This Undercover Spy Operation Helped Foil a Nazi Plot in 1930s L.A.

This Undercover Spy Operation Helped Foil a Nazi Plot in 1930s L.A.
Peter Faricy

In the spring of 1933, a police report submitted to LAPD captain William "Red" Hynes noted "considerable quantities" of Nazi literature littering the streets of downtown Los Angeles. A new group in town, Friends of the New Germany (FNG), was thought to be the source of this sudden burst of Nazi propaganda. Over the next several weeks Hynes, captain of LAPD's "Red Squad" intelligence unit, assigned men to keep an eye on the new group. On Aug. 1, 1933, he sent detective R.A. Wellpott undercover to attend FNG's second public meeting.

The meeting was held at 902 S. Alvarado St. in a mansion that had been converted into a German-American community center, of sorts. It housed an old-style German restaurant, the Alt Heidelberg; a new bookshop, the Aryan Bookstore; and a meeting hall. Approximately 100 people gathered in the hall for the meeting. Wellpott reported that a makeshift stage was set up in the hall, with a speaker's podium flanked by an American flag, the imperial German flag and the Nazi (swastika) flag. Fifteen young men dressed in brown shirts, "whose arms bulge with excess power," were scattered about the hall, "guarding" the meeting.

The meeting began with a phonograph recording of a German march. The West Coast leader of Friends of the New Germany, Robert Pape, called the meeting to order. A keynote speaker spoke on "the German-Jewish conflict," explaining that Nazis wanted to prevent the "bastardization of Germany" by eliminating Jews from power. When several people in the audience jumped up in protest, they were swept out of the meeting by the brown-shirted attendants. The meeting resumed with recorded speeches by Hindenburg and Hitler played on the phonograph. At the end of the evening, the attendees rose and gave the Nazi salute while the new German national anthem was played.

FNG's political activities in Los Angeles raised concern among Jewish and non-Jewish groups alike. The Jewish community newspaper B'nai B'rith Messenger (no relationship to the fraternal order of the same name) took notice of Nazi activity in the city in April. An article, "Hitlerites Organize Branch Here," claimed that Nazi propaganda agents had been sent to Los Angeles by Berlin. The paper even printed the alleged agents' names and addresses on the front page and called for their immediate deportation.

The Jewish press, the secular press, the Red Squad and local Jewish groups were just some of the groups in Los Angeles that viewed Nazi activity in the city with concern. Another group also was watching with concern: the city's veterans organizations. In the spring and summer of 1933, Friends of the New Germany focused its recruitment efforts on local veterans. FNG leaders assumed that U.S. veterans would flock to join their group, presuming that the former military members felt just as betrayed by the American government over recent cuts in their veterans' benefits as the FNG themselves had felt with the Weimar government in Germany at the end of World War I.

Herman Schwinn, West Coast leader of the German American Bund, 1934-1941
Herman Schwinn, West Coast leader of the German American Bund, 1934-1941
CRC Papers

Among the first veterans to be approached by FNG officers was the former U.S. Army lieutenant John Schmidt. Schmidt was the perfect potential FNG recruit. Born in Germany in 1879, Schmidt was a career soldier. In his teens, he had served in the German imperial army. In 1900, Schmidt immigrated to the United States and enlisted in the U.S. Army after his naturalization was complete in 1908. Even though Schmidt was an American citizen, FNG leaders believed that loyalty was determined by blood, not by the artifice of naturalized citizenship. He was precisely the type of recruit FNG was hoping to win.

However, FNG leaders were mistaken. Schmidt was neither disloyal nor angry. True, he had been born in Bavaria, and he was a U.S. veteran. Schmidt even had cause to be disillusioned with the U.S. government. Following the war, he had been hospitalized for six years with what today would be considered post-traumatic stress disorder. He suffered from chronic physical and emotional pain as a result of his military service and in 1930 had lost most of his disability pension when, in the wake of the stock market crash, Congress made sweeping budgetary cuts, which significantly reduced benefits to disabled veterans.

