Counterintelligence
In World War II

Introduction

President Franklin Roosevelt's confidential directive, issued on 26 June 1939, established lines of responsibility for domestic counterintelligence, but failed to clearly define areas of accountability for overseas counterintelligence operations. The pressing need for a decision in this field grew more evident in the early months of 1940. This resulted in consultations between the President, FBI Director J. Edgar Hoover, Director of Army Intelligence Sherman Miles, Director of Naval Intelligence Rear Admiral W.S. Anderson, and Assistant Secretary of State Adolf A. Berle.

Following these discussions, Berle issued a report, which expressed the President's wish that the FBI assume the responsibility for foreign intelligence matters in the Western Hemisphere, with the existing military and naval intelligence branches covering the rest of the world as the necessity arose. With this decision of authority, the three agencies worked out the details of an agreement, which, roughly, charged the Navy with the responsibility for intelligence coverage in the Pacific. The Army was entrusted with the coverage in Europe, Africa, and the Canal Zone. The FBI was given the responsibility for the Western Hemisphere, including Canada and Central and South America, except Panama.

The meetings in this formative period led to a proposal for the organization within the FBI of a Special Intelligence Service (SIS) for overseas operations. Agreement was reached that the SIS would act as a service agency, furnishing the State Department, the military, the FBI, and other governmental agencies with economic and political intelligence and also information on subversive activities detrimental to the security of the United States. It was also during this period that the President asked William Donovan to undertake several missions abroad. Donovan's work for the White House eventually led to the creation of the Office of Strategic Services (OSS) (see separate chapter on OSS in this volume).

With the creation of the Office of Coordinator of Information, the United States was technically provided with a central intelligence organization, coordinating and exchanging intelligence data with the older services. In practice, however, the well_intentioned plans did not prove adequate. The story of Pearl Harbor has often been told as an illustration of the shortcomings in the intelligence system. Although Washington had ample information indicating that Japan would make an attack on Pearl Harbor, the utilization of this information may best be described as casual. (See the separate chapter on Magic, the decoding of the Japanese codes in this volume).

The end of World War II saw the new President, Harry S. Truman, abolish the OSS because he felt that there was no place for a wartime intelligence agency in a peacetime situation. Shortly thereafter he realized that he indeed needed a central intelligence organization to keep the president informed on world events. This ultimately led to the creation of the Central Intelligence Agency (CIA), the National Security Council (NSC) and the Air Force Office of Special Investigations (AFOSI).

In the midst of all this activity, the Army Security Agency, later renamed the National Security Agency (NSA), made a major breakthrough in decoding Soviet intelligence messages. This program became known as the VENONA project (see the separate chapter on VENONA in this volume). The VENONA decrypts and information supplied by two American operatives of Soviet intelligence, Elizabeth Bentley and Whittaker Chambers, opened American political and intelligence eyes to the massive Soviet effort to infiltrate the US Government. This massive espionage effort and Soviet domination of several governments in Eastern Europe led to the Cold War.

 

The Office of Naval Intelligence (ONI)¹

Storm on the Horizon
It is estimated that by 1940, there were no more than 1,000 people employed by organizations composing the US intelligence community. Of those, most were working as radio intercept operators, and, although national efforts were generally limited in scope and capability, a good deal of raw information was being collected nevertheless.

One particularly serious problem during this time resulted from the sad fact that there was no coordin-ation between these agencies as each routinely worked totally independent of the others. There was no sharing of the intelligence product by agencies that established their own objectives and methods for collection, nor was there any effort to ensure essential coverage was afforded all matters bearing on US national security.

During this time, the president routinely received deficient information from several agencies, notably the Departments of State, Army, and Navy, because it was never produced by an integrated intelligence network that was capable of in-depth introspective analysis. It was precisely this disorganized system that failed to recognize the impending danger or protect our country from the devastating attack at Pearl Harbor.²

As had historically been the case, ONI suffered a rapid and continual rotation of naval officers through its ranks during the years immediately preceding the conflict as sea duty continued to remain more career-enhancing than service ashore. Management was not to be spared for between 1940 and 1945, there would be no fewer than seven different directors heading ONI. During 1940 and 1941, ONI relied heavily on 130 naval officers posted abroad as attaches or occupying certain other positions from which they could collect information. Unfortunately, this entire effort emphasized gathering obvious data about foreign ports, navies, and capabilities instead of the more sublime art of determining the intentions and plans of those particular nations. ONI not only failed to collect the vital information that would signal turbulent times ahead for our nation, but it was also precluded from thoroughly analyzing the material it did develop.

That particular responsibility was solely conferred upon the more prestigious War Plans Division, which would invariably rate the worth of information solely on its potential use of fleet units if hostilities ever broke out.

If there was one bright spot among these woeful efforts prior to our declaration of war, it was assuredly in the field of military cryptoanalysis. By 1939 and 1940, the Navy had made gains in breaking Japanese codes and ciphers although it was the Army's Signal Intelligence Service, which cracked that country's top diplomatic code enabling both services to decipher massive quantities of their communication. Assigned the code name "Magic," these collective message translations allowed the President, Army Chief of Staff George Marshall, and a small number of military officers access to high-quality information con-cerning Japanese military activities, diplomatic positions/policies, and, indirectly, certain items of information regarding their German ally.

This particular breakthrough served as a vital source of information throughout the war but was never exploited to maximum advantage because the final intelligence product was not shared with precisely those planners and policymakers at lower levels who could have used it to greater national advantage.

Perhaps the most serious shortfall was due to the fact this information was not analyzed in any depth or synthesized with material collected by independent sources and means. Undoubtedly there were countless hints of Japanese intentions, including their plan to attack Pearl Harbor, but the US intelligence effort proved itself incapable of separating meaning-ful clues from that which was irrelevant in the captured and deciphered traffic.

Contributing to Victory
Once the United States was finally forced into war, it was hard work and an indomitable spirit that could best explain how the Japanese Fleet Code was broken and the US Navy achieved a resounding victory at the crucial Battle of Midway fought on 4 June 1942.

Adm. Yamamoto devised a plan that employed a feigned attack against American forces guarding the Aleutian Island chain. It was his intention to drive American forces from the Pacific by drawing them northward toward the Aleutians while he captured the strategic island of Midway with a vastly overwhelming contingent.

Owing to the fact ONI had deciphered the Japanese Fleet Code, US Naval commanders knew and effectively countered every Japanese move, dealing them a resounding defeat with the loss of four Imperial aircraft carriers and a forced withdrawal from the area.

The Second World War precipitated the expansion of ONI with manpower and resources made available as never before. On the home front, ONI was directed to conduct personnel security inquiries, sabotage, espionage, and countersubversion cases, examine Japanese activities in the United States, and investi-gate war fraud matters. Even with an end to conflict and the general demobilization of US military forces, the Department of the Army, Navy, and later the Air Force, maintained sizable intelligence components, which would quickly gain respected positions in the intelligence community as their respective roles developed in the postwar environment.

A New Kind of Conflict
The coming of the Cold War brought an unprecedented reliance on our nation's intelligence community to keep the country aware of threats and fully prepared to meet all manner of conflict. It was during these years that ONI developed as an intelligence organization fully capable of supporting the US Navy in the accomplishment of its tactical and strategic responsibilities.

With the founding of the Central Intelligence Agency in 1947, the Navy did not relinquish what it considered a right to an intelligence organization and stood firm in the belief it would continue to "…collect, evaluate and disseminate that intelligence it considered important to its own need."³

At the center of today's Naval Intelligence community is the Office of Naval Intelligence which is within the Office of the Chief of Naval Operations. The Director of Naval Intelligence is an Assistant Chief of Naval Operations who reports directly to the Vice Chief of Naval Operations and is also indirectly responsible to the Secretary of the Navy. With the primary purpose of meeting the intelligence and counterintelligence needs of the US Navy, ONI frequently employs a variety of sources and methods to gather information regarding the intentions and capabilities of many foreign nations.

