In his testimony Kauder mentioned that Hatz ‘was glad to help me, and he was generously rewarded for the help’. In fact, Hatz, a triple agent, was involved in many affairs. In Turkey he participated in the unsuccessful peace negotiations between Hungary and the Western Allies, about which he also informed ‘Dr. Delius’ (Wagner) and Adolf Beckerle, the German Ambassador to Sofia.25 In January 1944, Hatz even had a personal meeting with Admiral Canaris in an attempt to work out a joint strategy of negotiations with the Americans.26 Allen Dulles, head of the OSS office in Switzerland, reported to Washington: ‘Hatz is reliable pro-German. However, he is short in funds and has numerous affairs with women. There is also an unconfirmed report to the effect that he is in touch with Jews who are paid by Hungarian Intelligence and that he shares in the profits which he makes from smuggling currency.’27 Soviet military intelligence was also well informed about the Hungarian negotiations with the Western Allies in Turkey.
According to Kauder, cables were sent by radio only in urgent situations; more frequently information was delivered to Sofia by couriers who flew once a week by Lufthansa. The Press Attaché at the Spanish Embassy, Vladimir Velikotny, a White Russian, prepared the reports. They were sent in sealed envelopes from the Hungarian Military Attaché in Turkey to the Hungarian Military Attaché in Sofia, from whom Kauder received the reports. Apparently, Hatz organized this channel, but in October 1944, he was called back to Budapest and transferred to a commanding military post.
On November 7, 1944, Hatz defected to the Soviets by plane and brought with him documents about the Hungarian Army and military fortifications on the Danube River.28 Most probably, Hatz spoke Russian because in his SMERSH/MGB documents he is mentioned with a patronymic name, Otto Samuilovich Hatz, as was done for foreigners who knew Russian. Hatz wrote four leaflets in Hungarian and made a record addressing the Hungarian troops and asking them to follow his example and to surrender to the Red Army troops that encircled Budapest.29 In retaliation, the Germans arrested Hatz’s parents and brother and sent them to a concentration camp in Germany, where his mother died. After the Red Army took over Budapest, Hatz assisted at the Soviet Military Commandant’s Office. In April 1945, SMERSH operatives arrested him and from mid-May 1945, he was kept in Moscow investigation prisons. Interestingly, in October 1946 he was put for a while with Hans Piekenbrock, former head of Abwehr I.30
SD officer Klausnitzer, who had questioned Kauder in Vienna, testified during the SMERSH/MGB interrogations: ‘Klatt was arrested [in Vienna] on suspicion of playing a double game. He was accused of having been in contact with British intelligence and feeding the German intelligence with British disinformation. Additionally, Kauder was accused of embezzling and taking for himself the money he received from the German intelligence.’ 31 Apparently, Klausnitzer was well informed about Kauder’s contacts with the British through Bandi (Andor) Grosz (aliases André György, Andreas Greiner, and ‘Trillium’ in the American Dogwood spy network created by Alfred Schwartz).32 Grosz was a Czech Jew and a shady triple agent who from January 1942 onwards was a go-between for Jewish organizations in Hungary and other German-occupied territories and Allied intelligence circles in Turkey. As for embezzling, the valuables confiscated by the Austrian customs supported this accusation.
However, Kauder told his British interrogators that Klausnitzer questioned him mostly about the Hungarians, Hatz, and Momotaro Enomoto, a Japanese journalist and spy in Sofia, whom Kauder knew well.33 Possibly, Klausnitzer also mentioned Hatz and Enomoto during interrogations in SMERSH because later MGB investigators accused Hatz of spy contacts with Kauder and Enomoto. In any case, Klausnitzer insisted that ‘based on interrogations, I had an impression that Klatt did not collect intelligence, and the information he sent out was just a creation of his imagination… Klatt frankly said that he would not have been working for the German intelligence if he was not able to make a lot of money. I concluded that Klatt was an adventurer, a swindler and he gambled for getting big money’.34
Klausnitzer considered Longin (Lang, as he called him) to have been more important in the spy network than Kauder:
According to the photo I’ve seen, Ira Lang has a high forehead, wide face, is snub-nosed, has deeply positioned eyes, wide mouth, he is about 48–50 years old. He should have been an officer. Klatt recruited him in Budapest and brought him to Sofia. Apparently, he sent people equipped with radio transmitters…from there to Russia through Romania…
Lang was the main person, while Klatt was only an impresario…[Lang] received 220 pieces of gold per month. With the help of Turkul’s organization he obtained very important information that immediately was sent to Berlin. It was noticed that he got the exceptionally valuable data that influenced the German tactics.35
The ‘pieces of gold’ meant coins. As Kauder told the British, ‘beginning in November 1944, Longin refused [to accept] hundred dollar bills. He demanded his salary in gold coins—napoleons. Longin began his spy career at 207 coins a month; the last payment…was 350 gold napoleons’.36 Therefore, the whole business was quite profitable for Longin.