Yes, Schmidt should have been the perfect recruit for FNG; but he wasn't. Schmidt was a loyal and patriotic American. He was a member of the Americanism Committee and one of the city's several veterans organizations, the Disabled American Veterans of the World War (DAV). Schmidt was committed to the nation's defense, even as he carried the emotional scars, physical disabilities and financial wounds from his World War I service.

On Aug. 17, 1933, Schmidt went over to FNG headquarters on South Alvarado Street to check out the group. There he met FNG gauleiter Robert Pape, Herman Schwinn and bookstore co-owner Paul Themlitz. Schmidt then submitted his first written report on FNG to fellow Americanism Committee member Leon Lewis. Using code name "11," Schmidt described what he learned about Friends of the New Germany to Lewis. FNG's mission, Schmidt reported, was to fight communism. FNG leaders, he wrote, "show[ed] me plenty of literature proving without a doubt that Communism was part of the Jewish plan of things and that therefore we must all combine to show the Jew as the author of all our troubles in America and throughout the world." Pape told Schmidt that the purpose of FNG was to drive Jews and Catholics out of government in the United States and replace them with German-Americans. Pape told Schmidt that he was confident that, once in power, German-Americans would lead the movement to bring Hitlerism into America.

German American Bund meeting, 1935
German American Bund meeting, 1935
CRC Papers

Pape was concerned that veterans misunderstood Friends of the New Germany. He told Schmidt that recent resolutions passed by the Veterans of Foreign Wars (VFW) and the American Legion denouncing Nazism were misguided and misinformed. FNG was committed to defending Americanism and fighting communists, Pape told Schmidt. FNG wanted to ally with American veterans against their common enemy. Pape encouraged Schmidt to bring some of his American Legion and VFW friends to FNG's next membership meeting to help forge new friendships, and he invited Schmidt to speak at the meeting. Schmidt agreed to both requests.

Schmidt returned to 902 S. Alvarado St. a few days later with his wife, Alyce. They dined at the Alt Heidelberg restaurant. The ambience and the food, Schmidt wrote in his reports, were reminiscent of the old country. The Alt Heidelberg was decorated in the style of an old German beer hall. Dinner there was a Depression-era bargain: three courses for 60 cents and beer for a nickel. The restaurant attracted an older German-American crowd, but lately, a rowdier, younger crowd of pro-Nazi German nationals had also been frequenting the place.

During the dinner, Alyce got up and left the table to find the powder room. Making her way up the stairs to the second floor, she was stopped by a woman who was agitated to find Alyce on the landing.

"Verboten!" Alyce was told. Alyce turned around and went back downstairs to her table.

Schmidt wrote that he had the distinct impression that there were secrets on the upper floors: "I am sure they have arms and equipment someplace. If it is in the house, I will know it soon."

Schmidt's early visits to FNG convinced him that Friends of the New Germany was no friend of democracy. He related his early observations to the Disabled American Veterans post commander Captain Carl Sunderland and DAV state adjutant Major Bert Allen. Both men agreed to join Schmidt in his undercover investigation of L.A.'s Nazis.

Sunderland accompanied Schmidt to lunch at the Alt Heidelberg a week after Schmidt's first visit, in early September, to meet with bookstore owners Themlitz and Hans Winterhalder. At the end of the meeting, Sunderland was convinced that the Nazis were smart, systematic and dangerous: "You know, Schmidt, when you first brought me down here, I thought you were playing a joke on me, and when I first met these guys, I thought it was all kid's play. Now I'm convinced that if they ever find you out, they are going to massacre you so that your own mother wouldn't know you. These fellows are covering up an awful lot and I surely would like to get to the bottom of this matter."

Sunderland went on: "Such a mob has no place in the United States. These men are not only out to drive the Jews from their public positions and destroy their properties but also they would not stop at starting any kind of trouble in this country which would serve their purpose. ... The[se] Nazis are not just against Jews. ... [They are] out to overthrow the United States."

