Foreign Relations of the United States: Diplomatic Papers, 1942, The American Republics, Volume V

862.20225/620

Summary of Memorandum on German Espionage Agents in Chile⁶¹

[Washington,] October 28, 1942.

This memorandum presents detailed and irrefutable evidence concerning the activities of 18 Nazi espionage agents in Chile and other persons associated with them in various ways in their activities.

Information was given the Chilean Foreign Minister as to the manner of operation of these agents on Chilean soil, as to their identity, associations, whereabouts, means of concealment, and other pertinent details.

Especially, detailed information was given to the Foreign Minister in this memorandum concerning the types of information which these agents send from Chile to Germany clearly showing the danger which their transmission constitutes to the security and shipping of many of the other American republics, including the United States. To quote from the memorandum itself, “the following types of information have been transmitted to Germany:

(1) Boat arrivals and departures from ports on the West Coast of South America;

(2) Information on the activities of the United States Government in connection with military and other aid furnished to the countries on the West Coast of South America;

(3) Information relating to the exports of the United States;

(4) Information on defense measures taken by Latin-American countries;

(5) General information from the United States;

(6) Political information, chiefly pertaining to Chile.”

The memorandum clearly shows that these agents in Chile relayed to Germany information received from other Axis agents operating in Argentina, Chile, Colombia, Ecuador, Guatemala, Mexico, Nicaragua, Peru, Venezuela, and the United States.

Evidence is contained in this memorandum that this ring of agents in Chile transmitted to Nazi spies in the United States instructions for their activities against the security of this country and the hemisphere, and helped to arrange for the development of communications and the obtaining of secret materials used by agents within the United States.

Certain members of this ring of agents operating on and from Chilean soil are shown in this memorandum to have made frequent journeys to other American republics in order to assist in the organization and maintenance of espionage activities.

Clear evidence was presented to the Foreign Minister that this ring of agents had received from Germany instructions to undertake the employment as spies and traitors to their own countries of nationals of American republics, including Chile itself.

Specific information was given to the Chilean Foreign Minister concerning the use of the Chilean mails by such agents, especially in their contacts with agents in other American republics, including the United States. Even post-office box numbers in Chile were given.

It was shown that this espionage group had well-established contacts with Nazi agents operating in the Far East, contacts carried on with the assistance of the Japanese. The names of persons who carried on this activity were given, along with much detail.

Information was given in detail concerning relations of this Nazi espionage ring, including Chilean citizens, to Japanese espionage agents in South America.

Information was given concerning the person who had been charged with developing a system of agents in the coastal towns of Chile for reporting on ship movements in those ports to be transmitted to Germany.

Information was given to the Foreign Minister of Chile concerning the organization on Chilean soil of a unit directed by a secret section of the High Command of the German army, charged with sabotage. This activity, organized on and directed from Chilean soil, affects not only Chile, but also the republics of southern South America and the West Coast.

There follow some details as to personalities and the working of the system.

As is well known, a principal interest of German espionage is the collection of information with regard to the movements of United Nations and neutral shipping. In Chile, the pattern was very similar to that established by German intelligence in many parts of the world. An important espionage center was the Chilean branch of the North German Lloyd, Compañía Transportes Marítimos. The Chilean company has legally severed its relationship with the Norddeutscher Lloyd, but the espionage activities continued. The system was developed by a North German Lloyd official, manager of the Compañía Transportes Marítimos, Friedrich von Schulz-Hausmann. Schulz-Hausmann has since moved to Buenos Aires, where he is active as a Nazi espionage agent.

The German manager succeeding Schulz-Hausmann was Bruno Dittmann, who was arrested last week in Chile, along with certain other employees of the Compañía Transportes Marítimos. Numerous other spies, some of them in key positions, have had contact with this office. Although there was no German shipping business in Chile, a large staff was maintained.

The pattern of this kind of activity has now become well-known. German commercial firms acting as blinds for espionage activities maintain contact with some member of the German diplomatic mission in the country in question. Such was the case in Chile, the officer of the Embassy being Ludwig von Bohlen, Air Attaché. Also concerned was Walter Boettger, the German Commercial Attaché. Boettger is also a high official of the Nazi Party in Chile, having at one time been Landeskreisleiter.

Bohlen cooperated closely with Japanese agents, maintaining close contact with the Japanese Military Attaché in Santiago, an important figure in Japanese espionage. Bohlen also made use of the diplomatic pouch of an ostensibly neutral nation. Also deeply implicated was the German Consul General at Valparaiso, von Pochhammer.

Thus, the participation of German diplomatic and consular personnel was completely demonstrated.

This group in Chile had contact with the German spy Luning, now under sentence of death in Cuba, also with other known German agents in Cuba, as well as in a number of the American republics, including the United States.

Thoroughly linked with elements of German espionage throughout the hemisphere, and having extraordinary facilities for communication with Germany, the Nazi spy ring in Chile was set up to act as a transmitting agency for espionage information going from the Western Hemisphere to Germany. It was not concerned primarily with reporting to Germany on matters Chilean, but with ship movements in many parts of the world and with the development of the world potential and military, naval and industrial activities of the United States. However, in numerous instances, information which was specifically damaging to Chilean national interest was conveyed by the spies to Germany.

In order better to cover up its activities, this ring drew in a number of Chilean citizens of German extraction, notably from the solid German districts of south central Chile.

Not only in Cuba have agents connected with this ring been apprehended, but also in the United States, Brazil, and elsewhere.

It should be noted that all this time, owing to the fact that Chile maintained diplomatic relations with the Reich, it was possible to transmit such espionage material to Germany through the Embassy.

This group in Chile was in contact with Walter Giese, in Ecuador, who was expelled by that country some time ago, fled to Argentina and has returned to Europe. The ring was also connected with an agent arrested and expelled by the government of Peru.

The financing of operations was carried out through the firm of O. Osterloh in Valparaiso, which maintained an account in the Banco Alemán in Buenos Aires. Money was actually distributed by various means. On one occasion, funds were transported for this ring by a Japanese diplomat.

From time to time, especially since June 30 (when this memorandum was handed to the Chilean Foreign Minister), further detailed information has been given to the government of Chile on the activities of enemy agents.

61. Summary by J. R. Toop, Division of the American Republics, of the memorandum handed to the Chilean Minister for Foreign Affairs by the American Ambassador on June 30. Copy of memorandum was transmitted to the Department by the Ambassador in his despatch No. 3931 of July 17; received July 27.