Churchill's Spy Files

by Nigel West

  Organisational Chart of the KO Spain

  Also in line with the R-organization, Referat II began in late 1943 to train ten to 15 Spaniards in the handling of S-materials. These men were to be left behind enemy lines. However, when all 3 operations in Spain were discontinued on orders from Berlin in early 1944, this plan had to be abandoned. Of the participants in this sabotage course, Blaum remembers Francisco Borjabad, the recruiting agent, and Ricardo Zusait and Emilio Diaz, both students. Since the training had to be suspended in its early stages, the Spanish agents never received any sabotage materials.

  KO Spanien envisioned another possibility for R-work in the support of a clandestine right-wing Falange group led by Perales, one of the earliest Falangists and a sincere idealist. Extreme political activities were of little interest to Abwehr II, which, despite its new designation, Mil Amt D, had remained a purely military organisation. It was suggested to Berlin, however, that as a demonstration of goodwill 20,000 pesetas be allotted to Perales’ organisation for its propaganda programme.

  Perales and his followers were in opposition to Franco’s foreign policy, which in their opinion had become increasingly favourable to the Allies. Perales was also a fanatic Catholic, a rabid opponent of Communism, and a thorough Germanophile.

  Perales’ group consisted of old Falangists who had supposedly remained honest and not joined in the frequent attempts by Falange leaders to enrich themselves. They considered themselves the ‘Falange autentica’, as opposed to the regular Falange organisation founded by Primo de Riviera,

  Perales, known as a very secretive person, never divulged more than vague information regarding the composition of his organisation. Moreover, it was felt by KO Spanien that his tremendous enthusiasm caused him to exaggerate the importance of his group. He claimed that such military leaders as Generals Yague and Munez Grande supported his movement, and that even Serrano Suner was sympathetic to his cause. It was considered doubtful, however, whether these important figures would openly ally themselves with Franco’s enemies.

  Despite suspicions of wishful thinking on the part of Perales, Referat II agreed that he could be of value in R-operations in the event that Franco should break diplomatic relations with Germany, or that Spain should be invaded by the Allies. In July 1944 a plan for making use of Perales was submitted to Berlin. Since approval was not immediately forthcoming and Perales needed time to round up and brief his collaborators, little progress was made in 1944. The project was still in its preliminary stages when Blaum left Spain in February 1945.

  The first step of the plan was to set up a W/T net which would assure permanent contact with Perales after a break between Germany and Spain. This net would have been the basis for future II work. The remainder of the plan, including S-training, could not be carried out because the blanket order prohibiting all S-activities was still in effect.

  Three W/T stations were to be established, at Madrid, Barcelona and Seville. The procurement of personnel and appropriate sites for the stations was entrusted to Fernando Alzag, head of the anti-communist department of the Falange Information Services. It had also been decided to turn over to Perales a set of the documents revealing the location of the S-deposits mentioned above. Since the documents were not available in Spain, a set was requested from Berlin. They were to be given to Perales just before the contemplated diplomatic rupture or invasion. In February 1945 this had not been done.

  Cooperation with Other Sections of KO Spanien

  Only a minimum of news and opinions were exchanged between Referat II and the other sub-sections. Information of I and III interest which was gathered along with II material was merely passed on to the interested sections. There were, however, some exceptions to this policy:

  In Seville, Captain Antonio Ojed, and Patricio Drexel, neither of whom were connected with II, were used in sabotage activities. Ojeda, a member of the Spanish Intelligence Service, volunteered information on maritime traffic to and from Gibraltar. Most of his reports came through Referat I. Drexel, a German resident of Seville, contributed reports on the internal political situation, police records, etc, some of which were used by III.

  Referat II obtained an especially valuable item of information for I-TLw through Drexel. A Spanish Air Force colonel supplied a complete description of a US four-engined bomber which had made an emergency landing in Southern Spain. Various technical manuals were included in the report. At the time (summer 1943), the Abwehr was looking for such material, and was anxious to obtain data on radar equipment, which was supplied in this report.

  Some III-F functions were taken over by the II office after all S-operations had been forbidden by Berlin. Perfecto Brioso, a Falange Information Services agent, had contacted Baldwin, of the US Embassy. Brioso, who had been engaged by the Spanish III-F service, had offered his services to the II office without the knowledge of III-F. Thus Blaum was able to learn what questions Baldwin had asked Brioso and what cover answers Brioso had been furnished by his own intelligence service. In one case, when Baldwin screened a number of Germans with Brioso’s aid, Brioso’s cover answers were supplied by the II office. Brioso’s activities came to an end when Spain decided to discontinue III-F connections with the US Embassy and Brioso refused to carry on without the shield of his own organisation.

  Enrique Zabal, a Spanish friend of a member of the II staff, claimed to have established III-F contacts with the British Embassy through certain left-wing and anarchist circles, who in turn claimed to know Varel, a Spaniard in the service of the British. KO Spanien had always been extremely interested in the results of Allied measures to gain support from the Spanish leftist parties. Zabal, however, was arrested by the Spanish police and admitted having worked as a III-F agent for the Germans.