Routinely such information is shared by ONI with policymakers and contingency planners or within the military community to support the formulation of naval or interservice plans and operations. It detects and warns of threats to the security of our naval establishment and is responsible for coordinating all intelligence activities within the Department of the Navy. ONI continually makes meaningful contri-butions to the US intelligence community and is tasked with advising the Secretary of the Navy and Chief of Naval Operations on all matters relating to naval intelligence and the security of classified naval matters.⁴

During the postwar years three components were established to carry out ONI field work. The first of these, Naval District Intelligence Offices, under the management of ONI, employed personnel assigned to duties in the United States or certain outlying areas and concerned themselves primarily with work in the internal security fields. These offices, directly responsible to the Naval District commanders, were primarily staffed with civilian agents and augmented by Naval Intelligence officers who conducted security and major criminal investigations involving naval personnel and property.

This particular system of District Intelligence Offices was superseded by the United States Naval Investigative Service which was founded in 1966.

The second ONI field component consists of those intelligence personnel on the staffs of flag officers who are assigned to duties in the United States or overseas. The fundamental responsibility of those assigned to staff intelligence duties is to support area, task force and fleet commanders by developing and furnishing operational or tactical intelligence needed to fulfill mission requirements. Intelligence officers working on such staffs not only support unit commanders, but also perform collection activities that further ONI objectives.

The last component consists of the contemporary naval attaché system employing personnel trained to collect intelligence for ONI while assigned to US missions, embassies, or other diplomatic posts around the world. Customarily, the naval attaches concern themselves with gathering information on foreign naval developments, capabilities, and trends.

These individuals are also responsible for compiling and continually updating data on foreign ports, beaches, and harbors since this information would be used in time of conflict to support all manner of naval air, surface, and subsurface operations.

A Continuing Need
With the advent and deployment of weapons that are literally capable of obliterating millions of people in a matter of minutes, ONI had no choice but to maintain a credible military deterrence. The modern day ONI is staffed by highly trained, capable, and devoted personnel who work hard to ensure their organization makes a meaningful contribution to the US intelligence community and national security interests. As potential adversaries continue to deploy technologically advanced weapons systems, the demand for increased quantities of quality intelligence will grow in the coming years. A sizable portion of this information will be gathered and developed by the Naval Intelligence community. Considering the potential consequences, the Department of the Navy and the United States of America have the need for a permanent, active, and professional naval intelligence organization more than ever before.

Colepaugh And Gimpel

In June 1940, the Special Agent in charge of the FBI's Boston Office was in his office reading a letter from the supervising US Customs Agent. The letter indicated that information had come to the attention of the Customs officers that, on several occasions from 2 to 27 May 1940, William Curtis Colepaugh had visited the German tanker, Pauline Friederich, which was tied up at Battery Wharf in Boston.

The Customs official advised that Colepaugh claimed he was engaged as a painter aboard the vessel. He reportedly indicated his intention, while visiting on the German tanker, of going to Germany to study engineering. It was also reported that he expressed dissatisfaction with conditions in the United States and claimed that he desired to leave this country.

It occurred to the Customs official that because of Colepaugh's dissatisfaction with conditions in the United States, the FBI might wish to conduct inquiries concerning him. A case was opened on William Colepaugh and instructions were issued to make the necessary checks to determine whether or not Colepaugh was engaged in subversive activities.

FBI investigation reflected that Colepaugh had been a student at a university in Massachusetts where he studied naval architecture and engineering. The records of this school showed that Colepaugh entered the school in September 1938 and that he had previously attended a secondary school in Toms River, New Jersey. His home address was listed as Old Black Point, Niantic, Connecticut. He was born on 25 March 1918.

Colepaugh was forced to leave the university on 6 February 1941 because of scholastic difficulties. From one of his former roommates, the FBI learned that Colepaugh received considerable mail containing propaganda publications from the German Consul in Boston and from German news agencies in New York. He claimed that Colepaugh showed considerable interest in these publications.

Colepaugh was a member of the US Naval Reserve. From Customs guards stationed at the wharf where the Pauline Friederich had been docked, the FBI learned that Colepaugh, on one occasion, claimed he was living aboard the vessel because he liked the crewmembers. On another occasion, he said he had permission from the chief officer to spend a few days on the ship. He stated that he liked the people aboard the ship better than the people in the United States.

The whereabouts of Colepaugh was unknown. One individual advised that he might be in South America as a crewman aboard a merchant vessel.

On 23 July 1942, the Scania, a Swedish vessel, arrived at Philadelphia from Buenos Aires. The crew list of that vessel indicated that William Colepaugh was a seaman on board the ship. Colepaugh was questioned by local naval officers, at which time he presented a Selective Service card indicating that he had registered under the provisions of the Selective Training and Service Act on 16 October 1940. During this interview, he admitted his failure to communicate with his local draft board and said that he had never received communications from that board. This information was immediately turned over to the FBI, and FBI agents interviewed Colepaugh.

The Philadelphia Office sent a teletype to the Boston Office, and a check was made of the records of the local draft board in Boston where Colepaugh had registered. It was found that he had failed to return a completed questionnaire to that draft board and had also failed to keep the draft board advised of his address. These were violations of a Federal law under the investigative jurisdiction of the FBI. Accordingly, FBI agents in Boston contacted the local US Attorney, and, on 25 July 1942, a complaint was filed against Colepaugh, charging him with violating the Selective Training and Service Act. A warrant was issued for his arrest.

Colepaugh was returned to Boston and was further interviewed by the FBI. He claimed that his father was a native-born American but that his mother was born aboard the German ship, The Havel, while en route to the United States. He indicated that while he was a university student, he met the Capt. of the German tanker, Pauline Friederich. Through this meeting, he was invited to visit the ship and did so on several occasions. During these visits, he became acquainted with a man whom he knew to be a Nazi Party leader on board the vessel. This man was a guest at the Colepaugh home on two occasions.

Colepaugh said that he had purchased a radio set. Subsequently, he received a telephone call from the secretary to the German Consul at Boston who was interested in his radio set. He denied building the set but admitted selling it to the German official for $60. He admitted that he had visited the German consulate on numerous occasions in early 1941. He said that from January to April 1940, he was employed at Lawley's shipyard in Boston as a laborer on board yachts.

On 7 May 1941, Colepaugh went to Canada and shipped out as a seaman on the Reynolds. The ship went to Scotland and returned to Boston in late July 1941. Colepaugh subsequently went to New York City, and on 5 September 1941 he obtained a job as a deck hand on board the Anita, which left New York City for Rio de Janeiro. He was at Buenos Aires in October 1941 and on 8 December 1941, secured a position as deck hand on the tanker, William G. Warden. He made a few trips on this ship in South American waters, and on 25 March 1942, he was again in Buenos Aires. On 5 April 1942, he secured work as a deck hand on board the Scania.

Colepaugh stated that he had written to the German Library of Information in New York City for publications, and he added that he had attended a birthday celebration in honor of Hitler at the German consulate in Boston. The secretary to the German Consul, according to Colepaugh, had discussed with him the possibility of his going to Germany to study at various marine-engineering schools.

The US Attorney in Boston advised that he would not authorize prosecution against Colepaugh if the latter would enlist for military service. Colepaugh promised to do so. Colepaugh enlisted as an apprentice seaman in the US Naval Reserve on 2 October 1942. Since he became a member of the Armed Forces, under the jurisdiction of the Navy, the FBI's case on Colepaugh was closed administratively. Copies of FBI reports in this case were furnished to Navy officials for their assistance.

On 28 June 1943, the FBI was advised that Colepaugh had been discharged from the Navy "for the good of the service." Colepaugh was again back in civilian life, and again the FBI began to interest itself in his activities. On 26 March 1943, it was determined that Colepaugh was working for a watch manufacturing company in Massachusetts. On 7 July 1943, he was known to be working for a poultry farmer in Concord, Massachusetts.

A check with the local draft board indicated that Colepaugh had telephoned his draft board on 10 January 1944 that he was going to enter the Merchant Marine and would send a letter to his local draft board advising them of his exact employment. Five days later, the draft board received a letter from him postmarked New York. Enclosed with this letter was a note on the stationary of the Swedish American Steamship line certifying that Colepaugh was employed on board the Gripsholm as a messboy.

