by Larry Loftis
Popov called Hoover’s bluff with his own, threatening to go public. “Truth to tell,” Dusko later acknowledged, “it would have been a delicate matter to have exposed Hoover. I was bound to silence by the British Official Secrets Act.” Nevertheless, the bluff worked. The director calmed down, and Dusko explained the problem facing Sousa. Hoover said he’d contact the magazine and try to stop publication of the Spanish and Portuguese editions. J. Edgar made the request, Dusko wrote, and apparently arranged the gag.
The FBI version of events is slightly different, and pertinent documents only raise further questions. On September 6, 1946, Popov sent a letter to J. Edgar requesting a meeting, reminding the director of his prior work with the Bureau. But if Dusko had spoken with Hoover in April, as he alleged in his memoirs, why would he request a meeting five months later? The correspondence seems to corroborate the assertion of Director Clarence Kelley in 1973 that the April 1946 meeting never occurred. Kelley acknowledged, however, that on October 24, 1946, Popov appeared in Mr. Hoover’s reception and that Dusko spoke with two aides.
That same day FBI agent C. H. Carson sent a memo to D. M. Ladd, confirming that Popov had arrived to discuss the Reader’s Digest article and the problem it had caused for Sousa. According to Carson, it was agreed that Dusko would personally handle the matter with Sousa, pointing out “that he, Popov . . . obviously was cooperating with the Allies during the war.” Strangely, Carson’s conclusion adds credence to Popov’s original version of the story: “Popov was affable and seemed satisfied with the results of the discussion. He was advised that as far as we know, Mr. Sousa was satisfied since the Director had written to him and the article had not appeared in the Spanish and Portuguese editions.” [emphasis added]
Which begs the question: If Popov had not met with Hoover in April as he alleged, why would the director write to Sousa, and why would the Spanish and Portuguese editions of the April 1946 Reader’s Digest issue omit the Hoover article, the lead story in the issue?
Perhaps more important than the details of how Sousa’s complaint was resolved, however, was Hoover’s response to Popov’s September 6, 1946, correspondence. Despite having just written about Popov in great detail five months earlier, J. Edgar penned a strange note at the bottom of the letter:
“Just who is this?”
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I’LL KILL HER
NEW YORK
AUGUST 1941
As weeks passed, it became clear to Dusko that J. Edgar Hoover’s sole motive for running him was to catch German spies. That goal explained the intense FBI surveillance, which Popov had unwittingly invited.
Not long after his arrival in the U.S., Dusko had cabled an Austrian named Stefan Otto Feldmann, a man MI6 had warned Popov about prior to his departure. Feldmann, whom the British suspected to be a German agent, was living in New York and apparently worked at American Express. Being transparent with his activities, Popov shared this information with the FBI, which, unknown to Dusko, had already contacted the cable companies to trace anything Popov sent or received. Soon thereafter, Lanman asked that Popov assist in trapping Feldmann.
Dusko agreed, allowing the FBI to install a microphone in his study. The plan was that Dusko would invite the man to his apartment, flip a switch in the cupboard to signal the FBI to start taping, and then get Feldmann to talk. Dusko mentioned to Lanman that there would be times when he was entertaining that he would want the microphone inactive. Charlie agreed, and the bug was installed.
FBI New York Assistant Director Earl Connelley gave J. Edgar Hoover a slightly different explanation:
The informant has frequently advised us that we are at liberty to conduct any investigation we desire into his activities. . . . In this connection it was believed desirable to install a microphone in the informant’s apartment, not only to cover the informant but also to cover any meetings which he might have in the future with any of his German associates. The matter was suggested . . . as a means of protection for him. . . . In connection with the idea that the microphone might be of protection to him . . . if . . . the Germans might trap him in the apartment with the intent to do bodily harm he could . . . bring the Agents to his apartment for his protection. Informant considered this proposal and stated that it would be satisfactory to him, provided a cut-off switch could be arranged so he could control the microphone. . . . Steps will be taken by us very shortly to perfect an arrangement of this sort.
