The Labor Branch of the Office of Strategic Services: An Academic Study from a Public History Perspective

Doria Marie Lynch, August 2007, University of Indiana, p.33-39

“By September 1944, the Allies recognized that Germany was not on the verge of
collapse as they had imagined. The realization dawned on Donovan and his OSS and
military counterparts that, without intelligence from inside Germany itself, the war might drag on endlessly.59 Now they were left with the question of how such a seemingly
impossible task could be done; after all, the OSS upper-level staff and British intelligence
had been saying for years that it could not and did not need to happen, that the risks were too great, that German security was too good. The internal divisions in the OSS, which were inherent ever since its inception and arrangement into a web of divisions, branches, groups, and subunits, finally became operationally apparent. When it came to one of the most crucial moments of the war, when Germany refused to collapse, there was only one branch in the entire OSS organization that had consistently prepared for the possibility of sending intelligence teams into the German heartland: the Labor Branch.60

Fortunately for Donovan and the Labor Branch, senior level OSS staff had finally
started to recognize the Branch’s value. William Casey, the OSS London Secretariat and
future director of the CIA, was the first high-level OSS staff member to call openly for
the infiltration of Germany based on the Labor Branch’s accomplishments and the insight they had gained over the past two years. As Casey recalled after the war, “the labor desk people were the only people who had any preparation for working into Germany. We had to turn to them to get information about the controls, the rationing, how the hell to stay alive.”61 In August 1944, during a trip through the Mediterranean Theatre of Operations, Casey commented on the Labor Branch:

These fellows here as in ETO [European Theatre of Operations] seem to
have shown more forward planning and recruiting for the penetration of
Germany than anybody else….I like the way the Labor Desk is integrated
into the Central European Division at Bari. They run their operations
jointly or in close collaboration with the appropriate geographic desk.

Casey reported that the Labor Branch had fashioned itself into the model branch of the
OSS: they worked in conjunction with other agencies and branches and were willing to
share information they obtained with other groups in the OSS and other Allies’ intelligence services.62 This kept the Labor Branch apprised of military, political, social,
and economic developments across Europe and especially in Germany and, as a result,
made it the only branch prepared to infiltrate the Reich. Casey would thus become one of
the Labor Branch’s greatest supporters and help to make it a central component of the
OSS, finally opening his co-workers’ minds to the value of labor groups in intelligence.
While Casey alone was not responsible for the infiltration of Germany, his support for the Labor Branch’s plans did propel those plans into action. In short, Casey demonstrated the power of the perceptive individual in a bureaucracy.
Two days before Casey sent the above memo, the Labor Branch finally received
approval from the OSS and SHAEF to send teams into the Reich. This plan, code named
Faust (after Johann Goethe’s famed literary character), had been in the planning stages
since October 1943. The agents involved were all recruited by Arthur Goldberg and his
staff, spoke fluent German, and had “experience in underground activities in Germany”
and contacts with “anti-Nazi groups.”63 The first Faust mission to be deployed was called
Downend and involved the very first OSS agent (and Allied agent in general) to infiltrate

Downend reflected the ways in which the Labor Branch was able to prove its worth and served as an example for future mission planning. Launched on September 1, 1944, Downend parachuted Jupp Kappius into the industrial Ruhr region of northwest Germany (see Appendix, Fig. 2). He was a German émigré forced to flee Germany with
his wife in 1937. As active members of the International Socialist Militant League, an
extremist socialist group that believed capitalism to be morally wrong, they were among
the first to be persecuted by the Nazis and seek freedom elsewhere.64 Kappius had found
the socialist and labor circles in London welcoming, and was quickly seen by Goldberg
and the others in the Labor Branch as a reliable and trustworthy anti-Nazi. As a result,
Kappius was recruited by the London Labor Branch in 1943.

Kappius’s mission objectives were extensive and would be difficult for one man
to carry out alone: “you will create an underground organization for the purpose of (1)
promoting internal resistance to the Nazi regime; (2) committing acts of sabotage against
the war effort; (3) encouraging subversion in all its forms.”65 Nonetheless, Kappius
hurled himself out of a Royal Air Force plane around midnight on September 1, 1944,
and set about his assignment. After landing in a field, Kappius buried his parachute, took
a two-hour nap, and then caught a train to his hometown of Bochum. Once here he
located his safe house, home of a young ISK couple; while associating with known ISK
members posed a risk to Kappius and the mission, the Labor Branch had no other option
when setting up the safe address. From this location he began making contacts in local
labor circles.66

Despite the odds stacked against him (being the first Allied agent to infiltrate
Germany, operating alone in the Nazi heartland, associating with known socialists—the
list goes on), Kappius succeeded in his mission to a remarkable degree. In the seven
months between his landing and his being overrun by the U. S. Army. He organized a group of seven men, each of whom had contact with two to five other men, who were shop stewards or union organizers in the Ruhr. He established sources in Essen and Witten also, including the director of a mining firm, a director of the Deutschebank, and a high official in Krupp. These men were used to collect information, pass on propaganda, and foster slow-downs and sabotage….He gained information also from ISK couriers from Hamburg, Bremen, Berlin, Goettingen, Kassel, Darmstadt, Ulm, and Frankfurt-am-Main.67

Unfortunately, because of communication difficulties, much of the information Kappius
gleaned from his contacts was not available to the Allies and the OSS until after he was
assimilated behind U. S. front lines.

