the summer of 1940, as British pilots fought desperately for the
skies of southern England, the battle was joined on a very different
front, thousands of miles from the coast of Kent.
It was fought through the political salons of Washington DC, the
boardrooms and the smoky nightclubs of New York.
The protagonists had no uniform save that of a well-tailored suit;
their weapons were native cunning, a plausible manner, and, from
time to time, a concealed revolver.
This was the secret battle for America, ordered by Winston Churchill
himself, and the fate of the free world hung upon it.
Today, we can reveal the untold story of how British agents went to
war on Wall Street, a story pieced together from a remarkable
collection of secret intelligence reports lying untouched for
Uncovered by the MoS, the documents show how British agents took on
Nazi sympathisers in the US with a masterful campaign of dirty
tricks and disinformation, how they outmanoeuvred Hitler’s network
of American allies and how they, ultimately, destroyed the Third
Reich’s powerful business and intelligence empire across the water.
documents show how British agents, headed by Highland clan chief
Donald MacLaren, took on Nazi sympathisers in the US]
Today, amid talk of special relationships and historic links, few
remember that a sizeable part of American opinion was pro-German,
even as Europe burned – or that many well-placed Americans were
There was a strongly held belief, particularly in corporate and
financial life, that the Nazis were the best bulwark against the
advance of Communism.
In fact, America and its vast industrial output were vital for the
Nazi war effort. German companies ran extensive US subsidiaries and
supplied the Third Reich with pharmaceuticals, chemicals and the
latest technology, directly or through South American subsidiaries.
The Third Reich needed information, too. Long before the outbreak of
war, German firms had placed networks of deep-penetration agents
across the American business world.
There was open sympathy for the German cause and it extended to the
very top of American society.
Sullivan & Cromwell, a powerful New York law firm, brokered numerous
deals between American business and the German companies that helped
bring Hitler to power.
The partners included John Foster Dulles, who later became Secretary
of State, and his brother, Allen Dulles, America’s wartime
spymaster, who became the first head of the CIA.
Standard Oil, founded
by the Rockefellers, was entwined with IG Farben, Nazi Germany’s
most powerful conglomerate. Brown Brothers Harriman, the oldest
private bank in the United States, was connected to Fritz Thyssen,
the German steel magnate who had financed Hitler.
Thyssen ran his
American business through the Union Banking Corporation, based in
New York. Its directors included Prescott Bush, father of President
George Bush and grandfather of President George W. Bush.
Henry Ford, founder of the Ford Motor Company, was the author of the
anti-Semitic pamphlet, The International Jew. He received a medal
from Nazi Germany in 1938. Hitler kept a portrait of him in his
All this, declared Winston Churchill, had to stop. The man charged
with tackling the Germans’ formidable operation was Donald MacLaren,
a Highland clan chief. Charming, persuasive and physically imposing,
MacLaren was a skilled operative who established a network of 150
agents across the Americas in the early years of the War on behalf
of British Security Coordination (BSC), the British intelligence
organisation in the US. Working closely with George Merten, a German
anti-Nazi, his mission was to report on Nazi-American business
By training, MacLaren was an accountant, a vital skill for
industrial counter-espionage. But he was no grey man. A snappy
dresser with a taste for good food, wine and cigars, MacLaren
relished his time in Manhattan and entertained his contacts at 21,
an upmarket restaurant a few blocks from the British intelligence HQ
at the Rockefeller Centre.
Their enemy was IG
Farben, the friend of Standard Oil. Born out of a merger between
Bayer, BASF, Hoechst and Agfa, IG Farben was the largest and most
powerful company in Europe and the biggest chemical conglomerate in
the world, producing the basic components of a modern industrial
state: explosives, film, plastics, fuel, rayon, paint, pesticides
and much more. Including poisonous gases.
Without IG Farben, Nazi Germany could not wage war. Hermann Schmitz,
its CEO, was one of Hitler’s earliest backers. IG Farben designed,
built and ran the company’s concentration camp at Auschwitz, known
as Auschwitz III, making Buna, or artificial rubber. Its managers
oversaw tens of thousands of slave labourers in conditions of
extreme brutality, forced to work until they died or were despatched
to the gas chambers to be killed with Zyklon B – a patent owned by
Hermann Schmitz was also a director of the mysterious Bank For
International Settlements, based in Basel. The BIS, which still
exists, was a key point in the secret channels between the United
States and the Nazis.
Naturally, IG Farben went by a different name in America, operating
as a company known as General Aniline and Film, or GAF.
And helped by its association with Standard Oil, GAF extended its
tentacles into the heart of the business, legal and political
establishment, sending diplomatic and industrial secrets – plus huge
profits – back to Berlin. MacLaren, then, was facing formidable
opposition, and not just from Nazi agents. The mandarins of the
State Department were obsessed with maintaining America’s neutrality
and they instructed J. Edgar Hoover, the head of the FBI, to refrain
from any collaboration with Britain.