The FBI had been informed that the Gripsholm was carrying individuals who were to be repatriated to Germany. It was not known whether or not Colepaugh would return to the United States as a crewmember aboard the same ship. The FBI therefore placed stop notices with appropriate Government agencies in order that these agencies would advise the FBI in the event Colepaugh returned to the United States.

On 15, February 1944, the Gripsholm sailed. Within a few days of its arrival in Portugal, Colepaugh looked up the telephone number of the German Consulate at Lisbon. It was Sunday, and he was advised that the Consul was not in. At noon, the following day, Colepaugh went to the Consulate in person and told the doorman that he was from the Gripsholm and wanted to see the Consul. Colepaugh explained that he was a friend of the former German Consul at Boston.

Colepaugh was admitted to the consulate and met with the German Consul. This individual brought to his office a woman who acted as an interpreter. After the Consul spoke to her, she turned to Colepaugh and her first words were, "Have you come with the information?"

Colepaugh replied that he did not come with information but that he wanted to find out if he could go to Germany. He explained that he knew the former German Consul in Boston and that he had advised him that it would be all right for him to go to Germany.

Colepaugh told the Consul in Lisbon that he desired to join the German Army and explained that he had taken a trip aboard a British ship to Scotland in the spring of 1941 at the request of the German Consul in Boston to gather information regarding convoys.

At the conclusion of the conversation, the Consul told Colepaugh to return on Thursday, and in the meantime he would get in touch with Berlin.

At noon on Thursday, Colepaugh returned to the German Consulate in Lisbon. He was told that no reply had been received from Berlin, and he was requested to return the following day. At 4:00 P.M. on Friday, Colepaugh returned to the consulate. This time there was another man with the Consul whose identity was not made known. This man informed Colepaugh that it would be all right for him to go to Germany. He asked Colepaugh whether or not he had enough money to fly to Germany.

When Colepaugh replied that he did not, this unknown person said he would place Colepaugh in the last exchange repatriation group leaving on the following Monday or Wednesday.

When this was agreed upon, the Consul called another individual into the room for the purpose of adding Colepaugh's name to the repatriation list under the alias "Gretchner." Colepaugh was advised to go to a certain hotel and await further word from the German Consulate.

Within a few days an individual whom Colepaugh had met at the Consulate called at the hotel and gave Colepaugh a slip of paper bearing the name "Carl Curt Gretchner." This was the name Colepaugh was to use while traveling on the repatriation train in Germany. At the train, Colepaugh was turned over to a Gestapo (German Secret Police of the Third Reich) representative.

Colepaugh, as "Gretchner," traveled by train from Lisbon through to Biarritz. While waiting there for a train connection, he met a Dr. Miller, connected with the Schutzstaffel (SS). Miller wanted to know why Colepaugh desired to join the German Army. Colepaugh replied that he liked not only the setup of the German Army but also the way it was handled. Miller asked Colepaugh if he later wanted to return to the United States. Colepaugh replied that he did not. Miller left Colepaugh in care of an unknown individual and they traveled to Saarbrucken, arriving early in March 1944.

On 20 March 1944, Colepaugh left for Berlin, where Dr. Miller met him and then introduced him to a member of the SS. This man asked Colepaugh questions about the United States. He was interested in the election, rationing, and the attitude of the American people toward the war. He questioned Colepaugh very closely relative to the latter's attitude toward the United States and asked why Colepaugh wanted to join the German Army. He also questioned him about his intentions after the war. Colepaugh replied that he had no interest in returning to the United States but intended to take up his shipbuilding trade in Germany after the war.

This man questioned Colepaugh about his attitude with reference to Hitler and the German Government. Colepaugh replied that the German Government and Hitler "look good to me." He opined that the war moves were for the best interest of the German people.

Near the end of June 1944, Colepaugh was interviewed by a high official attached to the S.S. He told Colepaugh that he was going to be placed in the Security Service that handled the training of Nazi spies and saboteurs. Thereupon, Colepaugh was sent to a school operated by the Security Service at The Hague.

His courses included training in radio work and the use of firearms and explosives. He also received a great deal of athletic training to build up his body and was taught to drive a motorcycle. He was taught how to handle explosives and was shown the most effective way to cause a train to be derailed. He was shown how to use thermite to the best advantage and was told that this substance would burn through steel and could be used to wreck a bridge or other steel structures.

Colepaugh was shown by practical problems how explosives would react. He was not only taught the basic principles of handling explosives but was also taught not to be afraid of them.

It was at this school that Colepaugh first met Erich Gimpel who had just returned from Spain where he had been acting as a German agent. Gimpel knew how to handle explosives and during the school course explained to Colepaugh their properties and the procedure to be used in handling them. Gimpel was an expert radio operator. He and Colepaugh were taught how to handle pistols, rifles, and submachine guns. They learned to fire these weapons with either hand.

Nazi Spy Erich Gimpel used this Abwehr forged
draft card to backstop his alias name.
PHOTO

While Colepaugh attended the school at The Hague, he was given the name Wilhelm Coller. He was furnished an identification card bearing his picture and that name. The rules of the school were explained to him, and the principal rule was that there was to be no talking to any person on the outside at any time regarding the activities of the school or its personnel. Colepaugh was left with the impression that a violation of this rule meant death.

Colepaugh soon learned that Gimpel was a person of importance in the Security Service in Germany. He had a private office at the Security Headquarters in Berlin and his own private secretary. He was treated with respect. Gimpel told Colepaugh that while he was acting as a German agent in Madrid in 1943-44, he was an instructor in a Fascist academy for young Spanish boys.

In August 1844, Colepaugh was sent to Berlin with Gimpel. They were given a photographic course in one of the branches of the Security Service. They learned to take pictures with a Leica camera and to develop and print these photographs. From there they were sent to Dresden, Germany, where they studied microphotography and worked with micro-photo-graphy negatives on special sixteen-millimeter film and then developed and examined them to make sure they could read them through the appropriate microscope on the apparatus. After this course, Gimpel and Colepaugh returned to Berlin.

At the time Colepaugh went to Dresden for his microphotography training, he did not know what his assignment would be. While he was there, however, Colepaugh was advised in the presence of Gimpel that they were both being sent to the United States but they were not told what their specific assignments would be.

Two days before Colepaugh and Gimpel left Berlin for Kiel, they went to the home of a Military Officer. There, they met three members of the S.S. Colepaugh was told that these colonels were Doctors of Engineering. They advised that the mission of both men in the United States was to obtain information from periodicals, newspapers, the radio, and all available sources regarding shipbuilding, airplanes, and rockets; in short, any war information that would be of value to Germany. These officers wanted Colepaugh and Gimpel to stress information pertaining to the engineering field. The information gathered by them was to be sent primarily by a radio that Gimpel was instructed to build. In the event of an emergency, either were to use American prisoners of war interned in Germany as "mail drops," or they were to use designated intermediaries in Lisbon and Madrid. Letters sent to these mail drops were to be written in secret ink.

Gimpel was instructed to build, in addition to a radio for his own use, additional radios capable of receiving and sending short-wave messages for use of other German agents who probably would be sent to the United States in the future. Gimpel was to receive instructions from Berlin after they had established a radio contact with Berlin from the United States as to precisely how these radios should be built.

Gimpel was enthusiastic over his mission to the United States and advised Colepaugh that it was not necessary for the latter to learn telegraphy inasmuch as Gimpel would handle the sending and receiving of messages and that Colepaugh could act as the "mouthpiece."

Gimpel told Colepaugh that after their radio had been set up in the United States, he would like to bring German saboteurs to America.

In sending information they would gather, they were instructed to use specific code wavelengths at specified times. They were also furnished with code signatures and other data to assist them in proper transmission. They were advised that their mission to the United States would last for two years. They would leave the United States either by submarine or some other means to be decided upon at a later date. In receiving instructions concerning their assignment, they were advised that Berlin would begin sending out messages in an attempt to contact them twenty days after they landed in the United States and that Berlin would continue to send out messages for a period of several months until contact was established.