Kappius had trouble getting information to his OSS handlers because at this point in time there were few reliable options for sending out information via radio or telegraph.68 Instead, in the early OSS infiltration missions into Germany, the agents had to rely on couriers to shuttle messages back and forth between the agent and OSS officers, usually located in a neutral country. Kappius had two courier agents, Kappius’ wife Aenne and another woman, Hilde Meisel. The couriers infiltrated Germany on foot via the Swiss border, made their way to Kappius in the Ruhr (a distance of a few hundred miles), and then returned with parcels of information to Switzerland. They only made this trip twice, but along the way Anne Kappius also managed to gain information from other labor resistance members. In essence, however, Jupp Kappius carried out most his resistance work out of contact with the Allies.

While the OSS did not receive copious amounts of information from Kappius, the information it did receive about industrial strength, manufacturing, underground groups, and troop movements was promising. More importantly, the Labor Branch had proven that Germany could be penetrated. While there were glitches, most notably with
communications into and out of the Reich, Kappius had not been captured; on the contrary, he had managed to blend into the populace with little apparent difficulty and set up a network of internal spies and saboteurs. These achievements were highly significant and encouraged the Labor Branch and the OSS to prepare for an onslaught of infiltration missions.

During Kappius’s deployment, William Casey was so impressed with the Labor Branch’s ability to work with other branches and organizations and their success in infiltrating the Reich that he began to push for the rearrangement of the Secret Intelligence Division in the Labor Branch’s image and under its tutelage, at least when it came to infiltration operations. Casey recognized that, if the penetration of Germany was to succeed, intra-agency cooperation like that seen in the Labor Branch would be needed, but on a larger scale. As early as September 1944, Casey recommended appointing a single geographic authority for the infiltration of Germany, establishing a separate penetration task force using all branch resources, and designating someone to run the recruiting drive for agents capable of infiltration missions.69

Then, in November 1944, the Secret Intelligence Division was reconstructed. Now called the Division of Intelligence Procurement (DIP) the Labor Desk nucleus which had been assembled over a period of two years by George O. Pratt was given direction of the SI [Secret Intelligence] German program…it was placed in charge of all SI London Desks, Air Operations, Bach Unit, and the Labor Desk field missions….In addition, R&D [Research and Development], responsible for equipping agents, and C&D Branch [Censorship and Documents], responsible for manufacturing documents, were to work full-time for DIP.70

This group would coordinate all Secret Intelligence resources in London and direct and
control all penetration operations. No longer were there to be a multitude of branches
working on disjointed intelligence operations. Instead, like the Labor Branch, which had
pooled its resources with other branches and stepped outside its role of gathering labor
intelligence and into the realm of planning operations in foreign countries, the DIP would coordinate and consolidate as many areas tied to secret intelligence as possible and use their combined strengths to get into Nazi Germany.71

Not surprisingly, the first OSS missions under DIP direction into Germany had strong Labor Branch connections: the Labor Branch had recruited or trained the agents, designed their cover stories, or determined their mission objectives.72 In any case, the
Labor Branch had clearly laid the foundation for German infiltration by obtaining
information from POWs, German exiles, and American agents, as well as training these
individuals to enter Germany. As with the Downend mission, all further missions had
their ups and downs. As technology improved, couriers gave way to the wireless telegraph, which in turn gave way to Joan/Eleanor, a high frequency radio transmitter
which enabled more agents to get more information out of Germany. As pilots and agents
gained confidence and experience, their rates of successful parachute drops improved.
The first operative who reached Berlin even managed to establish himself within the
ranks of the Nazi Sicherheitsdienst, or Security Service. The OSS had done what upperlevel officials had once thought impossible: entered the enemy’s heartland and infiltrated a key organ of the German fascist state.73

57 Gerhard L. Weinberg, A World at Arms: A Global History of World War II (Cambridge:
Cambridge University Press, 1994), 752.
58 Mauch, The Shadow War Against Hitler, 168.
59 Office of Strategic Services, Division of Intelligence Procurement Air Operations Final Report, Appendix 1, June 7, 1945, Box 49, Entry 110, RG 226, NA.
60 By the end of the war, other segments of OSS had infiltrated agents as well. Initially, however, the Labor Branch was the only group fully prepared to begin the infiltration. Other OSS branches that participated in the infiltration included the Seventh Army Detachment, which specialized in so-called tourist missions, and Special Operations, which infiltrated a negligible number of missions. See Persico, Piercing the Reich, 113, 319.
61 William Casey, interview by Joseph Persico, August 27, 1976, transcript, Folder Casey, Box 1,Persico Papers, Hoover Institute, Stanford, CA, 9-10.
62 William Casey to David K.E. Bruce and Colonel J.R. Forgan, OSS Memorandum, August 21, 1944, Folder 21, Box 565, Entry 92, RG 226, NA.
63 Mauch, The Shadow War Against Hitler, 179.
64 Kappius was so opposed to capitalism that, when he was recruited by the OSS, he would only accept five pounds per week to cover his living expenses; he refused to accept a wage. See Persico, Piercing the Reich, 75.
65 Ibid.
66 Ibid., 76-77.
67 United States War Department, The Overseas Target, 309.
68 MacPherson, American Intelligence in War-Time London, 176.
69 William Casey to David Bruce, OSS Memorandum, September 11, 1944, Folder 61, Box 220, Entry 92, RG 226, NA.
70 Captain Robert Thompson to George O. Pratt, OSS Report, Final Operations Report, May 26, 1945, Box 49, Entry 110, RG 226, NA.
71 MacPherson, American Intelligence in War-Time London, 172.
72 The Labor Branch had, over the previous two years, even set up a division within itself that handled creating cover stories and documents for Labor’s agents. Known as Bach, this unit became the central group for creating and verifying all cover and documentation for any agents entering Germany. For information on what BACH did, and how, see Persico, Piercing the Reich, 40-44.
73 Peter Karlow to Joint Chiefs of Staff, OSS Memorandum, June 5, 1945, Folder 59, Box 14, Entry 99, RG 226, NA.”

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