The Bormann Brotherhood

by William Stevenson

  Nothing is so secret as the world of finance; nothing so sacrosanct as money. The movements of forged currency and gold are probably at the top of the list of priorities when it comes to preserving secrecy. The real fate of the Nazis’ funny money has never been disclosed in documents made public. A rough estimate, based on independent calculations, is that about $300 million worth of forged notes was converted into usable currency to finance postwar Nazi groups in the Mideast and South America; and that $500 million worth of gold was fed into circulation through South Africa, where it can be transshipped to that “eternal sink for gold,” India, and through Hong Kong to China. In both instances, neither buyer nor seller is much concerned about origin.

  The Lake Toplitz story of hidden gold, sunken trunks of documents, and a fortune tucked away on underwater ledges originated with an officially inspired account of how Krüger drove up to the mouth of Gallery 16 and ordered everything to be tossed into the nearby lake.

  Lake Toplitz has since become the stuff of legend. Krüger is supposed to have taken off in a red Alfa Romeo convertible, accompanied by a striking blonde, in the direction of Switzerland. His orders to destroy the craftsmen as well as the machinery were never obeyed, however, and a number of the forgers escaped to tell a different tale. The fake currency was utilized for a while to buy protection for escaping persons. For some time after the Bank of England recalled its banknotes, the fake money was still accepted in remote stations along the escape routes. As for Krüger, he was back in Stuttgart in 1961, an energetic businessman “with experience in administration.”

  He had been described in 1945 as a man wanted for large-scale forgery and the murder of four concentration-camp inmates. American investigators said publicly in 1952, obviously in good faith, that Krüger obliterated all trace of the biggest act of forgery in history and then left with his Alfa Romeo crammed with genuine currency acquired through black-market operations in occupied capitals and a variety of beautifully forged passports. He had not been heard of since, despite the concentrated efforts of half a dozen police forces to catch him.

  Rudkin and Chutburn, of Scotland Yard, went back to their normal pursuits, having been informed that they need not trouble themselves any further over a matter that now involved the British Treasury and something known as “Higher Authority.” They were subject to the Official Secrets Act, and nothing has been heard from them.

  The search for Nazi funds was left to those not stifled by legal devices designed to protect bureaucrats from the penalties of their own mistakes. Ernest Cuneo, who had kept his special status within White House circles after Truman took up residence, checked with Sir William Stephenson in the 1950’s a series of reports from different sources in South America, all suggesting that Nazi funds were behind certain business activities. His information was independent confirmation of what Stephenson himself had heard.

  Stephenson had a considerable knowledge of German routes for couriers, agents, and smugglers. During the war, his intelligence net included at least one reliable observer on every neutral vessel sailing between the American continent and Europe; and these observers, as a matter of course, reported on arrival in port to the local British secret-service agent. At every civilian airport, he had men among the ground technicians and occasionally aboard the aircraft. One reason for his obstinate refusal to sabotage aircraft or ships was that he was protective of his own men; but also, as a pilot, he could never bring himself to destroy a plane and crew by such methods. His operations were shared with the U.S. Office of Naval Intelligence. Between them, it was agreed in 1945 that dirty money and Nazis on the run might be expected to move along well-defined routes. But at some point, and for reasons that one can now speculate upon, the curiosity of the two “happy amateurs,” Stephenson and Cuneo, was curbed.

  They knew that Brazil and Venezuela were the chief sources of industrial diamonds, needed by Hitler’s War Production Minister, Albert Speer; and they knew also that after the war the trade went on. Platinum had been a vital commodity, purchased with gold or convertible currency from Colombia and Ecuador; it was required for the magnetos of aircraft engines. Again, long after the war ended, German agents were paying as much as $500 an ounce against the regular world price, which fluctuated around one-tenth of that figure. They knew that five years after Krüger and Schwend allegedly vanished, marked banknotes were found in circulation in these South American states. The marked notes were not forged; they were notes whose registration numbers had been recorded at the time they were purchased in Swiss banks for the forged currency.

