The Princess Spy

by Larry Loftis

  Like Prince Max, Gloria had a colorful history. Mexican by birth, she was now thirty-one and was considered one of the most beautiful women in the world. In 1931 she had gone to Los Angeles to work with Clarence Brown, the famed MGM director who had helped launch the careers of Joan Crawford and Greta Garbo. Brown, it seemed, had identified Gloria as his next starlet. She returned to Mexico in 1933, however, without having appeared in a film, and then moved on to Paris and The Hague. There she married a Dutchman, Frank Scholtens, only to divorce him shortly thereafter. In 1935 she moved to Berlin, where she met and married Count Franz Egon Graf von Fürstenberg. The couple had two children, and when war broke out her husband joined the Wehrmacht. In 1942 Gloria moved with their children, aged one and four, to Madrid and filed for divorce.

  Gloria was a suspect, Thomas said, because of rumored connections to Himmler and her known association with the last suspect, Dr. Hans Lazar.

  While Lazar’s official title was press attaché of the German embassy in Madrid, he was perhaps the most powerful Nazi in Spain. During the Spanish Civil War he had entrenched himself in the country, working as a correspondent for the pro-Nazi broadcaster Transocean. When World War II broke out, he simply moved his office to the German embassy.

  From the beginning, Lazar had pursued a plan to move Spain’s public sentiment closer to Germany using propaganda and covert activities. Since Serrano-Suñer and the Falange controlled the Spanish press, Lazar had unmitigated freedom to plant German propaganda in most outlets. With a monthly budget of 200,000 pesetas, he had a bankroll to bribe Spanish journalists and government officials and to hire informants, which he did with abandon. At one point, the OSS estimated, Lazar had as many as four hundred agents reporting to him. Many of those agents, they knew, were informants whose job it was to shadow suspected Allied spies.

  Aline would soon know this sensation firsthand.

  I. Many considered Joselito, Belmonte’s contemporary, the greatest ever, but Joselito readily admitted that Belmonte was the progenitor: “I may be the greatest,” he once said, “but Belmonte invented what I do.”

  II. The energy conversion worked by burning charcoal in a stove in the trunk. It worked, but it was unreliable and greatly diminished the car’s power.

  III. Manolete, the bullfighter who stood alone at the top, had made over $30 million (inflation-adjusted) since 1939.

  IV. On July 5, 1944, Gregory Thomas and Ambassador Carlton Hayes would sign a formal lease, moving the OSS (identified as the “Other Agency”) offices into the third floor of the ambassador’s residence in the embassy compound (identified as the Montellano property), while Thomas himself would lease space in the adjacent “International Institute” building.

  V. As Germany’s prospects of winning the war waned, Franco distanced himself from the Falangists, starting with the removal of Serrano-Suñer from his administration.

  VI. The Reichsmarschall was the military’s senior field marshal and Germany’s highest-ranking soldier.

  CHAPTER 6 SNATCH-22

  Thomas showed Aline around the office, introduced her to the staff, and left her in the code room with Robert Dunev. Dunev was not much older than she was, Aline figured, with a boyish face and tender eyes, but he came across as older, more seasoned. About six feet tall, he was thin and well-dressed, and his dark complexion suggested he could have been a native Spaniard.

  He was also friendly and warm, and she was grateful to have a compatible office mate. Like her, he came from a middle-class New York home and had a small-town, easygoing nature.

  Dunev, in turn, was equally impressed with Aline, and relieved to have help. Since his arrival, he had struggled to keep pace with the relentless onslaught of work, much of which could now be shared.

  “Life in the code room improved dramatically with the arrival of Aline,” he recalled later. “Her looks and her personality, together with her enthusiasm for everything Spanish, boosted the morale in the back rooms of Alcalá Galiano.”

  The decoding itself, though, was not for the faint of heart. German order-of-battle intelligence was collected daily throughout Europe, and OSS radio operators in places like San Sebastian, Bilbao, and Barcelona would then encrypt and dispatch the information to Madrid’s OSS office. These messages, which were top secret and often urgent, would then have to be decoded and radioed to other stations or pouched to Washington.