Just before they left for Kiel and while they were still in Berlin, they were furnished with film bearing the names and addresses of about twenty American prisoners of war in Germany. These names were to be used by both men in the event they wished to correspond with Berlin. They were told that they were to write an innocuous message or letter but that the actual data they desired to transmit should be placed on the letter in secret ink. They were reminded that the Security Service in Berlin would examine all letters going to the American prisoners of war.

They received microphotographs with instructions for building the radio and also for receiving and transmitting messages when they reached the United States. Colepaugh was to use the code name "Walter," and Gimpel was to use the codename "Edgar" in transmitting messages to Berlin. In reply, Berlin was to use the codename "David." They were also given a microphotography apparatus, which was to be used to make microphotographs. They were also given one bottle of what appeared to be regular blue-black ink. In realty this was secret ink to be used for transmitting secret messages. At the same time, they were given a supply of developing power to develop any secret messages sent to them while they were in the United States.

Gimpel obtained from one of his friends in Berlin two .32 caliber automatic pistols and the necessary clips and cartridges for these pistols.

The code for sending messages on the radio to Germany, which was given to them was based on the words "Lucky Strike cigarettes, It's Toasted." They were also furnished wristwatches and two small compasses. They were given two kits of concentrated food that had been taken from captured American pilots.

Gimpel received a blue onion-skin paper packet containing about one-hundred small diamonds, which were to be used to provide funds in the event the money given to them was found to be worthless or dangerous to use.

The day before they left for Berlin for Kiel they signed various identification papers, which were later turned over to them in Kiel. The papers made out for Colepaugh carried the name William C. Caldwell. These papers consisted of a birth certificate showing Colepaugh was born in New Haven, Connecticut; a Selected Service registration card showing him to be registered at Local Board 18, Boston; a Selective Service classification card from the same draft board; a certificate of discharge from the United States Naval Reserve; a motor vehicle operator's license for the State of Massachusetts; and several duplicate papers, completely signed and filled out except that the names and addresses were omitted to permit Colepaugh and Gimpel to assume other names if such was found necessary.

About 22 September 1944, Gimpel and Colepaugh went to Kiel where they spent two days waiting aboard the Hamburg-American liner Milwaukee. Subsequently, they went aboard German U-boat Number 1230, which left the harbor immediately but laid off Kiel for about two days while waiting for a German convoy going up the coast of Denmark. They proceeded with this convoy to Horton, Norway, where the U-boat was given tests for about six days. Then they went to Kristianson, Norway, where they remained for two days taking on food and fuel.

Colepaugh and Gimpel had received $60,000 for their expenses. This sum had been determined when

Colepaugh had pointed out that the cost of living in the United States had taken a sharp turn upward. He estimated that it would be necessary to have $15,000 a year for the living expenses of one man. Based on this estimate, the $60,000 represented expenses for two men for two years.

On 6 October 1944, the U-boat left Kristianson and proceeded out into the broad Atlantic, bound for the United States. The U-boat commander was cautious. At the first sign of a suspicious sound, he would submerge the U-boat and wait.

On 10 November 1944, the U-boat approached the Grand Banks of Newfoundland. At that point the U-boat crew took radio bearings on Boston; and Portland and Bangor, Maine, and later they established a position off Mount Desert Rock, Maine. They laid off that point until about 4:00 P.M. on the afternoon of 29 November 1944.

During the day the U-boat rested on the ocean bottom. During the night it charged its batteries by using its diesel engines. Through listening devices the crew of the U-boat was able to hear fishing boats on the surface nearby, and on one day they listened to a fishing board which was anchored above them. It was during this period that word was received by radio from Berlin that a U-boat had been sunk in Frenchman's Bay, and the Capt. was instructed to land Colepaugh and Gimpel somewhere else.

Colepaugh, Gimpel, and the captain discussed landing places in Rhode Island, New Hampshire, and Maine. In the end, the captain disobeyed his orders and on the night of 29 November 1944, the U-boat completely submerged, started for Frenchman's Bay.

About one-half mile off Crab Tree Point, the Capt. ordered the U-boat to be raised until the conning tower was just above the water. In this fashion the U-boat proceeded to a point just about 300 yards from the shore at Crab Tree Point, which is just across the peninsula from Hancock Point.

During the trip across the Atlantic, Colepaugh and Gimpel wore regulation German naval uniforms but about half an hour before the U-boat came to its shore position, they removed their uniforms. The U-boat turned to face the south, and the crew made ready a rubber boat with oars. Attached to this boat was a light line to be used to pull the rubber boat back to the U-boat after Colepaugh and Gimpel had rowed ashore.

When the rubber boat was launched, the line broke, and it was necessary for two crewmembers to row Colepaugh and Gimpel to shore. At the landing point, there was a narrow beach of approximately six feet and then a bank. In the stillness of that cold November night on the Maine coast, Nazi agents Colepaugh and Gimpel stepped onto the shores of the United States. The German sailors also stepped ashore in order that they could return to Germany and brag that they had set foot in the United States. When the sailors departed they saluted, "Heil Hitler."

With their equipment, Colepaugh and Gimpel climbed the bank and walked through the woods adjacent to the shoreline until they reached a dirt road. They did not bring any explosives ashore and did not bury anything on the beach. They left their microphotography apparatus on the U-boat because it was heavy and they were in a weakened condition from their long stay aboard the U-boat.

The Nazi agents walked up the dirt road in a northerly direction until they came to the end of the road, at which point there was a house. Then they took a path in an easterly direction and followed it until they came to a macadam road. At that point the handle of the airplane luggage carried by Colepaugh broke and he had to fix it. They started again in a northerly direction.

The snow, which had been falling lightly during the early hours of the evening, was now falling rather heavily. They finally reached US Route 1 and turned left to walk in a westerly direction. It was about 12:30 A.M. when an automobile passed them. The car stopped, whereupon Colepaugh ran up to it and told the driver that he and his friend needed a ride to Ellsworth. Colepaugh was told that the car was a taxi, and after he talked with the driver, the latter agreed to take both men to Bangor for six dollars.

Arriving at Bangor about 1:30 A.M. 30 November 1944, the taxicab driver took them to a small restaurant to change a ten dollar bill to pay the driver. After doing so, both men walked to the railroad station and boarded a 2:00 A.M. train to Portland, arriving there at 6:00 A.M.

They caught a train for Boston shortly after 7:00 A.M. and arrived there about 10:00 A.M. They registered at a hotel shortly after noon. They spent the night in Boston and left the hotel early the next morning, taking a train to New York City. They arrived at Grand Central Station at 1:30 P.M. on 1 December 1944. They checked their luggage at the station and went to Pennsylvania Station where they checked a briefcase in one of the lockers. That afternoon they registered at a hotel as William C. Caldwell and Edward George Green. They remained at this hotel from 1 to 9 December 1944.

The primary concern for both Nazi agents after coming to New York was to locate an appropriate apartment or house from which the radio could be operated. They made numerous telephone calls to real estate agencies and answered classified ads in the newspapers in an effort to locate such a place. Gimpel usually accompanied Colepaugh in searching for apartments. Gimpel rejected several places, which would have otherwise been satisfactory, because of steel construction in the buildings making them unsuitable for sending and receiving radio messages.

Finally, on 8 December 1944, they were successful in renting an apartment on Beekman Place in New York City for $150 a month. They paid two months rent in advance. Colepaugh took the bags to the apartment while Gimpel waited on the street. Gimpel said he did not want to go into the apartment at first because he did not want it to appear that two men were renting the apartment.

They left the apartment promptly each morning and did not return until late at night to give the impression that they were businessmen going to work every day. Gimpel was with Colepaugh a great deal of the time, and it appeared that Gimpel was reluctant to let Colepaugh get out of his sight. On several occasions Colepaugh did go out in the evening for a good time but Gimpel refused to drink in bars. On 13 December 1944 the two men took the briefcase, which had been checked into the Pennsylvania Station locker, to the apartment.

