yet Interpol has to cope with the criminal results of actions by former Nazis, and sometimes it has to use unorthodox methods. It would subsidize small organizations—say, a league against racial discrimination. In France, the publisher of a newspaper or the producer of a public-affairs program on the state-run television network might be persuaded to conduct an investigative report. For many years Interpol filed copies of American and British secret-service reports on Nazi Germany’s pre-1939 and wartime operations in regions like South America. These operations involved the smuggling of large amounts of gold, banknotes, art treasures, and guns. These were within Interpol’s legitimate sphere of interest.

  Beata Klarsfeld was not the willing stooge of any police organization. She did have access to files, however. She got help from researchers in East Germany, even though she had been declared unwelcome there. Several Jewish documentation agencies offered their facilities.

  Her conclusions were that Bormann had followed the escape route on which there seemed to be general agreement, and that Operation Eagle’s Flight covered the transfer of money and documents. She had gone on her latest trip to Latin America with the intention of forcing Barbie into the open by arousing public anger. This led in the summer of 1972 to yet another of the controversies about the war that regularly shake France. She had come back with what seemed to be evidence that Barbie was one of the many survivors who worked for the Brotherhood’s business consortium, employing funds created by Krüger and Schwend, and also by a staggering quantity of missing gold.

  The disposal of Nazi gold reserves had been briefly covered in the reparations section of the 1945 Potsdam Agreement, in which the Soviet Union made no claim to gold captured by Allied troops in Germany.

  On September 26, 1946, the Tripartite Commission for the Restitution of Monetary Gold announced that nearly 280 tons of gold had been located. The price of that much gold was given by Interpol in 1972 as close to $500 million, depending on where it was sold. Yet even this huge amount was regarded as a fraction of the total quantity of gold hoarded by men working under Bormann’s orders.

  No report on the commission’s work had been publish
ed by 1964. But Jacques Rueff, French Inspector-General of State Finances, who had served on the commission, did receive a letter on the commission’s official notepaper, signed by the commission’s Secretary-General, John Watson, and mailed from the commission’s office in Brussels. The letter stated: “No details of the composition of the mass of gold in its entirety have been made public to date, either by the three governments which are the depositaries, or by the Commission…. In the Secretariat I have very few details on the negotiations between the three governments and the neutral countries with regard to gold of German origin.”

  What had happened to the captured gold, let alone the missing gold? Why a total lack of information after twenty years? A natural conclusion would be that the commission would find it embarrassing to say.

  Another conclusion is offered by Julius Mader, an East German researcher with an obvious loyalty to the Soviet point of view. Once the panic subsided in West Germany and the Cold War quickly obscured the recent activities of Nazi bigwigs, the captured gold went back to Bonn. The missing gold was never pursued, although it was known to have traveled by way of Spain and Italy to South America, because the Western governments had no desire to create tension or weaken a united anti-Communist front.

  That this is a Communist view need not make it invalid. Mader had been right in the past, and it was his persistence in 1972 that helped to make the West German authorities look into the case of Bernhard Krüger, whose partner was then in a Lima jail.

  Chief Inspector C. I. Rudkin and Detective Sergeant S. Chutburn were assigned by Scotland Yard to find Krüger and investigate what was probably the biggest forgery operation in history. They began their work at the end of the war, assisted by an American Secret Service man, Major George McNally. They knew that 212 master draftsmen, engravers, and printers had been extracted from the Nazi death camps and put to work counterfeiting millions of British currency notes. They knew this operation had been moved into the Alpine Fortress. They knew that twenty-three coffinlike boxes had been discovered, containing the equivalent of $60 million in Bank of England notes.

  They did not know that American agents had been chasing distributors of the notes in South America, or that British agents had collected a sackful in Lisbon. In a combined operation that typified their close partnership, Donovan and Stephenson had been watching the political changes in Germany’s spheres of influence, particularly Argentina, Brazil, and Bolivia. There seemed to be ready financing for tough right-wing politicians with pro-Nazi ideas. The money was traced back to Lisbon and Zurich. This early warning of financial adventures in South America made it possible later for Allied agents to pick up the trail of Frederic Schwend. But such is the peculiarity of shifting world alliances that when they were ready to move in 1950, it had become diplomatically unwise to bring about the arrest of Schwend in Peru.

  The first hint of money flowing illegally into South America came early in the war. Of the account of the prolonged battle to discover this, one example is enough. The Italian airline LATI carried valuable cargoes directly from Fortress Europe to Brazil, where one of President Getulio Vargas’s sons-in-law was chief technical director, standard fascist procedure to guarantee noninterference. The Brazilian government would not agree to stop the airline’s operations or examine the cargoes. The president had too much to lose. Brazil was one end of a two-way flow. Diamonds, platinum, mica, and other raw materials went to Germany. Convertible currency and gold were flown back to provide reserve funds if Nazi leaders had to retreat to South America. British agents could find no way to stop the traffic except to sabotage the planes, which Stephenson refused to do. The U.S. State Department was asked to put a squeeze on the operation by preventing an American oil company from supplying fuel, but this failed, too. In the end, a brilliant forgery caused the Brazilian President to suppose that he was being double-crossed. He canceled LATI’s landing rights and eventually broke off relations with the Axis Powers.