Connelley, it appeared, viewed a microphone as a more effective “protection” device than an alarm. The setup, in any case, proved unfruitful. Feldmann came by a few times—per Popov’s invitation to play cards—but never said anything of significance.
One day, Dusko wrote, he noticed that he had left the switch on and realized the FBI agents were taping needlessly. He flipped it off but out of curiosity followed the wire down the cabinet to the rug. A few feet later the wire stopped. It went to nothing. The switch was a dummy. The FBI was not bugging Feldmann, he realized, they were bugging him. Within minutes, he found a second microphone in the living room, and a third in the bedroom. The FBI had heard every conversation he’d had since moving in.
Popov protested with Dick Ellis at BSC, but it was useless; the colonel advised that his intervention would do more harm than good. “Hoover is very jealous about any interference with his organization,” Ellis said, “especially from the British.”
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Around October 13 Popov met again with Lanman. The Bureau was nervous, Charlie said, about the girl Dusko had been seeing, Terry Richardson. She had moved into Dusko’s building the prior week, Lanman knew, and the circumstances seemed dubitable. Popov’s residence was one of the most expensive in Manhattan, and yet somehow Richardson couldn’t pay her first month’s rent; Dusko paid it. Lanman said that suspected German spy Stefan Feldmann appeared to have been “planted” on Popov, and that Feldmann had hired Richardson to spy on him.
Dusko scoffed at the notion. If the FBI could prove Terry Richardson was a German spy, he said, he’d kill her. Unamused, Charlie replied that Dusko could not do such things in the U.S., and if he did, he would be tried as any other murderer.
Dusko saw no hurdle. “I’ll take her to South America.”
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When he next met with Foxworth, Popov wrote, he tried to remove the FBI stinger. He reminded Sam that British Intelligence had consulted the FBI about his coming and that the organizations were in full agreement. If the FBI would cooperate, he said, the British system could be duplicated in the U.S., with the Bureau controlling the agents. Foxworth acknowledged the reasonableness of the idea and suggested that a radio be set up where false messages could be sent to Berlin. Dusko agreed, but where could they get an Abwehr radio and appropriate codes?
He cabled von Karsthoff and requested a transmitter, noting that he had an operator and would soon have a house for installation. Ludovico didn’t respond. There was an alternative source, Dusko knew, but it would require von Karsthoff’s approval. Almost all German radio traffic coming from Berlin or Hamburg to the western hemisphere was routed through Rio de Janeiro, where Albrecht Gustav Engels—codenamed ALFREDO—ran a powerful shortwave radio transmitter. A 1942 FBI report would later show that Engels received or transmitted messages to Buenos Aires, Mexico City, Quito, Valparaiso, Los Angeles, New York, and Baltimore.
A native of Hamburg, Engels had left in 1923 to take a job with Siemens in Rio. The move seemed prudent; Brazil had a sizeable German community and close economic ties with Germany. In 1930 Engels transferred to Allgemeine Elektrizitäts Gesellschaft (AEG), a German electrical manufacturer. He moved up the corporate ladder and by 1932, at age thirty-two, was a director. Two years later he became a naturalized Brazilian citizen.
When war broke out in 1939, Albrecht was recruited to the Abwehr while vacationing that summer in Genoa. Technically adept, administratively skilled, and integrated into the Rio culture and business community,
Engels was the perfect spy. While he was principally called to collect data on U.S. industrial and military production, he soon became the Abwehr’s paymaster for South America. In 1941 alone the Abwehr had given him $100,000 to distribute as he saw fit. The agent Engels had heard about in New York—IVAN—would soon receive a sizeable chunk.
The story Dusko cooked up for the Abwehr, he explained to Sam, was that he had significant U.S. military information, too much to mail in secret ink, and that he would deliver it personally to an Abwehr officer; that person, he hoped, would be Engels. Foxworth went along and said he’d see what the FBI could supply.