On 21 December 1944 Gimpel and Colepaugh were at Rockefeller Center where Gimpel had purchased some clothing and was having alterations made on a suit. At about 5:30 in the evening, Colepaugh advised Gimpel that he did not desire to go into the store with Gimpel and would wait outside and listen to the Christmas carols sung where people were ice-skating.

While Gimpel went into the store, Colepaugh walked through the crowd, caught a taxi, and proceeded to the apartment on Beekman Place. He told the cab driver to wait. He went upstairs and took the bags, one of which contained the briefcase, and started to return to the taxi. On his way out, the sister of the man from whom the apartment had been subleased met him.

He told her he was going to visit his relatives in Connecticut for Christmas. Colepaugh got into the taxi and told the driver to take him to Grand Central Station. At the terminal he checked the bag containing the briefcase. He also checked his luggage in the baggage checkroom, placing the claim checks for the two bags in his wallet. He took the Lexington Avenue subway to 59th Street and registered at a hotel.

While they were living at Beekman Place, Gimpel had suggested on one occasion that they should separate. Colepaugh had not agreed to the plan, however, but on the night of 21 December, he actually separated himself from Gimpel.

During this time the FBI was also active. On 3 December 1944, the Boston Field Division received information that a British freighter, the Cornwallis, sailing from the British West Indies to St. John, New Brunswick, was torpedoed and sunk at about 6:00 A.M. on that date somewhere between Mount Desert Island and Mount Desert Rock off Bar Harbor, Maine. The ship sank in less than ten minutes as a result of an explosion in the starboard bow, and it was subsequently determined that the sinking actually occurred about eight miles northwest of Mount Desert Rock, Maine.

The FBI felt that the sinking of this ship was significant. It meant that an enemy U-boat was close to the coast of Maine, and the FBI could not discount the possibility that this U-boat also might have landed enemy agents.

The Boston FBI Office immediately dispatched agents to Rockland, Maine, and South West Harbor, Maine. The agents were assigned to a coastal patrol that at first was concentrated in the area of Frenchman's Bay. The FBI was able to determine from the US Navy that this area might be a logical place for enemy agents to land, inasmuch as the coastal waters around the area were deep enough for a U-boat to come close to the shore.

A deputy sheriff was interviewed who advised that his 18-year-old son had observed two strange individuals in the vicinity of Frenchman's Bay on the night of 29 November 1944. He related that the boy noticed the two men walking away from the beach area with their heads down against the snowstorm that was raging that night. The boy became suspicious of these men because they did not appear to be dressed like local residents. The boy told his father who proceeded to the area the next morning, in an attempt to discover traces of the two men. The snowstorm had evidently wiped out all traces.

The agents interviewed the deputy sheriff's son who told them that about 11:30 P.M. near Hancock Point he observed two unknown individuals. He said that they were walking as he met them in his automobile and that he noticed their tracks continued down the road for about a hundred yards and stopped at a point where a path from the beach meets the road. The boy said that both of these men wore light-colored clothing and no hats. It was his impression that the taller of the two was carrying a small bundle or suitcase under his arm.

FBI agents continued their inquiry in the area of Hancock Point and learned that a neighbor of the deputy sheriff had apparently seen the same two men. She advised that about 11:50 P.M., she observed two men walking away from the ocean and toward US Highway Number 1. She saw these two men about one mile from the point where the deputy sheriff's son saw them.

Agents closely examined the beach and all cottages and trails were closely scrutinized for any evidence that a landing had been made. No evidence was found during this search. All residents of Hancock Point, which embraces an area about five miles long and three miles wide, were interviewed by FBI agents without obtaining any information of value.

Additional investigation reflected that no passen-gers had boarded the only bus operating along US Highway Number 1 between Machias and Bangor on the night in question. Ticket agents of the Maine Central Railroad as well as representatives of trucking lines operating long-distance trucks passing through the area were interviewed. A check was made to determine whether any long-distance telephone calls had been made from the exchange covering Hancock Point.

No information of value was obtained. All available coastal residents, coastal sources of information, law enforcement officers, fishermen, and members of the Armed Forces, were interviewed by FBI agents. No information was developed as to the identity of the two men. The investigation continued.

In the meantime, Colepaugh knew that Richard Fairfax (Comment: fictitious name to protect the identity of the person), a former schoolmate, lived in Richmond Hill, New York. He knew the location of the Fairfax residence since he had visited Fairfax several years ago while they were students. He considered Fairfax an old friend.

At about noon on 23 December 1944, Colepaugh went to Fairfax's home in Richmond Hill where he talked with Fairfax's mother. She told Colepaugh that her son was working at a shoe store in Jamaica. About 2:30, Colepaugh met Richard Fairfax for lunch, at which time Colepaugh talked over old times. Colepaugh made arrangements to see Fairfax at his home about 11:00 P.M. Fairfax's mother had left for a visit in Philadelphia and was not to return for several days.

Colepaugh and Fairfax decided they would go out that night. Fairfax said that he wanted to shave first. While he was in the bathroom shaving, he and Colepaugh entered into a conversation about the war.

Colepaugh said to Fairfax, "Richard, remember you said that I could never get into any real trouble? Well, I am in a lot of trouble now."

Fairfax asked, "What sort of trouble, Bill"?

After a pause, Colepaugh said, "I just came back from Germany."

Fairfax said, "You mean you were in Germany"? Colepaugh replied in the affirmative and then told the entire story.

Fairfax thought Colepaugh was joking and asked him if he was sincere about the whole situation. Colepaugh replied that he was. Upon further questioning, Colepaugh indicated that his mission to the United States was to get information. Fairfax asked him how he intended to get this information back to Germany, and Colepaugh replied that it would be sent by wireless. Fairfax asked Colepaugh where this information would be sent from and Colepaugh said that it might be sent from anywhere.

Fairfax asked if he had a radio, and Colepaugh said no but indicated that Green was an engineer and could build a radio set. He pointed out that Green could make all of the parts of the radio and was even proficient enough to make a radio tube. Fairfax asked Colepaugh where Green was at that time. Colepaugh replied, "I don't know. I ditched him." Colepaugh told him Green's true name was Erich Gimpel.

After discussing more details of the bizarre story, Colepaugh asked Fairfax how to get in touch with proper authorities and subsequently Fairfax called the New York office of the FBI. Fairfax advised the agent who took the call that he had in his possession important information, which he could not discuss over the telephone and wanted an FBI agent to call at his home. A Special Agent was instructed to proceed to Fairfax's home.

On the evening on 26 December, the Special Agent introduced himself to Fairfax. Proceeding into the living room, Fairfax turned to the agent and said, "I want you to meet Mr. Colepaugh. He has a story to tell, and I'll let him tell it himself."

Colepaugh said that his name was William Curtis Colepaugh and that he had lived in Niantic, Connecticut. He appeared to be very nervous as he related to the agent that he and another man under the name of Edward George Green had been landed on the coast of Maine by a German U-boat. He said that they both were in the U.S. for the purpose of obtaining military, political and economic information to be subsequently transmitted to Germany by radio and letter. Colepaugh related in detail the events of his past life, his contact with crew members of the Pauline Friedrich, the fact that he had shipped to Scotland on a freighter for the purpose of obtaining information concerning convoys for the former German Consul in Boston.

In detail, Colepaugh explained his trip on the Gripsholm, his contact with the German officials in Lisbon, his entry into Germany, his course in the school at The Hague and his meeting with Gimpel, who was in the U.S. under the name of Green. He described his trip on the U-boat, the landing on the Maine coast, the subsequent trip to Boston and the final trip to New York City. Colepaugh told the agent that since their arrival in the U.S. they had not engaged in any espionage activities.

He said they had purchased some parts for a radio at various retail radio shops in New York City. Colepaugh advised that Gimpel was not satisfied with the setup at Beekman Place and told Colepaugh to watch the newspapers for an opportunity to rent a place on the outskirts of the city, which would be suitable for radio activities.

Colepaugh said that he had put off looking for a place on the outskirts of the city when he had made up his mind to get away from Gimpel. He claimed that after he left Gimpel at Radio City on 21 December, he took from the apartment the two bags belonging to Gimpel and that these bags contained between forty to sixty thousand dollars in American money. At this point, Colepaugh turned over to the Special Agent two baggage checks issued by a parcel room at Grand Central Station for these bags. The baggage checks indicated that they were stamped at 6:28 P.M. on 21 December.

