The Secret in Building 26

by Jim DeBrosse

  BUT THE DANGER of exposing the NCR project was only just beginning to take shape. The case had to be presented to a grand jury so that Montgomery could be indicted and stand trial. The Washington office of the FBI called Belmont on November 11 and told him to tell the judge that Montgomery must be held in jail quietly, with no publicity whatsoever during his trial or pleading. Belmont must also try to find a way to muzzle Montgomery in court. If that were not possible, Washington authorities told him, Belmont must call in every reporter likely to cover the proceedings and talk with them about their patriotic duty to keep the case quiet—a plea the FBI had used before with good results.

  As for Montgomery’s wife, Lillian, the Navy seemed to have decided that the best course was to continue her employment at NCR, where she could be watched. Indeed, she was to remain in her job throughout the war.

  Although the Navy had dropped out of the investigation, it was still vested in the outcome. In a November 13 memo, the Navy warned Hoover’s office that, if Belmont and Crawford failed to get a government theft conviction, it would “take the matter into our own hands . . . and thereafter [assume] the responsibility” for handling the case as one of espionage.

  The FBI fired back a long memo on the same day: if the Navy really wanted to keep Montgomery quiet, why not draft the man? By pressing Montgomery into service, the Navy could isolate him for the rest of the war, perhaps even placing him on a deserted island. The memo went on to cite instances where judges had given criminals the choice of jail or enlistment. The Navy took almost a week to reject the FBI plan, and then never explained its decision. In the midst of fighting a war, however, perhaps Navy officers were not interested in baby-sitting a potential traitor.

  Two FBI agents interviewed Montgomery in jail on November 13 and again two weeks later. They persuaded him to plead guilty to theft of government property, but he insisted again that he was innocent of espionage.

  Meanwhile, with the grand jury running a week behind schedule in considering the embezzlement charges, Montgomery was removed from custody in Dayton to the Clinton County jail, some thirty miles southeast in the small town of Wilmington. He remained incommunicado, but the smaller jail meant that he could not always be kept from the other prisoners.

  The record does not explain why Montgomery was transferred to the more rural county, but it is safe to assume that Meader and Navy intelligence officials wanted to draw attention away from his connection to NCR and distance him from relatives and friends who might begin to question his treatment. The jail keeper in Clinton County did his best to keep Montgomery isolated from other prisoners and “forgot to mail” two letters James had written. Montgomery’s oral request to see a lawyer likewise continued to slip the jailer’s mind.

  The slowness of the grand jury prompted the FBI and Crawford to come to their own agreement independent of the Navy: they would continue to investigate the possibility of espionage but not pursue the charge for now, even if it could be done secretly, for the simple reason that it would take too long. Any more delays in the case ran the risk of making Montgomery uncooperative and talkative.

  “I trust this will adequately dispose of the case in the event a guilty plea is entered,” Crawford wrote to Tom Clark and James McInerney in the attorney general’s office on November 18. “If he should stand trial, of course, we shall have further problems to deal with.”

  JUST WHEN IT seemed the Montgomery case might be under control, the local press began asking questions about the man being held in isolation in the Clinton County jail. Alarm spread through the Navy and Justice departments. An internal FBI memo on November 18 stated that Crawford “had already received inquiries from the press that . . . [a man named] James Thompson had been picked up by the FBI as a German agent.” The reporters had gotten the name wrong but most everything else right. They knew, for instance, that the suspect was from Franklin.

  Meader hoped that some hints from the FBI about the needs of national security might keep the papers quiet. In the main they were, but the Franklin Chronicle could not resist printing a short front-page article about Montgomery’s arraignment in federal court. While not mentioning spies or espionage, the article ended very cryptically by saying that “Montgomery’s arrest three weeks ago led to countless unconfirmed rumors that were circulated widely throughout the community.”

  Crawford immediately presented Montgomery’s case to the grand jury the next day as a simple charge of embezzling government property, although no information was given to the grand jury about Montgomery’s work at NCR and very little about the items stolen, other than to say that they were three gas tubes. The grand jury returned the indictment against Montgomery four days later. The case was now bound for public trial.