After interrogating Klausnitzer and the other ‘Klatt Bureau’ prisoners in 1945, in the spring of 1946 SMERSH operatives tried to kidnap Kauder in Salzburg, in the American occupational zone of Austria, but this attempt failed.37
In July 1947, after analyzing all information the investigators collected, the MGB sent a 61-page-long Memorandum on the KLATT-MAX Case to Stalin.38 It included the following main conclusions.
First, only eight percent of all ‘Max’ messages contained real information, while most of them were far from reality. This was not something new. Already in April 1944 Beria signed a report to Stalin that stated that the analysis of radio messages sent from Sofia to Budapest and from Sofia to Vienna from autumn 1941 until spring 1944, intercepted by the NKVD, NKGB, and SMERSH, demonstrated that most of Klatt’s data on the Red Army detachments and their movements were pure fantasies.39
Second, according to Soviet counterintelligence radio control, there were no attempts to send radio messages from Soviet territory to Sofia during the war. Additionally, contrary to Wagner’s suspicion, the MGB investigators found that Kauder and Longin did not receive information from the Soviet Legation in Sofia.
The MGB investigators suggested that Kauder might have prepared messages by himself, possibly using three main sources. He could receive eight percent of reliable information from the Russian émigrés who interrogated Soviet POWs for the Germans. The émigrés who worked in foreign embassies in Sofia could also have access to information on the Soviet Union. The MGB report mentioned the Swedish Legation as an example. Possibly, Sweden was singled out because at the end of 1943, the Soviet Foreign Affairs Commissariat asked the Swedes to recall their minister and military attaché from Moscow, accusing them of supplying the German Supreme Command with secret information about the Red Army.40 Finally, Kauder might have bought some information from German intelligence officers. Therefore, the MGB investigators basically concluded that Kauder concocted or invented the texts of his cables to Vienna and Berlin. However, it is hard to believe that one person could create thousands of cables by himself during a short period of time.
Still a Mystery
In the meantime, Kauder, Longin, and General Turkul were investigated by the American and British security services. In 1946 and 1947, the American officer Arnold Silver and the British MI5 officer ‘Klop’ Ustinov (the father of Peter Ustinov, the actor) interrogated these three individuals. Ustinov’s real name was Jona Baron von Ustinov, but for some reason he hated his name so much that he amazingly called himself ‘Klop’ which means ‘a bedbug’ in Russian. The two interrogators concluded that the whole of Kauder’s network was a creation of Soviet intelligence through which it fed the Abwehr and FHO with sophisticated disinformation.41 According to Kauder, already in 1941 he suspected that Joseph Schultz, his contact with Turkul and the network that Turkul and Longin supposedly had in the Soviet Union, was a Soviet agent.42
Kauder claimed that Schultz admitted this himself at the end of the war. However, Schultz disappeared and could not be traced. It is also possible that Schultz was Kauder’s invention, a ‘red herring’ to distract Silver and Ustinov’s attention to Longin and Turkul.
Despite the conclusions of the Soviet and Anglo-American investigators, it is still unclear where Kauder’s information originated from and what part Kauder played in creating the texts of cables. Apparently, through his people Longin controlled most of the materials that were sent from Ankara to Sofia. As the American investigator Silver characterized him, Longin was capable of any trick: ‘Ira Longin was an intelligent liar who could spin off 60 cover stories in as many minutes.’43 Interestingly, in March 1944 when Turkul came to Budapest, he began to suspect Longin of working for the Soviets.44 However, there is still no conclusive proof that Soviet intelligence ran Longin.