Colepaugh said that Gimpel liked to drink but was careful not to drink too much. The agent, in seeking a description of Gimpel, asked Colepaugh if Gimpel had any peculiarities. Colepaugh said that Gimpel did not carry a wallet but kept bills of large denominations in a roll in his trouser pocket and had the habit of stuffing dollar bills into the breast pocket of his suit coat. He said that Gimpel carried a Latvian coin, dated 1942, that was considered by Gimpel to be a good luck token.

He said that Gimpel liked to eat steaks and quite often frequented the better steak houses in New York City. Colepaugh said that Gimpel also liked to frequent Spanish restaurants where he could meet and talk to people in Spanish. He said that while he was with Gimpel in New York the latter had made a number of trips to a newspaper stand located at the foot of the subway stairs at Times Square, where he bought Peruvian newspapers.

In describing Gimpel, Colepaugh said that among other things he wore a silver Inca Indian ring with a square gold top and an Inca design. Gimpel wore this ring on the little finger of one hand.

Colepaugh was asked if he knew where Gimpel might be and he claimed that outside of the apartment at Beekman Place, he did not know of any other locality where Gimpel would go. He said, however, that Gimpel did not like the cold climate and that he possibly might go to the South. He said that Gimpel had mentioned to him at one time that he had passed through New Orleans.

Concerning the possibility that Gimpel might return to the old Times Building on 42nd Street and 7th Avenue to purchase Peruvian newspapers, Colepaugh said that during one of their last few days together he and Gimpel had attended a short-subject movie based on a "Crime Does Not Pay" type of film. He said the police apprehended the criminals in this particular story when they approached a newsstand to purchase a hometown paper. Colepaugh was not able to state whether this had made any particular impression on Gimpel, and he did not know whether Gimpel would continue to purchase Peruvian newspapers at the old Times Building.

Colepaugh related that with reference to radio material, they had purchased two millimeters, a magnifying glass, a 1944 edition of a radio amateur book, one ohm-test meter, and a small screwdriver.

At the Beekman Place apartment, agents contacted the sister of the person who sublet the top floor apartment to Colepaugh and Gimpel. She confirmed Colepaugh's story of his leaving the apartment with the two suitcases. She said that an hour after Colepaugh had departed, the door buzzer rang, and she went to answer the door. It was Green (Gimpel). He went up to his apartment and a few moments later came down to her apartment. He asked her if his friend was gone, and she replied that he had left to visit his family in Connecticut. He returned to his apartment and about ten minutes later asked her if he could have a key. She gave him a key, and he told her that he would return it to her later. He thereupon left the house.

About 1:30 P.M. the next day, Green returned the key to her and, as he was leaving the house, she noticed he was carrying two cardboard boxes. He indicated at that time he was on his way to join Caldwell.

Agents also interviewed the manager of the clothing store, who was able to produce a sales ticket, which was filed alphabetically under the name of Edward Green. The sales ticket indicated that one suit and one overcoat were sold to an Edward Green of a certain hotel on West 23rd Street.

Surveillance was placed on the newsstand at Times Square to see if Gimpel showed. All railroad and bus stations and airline terminals were examined in an effort to locate the bags known to be in the possession of Gimpel.

Colepaugh had turned over to a Special Agent two baggage checks for bags he had taken from the Beekman Place apartment and deposited at Grand Central Station. FBI agents went to the baggage claim area and interviewed the employees.

One of the employees stated that shortly after midnight on 22 December, an individual by the name of Green came to the south window of the parcel room. He stated that he had two bags that were checked but that he had lost the duplicate coupons. Green was admitted to the inside of the parcel room and told to search among the racks until he located his bags. Green finally located the two bags, which he claimed were his. The employee took Green and the two bags to another checker and asked him to take care of the matter because there was a large crowd waiting in front of the parcel room.

This checker related that one of the bags was a large tan leather case of the "two-suiter" type with two locks and that the other bag was a suitcase of gray airline cloth. He claimed that Green produced a key to the tan leather bag and opened it. When it was opened, it was found to contain dirty clothes and a Leica camera. Gimpel gave the checker two receipts for the bags and left the parcel room with them.

FBI agents had been conducting a continuous daily surveillance at a Times Square newsstand located halfway down the subway entrance stairway at the corner of 42nd Street and 7th Avenue. The newsstand consisted of a three-room store. The first room was open to the public and contained newspapers and magazines from foreign sources, together with some American publications. The second and third rooms of the stand were small in size and were used for storage and office purposes.

At 8:55 P.M. on Saturday, 30 December 1944, while Special Agents were watching this stand, they saw an individual enter the store. One of the agents, noting the resemblance of this person to Gimpel, called the other agent's attention to the customer. This individual was wearing a blue double-breasted overcoat, a brown hat, and a gray suit. His overcoat and suit answered the general description of the clothing reportedly worn by Gimpel. The agents were not able to see that he wore a ring with an Inca design.

The man did not ask for, nor did he go near, the South American newspapers, which were on display at the stand. Instead, he perused the newspapers and magazines published in English and generally moved around the area where these periodicals were on display. The agents were able to observe that he finally selected a copy of a pocket edition of the book entitled, Russia. After making his selection, this individual went to one of the clerks at the newsstand, who was beside the cash register, and paid for his purchase. At this particular time he was generally facing one of the Special Agents, and his back was toward the other agent who moved closer in order that he might overhear the voice of this individual. In paying for his purchase, the man spoke a few words in English with an apparent European accent.

One of the Special Agents noticed that in paying for his purchase, the individual took a bill from the inside of his coat and apparently from the breast pocket of his suit coat. The Special Agent remembered that this was a mannerism that Colepaugh said was peculiar to Gimpel. The agents exchanged nods. One agent preceded this individual from the store to the subway stairs, and the other agent followed.

On the stairway, immediately outside the store entrance, the first Special Agent turned to Gimpel and identified himself as well as the other agent as Federal officers. Both agents displayed their badges and requested the man's name.

He hesitated, saying, "What's this all about?" He was told by one of the agents that they were agents of the FBI, that it was a routine investigation, and that they desired to know his name, whereupon the unknown individual replied, "Green."

He was asked his full name and home address, and, in reply, this individual said that his full name was Edward Green and that his address was Massachusetts.

The agents then escorted him into the rear storage room of the newsstand and away from the presence of other persons. The agents knew that this person, who said that his name was Edward Green, was in reality Erich Gimpel. One of the Special Agents asked Gimpel whether he possessed any identification papers. A group of papers were produced from inside the suit-coat pocket. A Selective Service registration and a Selected Service classification card made out to Edward George Green, 582 Massachusetts Avenue, Boston, were among the identification papers, which also included a US Naval Reserve discharge made out in the same name and address.

He was searched and approximately $10,000 was removed from his person, as well as 99 small diamonds wrapped in tissue paper.

Gimpel advised that his bags and the briefcase containing the money were located in his room at his hotel. He gave permission to have his room searched and accompanied the agents to the hotel for that purpose. The search of Gimpel's room revealed currency totaling $44,100 as well as blank Selective Service registration and classification certificates. The agents also found blank certificates of discharge from the Navy, as well as blank birth certificates. Leica camera film, two Colt automatics, and a package containing two small bottles filled with a writing fluid were found. Gimpel identified articles and claimed that the two small bottles of writing fluid were secret writing ink to be used specifically for the purpose of writing secret messages.

Gimpel was taken to the New York FBI office where he was interviewed. He said he was born on 25 March 1910, at Merseberg, Germany. He claimed that he was in South America from 1935 to 1942, working for Telefunken, a German radio corporation with headquarters in Berlin. He said that he worked mostly in Lima, Peru. It was in Peru that he was interned by the police in June 1942 and was subsequently brought to Camp Kennedy, Texas, and was later taken to Jersey City, New Jersey, where he was repatriated to Germany on the Drottningholm. He arrived in Germany on 1 August 1942.