Anti-Hollywood handbill, 1938
Anti-Hollywood handbill, 1938
CRC Papers

Socializing with FNG officers proved as informative as attending FNG meetings. Alcohol loosened them up. They shared more with their new American friends than they probably should have concerning the secret political objectives of their organization. One evening in late September 1933, the DAV volunteers learned about FNG's plans for der tag, "the day" when the Nazi revolution would begin in the United States. Sunderland, the Schmidts, and the Allens, with their wives, went out with Winterhalder and two FNG officers for an evening of drinking, dancing and political conversation to the Loralei Restaurant, a German-American beer hall patronized by Nazis. According to reports filed by all three DAV informants, FNG was training a private militia to foment a Nazi-led insurrection in the United States. The plan called for FNG to incite unrest among American workers to hasten a communist insurrection, whereupon FNG and veteran allies would come to the rescue, "consolidat[ing] and march[ing] in military phalanxes to take the government."

"The kikes ... run this country," stormtroop commander Diederich Gefken told his new DAV friends. Jews, Gefken asserted, were responsible for the rotten deal vets were getting, and he was confident that American veterans were ready to vindicate themselves just as German veterans had done. He told Sunderland, "Thousands of stormtroopers in the U.S. were ready to stand shoulder-to-shoulder with U.S. veterans when the time came ... to help them take back the government from Communists and Jews." The uprising would start in cities where FNG was most active, like St. Louis, Chicago, New York and Los Angeles, and then spread across the country. Within two weeks of the insurrection, Protestant churches in the United States, led by the Lutheran Church, would launch a boycott of Jewish businesses. "That will take care of the 'Goddamn jews [sic].'"

Gefken, Pape and Schwinn also were eager to infiltrate the Los Angeles National Guard as part of their preparation for der tag. They peppered Schmidt with questions: How many Jews were in the U.S. armed forces? How many men were in the local National Guard? Would the National Guard be loyal in an uprising that targeted only Jews? Gefken and his friend Zimmerman were particularly eager to infiltrate the machine-gun company of the California National Guard to learn the American system of military training firsthand. Pape wanted to get into the National Guard to learn telegraphy. Could Schmidt get FNG men into key National Guard units in Southern California so that they could propagandize from within?

FNG had orders to secure the blueprints for the National Guard armories in San Diego and San Francisco. Gefken asked Sunderland if he could get the floor plans of the Southern California armory and of the National Guard aircraft unit in San Diego. Several FNG members had already joined the National Guard in San Francisco, Gefken reported, and had acquired the floor plan of the Northern California armory, which showed the precise storage location of munitions, supplies and weapons in the building.

Sunderland asked Gefken how FNG planned to acquire more arms. Gefken replied, "Well, it is difficult to smuggle them into the United States on ships. Ships have to go through the [Panama] Canal, where their cargo is checked. Guns can be smuggled in from Mexico and Canada. All stormtroops have personal weapons, but we've been instructed not to carry them in public because that would violate resident alien laws. When the zero hour comes, we will not hesitate to bring them out." In reporting this conversation, Sunderland reminded fellow Americanism Committee member Lewis that the movie studios had explosives. He recommended that background checks be conducted on German studio workers and that the studios take steps to secure their explosives.

Schmidt, with Lewis' assistance, proved his worth to FNG officers. Informing the National Guard's commander about the new recruits, Schmidt arranged positions for Gefken and Zimmerman in the machine gun company of the Southern California National Guard. Unfortunately, neither Gefken nor Zimmerman was admitted: Gefken because he had false teeth and Zimmerman because he could not promise to be punctual to drills because of his day job.

Nazi salute in court, Los Angeles Times, January 1934
Nazi salute in court, Los Angeles Times, January 1934
Los Angeles Times

FNG's Aryan Bookstore in downtown Los Angeles also was critical to the political preparation for "der tag." To passersby, the store was just a shop that specialized in books on National Socialism. In reality, the shop was a front for Nazi headquarters in Los Angeles. Many of the books, magazines and newspapers sold at the shop were published in Germany by the Ministry of Propaganda and exported to America to cultivate Nazism in the United States. The anti-Semitic content in this literature ran the gamut from rabid Jew-bashing to more subtle analyses of both contemporary events and world history that disguised their anti-Semitic agenda in the cloak of "academic scholarship." Schmidt found orders to Pape from New York on managing the shop: Bookshop personnel were all to be educated in National Socialism and were required to have read Mein Kampf. All bookstore personnel were to be American, and women were to do all the selling.