  The FBI had always been denied authority to wage “special operations” of the kind conducted by Stephenson. In this postwar period, the normal police investigative agencies of Britain and the United States were also hamstrung. In countries that tolerate criminal activities affecting other nations, it had not been unknown for Allied agents to apply the law themselves. There was pressure from some British Treasury agents simply to wipe out the sources of the fake money. To the old professionals, it seemed as if the bureaucrats, the Establishment intelligence agencies, and the departments concerned with foreign affairs had intervened.

  Perhaps they had. General Gehlen and his company of intelligence experts, within months of switching from Hitler’s side to that of the United States, had convinced his new friends that almost anything was justified in the Cold War against Communism. His agents were called V-men. They were recruited from the Gestapo and the SS. Nazi records, in which Germans who voiced opposition were frequently labeled “Communists,” were suddenly an Allied index to the worthiness of West German civilians. Values must have seemed upturned, for now the middle-level Nazis could boast discreetly of their virtue as enemies of Bolshevism. I think this explains the convenient evaporation of Krüger and the bulky apparatus known as Operation Bernhard. For the man who was Krüger’s real chief in this counterfeiting enterprise was Frederic Schwend; and his partner in the business projects launched on smuggled funds was Klaus Barbie, alias the Bolivian businessman Señor Altmann. By the summer of 1972, Barbie-Altmann was splashed across the front pages of Paris newspapers as the notorious “Hangman of Lyon.” He was talking to television interviewers and offering his memoirs; and he was saying repeatedly that he had done his duty as a German, and that he had performed his duty to democracy as a V-man in the Gehlen Org. He named Otto Skorzeny as the chief of the network called Die Spinne.

  The mass-circulation newspaper France-Soir crammed its front pages through several days of May and June with Barbie-Altmann’s self-justifications and the retorts of former resistance men who had suffered or lost comrades through his actions. Prominent Catholic churchmen were dragged into the controversy. Skorzeny’s organization, identified with the Brotherhood, was reported to command the loyalty of 100,000 fascist sympathizers in twenty-two countries, and to be funded by Nazi investments. Capital was estimated at 500 million francs by informers in some of the ten Brotherhood offices operating as private companies in France, with assets valued at 200 million francs.

  The conservative Le Figaro reported that Barbie-Altmann was being helped to evade justice by the West German ambassadors in Bolivia and Peru.

  Finally, the “International Wanted List of Nazi Criminals” entry for the Gestapo man was cited: “Barbie, Klaus: Lt-Col. or Captain of the SS, head of Department IV (Gestapo) involved in actions in Lyon, Dijon, Strasbourg 1934-44, sought by France and Great Britain on murder charges.” In March 1973, Barbie was arrested by Bolivian police because, said a government spokesman, it was thought he was trying to escape into a neighboring country and evade extradition.

  An outcry among French wartime resistance organizations obliged the Munich authorities to release some details of their investigations. These, however, were published before Barbie-Altmann had been forced into the open by Beata Klarsfeld. The wording seemed to me significant. It referred first to an application for a residence permit in West Germany made out by a thirty-year-old woman calling herself Ute Altmann, daugh
ter of Klaus Altmann, a resident of Bolivia. She stated she was born in Kassel, near Leipzig. The registry office there had no trace of such a person born on the date given; but there was an entry for Ute Barbie. The woman’s brother was named: “Klaus-Georg Altmann, son of Klaus Altmann, stated to have been born at the village of Kasel [sic] near Leipzig. There is no such place. The wife of Klaus Barbie gave birth to a son in the clinic of Dr. Kuhn in Kassel…. First name and date of birth coincide.”

  It seemed an example of bureaucracy at its worst: the slow-grinding, unimaginative mind of the civil servant resenting the intervention of citizen clods. There is the prim and proper nitpicking: some poor fool had misspelled Kassel, and the functionary meant to make the most of it. There is also a defensive note. The whole statement has the familiar ring of an official cover-up; the few details offered are those dug up already by newsmen.