Over the next few days Popov and Lanman conjured up bait. The Germans had asked for army tables of organization, Dusko told Charlie, and various updates on military production. Contacting army and navy sources, Lanman received a variety of information, including tables of organization for countless army sectors—armored companies, infantry divisions, engineer battalions, and more.
On October 15 they were ready. In a secret letter to one of Ludovico’s drop addresses—Jose Nunes, Rua Conseileiro Arantes Pedrosa 26, Lisboa—Dusko set the trap:
It would be impossible to send you by letter all of them because it would take nearly a month to write them all down. Arranging to photograph them. Suggest following solutions:
a) You tell me to whom to deliver the films or you send somebody very sure to take them from me. In that case, the password would be your secretary’s first name.
b) I could fly to a Central or South American capital, taking films with me. I could arrange trip under cover of diplomatic courier there and back. This solution is more convenient because it would enable me to take out other material I have. In case you take solution (b) send at once a cable . . . because I should take steps to obtain my diplomatic visa as soon as possible. Insert in a cable city to which I should go. Immediately after my arrival in designated city, I will send you my address by cable so your man can contact me. I should use same password as in solution (a).
In case you take solution (b), send me at once the expenses for my trip or have man who contacts me reimburse me. . . .
Why don’t you communicate with me? Have heard nothing from you since my arrival here.
Ivan
The bait was tricky. Dusko didn’t want von Karsthoff to think he’d orchestrated a trip to see Engels, so he would let the major pick the city. In theory, Ludovico could pick any location where the Abwehr was active, including Mexico City, but Rio was the western hemisphere hub and Engels was the South American driver. Dusko was confident Ludovico would select it.
Two weeks later, von Karsthoff cabled back:
ELIZABETH DEPARTED FOR RIO. FRANCISCO.
Dusko booked a Clipper flight and, rather than carry copies, prepared notes on various production numbers supplied by the War Department and the navy. The reasoning was that if he merely handed over materials, he’d lose an opportunity to see inside the German operation. By carrying only the tables of organization, a few documents, and notes, he could inform Engels that he’d need to dictate the full information to a secretary. In all likelihood, Dusko assumed, Albrecht would have a typist at the embassy take the dictation, thus requiring a longer stay and more opportunity to inspect facilities and espionage personnel.
On Wednesday, November 19, Dusko arrived in the Marvelous City and checked into the the Copacabana Palace. A telegram was waiting:
ELIZABETH WILL VISIT YOU THERE. GREETINGS. FRANCISCO.
Dusko assumed someone would call or come by the hotel, so he remained close, enjoying the beach and the pool. After three days, however, he had yet to hear from anyone, so on Saturday, November 22, he cabled von Karsthoff:
HAVING TO LEAVE RIO SOON. WONDER IF WILL BE ABLE TO CONTACT ELIZABETH.
Ludovico cabled back:
EVERYTHING POSSIBLE IS ORDERED. FRANCISCO.
Mindreading wasn’t Popov’s forte, and by Monday, having heard nothing, he was growing impatient. He located the address of the German naval and military attaché in the telephone directory, but what he found was a bit unusual: The building—some five or six stories—appeared to be the embassy, yet there was no marking. He introduced himself as Ivan to the receptionist. Minutes later an austere man with heavy, puffy eyes came out. Mid-fifties, he was small and very pale, sick-looking. Surely this was not ALFREDO, Dusko thought. The man ushered him to a private office and asked for a password.
“Elizabeth.”
The official, Captain Hermann Bohny, nodded and introduced himself. Dusko gave him the tables of organization and other materials and said he’d have to dictate more from his notes to the attaché’s secretary. Bohny gave him an address—156 Atlanticia, Manhattan Building, Apartment 84—and told him that someone would type the dictation there in the afternoon. Dusko also mentioned that he could build a radio transmitter for future correspondence but would need technical assistance. Bohny said he’d pass it along.
Hoping to kill two birds with one stone, Dusko told the captain that he had given von Karsthoff $10,000 to be delivered to Popov’s family in Belgrade, but it seemed the money had disappeared. Bohny agreed to look into it and said they would talk again. As they walked out, Hermann escorted him through a room where a number of Germans were secretly working.