The back rooms of the Aryan Bookstore in Los Angeles housed the headquarters for Friends of the New Germany. Schmidt's pencil drawing of the store's layout showed the shop's small retail space in the front, with a door that led to the back workroom and several private offices for FNG leaders. Schmidt's daily reports indicated that the back rooms often were busier than the retail space. FNG leaders used the offices to conduct daily business, responding to correspondence from New York, planning their next public rally, and receiving a parade of local allies including German vice consul Georg Gyssling and leaders of domestic right-wing groups the FNG was courting. Schmidt noted that the doors to the offices were padlocked when they were not in use. Alyce Schmidt, who did most of her work for Pape in the reading room, listened in on backroom conversations and reported what she heard to Lewis of the Americanism Committee.

A few weeks after John Schmidt submitted his first report to Lewis on Friends of the New Germany, Lewis called Red Squad captain William "Red" Hynes and asked to meet him. Hynes was in a hurry when Lewis called but told Lewis to meet him in front of the captain's office at the Los Angeles Chamber of Commerce building, and Lewis could walk with him to his appointment at police headquarters. Lewis walked the few blocks from his office to the Chamber of Commerce building to meet Hynes. This was not the first time the two men had met. For several months, Lewis and Hynes had been sharing notes on Nazi activity in the city — literally. Hynes shared police reports with Lewis and allowed him to copy them. Lewis, on the other hand, had secured private funding to pay for Hynes' undercover man. As the two men walked briskly toward police headquarters, Hynes told Lewis that he did not have the funds to continue paying agent "M" anymore. "It will cost us $150 per month in salary plus expenses to maintain this operation," Hynes told Lewis, "and we just don't have the money right now."

Lewis told Hynes that he had discussed the matter with Irving Lipsitch, president of the Jewish Federation of Los Angeles. Lipsitch and Lewis had decided that Lewis, along with an unnamed local merchant and two other Jewish attorneys, would get Hynes the money he needed. "But, I'd rather that 'M' stay on your payroll," Lewis told Hynes. "I do not wish to have any direct dealings with a private detective."

"I don't blame you," Hynes replied. "And, of course," Lewis assured him, "there would be a piece of change in it for you, too." "That would be fine," Hynes said.

Was the "piece of change" that Lewis promised Hynes a bribe? Possibly. The LAPD was notoriously corrupt. It is possible that Lewis' offer of "a piece of change" was simply Lewis playing politics the way politics was played with the Red Squad. There is no further mention of payoffs to Hynes after this meeting. Hynes remained helpful to Lewis until the reform-minded mayor Fletcher Bowron disbanded the Red Squad in 1938.  

Gastube Restaurant, Deutsches Haus, Los Angeles
Gastube Restaurant, Deutsches Haus, Los Angeles
CRC Papers

On March 13, 1934, a parade of cars carrying studio heads, directors, producers, screenwriters and actors rolled past Hillcrest's unmarked stone gates at 10000 W. Pico Blvd. on the edge of Beverly Hills. The minutes of the meeting, found in the Los Angeles archive, list the attendees, which included top studio executives and filmmakers from MGM, Columbia Pictures, Paramount Studios, RKO, Universal Pictures and United Artists.

The dinner guests took their seats around the banquet table, where they found copies of the anti-Semitic Silver Shirt newspapers, Liberation and The Silver Ranger. Both papers viciously attacked the Jews of Hollywood as enemies of Christian America. The Silver Ranger was published right in Los Angeles, and both were distributed nationally.

After dinner, the group adjourned to a meeting room, where Leon Lewis reported on the behind-the-headlines details of the recent local court case that Lewis and his DAV colleagues had engineered to exposed Nazi activity in Los Angeles. Lewis told his audience that the veterans who had testified at the trial had infiltrated FNG under his guidance.