  As Crawford envisioned the publicity in an open court case, he again called Meader and asked if the Navy would reconsider drafting Montgomery and making life easier for everyone involved. Meader called Washington, then telephoned Crawford. The answer again was no.

  By November 26, Justice Department officials were beginning to wonder if they had enough evidence to prosecute Montgomery. An FBI check on him found no previous criminal record—and given Montgomery’s relative youth, his wife, and his small child, a judge might well look upon a thirty-five-dollar theft as unworthy of a long sentence, even if it had been of government property.

  To help strike a deal with Montgomery and his lawyer, Thomas H. Ryan, McInerney told Crawford to leave open the term of Montgomery’s jail time to a decision by the court: if the circumstances were right—and the Navy agreed—Montgomery could be freed after serving fewer than five years.

  The Navy agreed. Crawford and the FBI agents visited Montgomery in jail and offered him the deal. Montgomery, believing he might get as little as a year in jail, went along. But the Navy was to fail to live up to its end of the bargain.

  FEDERAL CASE 1842, U.S. v. James Martin Montgomery Jr., was heard on November 27, 1943, in the federal court for the Southern District of Ohio in Dayton. With his court-appointed attorney present—whom he had met for the first time that morning—Montgomery pleaded guilty, as promised. The hearing was quick, simple, quiet—everything according to plan.

  Montgomery had no statement for the court. There were no reporters present and no indications that Lillian or any other member of Montgomery’s family was in attendance. Sitting secretively in plain clothes at the back of the courtroom was Francis M. Seaman, of the Navy’s Judge Advocate General (JAG) Office, who was there to make sure everything went according to the Navy’s wishes. He reported back to Washington that it had.

  Judge Robert R. Nevin sentenced Montgomery to five years in prison, but agreed that Montgomery’s sentence could be reduced later, if it seemed appropriate.

  The Justice Department and the FBI moved to keep their promises of tight security to the Navy. McInerney notified James V. Bennett, the head of the U.S. Bureau of Prisons, that precautions had to be taken to keep Montgomery from revealing secrets to other prisoners. That meant high-security lockup. But Bennett balked, thinking it an unusual request for someone who had committed such a slight offense. Instead, prison officials followed the assignment rules for young, first-time offenders and, on December 6, sent Montgomery to the federal facility at Chillicothe, Ohio—an “industrial reformatory” that was more a youth training camp than an Alcatraz.

  The Navy fumed. It contacted Bennett and insisted Montgomery be kept completely isolated. Bennett, in turn, complained to the top echelons of the prison bureau about the Navy’s unwillingness to supply an explanation for its demands and for not passing its request through regular channels.

  Undaunted, Navy officials demanded that Montgomery’s mail be intercepted, checked for codes, censored, and copied to them. When he learned of the Navy’s hounding of Bennett and the prison bureau, Edward A. Tamm—J. Edgar Hoover’s right-hand man—told Navy officials of his growing irritation with their meddling. But he must have been persuaded to back up their demands anyway—thanks, in part, t
o a Navy deception. For the first time, OP20G revealed something to the FBI about the nature of the NCR work, although it was deliberately false. Tamm informed Bennett in a memo that the Montgomery case involved a supersecret electronic device necessary to record accurate shipping information—a lie Tamm had been fed by the Navy.

  Despite their many misgivings, the FBI and Bureau of Prisons eventually cooperated with the Navy. Montgomery was moved into the most isolated part of the reformatory, and all his mail was intercepted and checked for hidden messages. He had little chance of contact with the outside world.

  AS MONTGOMERY LANGUISHED in isolation over the next few weeks, the unhappiness among prison officials over his treatment percolated up through the Justice Department. In a December 18 letter to Clark, Crawford said he had just heard from the warden at Chillicothe, who complained that he had no way of keeping Montgomery as secure and isolated as desired and that “Montgomery could only be kept in present status for several (3–4) months” without suffering psychological consequences. It was the second such complaint from the warden.