  Robert Dunev saving petrol on this day at the office. Michael Dunev

  Messages were always sent in groups of five letters, such as: FSTSD NNCXQ HYEMG. To decode it, Aline would place a “strip,” or key, beneath each set of letters, and then apply memorized combinations. Each letter she saw was the result of a combination of two letters: what was in the strip and the actual message. In the above example, Aline’s strip would read: BOADS TMISR ATDUC. In the memorized combinations, the letter F could only be formed by applying T + B. Thus, she would know that the first letter of the first word was T. The letter S, in turn, could only be formed by applying H + O. Continuing down the sentence, Aline eventually would have the message:

  THREE TANKS DESTR.

  But the strips were long, sets of 25 to 30 five-letter units, and they would change every month. Fortunately, the letter combinations never changed so once memorized, the code clerk was halfway home. There was a flaw in the system, though, as a message could be transmitted without being enciphered if the strips were not carefully positioned. Early on Robert had made such a mistake, sending a cable to London about troop movements without the appropriate strip, and thus without the resulting enciphering. His message read:

  THEFL OWOFO RDERO FBATT LEINT

  If intercepted, the Germans would have understood the message immediately:

  THE FLOW OF ORDER OF BATTLE

  London had been furious and demanded a court martial for the person responsible. Frank Ryan and Gregory Thomas came to Robert’s defense, fortunately, and used the incident to request assistance in the coding room. This mishap, in large part, led to the urgency of recruiting Aline.

  One other thing Aline found sobering about her work was that each agent had to have an “escape plan.” Since OSS employees did not have diplomatic cover, they would have no immunity if their cover was blown and they were discovered by Spanish authorities to be spies. In fact, espionage was a capital crime in Spain and every OSS agent knew well the burden this added. More frightening, perhaps, was the prospect of a German invasion. In preparation for one of those emergencies, each OSS agent was required to carry 21,900 pesetas—roughly $2,000 in 1944—at all times. This was quite a lot of money, but might be needed for bribes and last-minute transportation.

  This contingency plan had already been used once. The summer before Aline arrived, the Madrid OSS office ran out of pesetas. There was no procedure or preestablished plan for acquiring more and the embassy refused to assist. Madrid had cabled Washington on July 3, 1943, stating that they had on hand 827,000 pesetas (roughly $76,000) but had liabilities of 1,300,000 pesetas against this amount. “We hope to increase our peseta balance to five million net this month,” the cable said.

  Washington didn’t respond with a solution, perhaps because the State Department was well aware of Ambassador Hayes’s disdain for the OSS and its activities on his “turf.” So the only alternative, the Madrid office felt, was to buy the currency on the black market, a crime severely punished by the Spanish government.

  Frank Schoonmaker, a Madrid agent who was operating as a wine importer by day, offered to find pesetas and set up a clandestine purchase. Assisting him was a cipher clerk who had recently arrived, an older man code-named TIGER. Unfortunately, they were caught by police while conducting the purchase.

  The OSS then had a dilemma: Approaching the Spanish government to rescue the men would have been a tacit admission of illegal espionage. Fortunately, TIGER had just arrived in Spain and the authorities knew nothing about him, so he was summarily deported. Schoonmaker was another matter. The Spanish secret police had for some time kno
wn that he was an espionage operative, and the arrest was a golden opportunity to crack the entire American mission. Schoonmaker was thrown in a cell and prevented from seeing visitors.

  The OSS consulted the State Department and Ambassador Carlton Hayes initiated discussions with Spain’s foreign minister.I From a criminal justice standpoint, the Spanish contended that the American spy had to be punished, and they wanted to use Schoonmaker to set an example. On the other hand, local officials knew very well that their city was teeming with spies from almost every country in the war and had thus far chosen to display neutrality by turning a blind eye to their activities.