  Another III man, Fernandez-Fernandez, was engaged by Referat II. A Spanish police agent in Seville, Fernandez-Fernandez worked in a III-F capacity with the British Consulate, supplying British Intelligence with lists of arrivals and departures of aliens. He had also been asked to investigate suspect German agents. Necessary answers were, of course, supplied by the II office.

  In December 1945 Blaum was released from CIC custody and transferred to a PoW camp at Ziegenheim.

  7

  SEVENTH REPORT,

  1 NOVEMBER 1943

  The arrival in Scotland of Nicolay Hansen at the end of September 1943 was, in counter-espionage terms, an important event, as Petrie made clear. Additionally, it was evident from the outset that Hansen, an uneducated labourer from the Norwegian island of Spitzbergen, could not be prosecuted because of the circumstances of his arrest when he had immediately volunteered that he had been equipped with two transmitters, a British one, constructed by SOE, that he had been instructed to surrender, but the second, a German apparatus, he was to conceal. Instead of obeying his German controller, he had given up both. This act appeared to demonstrate his true loyalty, but under interrogation in his own language at Camp 020 two problems emerged. Firstly, ISOS had betrayed the fact that he had been issued with two cover addresses in Sweden, but when challenged on this point he had initially denied the accusation. Secondly, he only admitted the existence of a false tooth in his mouth, in which secret writing material had been concealed, after he had been given the opportunity to acknowledge it. Once again, he had lied to his well-briefed interrogators.

  Having given himself up to the police soon after he landed, Hansen was questioned in Fraserburgh by the RSLO, Peter Perfect, and had made a lengthy statement in which he described how he had been recruited by the Abwehr while serving a 20-month prison sentence for theft from a German naval depot at Harstad. He had agreed to undergo espionage training in exchange for an immediate release from jail, and this had commenced in May 1943 in anticipation of a mission to Spitzbergen. However, his destination was switched to Scotland and after his first flight on 17 September was cancelled because of bad weather, he completed his journey three nights later. The German plan called for him to find a job in Glasgow, perhaps as a mine
r, and then begin transmitting military information on his second, undeclared wireless set. After nine months he was to travel to Portugal or Spain and identify himself as HEINI to a German diplomat for passage to Oslo.

  When questioned, Hansen appeared cooperative, and identified the Germans he had encountered, and a dozen other trainees. However, doubts about his integrity led to a debate about the possibility of a prosecution, and eventually Liddell and the DPP concluded that no case could be brought without the risk of compromising Camp 020 as witnesses would have to be called to give evidence of Hansen’s lies. Accordingly, Hansen was detained for the remainder of the war.1

  SEVENTH REPORT

  A SPIES ARRESTED.

  Our special interrogation camp has been particularly busy during the last month as no less than ten new spies have arrived there; eight of them have been arrested at various points overseas.

  For the first time since December 1942, when double-cross agent ZIGZAG arrived in this country, a German spy called Nikolay Hansen was dropped by parachute in the neighbourhood of Fraserburgh on the night of 30th September. The choice of that neighbourhood for the dropping of Hansen is interesting. In the past parachute spies coming to this country are best dropped in the Midlands and East Anglia, but it is possible that the success, as they see it, of the dropping of sabotage equipment and wireless sets to MUTT and JEFF has led the German Secret Service to believe that Scotland is the safest venue for such clandestine operations. Hansen, a Norwegian miner by profession, at once gave himself up and revealed that he had been supplied by the enemy with two wireless transmitters. He had been instructed to bury one of these, and to give himself up with the other. The Germans imagined that the credulous British security Authorities would believe his story, release him and allow him to find himself a job in this country, when he was to pick up his second transmitter and start operating. It was subsequently found that this story was not quite complete, as under interrogation by our officers, Hansen revealed that he had been supplied with a cover address in Stockholm to which he was to write in secret ink, this ink being concealed in crystal form in a rubber container beneath a tooth stopping. We are satisfied that the reason Hansen concealed this last piece of intelligence was fear, as he had been threatened with dire penalties to himself and his family if he should ever reveal the Stockholm cover address which might compromise the Germans with the Swedish Government.

  Hansen’s training was cut short as after the capitulation of Italy, the German Secret Service were anxious to send a spy to this country as soon as possible. Hansen has stated that other agents are in training in Scandinavia for missions so it is possible that we may have some more aerial visitors.

  Another spy, also from Scandinavia, arrived in Iceland in September. He told the American military authorities there that he was a genuine refugee who had made his way from Norway in a fishing boat. He managed to persuade them that this story was genuine, but we regarded it as unconvincing, and induced the Americans to send him to the UK for further interrogation. As expected, this man, Fridrikson, confessed that he had been landed from a German submarine, equipped with a wireless transmitter which he had buried, and $9,000. One of his tasks was to finance another agent who is operating under Allied control in lceland, and with whom Fridrikson was to be put in touch after he had made wireless contact with his masters. He is being sent back to lceland to carry out his mission under control.

