by Dick Camp
Germany’s Interest in China
For decades Germany had had an extensive commercial interest in China, and over the course of many years leading up to World War II, had cultivated excellent diplomatic relations with the Chinese Nationalist Government, led by Chiang Kai-shek. There were fairly large German communities in the major port cities where they enjoyed a high standard of living. Trade was particularly encouraged by the German War Department, hoping to develop a source of scarce raw materials. The German Army even furnished advisers to train Chiang Kai-shek’s army, an arrangement that lasted until Hitler withdrew the advisers in 1938 when he was shifting his support to Japan, then at war with China.
The German Government’s interests in China was represented by the Diplomatic Service whose embassy was in Nanking with branches in Shanghai and Peking. In the late 1930s, the German ambassador opposed the Nazis’ pro-Japanese policy and was recalled in 1938. During the critical years that followed there was little if any coordination of German political affairs in China. However, the embassy continued to maintain a radio station (XGRS) that beamed propaganda in six languages throughout China and supported a listening post that monitored Allied broadcasts, which was used by the Nazi Party’s propaganda office, as well as the German War Department’s Intelligence Bureau.
The Nazi Party in China had its headquarters in Shanghai but was directly subordinate to Berlin through the National Socialist Organization for Germans in Foreign Countries (AO). AO’s principal aim was to penetrate the existing German societies abroad, to gain control over public and private institutions, and to have trusted members appointed to consular and diplomatic posts. The Nazi Party exercised considerable control over all German nationals living in China. Any party member who did not obey orders was subject to disciplinary action. There was even a local Gestapo office in Shanghai, acting under the direct orders of the Gestapo Chief of the Far East, Col. Joseph Meisinger, the “Butcher of the Warsaw Ghetto.” The Nazi Party oversaw various organizations in Shanghai—satellites of the Storm Troopers (SA), German Labor Front (DAF), League of German Girls (BDM), and the Hitler Youth (Hitler Jugend) organizations. There was even an offshoot of Goebbels’s Propaganda Ministry, operating under the cover name, “German Bureau of Information” (DISS), under Baron Jesco von Puttkamer, an ardent Nazi and member of the German upper class. His Shanghai Park Hotel office became the focal point for propaganda in the Far East, even penetrating into North and South American and Europe.
The most important German organization to penetrate China was the Intelligence Department of the German War Office, the Amt Auslands und Abwehr. The Abwehr responsible for secret military intelligence and covert operations, and was an integral part of the German High Command. All its affiliations were with the Wehrmacht, not with the Party or Party formations. In neutral countries, covert Abwehr offices called the Kriegsorganisation (KO) often worked within embassies and consulates under diplomatic cover. The first KO was established in Shanghai in 1940. Its leader, Navy Capt. Louis Theodor Siefken, recruited agents from the German community, relying on their connections to expand operations throughout China and the Far East. Its mission was to gather military and economic intelligence through the use of agents acting under the guise of journalists, doctors, technicians, diplomats, and businessmen. The KO’s principal agents were German but there were also subagents of various nationalities—Chinese, Japanese, Russian, French, Portuguese, Italian—involved in the spy network. The head of the organization worked out of the embassy office in Shanghai. This provided diplomatic “cover” for him, but raised the hackles of the “official foreign-service” types. Siefken used the embassy radio transmission to send reports back to Berlin, causing additional friction because he used his own codes, which was undecipherable by the diplomats. The KO also established listening posts to monitor Allied broadcasts. It broke one of the U.S. Coast Guard’s codes, enabling it to identify ships’ locations for German submarines. By 1942 another KO had been set up in Shanghai.