  This statement, forced out of the reluctant Munich authorities, came after the following steps had been taken:

  • December 7, 1959: The West German Association of Nazi Persecutees requested action from the Ludwigsburg Office in the case of Klaus Barbie. No reply. Ludwigsburg (handling over-all investigations into Nazi war crimes) was run at the time by Erwin Schüle, sentenced for Nazi war crimes; later amnestied and handed over to West German authorities.

  • May 16, 1967: The same association patiently informed the Ludwigsburg Office that over seven years had passed and they would like an answer.

  • May 23, 1967: The Ludwigsburg Office replied that preliminary investigations were handed over to the State Prosecutor’s office in Kassel back in 1963. It developed that Barbie last lived in Augsburg, so the case was given to the State Prosecutor there in August 1965. Then the Augsburg court found it could not act because Barbie had been sentenced to death by a French military court, which made it impossible for a West German court to retry him on the same charges. “In any case prosecution is impossible since Barbie is believed to be in Egypt and is not likely to return or be extradited.” (My italics.)

  • June 22, 1971: The State Prosecutor’s office in Munich said the case against Barbie had been closed. Although Barbie might have taken part in deporting Jews, “there is no proof that the suspect knew the fate awaiting them.” As to the executions of French resistance fighters, it could not be proved Barbie took part in the killing, although he ordered the arrests. “A clarification of the executions in the Lyons Gestapo office is no longer possible in view of the passage of time and the number of killings committed in the area of responsibility of the Lyons Gestapo office.” (My italics.)

  Barbie commanded the Gestapo detachments that killed the Frenchmen. He telegraphed his headquarters in Paris confirming he had sent three-year-old Jewish orphans in 1944 to “labor camps” in Eastern Europe, and that boastful telegram is still on file. It was evident to Beata Klarsfeld that her countrymen were not at all anxious to see justice done.

  Her aim in raising scandalized attention to the Barbie case was to shake Germany out of a mood she believed Bormann always counted upon. She knew, too, that there was more likelihood of justice being done in France, where the courts were not infiltrated by old sympathizers and friends of the past. She had no idea that she had also picked upon an offensive example of how killers had escaped by selling their talents to the intelligence agencies of East and West. Klaus Barbie had worked for an import-export agency at Schillestrasse 38, in Augsburg. Such agencies are the favored fronts of spy rings. This one had been operated by the Gehlen Org.

  Beata Klarsfeld was described to me as “paranoid” by an official of a Jewish international agency. She was working out some inner problems, said this official She belonged to a group of mentally unstable personalities seeking martyrdom. She wanted to be another Joan of Arc. And so on. This outburst was puzzling. The speaker was qualified in several disciplines: as a psychologist, as an economist, as a professor in international affairs. The professor went to some length to demonstrate that West Germany had grown out of its Nazi past; that the courts had done their best in difficult circumstances to weed out the major offenders. Germans like Beata Klarsfeld only muddied the waters.

  The girl’s sin against propriety was that she slapped Chancellor Kurt Kiesinger in the face at a public function, “to draw public attention to the disgraceful emergence of Nazis on the political scene again.”

  Puzzled by the strength of this attack on Beata Klarsfeld, which seemed out of proportion to the incident, I looked through the official Hansard report on a debate in the British House of Lords soon after Kiesinger became Chancellor in 1966. Lord Montgomery, an archconservative, one would have said, warned the Peers of the Realm of the dangers of German militarism. A fellow right-winger, Viscount Bridgeman, said that twenty years ago nothing seemed to be farther from the German mind than a reversion to Nazi practices. Now it looked as if this was beginning to be altered…. The mind went back to the ’30’s and remembered how quickly the political scene could change in the night in a place like Germany.

  The British Foreign Office had an obligation to deplore any hint of disenchantment with West Germany. But the debate spoke for itself. Montgomery had also voiced the fears of many: that a large withdrawal of British troops would leave the Germans in command of the northern army group at a time when there were few restraints on a revival of neo-Nazi attitudes. Montgomery had been accused of many things but it would be difficult to persuade even his worst enemies that he was paranoid.