After returning to Germany, Gimpel said he was employed by the German Foreign Office as a courier between Berlin and Madrid. He was also employed in Hamburg and Berlin designing shortwave radio transmitters. He said he could not go into the German Army because under the agreement between the US Government and the German Government he would not be allowed to enter military service in Germany. He spent one year in Hamburg, until it was bombed out in August 1943. There he helped produce radio and electrical equipment for various German Government agencies. He continued his employment as a courier between Berlin and Madrid until February 1944 and was subsequently engaged to check newspapers for technical information. He continued on this job until July 1944 when he was asked if he desired to work in foreign countries.

Agreeing to do this, he was sent to The Hague, where he first met Colepaugh. He became friendly with Colepaugh in order to practice English. He said that Colepaugh was enthusiastic in his praise of Germany, and Gimpel thereupon decided that Colepaugh would be a good companion for a foreign trip. When Gimpel agreed to come to the United States, he requested that Colepaugh be allowed to accompany him.

He said that in the spring of 1944 he had to sign the following documents:

"I obligate myself to exert my entire strength on behalf of Germany; otherwise I am aware that I can expect the sharpest reprisals."

While at The Hague in July 1944, Gimpel said he signed the following paper:

"That in no event will I, after entrance, give information as to what I have seen here."

He said that this paper was a kind of oath, which he had to take for the purpose of pledging himself against revealing any of the activities that took place in The Hague school.

In explaining his proposed work in the United States, Gimpel said he was to build an 80-watt radio transmitter and that Germany was to start sending messages to him about one or two months after he and Colepaugh had landed in the United States. In the event radio contact with Germany could not be made, he was to send letters to the "mail drops" given to him. He said that when he found out that Colepaugh had left him, he went to a hotel, thinking that perhaps the police might have picked up Colepaugh. He said he subsequently checked out of this hotel and went to another hotel, where he expected to remain until 1 January 1945. He wanted to go to South America but knew it would be hard to get there.

In explaining the use of secret ink, Gimpel said that letters containing innocuous messages were to be written to prisoners of war whose names were furnished by the Germans or to mail drops in Madrid or Lisbon. Gimpel explained that in order to write a secret message, the message was written with specially prepared ink on a piece of paper. The piece of paper was pressed firmly, preferably by weights, against the paper bearing the message and was left in this position for several hours. When the blank piece of paper was removed, it would bear a secret message that could not be seen unless appropriately developed. This paper would appear blank, and an innocuous message could be written on the reverse side. A special type of development could subsequently make the secret message readable.

On instructions from the Attorney General, the FBI turned over Colepaugh and Gimpel to the military authorities in New York City. On 6 February 1945, they faced a Military Commission at Governor's Island, charged with violation of the 82nd Article of War and conspiracy. On 14 February this Military Commission found them guilty and sentenced them to be hanged. Later, the President of the United States commuted their sentences to life imprisonment.

The Custodial Detention Program

The epitome of preventive intelligence was the Custodial Detention Program established by the FBI and the Justice Department during 1940-1941. It should not be confused with the internment of Japanese-Americans in 1942. Both the FBI and military intelligence opposed the massive infringement of human rights that occurred in 1942 when 112,000 Japanese and Japanese-Americans were placed in detention camps__a decision made by President Roosevelt and ratified by the Congress. The authoritative histories stress the crucial influence of the Army's Provost Marshall General and his "empire-building" machinations, especially in reaction to a prewar decision transferring responsibility for alien enemy interment to the Justice Department.⁵

The mass detention of American citizens solely on the basis of race was exactly what the Custodial Detention Program was designed to prevent. Its purpose was to enable the government to make individual decisions as to the dangerousness of enemy aliens and citizens who might be arrested in the event of war. Moreover, when the program was implemented after Pearl Harbor, it was limited to dangerous enemy aliens, and the plans for internment of potentially dangerous American citizens were never carried out.

The most significant aspects of the Custodial Detention Program bear upon the relationship between the FBI and the Attorney General. Director Hoover opposed Attorney General Robert Jackson's attempt in 1940 to require departmental supervision; and, when Attorney General Francis Biddle abolished the Custodial Detention List in 1943, the FBI Director did not comply with his order.

Director Hoover asked Attorney General Jackson in June 1940 for policy guidance "concerning a suspect list of individuals whose arrest might be considered necessary in the event the United States becomes involved in war."⁶ Secretary of War Henry L. Stimson advised the Attorney General in August that the War Department had emergency plans providing "for the custody of such alien enemies as may be ordered interned" and suggested that they be discussed between military and Justice Department officials.⁷ To deal with these matters, Attorney General Jackson assigned responsibility to the head of a newly created Neutrality Laws Unit in the Justice Department. This Unit was later renamed the Special War Policies Unit and undertook Departmental planning for the war, as well as analysis and evaluation of FBI intelligence reports and the review of names placed on the Custodial Detention List.

The FBI Director initially resisted the plan for Justice Department supervision. He told the head of the Special Unit that the Department's program created "the very definite possibility of disclosure of certain counterespionage activities."⁸ Hoover added, "The personnel who would handle this work upon the behalf of the Department…should be selected with a great deal of care. We in the FBI have endeavored to assure the utmost secrecy and confidential character of our reports and records. To turn over to the Department this great collection of material in total…means that the Department must assume the same responsibly for any leaks or disclosure, which might be prejudicial to the continued internal security of our country. Obviously, such personnel will know the identity of many of our confidential informants… The life and safety of these informants are at stake if their identities should become known to any outside persons."

Hoover also feared that if the Department took over any administrative action or prosecution, the identity of confidential informants now used by this would "cut off that source of information insofar as continued counterespionage might be concerned in that case." He claimed that if the Attorney General approved the plan, it would mean the Justice Department was "ready to abandon its facilities for obtaining information in the subversive field."⁹

Attorney General Jackson refused to give into the FBI Director. After five months of negotiation, the FBI was ordered to transmit its "dossiers" to the Justice Department Unit.¹⁰ To satisfy the FBI's concerns, the Department agreed that any formal proceeding would be postponed or suspended if the FBI indicated that it "might interfere with sound investigative techniques." The FBI was assured that the plan "does not involve any abandonment by the Department of its present facilities for obtaining information in connection with subversive activities by surveillance of counterespionage," and there would be "no public disclosure of any confidential informants…without the prior approval of the Bureau."¹¹ Thus, from 1941 to 1943, the Justice Department had the machinery to oversee at least this aspect of FBI domestic intelligence.

The wartime detention plans envisioned entirely civilian proceedings for arrest of alien enemies following a presidential proclamation pursuant to statutory provisions, and all warrants should be authorized and issued by the Attorney General.¹² Separate instructions stated that, with respect to American citizens on the list and "not subject to internment," a Departmental committee would consider whether specific persons should be prosecuted under the Smith Act of 1940 "or some other appropriate statute" in the event of war.¹³

FBI instructions to the field reiterated the types of organizations whose members should be investigated under the Custodial Detention Program. In addition to the groups listed in 1940, the order included the Socialist Workers Party (Trotskyite), the Proletarian Party, Lovestoneites, "or any of the other Communist organizations or…their numerous `front' organi-zations," as well as persons reported as "pronouncedly pro-Japanese."¹⁴

FBI officials were concerned that the Department plan did not provide sufficiently for action against citizens. In addition to the Smith Act of 1940, FBI officials pointed out to the Department "the possibility of utilizing denaturalization proceedings." At the FBI's request, the Special Departmental Unit prepared "a study of the control of citizens suspected of subversive activities." As later summarized by the FBI, the study stressed:

"…the great need for a federal overall plan of legislation to control suspected citizens, rather than isolated statutes which would care for particular citizens…." It was pointed out that the British system of defense legislation had been to enact a general enabling statute under which the executive authority is permitted to promulgate rules and regulations having the effect of law, and it was suggested that, if this country entered the war, a similar type of statute should be enacted which would enable the President to set up a system of regulations subject to immediate change and addition as the need arose. ¹⁵

Attorney General Francis Biddle did not endorse this position. Instead, the Department's Special Unit relied upon recently enacted specific statutes as the basis for its planning. These included the Foreign Agents Registration Act of 1938, the Smith Act of 1940 making it a federal crime to urge military insubordination or advocate the violent overthrow of the government, and the Voorhis Act of 1941 requiring the registration of organizations having foreign ties and advocating the violent overthrow of the government.