The powerful Irish and Catholic lobbies were violently anti-British,
none more than Joseph Kennedy, US ambassador to London. A pro-Nazi
lobby, the German-American Bund, boasted celebrity supporters, such
as the aviator Charles Lindbergh. At its peak, the America First
Committee, the most formidable isolationist lobbying organisation,
had several hundred thousand members, including future President
MacLaren decided to use the same tactics as the Germans. He, too,
became a fake businessman and, using an alias, claimed he wanted to
establish a relationship with GAF.
His first attack was
the work of a classic agent provocateur. The GAF directors, he
discovered, were split into two factions over how they would protect
their interests should America enter the war. MacLaren, who by now
was close to a number of GAF board members, began leaking and
fabricating information to set one faction against another.
This, he later said,
resulted in one group racing the other to Washington to report the
wicked activities of their colleagues to the Department of Justice.
Each faction denounced the other as working for the Nazis; each was
MacLaren’s masterstroke, though, was a publicity blitz against IG
Farben that finally forced the US authorities to take action.
It was in spring 1942, that BSC launched a 70-page pamphlet called
Sequel To The Apocalypse, a taut distillation of MacLaren and
Merten’s investigation of IG Farben’s American networks. Booktab, a
BSC front company, published 200,000 copies, on sale at 25 cents,
the striking cover featuring the four horsemen of the Apocalypse,
one holding a torch aloft, whose smoke spelled out ‘IG Farben’.
The contents were explosive. They revealed, for example, the role of
IG Farben in promoting the war, and the huge profits it was making
from the destruction. It also detailed the company’s web of links
with American household names, especially Standard Oil. With a
foreword written by Rex Stout, a popular mystery novelist, it sold
out immediately. Stout proclaimed that IG Farben’s American business
partners were traitors, working for Nazi Germany’s interests.
For GAF and Standard Oil, the pamphlet was a public relations
catastrophe. They immediately despatched teams of employees to buy
up copies. But it was too late. The US authorities felt obliged to
act; IG Farben’s business empire in America was closed down and its
subsidiaries placed on a blacklist. The US government also seized
2,500 patents from Standard Oil, on the grounds that they were owned
by IG Farben.
This was a massive setback for Nazi Germany, as it could no longer
use its American network to supply vital war materials.
Its US allies were named and shamed, causing a wave of revulsion –
especially as, by now, the United States was at war with Germany.
In many ways, Donald MacLaren seemed an unlikely spy – and it is
thanks only to a cache of yellowing intelligence papers that some
part of this story has been retrieved. The BSC archives were
deliberately destroyed after the war because they were judged too
sensitive for the public gaze. But MacLaren was as stubborn as he
was brave. He kept his papers.
Paradoxically, it was
his upbringing as a son of the manse that aided his work as a spy.
The teenage Donald helped out on his father’s parish rounds,
sometimes even ministering to the dying. Warm and convivial, he had
an unrivalled ability to get people to share their deepest
By 1938, MacLaren had moved to New York. His skills at forensic
accounting made him a natural recruit for BSC. New York in 1940 was
a magnet for Allied and Axis intelligence agencies. Its immigrant
populations provided natural cover for spies. It was dangerous work.
He once told his son, Donald, he had killed an enemy agent and
interrogated many more, but would not reveal where or when. ‘But
fortunately, I never had to torture anybody.’
MacLaren himself was keen to fight and obtained a commission with
the Queen’s Own Cameron Highlanders but British intelligence refused
to let him leave.
As the War ended, MacLaren went to Germany to build a legal case
against IG Farben executives. He submitted a series of lengthy memos
on the company and its leaders who, said MacLaren, embodied the dark
nexus of German industry and the Nazi war machine. MacLaren argued,
with remarkable foresight, that the way the Allies dealt with IG
Farben would determine the economic balance of power in post-War
‘We are dealing here ... with denazification and demilitarisation of
the heart and soul of the German war machine,’ he wrote.
In 1947, 24 senior IG Farben officials were tried for war crimes.
Thirteen were found guilty. Their sentences were derisory. Hermann
Schmitz received four years for ‘plunder’.
All IG Farben
executives were released by 1951 on the orders of John McCloy, US
High Commissioner for Germany.
Schmitz and his colleagues were warmly welcomed back to the German
business world. The Cold War meant revitalising German industry was
more important than punishing those complicit in mass murder.
IG Farben no longer legally exists. It was broken up into its
constituent companies. But they are more powerful than ever. BASF is
now the world’s largest chemicals company, with annual sales of
almost €80 billion. Bayer is the world’s biggest producer of
eventually moved to London, where he worked for the United Baltic
Shipping Corporation, becoming a director.
In 1950, he stood as the unsuccessful Labour candidate in the
Conservative seat of Kinross and West Perthshire.
He died in June 1966, aged 56, having never spoken publicly about
his wartime role, the risks he took and the remarkable service he
performed for his country.
© Adam LeBor
Tower Of Basel: The Shadowy History Of The Secret Bank That Rules
The World, Adam LeBor’s investigative history of the Bank For
International Settlements, is published by PublicAffairs.
This article was
taken from the