Enemies: A History of the FBI (20 page)

The president, the attorney general, and Hoover convened one of the most extraordinary military tribunals in the history of the United States. Its conduct echoes down to this day. On June 30, 1942, two days after the Dasch story hit the newspapers, Attorney General Biddle received a note from FDR, reprinted here with Biddle’s comments in brackets:

I have not had an opportunity to talk with you about the prosecution of the eight saboteurs landed from two German submarines nor have I recently read all the statutes which apply [Note the Rooseveltian touch, as if to say: I know all about law, and anyway I don’t have to read the statutes: this is War.]

It is my thought, however:

1. That the two American citizens are guilty of high treason. This being war-time, it is my inclination to try them by court-martial. I do not see how they can offer any adequate defense. Surely they are as guilty as it is possible to be and it seems to be the death penalty is almost obligatory.

2. In the case of the other six, who I take it are German … I can see no difference [i.e., don’t split hairs, Mr. Attorney General].

F.D.R.

But the laws of the United States and the rulings of the Supreme Court stood in the way. In a Civil War case, the Court had held that a civilian could not be tried in a military court unless martial law had been declared and the civilian courts closed. Biddle had to find a way around that ruling. He told the president to appoint a special military commission. It would run a secret trial against the saboteurs under military law. When this decision came to the Supreme Court for a review, as it inevitably would, Biddle would argue that enemy combatants, waging a secret war against America, could be tried and punished by a military tribunal under the laws of war. The same argument would be raised in America’s twenty-first-century war on terror.

FDR signed an executive order creating the military commission immediately. The secret trial began the next week, with seven army generals presiding. Armored vans flanked by soldiers with machine guns brought the prisoners from the District of Columbia jail to a closed chamber on the fifth floor of the Justice Department, a small lecture hall that served, in ordinary times, as a classroom for FBI agents.

Biddle led the prosecution. Hoover sat at his right side, passing him dossiers on each defendant, summaries of the evidence, transcripts of their statements and confessions under arrest. Dasch and Burger were the last to testify in the two-week trial. Each made full confessions; each said he had had no intent to carry out his mission of destruction.

On August 3, the seven generals reached a unanimous verdict. It was up to the president to pass sentence. He already had decided that death was “almost obligatory.” And that was the sentence he pronounced. But Biddle persuaded him to commute Burger’s penalty to life and Dasch’s to thirty years. The attorney general thought that their confessions had value—and he knew that the FBI could never have made the case without Dasch.

Starting at seven o’clock on the morning of August 8, General Cox informed the saboteurs of their fates. One by one, the six condemned men were led to the death row of the District jail, served a breakfast of bacon and eggs, sent to the barber to have their heads shaved, and, starting at one minute after noon, seated in the electric chair, fitted with a rubber mask and a steel helmet, and electrocuted. They were buried in the potter’s field at the edge of the nation’s capital; six planks of wood with no names served as their headstones.

Dasch and Burger went to the federal penitentiary in Atlanta; Dasch to solitary confinement, where no one could hear his story. Barely seven weeks had passed from the day of his defection to the date of execution.

The Supreme Court had convened before the verdict to weigh whether the president had the power to create secret military tribunals in cases of sabotage and terror. But the proceedings had been so secret that no record was presented to the Court. The case deeply troubled Chief Justice Harlan Fiske Stone—the secrecy of the trial and the verdict, the rules that governed the commission, the president’s having the power to put the defendants to death. But it was his opinion to write. And he wrote carefully.
Ex Parte Quirin
, named after one of the executed German saboteurs, remained the last word on the subject of military tribunals for the next sixty years.

The Court could not “define with meticulous care the ultimate boundaries of the jurisdiction of military tribunals to try persons according to the law of war,” said Stone’s opinion, dated October 29. Nor could it write the rules that could create a constitutional basis for a military commission. That was up to Congress. But in this case, the government did have the power to try the defendants as unlawful enemy combatants.

