Walter Hirschfeld’s life was in an out-of-control spiral, and the CIC was growing increasingly embarrassed by his activities. He had been blackmailing former members of the SS and their relatives, running small-time money laundering operations, and had probably had a hand in murdering Dr. Marianne Six. More scandal bubbled into the public domain during Operation Flower Box when Hirschfeld began an affair with 27-year-old Frau Erna Hoffmann, the wife of Heinrich Hoffmann, Adolf Hitler’s personal photographer. When he learned that Hoffmann was in Allied custody, Hirschfeld hatched a plan to steal his furniture and artwork and use it to decorate the leather shop and his own home. The piece-by-piece theft was underway when his romance with Erna hit the rocks. She reported Hirschfeld’s larceny to local Schorndorf police and the items were restored to the Hoffmann home. Hirschfeld, thanks only to his connections with the CIC and local police, avoided a jail sentence.14
It was at this time that Hirschfeld also suffered a very public breakup of his friendship with Gerhardt Schlemmer. The pair had borrowed money from a local bank to spend on luxury items, alcohol, and women. When they were asked for collateral, the men offered up the inventory in the CIC-owned leather firm to secure the fraudulent loan. After Operation Flower Box ended and the leather shop closed, the bank demanded repayment. Neither man had any intention of paying back the funds. Schlemmer was the only one who signed the note, and he eventually ended up in jail. While he was interned his friend and comrade Hirschfeld had another affair—this time with Schlemmer’s wife Barbara. Both were seen dancing and frolicking in a popular American bar in Stuttgart. The mortified Schlemmer made preparations to divorce his wife but eventually halted the proceedings. The longstanding friendship between Schlemmer and Hirschfeld, however, was kaput.
So was Hirschfeld’s tenure with the CIC. Like every good bureaucracy the American Intelligence operation knew it had to have a record justifying his removal. Two men were employed to investigate and report on his outlandish behavior. Both were known mass murderers. One was Emil Augsburg, and the other was Klaus Barbie. These men were well suited for the task—the latter particularly so.15
Nickolaus “Klaus” Barbie was born in 1913 along the Rhine River in picturesque Bad Godesberg. Although most of his grades were mediocre at best, Barbie excelled in languages. He discovered Nazism while still in college and joined the party in 1933. Close association and comradeship with others experiencing similar feelings of angst over the deteriorating economic and social conditions appealed to Barbie. After several failed attempts to pass his final exams, he finally graduated in 1934. A voluntary six-month stint at a Nazi labor camp seared party propaganda deep within him. Service with the German resistance movement in the occupied Rhineland followed. Barbie claimed his father (whom he despised) had died in the 1930s from a festering French bullet wound inflicted during World War I. His death, he later explained, crippled the family financially and limited his own professional aspirations. Barbie turned this anger against the French. Years later, this personal wrath would inflict far more pain and suffering than a single French bullet fired over the berm of a muddy trench.16
The SS and Klaus Barbie were made for each other. He joined Himmler’s organization in 1935 and the SD shortly thereafter. Instruction in Berlin on the finer techniques of interrogation (i.e., torture) and investigation followed. His stint in Amsterdam in 1940, where he oversaw the deportation of thousands of Jews, earned him an Iron Cross. The award was bestowed after he publicly beat a man to death for a minor infraction. Now it was time for Lyon, France, to feel the sociopath’s rage. In 1943 Barbie was assigned to “cleanse” the southern French city widely known as a hotbed of French resistance. As the head of the Gestapo there, Barbie freely murdered hundreds of people and deported thousands of Jews to the death camps. His personal sadistic actions are legion and well documented. His most notorious feat was the infiltration of the Resistance and the arrest of Jean Moulin, General Charles de Gaulle’s chief representative in France and a hero of the Resistance movement. Moulin was beaten to death by Barbie himself. Another decoration from Hitler arrived. Barbie deserted Lyon and fled to Germany when the Allies approached. The French were anxious to get their hands on Barbie and searched ceaselessly but unsuccessfully for him. They tried the “Butcherof Lyon” in absentia and sentenced him to death. It was this man—a murderer and sadist of the worst order, but also an experienced interrogator with invaluable intelligence that would be useful in the budding Cold War with the Soviet Union—who was now investigating Walter Hirschfeld on the payroll of the United States Government.17
Both Barbie and Augsburg were more than pleased to assist the CIC with “Operation Happiness,” the incongruous code name tagged to their assignment, if it meant avoiding jail or a trial for war crimes. Both relished the work. Detailed reports were compiled on the death of Marianne Six, Hirschfeld’s affair with the wife of Heinrich Hoffmann, his failed business ventures, and his many attempts to blackmail relatives of former SS members. The report, which was turned over to U.S. Special Agent Camille S. Hajdu, successfully knocked out any support Hirschfeld had left within the American intelligence community. Who would stand up for this man in the face of this damning dossier? An unsigned CIC memorandum dated March 6, 1947, the probable result of the vindictive accomplishments of Augsburg and Barbie, recommended the following: “If any action is contemplated to remove Hirschfeld from his present precarious position … it [should] be done in such a manner as to preclude any further embarrassment to the CIC.” Hirschfeld was dismissed from the CIC before year’s end. Gone were his BMW, Mercedes, and luxury apartment. Gone, too, was his power and influence on the streets of postwar Germany. Augsburg and Barbie made sure Hirschfeld’s name was publicized and blacklisted in the circles frequented by former SS members. “It must fill every German with shame, that a member of the so-called former ‘leader society’ denounces his former comrades for a vile Judas,” wrote one underground German publication.18
Walter Hirschfeld’s career was finished.