  A compromise was reached between Hayes and the Spanish government. The following night Schoonmaker’s cell door was left unlocked, guards were mysteriously absent, and he sprinted out to a waiting car. He was then whisked to the embassy and hidden in the attic. The “escape” made Madrid’s headline news, and several days later Schoonmaker, hidden inside an embassy Buick, was driven nonstop to Gibraltar. A Spanish court convicted him in absentia and sentenced him to life in prison.

  * * *

  Meanwhile back in the United States, Edmundo Lassalle was still trying to cut through the bureaucratic red tape preventing him from leaving for assignment. The OSS and the Walt Disney Company continued to wrangle over details for his services, and Roy Disney himself took the lead in negotiations.II The OSS wanted no traceable ties to Lassalle, yet it sought to control every aspect of his time and finances. Disney, on the other hand, wanted a legitimate representative who could provide real services and open doors for producing films on the Iberian peninsula.

  After months of deliberations the parties finally agreed to the original terms: Disney would provide Edmundo with a normal salary and expense account, and the OSS would secretly reimburse them. Edmundo would sign an employment agreement with Disney and perform a certain amount of work for the company in Spain, and the reimbursement aspect would be covered by a separate contract between the OSS and the Disney Production Company.

  It was the perfect cover: a Trojan horse disguised as Mickey Mouse.

  By mid-March, Aline had settled into her new job and decided it was time to discover what Madrid had to offer at night. She had gone to dinner with Juanito the week after arriving, and he had proved to be a perfect gentleman. So when he began inviting her to receptions and dinners, she readily agreed. While she had no romantic interest in him, Juanito had access to every level of society and, as long as she kept any romantic impulses on his part in check, he seemed to have the makings of a good friend.

  Besides, he continued to send flowers.

  And chocolates.

  * * *

  While Aline was finding her footing and Edmundo was preparing to leave for Madrid, the Germans were focused on investigating one of their own. An Abwehr officer named Johann “Johnny” Jebsen, they feared, was feeding information to Britain’s MI6. Jebsen’s territory was Spain and Portugal, and he was the case officer for Germany’s best agent, Ivan.III The Gestapo and SD had long suspected that Jebsen was a traitor, and that Ivan might be a double, but they never had material proof. They had ordered Jebsen to go to Biarritz, France, for a meeting where they planned to arrest him and fly him to Berlin for questioning, but Johnny smelled a trap and made up an excuse for not leaving Spain. Perhaps under pressure from the Gestapo, the Abwehr decided to expedite the matter by snatching Jebsen in Madrid or Lisbon and forcibly taking him back to Berlin.

  Kidnapping someone in a foreign country was difficult enough, but doing so in neutral Portugal or Spain was delicate, to say the least. If those doing the kidnapping were caught or the plot was foiled, it would be a diplomatic fiasco and could do serious damage to German-Spanish relations. But to let Jebsen orchestrate counterintelligence against them was unthinkable.

  To handle such matters the Germans had a snatch team, the Ablege Kommandos, who were experts at making people disappear quietly. They could either kidnap their victims—drugging them and sneaking them across the border—or kill them with an odorless, tasteless, and fast-acting poison that could be added to any food or drink. After twenty minutes the substance left no trace in the body and would clear an autopsy. And the Kommandos were not Germany’s only option. Just one year before, in 1943, an Abwehr snatch team had killed a man in Madrid in broad daylight. In that instance, as in most cases involving Germans, the Spanish police looked the other way.

  On April 30 Johnny Jebsen disappeared. He was never heard from again.

  British intelligence learned later that he had been lured to the German embassy in Lisbon, was knocked out and injected with a sleeping agent, and was then stuffed into the trunk of a car with diplomatic plates. From Lisbon he was driven to Madrid, and from there to Biarritz, where an Abwehr plane was waiting. Jebsen was flown to Berlin and incarcerated in the Gestapo’s notorious prison at Prinz-Albrecht-Strasse. Jebsen, the British were sure, was then subjected to “enhanced interrogation”—that is, torture.