Finally, the notorious Pavel Sudoplatov, head of the NKVD/NKGB terrorist directorate during the war (its function was similar to the Abwehr II), created more confusion, claiming in his memoir that his Moscow agent Aleksandr Dem’yanov (alias ‘Heine’) was Kauder’s ‘Max’.45 But the memoir of Dem’yanov’s wife, who was also a Soviet agent, as well as other Russian recollections, do not support this identity.46 Additionally, when Germany attacked the Soviet Union, Kauder had already sent 600 ‘Max’ messages to Vienna, and the Abwehr clearly identified two ‘Max’ agents, referring to ‘Heine’ as ‘Max North’, and to Kauder, as ‘Max South’.47 Therefore, Dem’yanov had nothing in common with Kauder’s ‘Max’.
The Russian security services never mentioned what happened to Kauder’s arrested co-workers and Klausnitzer. Usually such prisoners were sentenced to long imprisonment in labor camps, while Klausnitzer might have received a death sentence as an SD officer. As for Otto Hatz, his investigation was concluded at the end of 1951 and on January 29, 1952, a session of the Military Tribunal of the Moscow Military District sentenced him to fifteen years’ imprisonment in labor camps as a Hungarian spy. This was a ‘lenient’ conviction for a spy because usually spies received the death sentence or 25 years of imprisonment; the tribunal took into consideration that Hatz voluntarily joined the Soviets and worked for them in 1944–45. Hatz’s verdict mentioned Ast Vienna and Kauder:
During his spy activity Hatz was connected with military attaches of other countries, in particular, of Finland and Japan, as well as with the German intelligence men from the German intelligence offices ‘Abwehrstelle Sofia’, ‘Abwehrstelle Vienna’, and ‘Klatt Bureau’. From them, he received intelligence information about the Soviet armed forces and sent it to the [Hungarian] Intelligence Directorate in Budapest.
Additionally, in 1943 Hatz Otto established contact with the representatives of American intelligence and participated in the secret political negotiations of the Americans with the [Hungarian] government of [Miklós] Horthy about a possibility of Hungary quitting the war.48
In July 1952, Hatz was sent to the Ozernyi Special Camp for political prisoners in the Krasnoyarsk Province. Four years later he was released and returned to Hungary. He became a trainer of the Hungarian and East German fencing teams and in 1977, 75-year-old Hatz died in Budapest.49 In mid-1947, the Americans released Kauder, Longin, and General Turkul, coincidently at the same time as the MGB sent its report on Klatt to Stalin. Arnold Silver saw Kauder for the last time in Salzburg in 1952, while in 1964 he heard from his colleagues that Kauder tried to approach the CIA to offer his assistance.
If only eight percent of the ‘Max’ information was real, as Soviet investigators concluded, Admiral Canaris, the FHO, and Gehlen, as well as Fremde Luftwaffe Ost, look bad for relying upon this source. The two other main Abwehr sources of information on the Soviet Union that the FHO relied on, ‘Stex’ in Stockholm and German journalist Ivar Lissner in Harbin (China), also worked under Soviet intelligence control.50
Successful Operations
The German intelligence failures are unexpected because in general, as Gehlen described to the Americans in June 1945, the FHO had good knowledge of Soviet intelligence and its methods:
The Russians repeatedly attempted to deceive their enemies by planting specially prepared reports in the international press…ANKARA and STOCKHOLM played an important role in this respect… Sometimes the Russians even succeeded in giving their ‘news items’ the appearance of coming from different sources and of corroborating one another. Especially numerous were reports planted by the Russians concerning exhaustion within the ranks of Russian troops, low morale, food troubles in the interior, and counter revolutionary trends in the Soviet Union…
Besides these general methods of deception, certain deceptive ‘news’ might also be spread by agents…
Neutral and friendly foreign correspondents were also used by the Russians to deceive the enemy.51
Some intelligence information the Germans received supposedly from Moscow was surprisingly correct. For instance, the story and activity of Vladimir Minishkiy or Agent 438, as E. H. Cookridge (a pen name of Edward Spiro, the British journalist and intelligence officer), Gehlen’s biographer, calls him, remains a mystery. The name ‘Minishkiy’ makes no sense in Russian.