The Supreme Court had been painted into a corner by the president and
the FBI. The six condemned men were already dead. What if the Court had found the proceedings unconstitutional? Or what if it had discovered that Hoover had promised Dasch freedom in exchange for a confession? As Chief Justice Stone wrote in a private memorandum for the record, the Supreme Court would then be placed “in the unenviable position of having stood by and allowed six men to go to their death without making it plain to all concerned—including the President—that it had left undecided a question on which counsel strongly relied to secure petitioners’ liberty.”

That question was whether the commission was constructed lawfully by the president. It would go unanswered until after the United States confronted a new kind of enemy combatant in 2001.

The Nazi saboteur case brought two windfalls for the FBI, one public, one secret. The publicity was great: the American people universally believed that the Bureau had broken the case by itself. They knew nothing about the defection and confession of George Dasch. The FBI’s public relations machine prepared a Congressional Medal of Honor citation for Hoover. Though the medal never came, the case could not have been a better boon for the Bureau’s image.

The second bonanza from the Nazi saboteur case was the FBI’s deepening understanding of how the
Rueckwanderer
system worked. The Bureau, investigating the past lives of the saboteurs in the United States, found that three of them had established their allegiance to the Third Reich by buying the Nazi marks at banks in New York and Chicago. Their applications to exchange dollars for marks let German intelligence know who they were, where they lived, and how to reach them. The Abwehr had paid their passage back to Germany and trained them as sabotage agents.

Thousands of German Americans had bought the marks and gone to Germany. How many had returned to the United States as Nazi spies?

In the fall of 1942 the FBI intensified a national investigation, one of the biggest and most complex cases it had ever handled. The Bureau eventually interrogated 997 German aliens in the United States; 441 were detained or jailed on orders from the attorney general for their allegiance to Germany. The case involved hundreds of agents, tens of thousands of documents, and the biggest bank in America: Chase National.

In New York, Percy Foxworth, now Hoover’s assistant director for national security affairs, took charge of the case. He obtained documents suggesting lucrative financial connections among American bankers, multinational companies doing underground business with Germany, the
German-American Bund, and the Nazi government. Precisely how Foxworth got his hands on the documents was a sensitive matter.

The FBI had recruited an assistant cashier and a midlevel manager in the foreign department of Chase’s main office in New York. At night, FBI agents sneaked in and spent hours upon hours combing through the foreign department’s files. These searches were conducted without warrants; they fell somewhere in the gray area between a black-bag burglary and an intelligence investigation. Either way, they were illegal.

The FBI had a theory that Chase was acting on behalf of the German government in violation of the Foreign Agents Registration Act, the same law Justice had used to indict suspected spies. This was more than a thorny political issue. It was tantamount to a charge of collaborating with Hitler.

The charge could not be proved. The bank outmaneuvered the Bureau. Chase hired John Cahill, a very knowledgeable lawyer who had been the federal prosecutor in charge of the grand jury investigating the case. He was well aware that the FBI had gathered evidence against Chase illegally. Cahill knew enough to turn the tables. He threatened to put the FBI on trial. Its black-bag jobs would be revealed if the case proceeded, and that was a cost Hoover would not pay. The politically explosive investigation collapsed.

“W
E HAD NO ONE TO GIVE US COUNSEL
”

The FBI suffered another misfortune that winter. On January 15, 1943, Percy Foxworth died when his plane crashed in the jungles of Dutch Guiana, on the northeast edge of South America. Foxworth and a fellow FBI agent were en route to Morocco, where Roosevelt and Churchill were holding a war council. Foxworth had been assigned by the War and State departments to interrogate an American citizen and alleged Nazi collaborator who had been arrested in Casablanca as a potential threat to the president.

His death was a heavy blow to the Special Investigative Service, which by 1943 had grown to 583 FBI agents but was still struggling to achieve its mission.