  The Jebsen kidnapping was evidence that no spy—not even OSS agents operating in neutral Spain—was exempt from danger. But no one could have predicted just how close that danger was. A few days after Jebsen’s disappearance, as Aline’s office mate Robert Dunev was parking his car in front of the American embassy, he noticed that across the street, hiding behind a Mercedes, there was a man taking his photograph.

  Realizing that he had been spotted, the photographer jumped in the Mercedes and sped off. Robert whipped his car around and floored it.

  The chase was on.

  They raced through the streets of Madrid, but Robert’s old car could not keep up with the speedy Mercedes. Somewhere on the Paseo de la Castellana Robert lost him. For several minutes he cruised along the Castellana and then up and down side streets.

  Suddenly, he saw it; the Mercedes was parked. He pulled in behind it, but the driver was gone. Robert wrote down the tag number and when he returned to the office he began to dig. As he suspected, the car belonged to the German embassy. He had seen the photographer’s face clearly, too, so he began searching for his identity. Combing through OSS and embassy files, he found him.

  The man was indeed German and known to be a kidnapper of enemies of the Third Reich. Robert also found out that the man’s modus operandi was to drug his victims, bundle them in the trunk of a car with diplomatic plates, and then race across the border into France. From there his victims were transported to Berlin.

  I. Ambassador Hayes was so incensed that he requested OSS’s removal from the entire Iberian peninsula. While his request was denied, he did obtain a considerable concession, restricting OSS’s SI operations in Spain to “only such intelligence as may be requested or agreed to by the Ambassador and the Military and Naval Attaches, or be requested by the Joint Chiefs of Staff with the concurrence of the State Department.”

  II. Walt Disney’s older brother, and cofounder of the company.

  III. His name was Dusko Popov, a British double agent who worked for MI6, MI5, and the FBI.

  CHAPTER 7 DEATH BY MURDER

  On May 13, 1944, Edmundo Lassalle finally left the United States en route to Lisbon and Madrid. Sailing aboard the SS Thome from Philadelphia, he would not arrive in Lisbon until sixteen days later, on May 29.I Since Portugal was part of his Disney territory, he met with a few media and industry contacts, and two days later he was off for Spain.

  He arrived in Madrid on June 1 and wasted no time providing Disney with tangible results. He met with local film industry officials and then gave an interview with one of the city’s leading magazines, Primer Plano. He was treated almost as a celebrity, the name of Walt Disney being universally known and admired. It was a card that would open any door, Edmundo realized, and one he would begin to use often.

  Edmundo Lassalle (on the left in the photo), representative for Walt Disney, in the June 11, 1944, issue of Primer Plano (with Paramount Pictures film star Marlene Dietrich on the cover).

  After tending to Disney business for a day or so, he recei
ved instructions from the OSS that he was to meet his Madrid contact at the Palace Hotel later that week. On the appointed day, he lingered in the lobby and waited for the woman who met the description.

  * * *

  The elevator door opened and Aline scanned the lobby as she slowly made her way to the front desk. Casually, she let her handbag slip from her hands.

  Like a poised panther, a dark handsome man darted for it.

  “The historical way to meet a lady,” the man said, handing it to her.

  Aline smiled. He had thick shiny black hair, a mustache trimmed like Clark Gable’s, and smoldering dark brown eyes. His caramel skin was smooth and polished, his hands and fingers elegant and graceful.

  “Edmundo Lassalle’s my name,” he said. “Would you do me the honor of joining me for a drink in the bar this evening?”

  “How kind of you to invite me,” Aline replied, completing the predetermined exchange of passwords.

  It was a clumsy rendezvous, but Washington needed to get them together as quickly as possible. Since Edmundo was in deep cover as a representative of Walt Disney Productions, he couldn’t be seen going to Aline’s hotel room, and certainly not to the American embassy or the Oil Control Commission, as the former was likely watched and the latter might be. The plan Frank Ryan had come up with for Edmundo was that he would be based in Barcelona, liaising discreetly with the OSS station there, but would come often to Madrid. On many occasions, Ryan surmised, Edmundo would carry messages for Gregory Thomas, but he would need a cutout as the go-between.