Cookridge writes that according to Minishkiy’s statements, before the war he was a high-level Comminist Party functionary in Moscow.52 However, the Russian historian Boris Sokolov could not find the names Minishkiy or Mishinsky as other sources called him on the lists of staff of the Party’s Central Committee, or the Moscow City and Province committees.53 In October 1941 a Walli I group captured Minishkiy, a political Commissar, near the city of Vyazma. After Hermann Baun, head of Walli I, interrogated him, Minishkiy was transferred to Gehlen’s headquarters. Gehlen personally recruited Minishkiy and in May 1942, after training, Minishkiy was smuggled through the front line. The operation was called ‘Flamingo’.
According to ‘Flamingo’ messages from Moscow, Soviet officials believed in Minishkiy’s cover story of escaping from the Germans written by Baun’s men, and as a reward he was supposedly appointed to a politicalmilitary desk at the GKO office. In reality, it was impossible for a Soviet officer who had been in German captivity to be accepted into the GKO staff because he would be vetted in an NKVD filtration camp and, most probably, sent to a shtrafnoi battalion. However, judging from Minishkiy’s messages to Gehlen, he might have had access to high-level military information. Here is an example.
On July 14, 1942, Gehlen and Heinz Herre, head of the FHO’s Gruppe II, presented General Hadler, Chief of the General Staff, with a report based on the message they had just received from Minishkiy.54 It stated that during the previous night a meeting of ‘the war council’ took place in Moscow. Marshals Boris Shaposhnikov and Kliment Voroshilov, Commissar for Foreign Affairs Molotov, and ‘heads of the British, American, and Chinese military missions’ were present. Boris Shaposhnikov reported on future military plans, including preparations for the Stalingrad Battle. The problem of Soviet reserves of manpower, and a redirection—to support British troops in Egypt—of armaments destined for the Soviet Union as part of the lend-lease were also discussed.
Most of the circumstances he mentioned were wrong. This could not be a GKO meeting because the message did not mention Stalin and other GKO members. Most probably, it was a meeting of the representatives of the Red Army (Shaposhnikov and Voroshilov) and Foreign Affairs Commissariat (Molotov) with the Allied military attachés who came to Moscow from Kuibyshev, where foreign embassies moved in June 1941. Heads of military missions could not have attended this meeting because the British and American military missions were organized in Moscow later, in 1943.
But surprisingly, the main details of the message were correct.55 As it stated, later in July 1942 the Red Army began its retreat to the Volga River, at the same time defending Stalingrad and the Northern Caucasus, and it was on the offensive near Orel and Voronezh. Also, the Soviet government admitted that it had a problem with recruiting new men because of the enormous losses during the first ye
ar of the war. And the same July Stalin agreed to redirect a part of the lend-lease military equipment to Egypt to reinforce British troops fighting with Erwin Rommel’s Panzer Army Africa.
It remains unknown how Minishkiy acquired information about the agenda of the meeting. Also, he supposedly sent this and other messages through a radio operator ‘Aleksander’, another Baun agent in Moscow. It is questionable if ‘Aleksander’ could operate from Moscow, totally controlled by the NKVD counterintelligence. Therefore, the whole of Operation Flamingo looks suspicious, like a Soviet deception. However, there was no sense in Soviet intelligence releasing real information on a number of military plans, a lack of Soviet servicemen in mid-1942, and the help to British troops in Africa.
Cookridge writes that Minishkiy stayed in Moscow for three months, and then Gehlen organized his escape with the help of a Walli I field group that brought him back.56 Later Minishkiy worked in Group II of the FHO. Presumably, he surrendered to the Americans along with the rest of Gehlen’s men and later lived in the United States.
In a number of other cases the FHO was efficient. For instance, it had discovered the existence of SMERSH within three months of its creation.57
In July 1943 the FHO captured a secret manual for SMERSH’s officers. Gehlen wrote in his memoirs that it described ‘how to detect “parachutists, radio operators, saboteurs, and other German espionage agents”. It was translated by Group III, and we modified our tactics and forged documents accordingly.’58 Possibly, this was a copy of the Instruction for Organizing the Search for Enemy Agents that SMERSH headquarters sent to every SMERSH officer in the field. A copy of the translated text was immediately sent to Hitler, who attentively read it from cover to cover.
Smersh: Stalin's Secret Weapon: Soviet Military Counterintelligence in WWII Page 29