Chapter 13
“Knowing what a passionate rage Kaltenbrunner would fly into should he learn that the gold had not arrived, I never informed [him] of the mistake which had been made.”
— SS Obersturmbannführer (Lieutenant Colonel) Arthur Scheidler
Ernst Kaltenbrunner’s Missing Sacks of Gold
The stranger came right to the point. “I am here to discuss buried treasures in the U.S. Zone of Austria.” CIC special agent Robert Kauf leaned back and looked askance at the man who had settled into a chair on the opposite side of his desk. The alluring and intriguing subject came up for discussion on a beautiful sunny day in June of 1947, two full years after Germany’s unconditional surrender. Any doubts Agent Kauf harbored at the outset of the meeting with the Chief of the Austrian Investigation Service of the Ministry of Property Control and Economic Planning were quickly put to rest. By the time Hofrat Reith left his office, Kauf was a believer. He and his agents were about to embark on a fascinating investigatory journey. The story they uncovered entailed war and corruption, pillage and mass murder, stolen and concealed fortunes, and black market trading in gold and currencies.
Reith had been investigating rumors that multiple millions in gold, jewels, and currency, had been buried or otherwise hidden by retreating SS officers during the war’s final fleeting hours. “At first these rumors sounded too fantastic to be given credence,” explained Kauf, “but interrogation of alleged eyewitnesses and cross-checking of their testimony have convinced Reith that treasures were actually buried at a number of different places between Salzkammergut and Zell am See.” Even more amazing was that “the location of most of these spots is known to within a radius of two square miles, while in one or two cases even the exact location is believed to be known.” Rumor also had it that large caches of arms and foreign currency—principally American dollars, Swiss francs, and English pounds—were waiting to be found.1
The Austrian appeared that day to request “full CIC coop
eration” in recovering the treasures, something Reith deemed absolutely necessary. He counseled Kauf that his “experience has shown that his investigators were often viewed with suspicion by the local CIC,” and that many American agents, “when they learned of the purpose of the inquiries, initiated investigations of their own, which jeopardized the success of the Austrian investigation.” Full cooperation, he continued, would avoid “a duplication of efforts.” Specifically, Reith asked Kauf for three areas of assistance: (1) The interrogation of specific witnesses being held in Camp Marcus Orr, Camp Dachau, and Camp Nuernberg-Langwasser; (2) Instruments, such as advanced metal detectors, to assist in the detection of buried treasures; and (3) Assistance in apprehending and interrogating “a number of persons who are said to have ‘powerful American protectors,’ and whom the Austrians, therefore, have not dared to approach.”2
In his report to headquarters Kauf heartily endorsed Reith’s requests. “Aside from the obvious result of recovering and returning the valuables to the rightful owners, a successful operation would also serve to eliminate a possible security threat by recovering hidden arms [and] depriving possible subversive elements of potential funds,” he wrote. The Americans were not wholly unaware of the swirling rumors about hidden treasures and buried loot. In fact, the CIC had made several stunning discoveries of gold, jewels, currency, and other items of interest in the weeks and months following the close of the war. Kauf and his fellow agents had long suspected many high ranking ex-Nazi Party members, SS officers, and others living in the U.S. Zone of Austria “are only able to do so because they have access to some of the treasures.” Reith’s detailed information merely confirmed these suspicions.
After outlining Reith’s solid investigatory credentials, Kauf concluded that it was in the best interests of the United States to offer the Austrians any help they required. I am under the impression, he concluded, “that Reith has accumulated a great deal of concrete evidence on the subject matter, so that a joint operation would…not…be a disadvantage to the CIC.” Kauf’s report and recommendations triggered the proposed operation. Kauf, however, did not know that a tentative investigation had been simmering on a back burner for several months.His conference with Reith merely cemented into place the pieces necessary to provoke full-blown CIC support.3
Reith’s report focused on a half-dozen or so “credible” treasure stories. The first, he told Kauf, pushing the paperwork across the desktop, involved two men—Ernst Kaltenbrunner, the head of Himmler’s notorious RSHA, and Arthur Scheidler, Kaltenbrunner’s aide-de-camp— and a fortune in missing gold.
