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Authors: Oliver L. North

BOOK: War Stories III
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Ships bombed at Pearl Harbor.
Hours before the U.S. declaration on 8 December, Churchill's government in London and the rest of the British Commonwealth, already at war with Germany and Italy, decided for war against Tokyo. Then, on 11 December, Hitler and Mussolini declared war on the United States—to which Congress reciprocated that afternoon. Churchill's great hope—that the U.S. and Britain would become “co-belligerents against Fascism”—was finally realized.
But in the days immediately after the Japanese surprise attack, it became apparent that despite all the warnings, America's military was still woefully unprepared for war on a global scale. The Selective Service Act had narrowly passed in 1940, but it wasn't until 12 August 1941 that Congress extended the term of service beyond twelve months and authorized the movement of U.S. personnel overseas. The bill passed the House of Representatives by a single vote.
Though building larger, more effective U.S. fighting forces languished while war consumed Europe, America did begin to expand and improve its
intelligence and counter-intelligence capabilities. Unconstrained by restrictions that isolationists in Congress imposed on the military, FBI director J. Edgar Hoover began a quiet expansion of “the Bureau” shortly after Hitler invaded Poland in September 1939.
 
U.S. tanker struck by German U-boat.
Hoover had read with alarm the reports of espionage and sabotage operations being conducted in Europe by Hitler's
Abwehr
, the intelligence department of the German Armed Forces. He correctly assumed that if war came, Hitler would attempt similar operations in the United States and Latin America—and he wanted the FBI to be ready. Hoover set out to recruit as many bright new field agents as he could squeeze into his budget. One of those “early hires” was Ken Crosby, a young lawyer in Atlanta. Crosby would help crack one of the biggest German spy rings of World War II.
KEN CROSBY, FBI
Washington, DC
15 December 1941
On 2 September 1939, I was working in a law office in Atlanta, Georgia, when I read the news of Germany invading Poland. On one of the inside pages was a little squib that said simply that in view of the unrest in the world, Congress had appropriated an increased budget for the FBI to hire more agents. The article noted that FBI applicants had to be lawyers, and I was a lawyer. I put the newspaper down, walked straight to the FBI office, applied, and three months later—in December 1939—I was FBI agent number 831 in Washington.
In early 1940 I finished my training. The FBI “Academy” was then in Washington, DC—at the Justice Department. From there, I went to Boston for my first assignment and then in early 1941 I was selected to work undercover in counter-espionage out of the New York field office.
The unit I was assigned to was already working against the Abwehr—Hitler's intelligence service. The Germans clearly anticipated that the United States was going to get in the war. They were trying to steal all the blueprints, details of armaments, shipping information, the names of the ships, the cargo of the ships—and conduct as much spying as they could—
before
the U.S. became a combatant. They also wanted to prepare for sabotage operations in the U.S. once we entered the war. And they were doing a lot of their preparations in Latin America.
The Germans had couriers going back and forth on ships, passing along all the information they could about Lend-Lease supplies, war production, our armaments industries, shipments to England, and the like. Often they relied on German immigrants and American citizens of German descent.
The office I was assigned to had been doing undercover work in connection with the Duquesne spy ring—the biggest espionage case in our history. When investigation of the Fritz Duquesne case started in 1940, leads were developed in Latin America that indicated there were German intelligence agents operating inside the United States.
William Sebold was key to breaking the spy ring. Sebold had been born in Germany, served in the Kaiser's army in World War I, but had immigrated to the U.S. in 1921 and become an American citizen. In 1939 he returned to Germany to see his mother. While he was there, the Abwehr pressured him into spying for them by reminding him that he had family in Germany. They actually blackmailed him into serving them.
But before returning to the U.S., Sebold secretly told a U.S. consular officer in Cologne about the Abwehr threats and the training they had given him. When he arrived in New York on 8 February 1940 he showed the FBI agents from my unit everything that his German “controller” had given him: a watch with a secret compartment, coded messages and
communications procedures, a big pile of money and micro-photographs he'd been given to pass on to other German agents working in the U.S. and Latin America.
We set him up in an office under the assumed name they had given him and even built a clandestine radio transmitter/receiver, just as they had instructed him. He really was very bold—and very brave. I was one of the agents who worked with him almost every day.
We manufactured bogus information for him to transmit and started watching all of the people he had been told to contact. Sebold was so convincing that his Abwehr controller in Germany began directing all of their other agents in the region northeast to Sebold's office to pass on their intelligence. By the time we shut it down after sixteen months, Sebold was the U.S. “controller” for thirty-three German agents.