  Recently the Security Service has adopted a policy of harassing and arresting, whenever possible, Spanish seamen known to be working for the enemy. Pursuing this policy we arrested at Trinidad two Spanish officers of the Ybarra line whose ships ply between Spain and South America. After interrogation here both made written confessions of espionage on behalf of the Germans. There is ample evidence that this harassing policy is achieving notable success and is seriously impeding, not just the German espionage, but also the brisk German contraband traffic between the Argentine and Spain.

  In connection with espionage in South America, we arrested recently an Argentinian, an agent of the German Secret Service station in Berlin who was en route thither. He has now arrived in this country and is under interrogation.

  A spy of the Italian Secret Service named Bonzo has been arrested in Gibraltar. He also had a mission in the Argentine, having been sent to Buenos Aires from Europe in June 1942. He was arrested on his return to Europe with his family, the first purely Italian spy to be handled at our international centre.

  B SPIES EXPECTED.

  Another spy also connected with the Argentine will shortly be arrested and sent here for interrogation. This man, Osnar Alberto Hellmuth, has been sent on a special mission to Berlin as the personal emissary of President Ramirez to the Germans. On arrival, he was to be introduced at once to Himmler and also to the Führer. It is believed that one of the objects of his mission is the negotiation for the sale of German arms to the Argentine, and that it also covers the general arrangements for the safeguarding of German interests in the Argentine if relations with Germany are broken off. Hellmuth enjoys the confidence of an inner ring of the Argentine Government which includes, as well as the President, Admiral Sueyrro (Minister of Marine) and Colonel Gilbert (Minister of Interior). Hellmuth has been given as cover the ad hoc appointment of Argentine Consul at Barcelona, but the real object of his journey is being kept a secret from the rest of the Argentine Government and from the Argentine Ambassador in Berlin. He has recently been arrested in Trinidad on his way to Europe, and arrangements have been made for his rapid transfer to the UK, partIy by air, and partly in one of HM ships.

  As regards espionage directed against this country, there has recently been intense activity in the Lisbon branch of the German Secret Service which is concerned with Air Force matters. It is known that they are attempting to send spies to this country in the guise of Allied Air Force volunteers. The object of this type of espionage venture is for the spy to become a pilot in an operational unit, and, when flying an aircraft of the latest model, to land in German-occupied territory. This type of espionage is not new to us, and there have been several previous examples, such as FATHER and FIDO, to whom reference has been made in previous reports. One such spy, a Belgian named Bertrand, is now on his way to this country. Two other Belgians, agents of the German Secret Service, are also intended for the UK and we shall not obstruct their journey, but arrest them on arrival.

  C DOUBLE CROSS AGENTS.

  As mentioned in the last summary, a difficult situation had arisen. TRICYCLE’s spy-master has been in touch in Madrid with the British Authorities and said that he was under serious suspicion with the Germans and might have to ask for asylum in the UK. During the last month this situation has improved, as it has been possible to persuade TRICYCLE’s spy-master to retain his position in the German Secret Service. It also means that the suspicions have been somewhat allayed, and that his position is not as bad as we thought it was. His main rival in the German Secret Service had expressed doubts about the bona fides of TRICYCLE, but his criticism had been unsuccessful and he had been sent to the Eastern front. The spy-master has also been providing useful information on various subjects of great interest and importance, including changes in the higher ranks of the German Secret Service, and details regarding the activities of its Head, Admiral Canaris, during his recent visit to Spain.

  It is hoped that within a short time TRICYCLE will pay a further visit to Lisbon, accompanied by an officer from this department, when it is hoped that through contact with his spy-master he will obtain more useful information.

  Through the medium of double cross agent GARBO, we have recently been able to continue our policy of harassing and impeding the German Secret Service. We have already completed an operation which will force their branch in Lisbon to find new cover addresses, a task which is becoming increasingly hard for them. It was arranged that a batch of GARBO’s letters should be ‘intercepted’ by the British censorship and enquiries then made in Lisbon about the persons to whom these sec
ret ink letters were addressed, which showed the Germans that these addresses, twelve in number, were blown. The Germans have sent a special officer from Madrid to Lisbon to conduct an investigation and have told GARBO to lie low for the next six weeks or two months, by which time they hope that the storm will have blown over.

  D SABOTAGE.

  Allied shipping at anchor in Gibraltar Bay has suffered a number of successful attacks by Italian divers carrying explosive charges. 52,459 gross tons of shipping have been seriously damaged. Although the Security Service has long suspected that these attacks were based on the Spanish mainland, we could not exclude the possibility that the attacks originated from Italian submarines. After the armistice with Italy, the Chief Engineer of an Italian tanker, interned since the outbreak of war with Spain in Algeciras harbour, gave information to the British Vice-Consul at Algeciras which made it clear that since the end of 1942 all the sabotage attacks had been based on this tanker, which had been specially modified to become a sabotage depot ship. Underwater hatches had been constructed so that Italians in light diving-suits could leave the tanker below the water and proceed with human torpedoes and other types of sabotage equipment into Gibraltar Bay, attaching them to the hulls of our ships. The Italian personnel came overland across Italy, and hid in the tanker until the time of the attack. The sabotage equipment was also brought across Spain and housed in the tanker. Despite this, even after the armistice, the Italian Authorities persisted in their denials that the sabotage was shore-based.