  On December 29, Montgomery was transferred from Chillicothe to the more secure federal prison in Terre Haute, Indiana. He was isolated as soon as he arrived there and allowed no visitors. Prison officials continued to fear for his mental status. In a memo that may have been sent directly to Hoover, Tamm wrote that Bennett had contacted McInerney in the Justice Department and told him that no individual could stand such treatment for long. Tamm said he agreed with McInerney’s skepticism about the Navy’s case: “[McInerney] stated the Navy may have conjured up the whole thing and have become unduly excited in the matter.”

  LESS THAN TWO weeks later, on January 10, 1944, Ryan asked for a reduced sentence, thinking he had every chance of success, given the deal made at the time of Montgomery’s sentencing. But Ryan’s request was flatly denied. He was not informed of the exact reasons and certainly not of the behind-the-scenes role of OP20G in blocking the request. But that was not the end of the protests. A new and surprisingly effective advocate emerged for Montgomery: his wife, Lillian. Despite the fact that her husband hadn’t been entirely honest with her, she lobbied the FBI and Justice Department for his release.

  J. Edgar Hoover made the first move. On February 17, he ordered the Cincinnati FBI office to drop the espionage investigation against Montgomery, despite a startling new revelation: Montgomery had at one time used an alias, “Gerald Walters.” Regardless, Hoover decided to write off the case in part because an FBI investigator had discovered that some of the names on Montgomery’s lists of foreign agents simply matched those in the book Armies of Spies, found in the downtown Dayton library. Overlooked was the fact that there were other names on Montgomery’s lists and that he must have spent considerable time searching other sources. Hoover didn’t declare Montgomery innocent but argued that any further investigation threatened the Navy’s desire for utmost secrecy.

  Meanwhile, the Justice Department began inquiries to see if Montgomery’s sentence should be reduced. A special agent was sent to Dayton and also to Terre Haute to meet with the prisoner.

  Montgomery, it seems, was a new man. Perhaps the few letters he had just been permitted to receive from his wife had bolstered his spirit. Perhaps, too, he finally realized that the government was not going to keep its promise of an early release. When he met with the Justice Department investigator in early March, Montgomery was, for the first time, aggressive—though not entirely truthful—in defending his innocence. He strongly protested his sentence as excessive. He denied the Navy’s charge that he was a spy. He drew a sad picture of his early life, especially his having to leave home because of his second stepmother. He emphasized that his two brothers were overseas in the armed forces.

  Montgomery claimed that his only contact with a foreign power was the 1938 letter to the Germans. He omitted any reference to later letters, nor did he mention the stolen parts found in his home or the list of agents in his car. Montgomery then stretched the truth of his personal life to the breaking point. He claimed he had been a good member of a Presbyterian church but that he had been unable to attend church the last few years because he had been working seven days a week. He exaggerated the number of years he had worked at his furniture factory job in Miamisburg and left out entirely any mention of the time spent in Cincinnati or the temporary work he had done over the years. He even supplied an incorrect starting date for his job at NCR.

  Although the investigator mentioned afterward in his report to Washington that Montgomery’s file hinted at possible espionage, he was clearly sympathetic and failed to catch many of the inconsistencies and outright lies in what Montgomery had told him.

  Another compromise was soon reached: the Navy agreed to inform the Justice Department every month on whether it was necessary to retain Montgomery in isolation and immediately when the NCR work was no longer a secret. But the Navy continued to demand that Montgomery’s mail be sent to the FBI’s codebreakers, now revealing to Hoover’s office that Montgomery had some knowledge of cryptology.

  Lillian managed to send her husband nearly four letters a week—his only contact beyond the confines of his cell, other than two letters sent from his father, during his entire time in jail. Montgomery may not have known that his younger brother, Billie, had been killed in action in October 1944. Billie had been carrying wounded men from a rice paddy on Leyte in the Philippines when a sniper shot him. Certainly, Montgomery was unaware that his own draft status had been quietly altered and that his name had been placed on a secret security-risk list—a tag that followed him and his son through the cold war, according to the family.