On the Hunt
Farrell reported the discovery of the transmitting station to the OSS, which ordered him to continue the investigation. In December 1945, Dr. Erich Kordt, Consul General of the German Embassies in Tokyo, Nanking, and Shanghai, was interrogated by OSS agents. Farrell was provided the interrogation report, that outlined the extent of German penetration into China and also revealed the internal conflicts which hindered cooperation among the different German governmental agencies—the diplomatic department, the Nazi party, and the intelligence department of the German War Office—by fostering conflicting agendas and encouraging personality conflicts. Dr. Kordt had been involved in the German resistance to Hitler’s regime in the late 1930s and had been an agent for the Soviet spy Richard Sorge until 1944. Based on the report, Farrell became convinced that German officials continued to furnish aid to the Japanese until their surrender. The OSS directed Farrell to brief the Chinese on the extent of his findings. As a result of his investigation, he was appointed as a member of the War Crimes Investigation Board of Chiang Kai-shek’s Military Council, Canton Branch.
Farrell realized that he had to act quickly. He had evidence that the key suspects, Lt. Col. Lothar Eisentraeger, alias Col. Ludwig Ehrhardt, head of the German War Office Intelligence Department in China; Baron Jesco von Puttkamer, head of the German Bureau of Information; SS Col. Joseph Meisinger, Gestapo Chief of the Far East; and others of their ilk, were “going to ground” in an effort to escape Allied counterespionage efforts. In addition, vital witnesses, many of whom were former Japanese intelligence operatives, were being repatriated back to the home islands or were in danger of being lost in the confusion of war-torn China.
COLONEL JOSEPH MEISINGER
SS-Standartenführer (Col.) Joseph Albert Meisinger, a long-time member of the SS, was ordered to the Tokyo Embassy early in 1941 after a series of failed assignments and charges of brutality. His personnel file noted him to be “so utterly bestial and corrupt as to be practically inhuman.” He was notorious for ordering the execution of hundreds of Polish Jews, earning the sobriquet “Butcher of Warsaw.” In Japan he continued to campaign for the extermination of Jews, while purging the German community of enemies of the Third Reich. He also worked closely with the Kempeitai, the Japanese Secret Intelligence Service. At the end of the war, he turned himself in to American counterintelligence and was eventually turned over to the Polish government as a war criminal. Meisinger was convicted and sentenced to death. The sentence was carried out on 7 March 1947.
Armed with the authority of the Military Council and backed by the OSS, Farrell used the extensive resources of the X-2 Counter-Espionage Section Branch to assist Chinese police in locating, arresting, and interrogating suspected war criminals. In some cases he accompanied Chinese police on the arrests.
X-2 had been created in June 1943 by Colonel Donovan to work with the British on their “Ultra” program breaking German encrypted communications. Donovan picked an old friend, Washington attorney James Murphy, to head the branch. Its officers could veto operations proposed by Special Operations and Secret Intelligence no questions asked, and all sections of the OSS were instructed to give full cooperation and support to X-2. By the end of World War II, the X-2 had 650 personnel assigned in its various locations and had exposed some three thousand enemy agents.
As Farrell and his team identified suspects and evidence of illegal activities beyond the Canton-Shanghai area, field detachments from the Strategic Services Unit (SSU) were tasked to provide support. Their investigations uncovered evidence of the execution of American flyers, the mistreatment of Allied prisoners of war, the collaboration of Americans and other foreign nationals, as well as the post-surrender operations of Bureau Ehrhardt. Farrell quickly discovered that his investigation could be compared to peeling on onion—each layer exposing another, adding to his store of information and forming a picture of German subversive activities.
The sixty-year old Ehrhardt (Eisentraeger) was described by Farrel
l “as a close personal friend of Hitler. He was a somewhat nondescript, balding man with a high ‘widow’s peak,’ prominent chin, and stern countenance, leaving one with the impression of firm authority. He was an extrovert, who enjoyed the ‘good life’ and the companionship of everyone willing to keep him company and listen to his boastful tales.” During the war, Bureau Ehrhardt was a unit of the German High Command and operated under the auspices of the German Embassy. Its offices were located in Shanghai, with branch offices in Canton (Bureau Heise) and Peiping (Fuellkrug)—named after their leaders, Erich Heise and Siegfried Fuellkrug. Under Ehrhardt’s leadership the organization flourished, recruiting agents, expanding operations, and developing sources within the Japanese military hierarchy.
