Spy Blog from the International Spy Museum

Dr. Thomas Boghardt, Historian

At the height of World War II, in 1942, the Germans began to produce massive amounts of British counterfeit banknotes. Their goal—bring down the British economy by flooding the United Kingdom with fake money.

The scheme was run by SS intelligence officer Bernhard Krüger, hence its name, “Operation Bernhard.” Upon orders from SS boss Heinrich Himmler, Krüger selected over 140 concentration camp inmates to implement the operation. This course was as ingenious as it was diabolical—while the camps offered a large pool of talent (graphic designers, printers, professional forgers), the selectees could simply be liquidated at the end of the operation to ensure secrecy. Krüger himself always treated his workers kindly—in fact, some testified on his behalf after the war—, but they knew all too well that they lived on borrowed time, and that any day could be their last.

Operation Bernhard was an unparalleled success. Within two years, the inmates produced nearly 9 million pound notes—13 percent of the £1 billion worth of real notes then in circulation. When the Bank of England detected some of the counterfeit notes, it reverently described them “as the most dangerous ever seen.” And even though a lack of German aircraft prevented the notes from being dropped over Britain, and cause financial havoc there, the SS used the notes on a large scale in Europe to buy arms, raw materials, and pay their own spies. The notes also underwrote the liberation of fallen Italian dictator Benito Mussolini in a daring commando operation in 1943.

Operation Bernhard’s most cherished result, however, was that it saved lives. When the war ended, the SS guards in charge of the prisoners simply disappeared. Whether any of the inmates would have survived without joining Operation Bernhard, is highly doubtful.

Operation Bernhard was recently turned into an excellent movie, The Counterfeiters, which won an Oscar as the best foreign (Austrian) film in 2008. The International Spy Museum is pleased to screen it on 4 February, and provide a historical context. For more information, see: http://www.spymuseum.org/programs/calendar_pages/2010/q1/2010_02_04_prog.php

Dr. Thomas Boghardt, Historian

Espionage fiction has long influenced people’s notions of intelligence. And there are a good number of first-rate espionage authors to choose from, including John le Carré, Graham Greene, and Ian Fleming. But who did it best?

The answer, of course, depends much on one’s own taste, but my choice is the British writer Eric Ambler (1909-1989). Here is why: Ambler never loses focus, uses unstilted, crisp prose, and simply tells a good story well. His protagonists are believable, and his scenarios are realistic. Many of his novels are set in the interwar period, and as a contemporary of Mussolini and Hitler, Ambler masterfully uses the backdrop of a Europe gripped by totalitarianism, and on the brink of war, to craft powerful stories. Since Ambler’s hero is typically not a professional spy, but someone who accidentally stumbles into a major politico-espionage plot, the reader can easily identify.

If I had to pick one of Ambler’s many excellent novels, it would have to be Journey into Fear. Published and set in 1940, the book describes the flight of an Englishman, Howard Graham, aboard a small Italian steamer from fascist agents. As the vessel is chugging across the eastern Mediterranean from Istanbul to Genoa, Graham discovers with growing horror that his fellow passengers are not what they initially seemed—and that his journey may not lead to safety at all.

Journey into Fear is a relentlessly paced suspense novel. Whether you are interested in espionage, interwar Europe, or simply a good story, you will not be disappointed. Read and enjoy!

Nothing is What It Seems

Listen Here: The Terrorist Challenge

January 8, 2010

Continuing the Spy Museum’s SPYCast®, Peter Earnest, Museum Executive Director and 36 year veteran of the CIA, is interviewed by Museum Historian Dr. Thomas Boghardt on this week’s breaking intelligence news.
The U.S. authorities’ failure to prevent a Nigerian suicide bomber from boarding a Detroit-bound plane on Christmas Day, and the suicide bombing at a CIA base in Afghanistan have roiled the intelligence community. International Spy Museum historian Dr. Thomas Boghardt discusses with SpyCast host and CIA veteran Peter Earnest how these incidents unfolded and their implications for intelligence reform.

Find past SPY Casts here: http://www.spymuseum.org/programs/spycast.php

Q&A Amy Knight author of How the Cold War Began: The Gouzenko Affair and the Hunt for Soviet Spies. Learn more  about Gouzenko and ask the author your questions at SPY on Wednesday January 20th.

Q: Who was Igor Gouzenko?

A:  Igor Gouzenko was a code clerk for the GRU, Soviet military counterintelligence, in Ottawa, Canada.

Q:  How and why did he defect?

A:   He defected in September 1945 with a large number of secret documents by turning himself in to the Canadian RCMP. 

Q:  Why was his defection so important in “starting” the Cold War?

A:   Gouzenko’s defection had a huge impact, contributing to the growing Cold War between the Soviets and the West, because he had clear proof that the Soviets had an extensive espionage operation in North America.

Q:  Beyond the documents Gouzenko defected with, how did the western intelligence agencies utilize him afterward?  Did his training as a cipher clerk provide any unique opportunities?  

A:   Gouzenko’s training as a cipher clerk as such did not offer western intelligence unique technical opportunities to learn more about Soviet espionage, but his broader knowledge about what the Soviets were up to was seen as invaluable to western intelligence.

Q:  What became of Gouzenko in his later years? Did the Soviets ever attempt any known acts of retribution against him?

A:   Gouzenko’s use to the west gradually declined because his knowledge became outdated.  He lived with his large family under an alias in a town near Toronto and became very embittered with Canadian authorities, who he thought did not treat him fairly.  The Soviets never attempted to go after Gouzenko, as far as I know.  Stalin reportedly ordered that Gouzenko be left alone because an act of retribution would make the Soviets look bad.

 Dr. Thomas Boghardt, Historian

In 1894 the French army obtained a letter revealing that a high-ranking officer was selling secrets to Germany. Suspicion fell on Captain Alfred Dreyfus, a Jewish officer. Ignoring the fact that Dreyfus’ handwriting did not match the letter, an anti-Semitic court convicted him of treason and imprisoned him on a barren island.

Eventually the truth emerged: the real traitor was Major Ferdinand Esterhazy, a close friend of an officer in the French Intelligence Bureau. But the military ignored this new evidence until public pressure forced a retrial. Once again, Dreyfus was convicted, and only a presidential pardon eventually secured his freedom. But it took another century until French President Jacques Chirac offered an apology for Dreyfus’ maltreatment, and officially rehabilitated him in 2006.