Dusko glanced at the items they were working on and then looked away.
It made no sense.
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That afternoon he stopped by the apartment on Atlanticia and was met by a tall woman, about twenty-eight, who appeared to be German—blond hair, blue eyes, fair complexion. Her name was Simon. Dusko dictated his information, and Simon informed him that another woman would later show up at his hotel, pretend to be a friend, and advise of the time and place of his next meeting. No one showed, but on Wednesday Dusko received a call from a “Mrs. Dubois,” who advised that he should return to the address of his prior meeting that night at half past seven. He returned to the Atlanticia apartment, but there was no meeting; instead, Simon told him to be at another address, 91 Rua Bulhoes de Carvalho, in Ipanema, the following evening at eight. The attaché would be there, she said, along with another man. Dusko was not to take a taxi, but should walk, she said, coming in the front entrance.
Per instructions, Dusko hiked to Ipanema, where Bohny introduced Engels. Late thirties, Albrecht appeared to be an accomplished athlete—six foot, 190 pounds, well built—and seemed, Dusko thought, to be in the mold of a Prussian General Staff officer. He was tanned, well groomed, and wore expensive clothes. With dark hair and complexion, his light, clear eyes conveyed a serious, sinister look; wearing his fedora, he looked like a gangster.
Engels said he’d seen Popov’s suggestion to build a radio and confirmed that Dusko should acquire the parts and do so. Engels could place on microdots—which Popov would carry in his baggage—a list of parts to purchase, frequencies to use, and codes. In the meantime, Dusko was to continue sending letters to his contact in Lisbon.
After a few minutes the German switched gears and asked if Popov would help with some information Engels needed from the States—research on what the U.S. was doing with uranium. Albrecht showed him a questionnaire which asked how it was being processed, to what degree of purity, and how much had been stockpiled. Uranium ore, Dusko would later discover, was a key ingredient necessary to produce an atomic bomb.
He agreed, and suggested that Albrecht put the details of the request on microdots. Redirecting, he told the German that he had been promised a machine to produce the dots, and asked if Albrecht had any idea when Dusko would get one. Engels said he could help. If Berlin sent him the materials, he said, he’d forward them to Canada.
Engels said that he employed a Portuguese captain, and that the materials could be hidden on his ship. The material would take a month to reach Canada, and from there Dusko would have to transport it across the border. When the captain weighed anchor, he’d send a message saying that he had g
iven the money to a bald-headed doctor. Thirty days later, Popov was to go to Quebec and check in at the Château Frontenac. The bald-headed doctor, Engels said, would stop by Dusko’s room and drop off a prescription, which would explain where to pick up the machine.
On December 1 Dusko met again with Bohny and Engels. The Germans handed him $10,000,* courtesy of the Tirpitzufer, along with further instructions concealed on two microdots they affixed to one of Dusko’s hotel phone messages.* One dot contained questions about U.S. production of destroyers, torpedo boats, escorts, submarines, and rapid-fire cannons for planes and tanks; the other provided new cover addresses, radio frequencies, codes, and times for contacting Engels once Popov’s radio was up.
When Dusko returned to the Copacabana, he realized that if he had to wait a month for Engels’s shipment, there was no need to hurry back. He had accomplished his goal regarding the radio, had seen the Rio operations, and had been given a nice payment. He canceled his airline reservation and cabled Lanman to let him know that he’d be leaving on December 3 aboard the S.S. Uruguay, a Moore-McCormack luxury cruise liner. With ports of call in Trinidad and the Bahamas, he and the Uruguay would arrive in New York on December 15, Dusko well rested and restored.
When the Uruguay moored in Port of Spain, Dusko remembered, he and a girl he’d met on board were standing at the rails, basking in the sun. As the staff hustled for disembarking, a small pilot boat approached. Suddenly, the driver lashed his craft to the cruise ship and jumped aboard. Moments later, the man was at their side.
He wanted to speak with Mr. Popov—privately.
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