The office that the FBI set up for Sebold was constructed with a mirror in the hallway—and it had special two-way glass in it. From Sebold's side, it looked like any other mirror—but we always had agents with cameras on the other side—looking into the room so that we could film and photograph the German agents who came to meet with him.
Fritz Duquesne was one of the most senior German intelligence operatives in the United States. He was operating from a “front company” in New York called “Air Terminals Company” and one afternoon in the spring of 1941, I was “behind the mirror” when Duquesne walked into Sebold's office to pass on a report. Duquesne was known to be very cautious, suspicious of everything. He looked around the room awfully carefully—clearly checking for monitoring equipment. And then he walked up to the mirror and stares right into it—like he's looking straight at me.
I thought, “Can this guy see me? Maybe this mirror isn't working right. If he sees me, I'm in real trouble—I've blown the whole case.” Duquesne put his face within twelve inches of my face behind the mirror—as though he was looking me right in the eye. My heart was beating so loud, I was sure he could hear it. I was ready to collapse! Then, he pulled out his pocket comb and started combing his hair!
I don't think I took a breath until he finished and walked away. When he did, I was soaked in sweat.
Shortly thereafter, on a Sunday night, my FBI unit carefully orchestrated the arrest of all thirty-three members of the spy ring. We had great evidence under the Espionage Statute—which had to be complied with in order to get a conviction—and all of them were convicted and went to jail.
In a way it's too bad we shut it down when we did. The Espionage Act provides for execution in time of war—so if we had waited until after Pearl Harbor was bombed before making the arrests, Duquesne and most of his agents probably would have been hung.
Crosby's assessment about the sentence that Duquesne and his cohorts would have received is correct. On 13 June 1942, eight German saboteurs were apprehended after being put ashore by U-boat—four on Long Island and four more on the coast of Florida. At Hoover's insistence, and with the support of Attorney General Biddle, all were tried in secret military tribunals and in August—just two months later—six of the eight were executed. The remaining two—named as “cooperating witnesses” in the trials—were sentenced to life in prison. The trials would set a precedent for dealing with non-military enemy combatants that would be used throughout the war for prosecuting spies and saboteurs and is still cited today for dealing with terrorists.
This new process for dealing with spies reflected other changes in U.S. counter-espionage, intelligence collection, and “special operations” capabilities precipitated by America's entry into the war. Shortly after Pearl Harbor, Hoover reorganized the FBI, creating a permanent office for counter-intelligence and counter-espionage. U.S. “offensive intelligence” capabilities were also transformed following the declaration of war.
On 27 May 1941, concerned about Japanese moves in the Pacific, President Roosevelt had declared a “State of Emergency” in an effort to accelerate preparations for hostilities. Using his emergency powers, FDR appointed Brigadier General William Donovan—a World War I hero—as
the Coordinator of Intelligence on 11 July. Donovan's appointment created immediate friction—within the War and Navy Departments as well as with the FBI—and slowed his plans for building U.S. covert action capabilities.
In June 1942, Donovan's organization was renamed the “Office of Strategic Services”—the OSS. The following month, the War Department activated the First Special Service Force, and placed it at Donovan's disposal to conduct “espionage, sabotage, intelligence collection, and support for internal resistance” behind enemy lines. The OSS—often in cooperation with the British Special Operations Executive—would go on to conduct some remarkably successful espionage and intelligence operations.
The transformation in U.S. counter-espionage and intelligence capabilities brought about by our entry into the war reflected the changes taking place in every other part of American life. The expansion of industrial production—ships, planes, tanks, weapons, and ammunition—that had begun as a consequence of “Lend-Lease” now accelerated dramatically. Unemployment, which had hovered near 10 percent through most of 1941, now dropped dramatically as millions of men responded to calls for military volunteers and draft notices. American women—who had never thought of joining the labor force—now found opportunities in the Armed Forces, government service, war production plants, and shipyards.
American mobilization couldn't happen overnight, however. Britain, Russia, and China may have gained a powerful new ally against the Axis Powers—but the immediate effects were hardly positive. In the closing days of 1941 and the opening months of 1942, the Allies were subjected to a series of disasters. On Christmas Eve 1941, after a heroic fight, the U.S. Navy and Marine garrison on Wake Island finally succumbed to the Japanese. The following day, Hong Kong fell. And on 15 February 1942, Singapore was captured—along with 135,000 British, Indian, and Australian troops.
On 8 March Rangoon, Burma, was seized by the Japanese and the next day the Dutch government in exile surrendered the entire Netherlands East Indies. On 9 April, 80,000 U.S. and Filipino soldiers surrendered to the Japanese on Bataan and on 6 May 1942, the island fortress of Corregidor in Manila Bay was captured—ending all but guerilla resistance in the Philippines.

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