By 1945, however, the German military situation at home was desperate. The Allies were pressing on all fronts and it was only a matter of time until Hitler’s forces were totally defeated. Ehrhardt clearly understood that his organization’s status was precarious at best and, after repeated requests for instructions to Germany went unanswered, he ordered, on his own initiative, the files containing information about the Japanese burned. He did not want them to see what his organization had learned about them, in case Germany surrendered and the files fell into Japanese hands. On 8 May the German High Command unconditionally surrendered and ordered all German military, naval, and air forces, and all forces under German control to cease active operations. Paragraph five of the order specifically stated: “In the event of the German High Command or any of the forces under their control failing to act in accordance with this act of surrender, the Supreme Commander, Allied Expeditionary Force and the Soviet High Command will take such punitive or other action as they deem appropriate.”
FUNCTIONS OF THE COUNTER ESPIONAGE BRANCH
1. To collect from every authorized source appropriate intelligence data concerning espionage and subversive activities of the enemy.
2. To analyze and process such intelligence in order to take appropriate action, and to exchange such intelligence with appropriate authorized agencies.
3. To institute such measures as may be necessary to protect the operational security of OSS, and to prevent the penetration of our espionage and other secret activities.
4. To cooperate with the counterintelligence agencies of the United States and our allies, and afford them timely information of enemy attempts at penetration or subversive action from areas in which X-2 is authorized to operate.
5. To prepare secret lists of subversive personalities in foreign areas for the theater commanders and other such government agencies as the director may prescribe.
Ehrhardt was informed of the order and sent a telegram through the German Embassy to all agencies and sub-offices of his organization notifying them of the surrender and directing them to cease operations. However, he worded the telegram in such a way as to suggest that continued cooperation with the Japanese was desirable. As a result of his suggestion, the members of the bureau and the German Information Bureau in Shanghai signed contracts to provide military information to the Japanese, violating the surrender agreement. On 20 May, an intelligence officer of the Japanese High Command at Nanking visited Ehrhardt on orders from the Japanese Supreme Command in Tokyo. He conveyed to him that the Japanese government was anxious to use the bureau “to the greatest extent possible.” He also encouraged the bureau to continue forwarding Allied radio call signs and wave lengths. The bureau complied, sending the intercepted messages to the Supreme Command at Nanking once or twice a week.
Getting the Goods on the Evil Doers
Heise Bureau
During the investigation of possible war crimes, Farrell reported receiving information regarding a German-run transmitting station located in Shameen, the European section of Canton. “Investigations were made concerning the inhabitants of this place [30 Chu Kong Road] and the significance of the aerials on the roof of the building,” he noted. On the morning of 13 September 1945, Farrell and two members of his team entered the building and found two German nationals, Oswald Ulbricht and Hanz Niemann. Farrell and his fellow agent, U.S. Army Staff Sgt. Marvin M. Gray, interrogated them. The men reported that, “The operation of the station was planned in Shanghai by Lothar Eisentraeger out of an office in the German Embassy known as the Bureau Ehrhardt.” The two indicated that Erich Heise and themselves were assigned to operate the station. They identified Heise as the head of the Canton organization. They also provided information that laid out Heise’s post-surrender activities but remained silent about their own actions. Ulbricht swore that the station was in operation only until Germany’s surrender on 8 May 1945. Farrell noted however, “I suspect that under cover, the station was still functioning up until … the Japanese surrendered [in mid-August 1945].”