SS Obersturmbannführer (Lieutenant Colonel) Arthur Scheidler performed a myriad of tasks for the Third Reich, but as a bureaucrat within the RSHA he was, in essence, Ernst Kaltenbrunner’s major-domo. Scheidler handled both official and personal matters for his powerful boss—everything from scheduling meetings to such tiresome tasks as paying rent, arranging for banquets, or sending funeral wreaths (a commonplace practice within RSHA). One of the perks Scheidler enjoyed because of his personal association with Kaltenbrunner was free travel and entertainment. Much of it was designed so that Scheidler could purchase presents and wine for Kaltenbrunner and his esteemed guests. A typical procurement trip would originate in Berlin with Austria or Hungary as the final destination. From the German capital Scheidler would drive Kaltenbrunner’s armored car to Hindelang, south of Munich, where he would pick up Countess Gisele von Westarp, the chief’s 24-year-old mistress. From there Scheidler and the countess would travel on to Salzburg, Austria, in order to pick up Scheidler’s wife, Iris. Kaltenbrunner would fly in from wherever his duties had taken him and join the trio waiting for him in the beautiful medieval city. Days filled with luxurious shopping and dining sprees followed in Vienna or Budapest, Hungary. Scheidler and his wife often purchased costly silk dresses, toiletry articles, and other commodities no longer available in war-torn Germany. He made sure to stock up on rare items his chief would want to offer his guests, including expensive clothing, fine cognac, American cigarettes, and Dubonnet wines. The two couples enjoyed a close friendship. They frequently traveled together to Altaussee in Austria in order to celebrate a birthday or holiday. The high life continued into 1945, even as their world crumbled into dust around them.4
The nightmare of the Second World War was unimaginable in tiny 1911 Henneberg, Germany. There, into a middle class family, Arthur Ernst August Scheidler was born, the second of five children. The early years for the quiet and aloof youngster were spent in Meiningen, where he attended primary and high school. An above average student with a keen eye for detail, Scheidler entered the business school in Meiningen in 1925 and graduated three years later. A thirst for ambition and success did not come naturally to the young man, so when an offer for a modest clerical position in town was made he promptly seized the opportunity—and remained there for the next six years. From within the confines of his small town the round-faced, short and balding bureaucrat-in-training quietly observed the rise of Adolf Hitler and the progressive acquisition of power by the Nazi party. Without fanfare he became a member of the SS in 1933, but remained in his position of employment. Aspirations for something beyond sitting at a desk in Meiningen were beginning to burn within. Before 1935 was over Scheidler had shed his civilian employment and enlisted with the infantry. The next eight months were expended undergoing rigorous training in an SS infantry school. That fall he joined the SD and was transferred to Berlin, where he served in a variety of administrative capacities for the next four years. Scheidler had finally found a comfortable home tucked away in the belly of the beast.5
While Poland was being cleaved in two by Hitler and Stalin, and raped by the likes of Franz Konrad, Kurt Becher, and Hermann Fegelein, Scheidler was promoted to serve as an administrative aide to SS General Reinhard Heydrich, chief of RSHA. He dutifully served Heydrich and was advanced to the rank of Sturmbannführer in 1941. When Heydrich was assassinated in Czechoslovakia in 1942, Scheidler was assigned to serve the new chief, a tall Austrian with a horse-shaped head accented with fencing scars and punctuated by cold, dead eyes—Ernst Kaltenbrunner. Exactly how much Scheidler knew about the murderous activities of the RSHA and Kaltenbrunner is subject to some debate. Certainly he was exceedingly familiar with the intricate internal politics infesting RSHA and the oddball personalities that slithered within its confines. He freely admitted after the war that he was “familiar” with his chief’s personal life, but claimed that his duties were “purely administrative.” His official work only provided him with “a sketchy knowledge of Kaltenbrunner’s confidential affairs.” Scheidler “never participated” in the important conferences held or attended by Kaltenbrunner, or at least he so testified, although he did admit learning “of confidential matters from dinner-table conversations and occasional remarks by Kaltenbrunner and his guests.”
Scheidler’s professional tasks, however, were inextricably inter-twined with Kaltenbrunner’s “principal interests,” which according to Scheidler were Bureaus I (personnel), III (security), and VI (military intelligence and counter-intelligence). The operations of Bureau III “were a closely guarded secret,” explained Scheidler, “never discussed at the dinner table.” There was good reason for the suppressed conversation: within the confines of Bureau III operated the Einsatzgruppen—the killing squads responsible for some 2,000,000 murders in Poland and Russia. According to Scheidler, of all the RSHA bureau heads, Otto Ohlendorf, chief of Bureau III, was the one “Kaltenbrunner had the greatest confidence [in] and whom he saw the most frequently.” Scheidler may have attended few if any formal “conferences”; no evidence exists one way or the other on that issue. It is inconceivable, however, that someone holding his rank and tenured credentials inside the RSHA, and who enjoyed such intimate professional contacts with the likes of Heydrich and Kaltenbrunner, did not know that his paper shuffling represented hundreds of thousands of dead men, women, and children. It also represented a fortune in gold, currency, and jewels.6
Nazi Millionaires Page 26