Hoover tried repeatedly to rid himself of the SIS. “
I do strongly recommend that the FBI be relieved of all responsibility for the handling of any special intelligence work in the Western Hemisphere, and that this responsibility be completely and fully placed upon Colonel Donovan’s organization,” he wrote to the new chief of army intelligence, Major General George
Veazey Strong: “I am most anxious and willing to withdraw entirely and completely from the Latin Americas.”

There are few examples of Hoover offering to cede power, certainly not to a political enemy like Donovan. He did so only when he sensed the risk of embarrassment. And the SIS was a ceaseless source of chagrin.

“
You must remember that we were starting from absolute scratch in the intelligence business,” said John Walsh, an FBI agent on the national security beat who went to Medellín, Colombia, for the SIS in 1943. “We had no one to give us counsel on this thing.”

The SIS assignments in Colombia were to hunt Nazi spies and shut down the clandestine radio networks that linked espionage agents and officers to their masters in Germany. But Walsh quickly discovered upon his arrival in Colombia that he was at a loss for work. “All the German aliens had been arrested by that time,” he remembered. “Colombia had declared war on Germany and they had rounded up all the Germans.

“I spent a lot of time at the country club,” he said. “I really didn’t have much in the way of an assignment.”

The FBI would claim in later years that the work of the SIS had led to the arrests of 389 Axis agents and the destruction of 24 Nazi spy-ring radio stations, mostly accomplished in 1942 and 1943. Hoover stole the credit that rightfully belonged to the Radio Intelligence Division (RID) of the Federal Communications Commission, the New Deal bureaucracy that oversaw broadcasting in the United States. Hoover had a knife out for the chairman of the FCC, James Lawrence Fly; the two fought for years over the FBI’s power to plant wiretaps.

The civilians of the Radio Intelligence Division intercepted clandestine German communications with spies in Latin America. They worked with American embassy officials and local police to shut the networks down. In 1942, the RID picked up a plan to sink the
Queen Mary
, which was carrying ten thousand American and Canadian troops to war, and led the Brazilian police to arrest more than two hundred German spies. That one case alone accounted for half the Axis spy arrests claimed by the FBI and the SIS in Latin America throughout all of World War II.

The FBI’s secret history recounts: “
An Agent could not be expected to produce any worthwhile information until after he had served on assignment for a number of months at the very minimum in order to learn local customs, the language, etc.”

But more than a few months abroad proved too much for many FBI
agents. Scores if not hundreds resigned from their undercover work with the SIS or requested transfers home, “thoroughly disgusted” and “completely disillusioned when faced with something entirely different from the glamorous picture envisioned by them before undertaking the assignment.” They were “subjected to all kinds of ridicule” by American soldiers and sailors throughout Latin America asking “why they were not in uniform and were trying to sell soap, magazines, or perform some other ostensibly unimportant and non-war connected job.” State Department diplomats and military attachés delighted in “uncovering, exposing and embarrassing the Bureau’s undercover agents,” the secret history continues, calling them slackers and draft dodgers. “Unfortunately,” the secret history records, “the Bureau’s undercover representatives were in large measure young, healthy, intelligent, personable Americans of draft age and obvious military potentiality operating under weak and frequently illogical covers.”

SIS men were called worse names, like turncoat and traitor. Trying hard “to obtain the confidence of pro-Nazi individuals and thus obtain information from within pro-Nazi ranks,” they were “engaging in what appeared to local United States State Department, Military and Naval officials to be extremely questionable and suspicious activities and associations,” the secret history recounts. “Many of the men also became suspected by the British, some legitimately and others apparently solely due to the fact that the British suspected them of being Bureau representatives and desired to expose them by embarrassment.”

All his life, Hoover had a rule: Don’t embarrass the Bureau. He had to repair the ill repute and lowly status of the FBI abroad. His confidant at the State Department, Assistant Secretary of State Adolf A. Berle, came up with an ingenious solution.