"We knew that the evidence regarding Nazi activity was not properly admissible," Lewis told his guests, but the judge had allowed evidence into the record anyway for the sake of the publicity the trial would attract.

Lewis went on to explain that the undercover operation had cost him $7,000. Lewis told the moguls that in order to maintain this "anti-defamation work," their financial support was required. Lewis proposed that a full-time publicity man be hired to work in the tradition of the Anti-Defamation League to fight Nazism in the city. This would relieve Lewis of the task and allow him to return to his law practice, which "had been shot to hell" in the previous six months because of the investigation.

His dinner guests were attentive. The Jewish executives of the motion picture industry did not need a primer on the implications of Nazis in Los Angeles or on the implications of anti-Semitism for themselves. They had been in the crosshairs of anti-Semitic attacks for more than a decade from Protestant and Catholic groups concerned that motion pictures, in the hands of "former pants-pressers and button-holers," presented a direct threat to American virtue. In fact, just six months earlier, Catholic Church leaders had organized a nationwide protest against the industry and threatened a national boycott of motion pictures if the Jews of Hollywood did not capitulate to a production code written by, and monitored by, the church's chosen representatives. At a meeting with the archbishop of Los Angeles in 1933, the church's lay representative, attorney Joseph Scott, warned the moguls that "the dirty motion pictures they were making, along with other invidious activities on the part of the Jews, were serving to build up an enormous case against the Jews in the eyes of the American people." Scott reminded them that certain groups in America were sympathetic to the Nazi purpose and were organizing to attack Jews in America, and that "what was going on in Germany could happen here."

Scott's warning may have been ringing in their ears that night at Hillcrest as they discussed Lewis' proposal. Rabbi Magnin, Judge Roth, Marco Hellman and Irving Thalberg all spoke up in support of the proposed program. Louis B. Mayer was emphatic about continuing the operation: "There can be no doubt as to the necessity of carrying on, and I for one am not going to take it lying down. Two things are required, namely money and intelligent direction. It [is] the duty of the men present to help in both directions."

Following Mayer's comments, MGM producer Harry Rapf moved that a committee composed of one man from each studio be appointed. Each studio selected a representative, resulting in a studio subcommittee: Irving Thalberg (MGM), Harry Cohen (Columbia), Henry Henigson (Universal), Joseph Schenck (20th Century), Jack Warner (Warner Bros.), Emanuel Cohen (Paramount), Sol Wurtzel (Fox) and Pandro Berman (RKO). The members of the new Studio Committee publicly pledged to support the fact-finding work for one year. Thalberg committed MGM to $3,500. Emanuel Cohen committed Paramount to the same amount and promised to speak to Jack Warner about a similar pledge. Universal pledged $2,500, and Berman promised that RKO would contribute $1,500, pointing out that RKO had only eight Jewish executives. The smaller studios — Fox, 20th Century and United Artists — each pledged $1,500. Phil Goldstone and David Selznick were asked to raise $2,500 each from agents and independent producers. In less than an hour, Lewis had secured $22,000 in pledges. The studio committee itself met monthly to review the content of any production that might exacerbate the rising tide of anti-Jewish sentiment in the United States.

The threat of Nazism catalyzed the wealthiest Jews of Los Angeles to political action. Beginning in March 1934 and continuing through the end of World War II, the Los Angeles Jewish Community Committee convened every Friday to hear reports from informants on escalating Nazi activity in the city and to deliberate on their response.

It took Lewis six long months to secure the funding. In doing so, he bridged a social chasm between the city's Jewish community and an unlikely political partner, the city's veterans, and transformed those former soldiers into "Hollywood's spies."

Excerpt adapted from Hollywood Spies: The Undercover Surveillance of Nazis in Los Angeles by Laura B. Rosenzweig (published September 2017), with permission from New York University Press. © 2017 by New York University.


Sponsor Content

Newsletters

All-access pass to the top stories, events and offers around town.

  • Top Stories
    Send:

Newsletters

All-access pass to top stories, events and offers around town.

Sign Up >

No Thanks!

Remind Me Later >