Acting at "the postinvestigative level," the Special War Policies Unit considered these and other statutes as the basis for coordinating "affirmative action on the internal security front." Its annual report in 1942 stated:

The Unit deals with new forms of political warfare. As part of its equipment, it has engaged analysts with
special experience and schooling in the field of political organization and ideologies. The Unit has not only sought to collate information regarding dangerous individuals and organizations; it has sought to bring together a trained staff equipped to understand the methods, beliefs, relationships and subversive techniques of such individuals and organizations for the purposes of initiating appropriate action.¹⁶

During the period 1941-43 the Special Unit included a Foreign Agents Registration Section, a Sedition Section, an Organizations and Propaganda Analysis Section, and a Subversives Administration composed of a Nazi and Fascists Section and a Communist Section. The Special Unit initiated such wartime measures as the internment of several thousand enemy aliens, the denaturalization of members of the German-American Bund who had become American citizens, sedition prosecutions, exclusion of publications from the mail, and prosecution of foreign propaganda agents. The Unit received and analyzed reports from the FBI, the State Department, the Office of War Information, and the Office of Strategic Services. Attorney General Biddle abolished the Special Unit in July 1943 and transferred its prosecutive functions to the Criminal Division.¹⁷

In 1943, Attorney General Biddle also decided that the Custodial Detention List had outlived its usefulness and that it was based on faulty assumptions. His directive to the FBI and the Departmental Unit stated:

There is no statutory authorization or other present justification for keeping a "custodial detention" list of citizens. The Department fulfills its proper function by investigating the activities of persons who may have violated the law. It is not aided in this work by classifying persons as to dangerousness.

Apart from these general considerations, it is now clear to me that this classification system is inherently unreliable. The evidence used for the purpose of making the classifications was inadequate; the standards applied to the evidence for the purpose of making the classifications were defective; and finally, the notion that it is possible to make a valid determination as to how dangerous a person is in the abstract and without reference to time, environment, and other relevant circumstances, is impractical, unwise, and dangerous.¹⁸

Upon receipt of this order, the FBI Director did not abolish the FBI's list. Instead, he changed its name from Custodial Detention List to Security Index.¹⁹ The new index continued to be composed of individuals "who may be dangerous or potentially dangerous to the public safety or internal security of the United States." Instructions to the field stated:

"The fact that the Security Index and Security Index cards are prepared and maintained should be considered strictly confidential, and should at no time be mentioned or alluded to in investigative reports, or discussed with agencies or individuals outside the Bureau other than duly qualified representatives of the Office of Naval Intelligence and the Military Intelligence Division, and then only on a strictly confidential basis."²⁰

The Attorney General and the Justice Department were apparently not informed of the FBI's decision to continue the program to classify dangerous individuals but under a different name.

Moreover, FBI investigations did not conform to Attorney General Biddle's statement that the Justice Department's proper function was investigation of "the activities of persons who may have violated the law." The FBI Director's instructions at the end of the war emphasized that the Bureau investigated activities "of prosecutive or intelligence significance."²¹ However, toward the end of the war, the FBI did limit substantially its investigation of individual Communists. Orders to the field requiring investigation of every member of the Communist Political Association (CPA) (as the Party was named during 1943-1945) were modified in 1944, when field offices were instructed to confine their investigations to "key figures in the national or regional units of the CPA." This directive received "widely varying interpretations" in the field, and many offices "continued to open cases on the basis of membership alone." Further instructions in April 1945 stated that investigations were restricted to "key figures" or "potential key figures" rather than to all members as had been the policy before 1944. Security Index cards were "prepared only on those individuals of the greatest importance to the Communist movement."²²

At the end of the war, the head of the FBI Intelligence Division, D. M. Ladd, recommended to Director Hoover another cutback in operations. This proposal was approved by the FBI Executive Conference, and the State Department and the Justice Department's Criminal Division were advised of the changes.²³ FBI field offices were:

"…instructed to immediately discontinue all general individual security matter investigations in all nationalistic categories with the specific exceptions of cases involving communists, Russians, individuals who nationalistic tendencies result from ideological or organization affiliation with Marxist groups such as the socialist Workers Party, the Workers Party, the Revolutionary Workers League or other groups of similar character and members of the Nationalist Party of Puerto Rico."

The FBI would open "no new general individuals security matter investigations…unless they fall within the above specific exceptions." However, the instructions permitted the field to continue investi-gating "individuals whose activities were of paramount intelligence importance such as individuals closely allied with political or other groups abroad, individuals prominent in organi-zational activity of significance, or individuals falling within similar categories." The instructions added:

It is realized, of course, that in connection with the intelligence jurisdiction of the Bureau it will be necessary to investigate the activities and affiliations of certain individuals considered key figures in nationalistic and related activities or considered leaders of importance in various foreign nationality groups…. If in such an instance you have any question as the advisability or desirability of instituting such an investigation in view of the above instructions, you should, of course, refer the matter to the Bureau for appropriate decision.

This flexibility specifically allowed for the investigation of "fascist individuals of prosecutive or intelligence significance."²⁴

President Roosevelt's Directive of December 1941 on the FBI's SIS reads as follows:

In accordance with previous instructions the Federal Bureau of Investigation has set up a Special Intelligence Service covering the Western Hemi-sphere, with Agents in Mexico, Central America, South America, the Caribbean, and Canada. Close contact and liaison have been established with the Intelligence officials of these countries.

In order to have all responsibility centered in the Federal Bureau of Investigation in this field, I hereby approve this arrangement and request the heads of all Government Departments and Agencies concerned to clear directly with the Federal Bureau of Investigation in connection with any intelligence work within the sphere indicated.

The Director of the Federal Bureau of Investigation is authorized and instructed to convene meetings of the chiefs of the various Intelligence Services operating in the Western Hemisphere and to maintain liaison with Intelligence Agencies operating in the Western Hemisphere: (Confidential Directive to the Heads concerned, 12/41.)

An agreement between the FBI and military intelligence dealing with Special Intelligence operations in the Western Hemisphere: cited Presidential "instructions" of June 24, 1940 and January 16, 1942. It described FBI responsibilities as follows:

"The Special Intelligence Service will obtain, primarily through undercover operations supple-mented when necessary by open operations, economic, political, industrial, financial and subversive information. The Special Intelligence Service will obtain information concerning movements, organizations, and individuals whose activities are prejudicial to the interests of the United States." (Agreement between MID, ONI and FBI for Coordinating Special Intelligence Operations in the Western Hemisphere, 2/25/42.)

The following sections from a Joint Chiefs of Staff Directive on the functions of the Office of Strategic Services indicate overlap between FBI and OSS operations in 2943:

3. Secret Intelligence

a. The Office of Strategic Services is authorized to: (1) Collect secret intelligence in all areas other than the Western Hemisphere by means of espionage and counter-espionage. In the Western Hemisphere, bases already established by the Office of Strategic Services in Santiago, Chile, and Buenos Aires, Argentina, may be used as ports of exit and of entry for the purpose of facilitating operations in Europe and Asia, but not for the purpose of conducting operations in South America. The Office of Strategic Services is authorized to have its transient agents from Europe or Asia touching points in the Western Hemisphere transmit information through facilities of the Military Intelligence Service and of the Office of Naval Intelligence.

4. Research and Analysis

The Office of Strategic Services will (1) furnish essential intelligence for the planning and execution of approved strategic services' operations; and (2) furnish such intelligence as is requested by agencies of the Joint Chiefs of Staff, the armed services, and other authorized Government agencies. To accomplish the foregoing no geographical restriction is placed on the research and analysis functions of the Office of Strategic Services.… (Emphasis supplied).

(JCS Directive: Functions of the Office of Strategic Services, JCS 155/11/D, 10/27/43.)

CONTINUE CHAPTER 1