  CHAPTER 15

  A series of murders followed Beata Klarsfeld’s denunciation in 1972 of Gestapo Colonel Klaus Barbie. Suddenly the Bormann puzzle ceased to be a game. Each murder was linked with the Brotherhood. Interpol became involved when one of the killings was associated with the sale of arms to Arab guerrillas through one of the Bolivian agencies run by Barbie under his cover name. These investigations broadened to include the otherwise unexplained murder of the Bolivian Consul in Hamburg. Next a well-known Italian editor died in a dynamite explosion in Milan, and it became apparent that assassination teams were at work, although it was far from clear what the motives were.

  The first clue was provided when a former Nazi collaborator of Barbie’s was found strangled in a suburb of Rio de Janeiro. This was Count Jacques Charles Noel Duge de Bernonville, a friend of the Hangman of Lyon. He was found dead on April 27, 1972 in his apartment, a gag in his mouth; his hands and feet tied.

  The Count was sentenced to death by a French military court for helping Barbie during the Nazi occupation. Death came violently, but a little late. The Count evaded it first by escaping to French Canada, where he remained until 1951, a distinguished figure among the Catholic aristocracy of Quebec. When the French government finally heard where he was, a formal request was made for his extradition. He flew with his family straight to Rio. The Brazilian government refused to extradite him, and by 1956 he was a prominent spokesman for extreme right-wing groups. His wife returned to Paris, and he made periodic transfers of money through the Banque Nationale de Paris under the code “Credit L Jouvait XF 495.” He traveled frequently to Bolivia and Peru, the two countries where Nazi funds had been put to work in a variety of business enterprises. It was in Lima, Peru, that his partner, Luis Banchero Rossi, was murdered in January 1, 1972, after being identified as an associate of Barbie. Shortly afterward, the Nazi counterfeiter Schwend was put in a Peruvian jail. Schwend, it later appeared, might have been put there for his own safety.

  The Count de Bernonville was reported by Brazilian police to have said it was time to publish his memoirs and to challenge the French people to judge for themselves if the Nazis and their sympathizers were really so very wrong. This must have alarmed the less self-confident members of the Brotherhood. The Count’s history and the other murders were engulfed in such a smoke screen of rumor and half-truths that it would take time to disentangle fact from fantasy. Meanwhile, I checked with Stephenson, who said I was on the right track. So I struck, not too confidently, into the veterans of the British Special Operations
Executive, which had built up the secret armies of Europe with arms and supplies from America. These were all quite extraordinary men, not men given to melodrama, whose peacetime occupations put them in areas where large financial deals are closed on the basis of a man’s word of honor.

  This sense of honor had kept such men silent about wartime operations until the provisions of the Official Secrets Act were relaxed in this same year of 1972. This had the effect of making available a version of events as seen by the Establishment intelligence agencies, whereas the Special Ops men had functioned often without written authorizations or official files. There was always rivalry between “scholarship and skullduggery,” and officialdom liked to put itself among the scholars. I went in search of the skullduggery merchants and discovered that they held strong views about the blind way the West forgot all the lessons offered by the Nazis in its anxiety to tilt at Communist windmills. There was never a disposition to underestimate Russian plans to destroy our own system; but the survivors of SOE had a misleadingly casual approach to threats of this kind. These Baker Street Irregulars were accustomed to think out a problem after the manner of their elected patron, Sherlock Holmes, whose fictional address was on the same street as their wartime headquarters had been.

  They recalled that Nazi Germany occupied other countries according to well-laid plans in which the SS and the Gestapo were to provide garrisons at key points to keep the native population under permanent subjection. Some of the natives would supply slave labor for the industry and agriculture of the German empire, and would remain in a state of total inferiority, without any educational or human rights, condemned to be treated literally as subhuman and entirely at the disposal of the master race.