  The forgery used against the Nazis was the work of a team gathered together in the safety of Canada, and working under cover of a nonexistent Canadian Broadcasting Corporation radio station known as “Station M.”

  The Nazi forgeries were the work of prisoners under suspended sentences of death. It was thought for a long time that the sole purpose of manufacturing fantastic sums of British money was to wreck the British economy. If the integrity of British money became questionable in neutral and Allied countries in the middle of a war, the results would be catastrophic. Only much later was it evident that the counterfeit money had been exchanged for valid currency by Bormann’s agents, working through banks in Spain, Switzerland, and Sweden. The fake notes had been used to finance Nazi Germany’s intelligence operations—notably the spy in the British Embassy in Turkey—“Cicero,” who sold secret files to the Nazis for 300,000 British pounds sterling, all of them forged. But the sums used to help Germany’s war effort were nothing to those misdirected to prepare nest eggs abroad for men on the run.

  Bernhard Krüger was in 1942 the director of a department of the Central Security Office of the SS that had been faking British currency since 1940. It grew out of all recognition when Martin Bormann was confirmed as Secretary to the Führer and issued orders that went beyond anything the stiff-necked bankers and civil servants of the Reich Printing Office and the Reichsbank had envisaged.

  Just outside Berlin, in one of the most closely guarded camps in the country, groups of highly skilled technicians were gathered. The paper for the forged British notes had to be manufactured from pure linen. Watermarks had to be introduced, and the paper then treated to defy expert inspection. Printing and engraving took place in Block 19, an isolated shed from which escape was not just impossible, but unthinkable.

  Walter Schellenberg has described some of the problems: “The secret service forged banknotes and rubles to finance our work. Then it became a much bigger operation. It took two years to imitate the so-called greaseproof paper needed for English pound notes. We had two large paper mills devoted entirely to that work alone. Engraving was complicated by the fact that 160 identifying marks had to be discovered in each note and then copied by the most skilled engravers. Professors of mathematics worked out a complicated formula by which they could anticipate each new issue of Bank of England notes. This was done so that the registration number on each banknote was always just about one hundred to two hundred figures ahead of the real notes coming off the presses in London.”

  Schellenberg was instructed to purchase good currency with a proportion of the forged notes. He believed Bormann was putting the notes into categories by testing them in foreign banks; the grade-one notes were finally converted into American dollars. In theory, the operation came under Himmler, but he frequently had little say in these things and was often unaware of details of an operation so vast. Bormann, on the other hand, was expert in handling money and had a cast-iron memory.

  The chief bookkeeper of the operation was a Czech political prisoner, Oskar Skala. He testified after the war that the “plant” produced 400,000 notes a month, and that Krüger and Schwend packed away a proportion of the grade-one notes in large wooden boxes. Another expert, a concentration-camp inmate who was awaiting the gas chamber because he was a gypsy, Solly Smolianoff, specialized in American dollar bills up to denominations of one hundred. His work had been known to J. Edgar Hoover for some years, it later turned out, because Smolianoff had been a forger by profession who specialized in U.S. currency. It was pure luck that Krüger and Schwend found him in a death camp.

  Smolianoff told a story to Scotland Yard and American investigators that seemed fantastic, except that the evidence was there in Gallery 16 near the village of Redl Zipf, part of the Alpine Fortress. The gallery was in an underground network of storage corridors and workshops. Along the two-hundred-foot tunnel were the banknote presses and machinery which had been transferred from Berlin. Smolianoff said they had been moved, kit and caboodle, while Himmler was trying to make a deal through Count Be
rnadotte. (He had failed, by then, to secure his future by selling the lives of Jews to his American contacts. Schellenberg had come to the glum conclusion that the American rabbinate did not wish to discuss terms of such an obscene nature.) The factory for the manufacture of fake banknotes was discovered first when American intelligence men tripped over a truckload of counterfeit notes. The notes were in wooden boxes, each box with a manifest stapled inside. The discovery was made soon after Hitler’s suicide, and the truck was trundling along a back road of his Bavarian fortress. The German Army captain driving the truck simply told his American captors where to look for the printing presses that had almost wrecked Allied fortunes while they were making the fortune of their sponsor, Bormann.

  A version of events was made public. Krüger, it was said, had disappeared from Gallery 16 at the end of the war after giving orders that all the records were to be burned and the printing dies sunk in Lake Toplitz. The craftsmen had been sent to Ebensee concentration camp to be exterminated. Out of 9 million Bank of England notes with a face value of about $600 million, about $6 million worth went to the Mideast to support German activities among pro-Nazi Arab leaders and about $30 million worth went to neutral countries to pay German accounts.

  This left a sizable amount still to strike off the books. Where was it?

  The Bank of England withdrew from circulation its banknotes of most denominations and exchanged them for five-pound notes of a new design in which a fine metallic thread had been drawn through the fabric in a manner thought to be proof against the most clever forgers. No explanation was given for this decision to Parliament. It was a desperate measure to kill the fake currency already in circulation. It succeeded to a limited extent. Foreign banks were caught with large sums of money, which they were able to change for the new currency if they worked fast enough. A number of banks, however, chose to take a loss. These were the banks on which Allied intelligence focused its attention after the war.