  World War II had been over for six weeks when the Navy at last relented: Montgomery was released on parole on October 11, 1945. But even then, the Navy refused to reveal the true nature of the work at NCR to anyone beyond the tight circle of Ultra. Contradicting its earlier lie in 1943, that NCR was building an electronic device that kept track of shipping, the Navy told Clark another lie: that Montgomery had worked on the Navy’s proximity fuse, a radar-triggered artillery shell for bringing down aircraft.

  What the British were told about the Montgomery affair remains unknown. None of the archives in either nation contains any indication that the Navy informed GCCS about the breach of security, despite the 1943 pledge to report all such cases.

  Whether or not Montgomery had planned to contact the Nazis about the NCR codebreaking machines may be open to question. But what is certain is that Montgomery and his wife never fully recovered from the ordeal. After his release, Montgomery drifted from menial job to menial job, perhaps because he was blacklisted, as his family members have suggested.

  It wasn’t until 1953 that Montgomery got a break. He was hired for his first real job in more than a decade as a service repairman for the Jackson Instrument Company. But Lillian began suffering a series of nervous breakdowns, and Montgomery remained uncommunicative and unable to handle his family hardships. In 1967, they were divorced.

  Montgomery seems never to have revealed the NCR secret to anyone. He died in Miamisburg on September 24, 1970, a couple weeks shy of his fiftieth birthday. He left behind a 1965 Dodge Monaco valued at $750 and a child-support debt to Lillian for their two daughters of $740. Lillian was able to find the $1,100 needed for his cremation and burial in Dayton’s Woodland Cemetery.

  Montgomery would have died alone except that Lillian had taken him back into her home to care for him in his final days. The records show he died of a heart attack at 4:00 P.M., brought on by a combination of choked arteries and years of diabetes. His family believes he was killed by a past that haunted him to the end.

  12

  Triumph!

  February 1, 1944—South Atlantic

  EN ROUTE FROM Bordeaux to the South Atlantic for another raid on Allied shipping, Korvettenkapitän C. C. Buchholz, skipper of U-177, received a radio transmission from U-boat Control: “Attention. Japa-nese submarine in vicinity of your outbound course at 00-09 North,
25-45 West.” Ironically, that warning triggered the beginning of the end for Buchholz and the crew of U-177, one of the most successful submarines in the German fleet. Commissioned in February 1942, it had sunk at least six Allied ships over the ensuing two years and perhaps as many as twenty-seven, if German broadcasts at the time are to be believed. But its fortunes were to change dramatically with the broadcast from Berlin.

  The encoded radio message was copied by an Allied intercept station and sent to OP20G’s communication annex, where almost ninety Bombes were now in full operation. With the help of the American Bombes, the Allies were finding Shark and related keys within a day or two. Codebreakers reduced that to half a day by early summer of 1944, so that many Enigma messages were being read virtually at the same time as the German clerks receiving them.

  On February 6, 1944, at 7:00 in the morning, two B-24 long-range bombers lifted off from Ascension Island in search of U-177. Visibility was good—up to fifteen miles—with scattered cumulus clouds drifting above moderate, sunlit seas. Spotting the sub would be relatively simple: the intelligence information guiding the bomber crews was current enough to pinpoint its location. Better still, the planes had no need to use their radar, which might tip off enemy detection equipment to their approach.

  Three and a half hours later, Lieutenant Carrell I. Pinnell’s B-24 was just below the clouds at 2,600 feet when the bow gunner spotted the heavy wake of a fully surfaced submarine about twelve miles away, bearing seventy degrees from the course of the plane. Pinnell immediately radioed his wing partner, who was miles behind, then told his crew to man their battle stations and test their equipment before he hit full throttle on the four-engine Liberator and banked out of the sun in fast pursuit.