Farrell learned that Hajimu Masuda, a Nisei born in Los Angeles, was being held in the Ward Road Jail, Shanghai for having served in the Japanese Army. Farrell notified headquarters that, “If we receive confirmation that Masuda is an American citizen as he claims, I am going to arrest him for treason and demand the death penalty.” Under interrogation, Masuda admitted being a radio interceptor in the Heise organization after the surrender. “I monitored certain broadcast bands of the United States and Chinese Air Forces. My job was to take down word for word the conversations concerning take-offs, plane numbers, how many planes in flight, cargoes they carried, and landing times and places. I came to know that we were plotting all the American and Chinese plane movements, cargo movements and troop traffic which were coming over the Hump from India into China.” Masuda implicated Ulbright and Niemann as continuing to work after the surrender.
Next Farrell had Maj. Gen. Tomita Naosuke, chief of staff of the Japanese 23rd Army questioned. Staff Sergeant Gray took his deposition at the Honan Japanese Internment Camp. Naosuke swore that, “Erich Heise and his office staff (including Ulbricht and Niemann) continued operations with the Japanese after the surrender of Germany.…” Gray also interviewed Heise’s Chinese interpreter, D. M. Shaw. “He made me continue to help in the work he was doing … despite the German surrender.” Based on their testimony, Farrell had Heise arrested. After being confronted with the evidence, Heise caved in and provided Farrell with a chart of the German organizational structure in China, implicating Ehrhardt as the head of the German War Office Intelligence Department, the KO as well as the individual responsible for “suggesting” to continue providing intelligence information to the Japanese.
Farrell continued pressuring Heise, who admitted receiving a monthly salary of between two and five million dollars CRB (Central Reserve Bank of China) from the Japanese for information. He implicated Ulbricht and Niemann in an ongoing effort to monitor U.S. wireless communication and intercept warning net messages during the battle for Okinawa. He also “fingered” Franz Siebert, the Canton Consul General. According to Heise, Siebert continued to act as the German government representative and did nothing to stop Ehrhardt’s activities even though he knew they were in violation of the surrender protocols. After his office was closed, he continued to exercise consular prerogatives and ordered German nationals to actively assist the Japanese. In June 1945, Siebert gave the Japanese detailed lists of war materials held by German firms in Canton because “he considered it his duty.”
As a result of Heise’s admission, Farrell had him jailed, along with his two confederates, Ulbright and Niemann; Dr. Johannes Otto, head of the Nazi party in China, Siebert; and all members of the consulate, who were stripped of their diplomatic immunity. One night while pursuing leads, Farrell was ambushed near his hotel by a lone gunman, who fired one shot at a distance of ten feet, just missing—but Farrell felt the round pass his head! Farrell pulled his pistol but the flash from the gunman’s pistol had blinded him, so he was unable to get off a shot or identify the assailant. Not long after this incident, an intruder broke into his hotel room but was scared off by Farrell and Gray who brandished their .45-caliber service automatics. The two incidents convinced Farrell
that he was on the right track, for attacking an OSS agent was an act of desperation that would bring the entire weight of the American counterespionage effort down on the assailants.
HEISE BUREAU-JAPANESE INTELLIGENCE
Farrell and Gray interviewed a number of Japanese intelligence officers to determine the relationship between the Heise Bureau and the intelligence office of the 23rd Army, which was responsible for the Canton area.
• Captain Aoyama, Japanese intelligence liaison officer to the Heise Office stated that, “The Heise had been detailed from the Bureau Ehrhardt, headquarters of the German espionage system for all China in Shanghai, to open a sub-office for South China in Canton. Heise was told to monitor broadcasts from Kunming and other related ATC [Air Traffic Control] bases. Since March 1944, the Heise office provided intelligence to two Japanese units, Kagami and Misumi, named for their commanders. After the German surrender, the Heise office received technical assistance for the interception of U.S. naval broadcasts, 2730 kilocycles, under orders from General Headquarters in Nanking. Heise told me that he had received a telegram from Shanghai at the time of the German surrender, ordering him to continue to work.”
