THERE IS NO DOUBT THAT Eppler and Sandstette were undone by their actions. Colonel Jenkins in his report of August 1942 highlighted this.
They were too intoxicated with the possession of so much money and too intent upon enjoying the ‘fleshpots’ of Egypt in the form of women and wine.1
This appears to have been true; why did Eppler act in such a risky manner? He must have known that it was dangerous to draw attention to themselves.
Long before he met Eppler, Sansom became aware of a Rifle Brigade Lieutenant buying people drinks in large quantities and paying in Sterling. The first report came from the Turf Club, a favourite haunt of British officers, an all-male establishment at 32 Sharia Adly Pasha.
[It] would not have looked out of place in St James’s street. A few minutes’ walk from there brought one to Shepheard’s Hotel, which after the Pyramids, was the most famous tourist landmark in Cairo.2
By the time Sansom got to the club the bird had flown. But he took away the money spent by the mysterious Rifle Brigade officer who had
… spent a few English pound notes and one fiver. There was nothing illegal in this, it just struck me as ‘odd’, for the forces were all paid in Egyptian currency. Apart from a few notes, probably sent by relatives in letters, English money was hardly ever seen.3
Using the barman’s description of the mysterious man, Sansom checked out the Rifle Brigade officers who could have been in Cairo at the time. He came up blank; however, while there were many reasons for someone masquerading as an officer, Sansom knew that spending that amount of money pointed toward shady dealings, perhaps espionage. But surely the Abwehr knew that the British forces were usually paid in Egyptian currency?
The only plausible explanation of the affair seemed to me that the Germans had made a colossal blunder of the most elementary kind. They had provided one of their agents with the wrong currency for the country in which he was operating.4
The Rifle Brigade officer was in fact Eppler, who by this time had only Sterling to spend. Several different people had been changing money for the two spies on the black market, although Albert Wahba, the pimp, seemed to be the main money changer. He boasted on one occasion that he was carrying ‘£15,000 in my pocket. I have to do all their business. They cannot do without me.’5
Eventually Eppler and Sandy were forced to spend British currency openly, as ultimately even the black market would not accept Sterling at any price.
Sansom had also found out the rate of exchange on the black market, and that, as one of his NCOs reported, ‘None of the usual operators will touch Sterling. They must think Rommel has got us licked.’6 The money business was both a help and a hindrance to Sansom and his men.
I told the men to watch out for English money spenders in bars and cabarets … I warned them not to do anything that might put our quarry on his guard, and inevitably this hamstrung them somewhat. They could not go round asking direct questions about the currency-spending for fear that he would hear of it and be scared off. That was one reason why my men failed to get any lead. Another reason was that, as I had feared from the beginning the man we were after had realized he was suspected at the Turf Club.
I learnt afterwards that was the last occasion Hans Eppler wore British Army uniform in Cairo. So in looking for a Rifle Brigade subaltern we were chasing a phantom – although, of course, we were not counting on the spy always to wear the same kind of clothes.7
According to Eppler it was after the meeting with Anwar El Sadat and Hassan Ezzet on the houseboat that he learnt that some of the currency he had been supplied and had changed was counterfeit. He had just poured his four fingers of Scotch and was sitting on one of the deck bar stools when ‘Sami, the money-changer came up the gangway.’ After Eppler poured him a gin, Sami told him that his pounds were counterfeit.
‘Nonsense! What are you talking about?’ Eppler was stunned by more bad news.
After a lengthy discussion Sami said that he was still willing to get rid of Eppler’s remaining Sterling but that it would be ‘expensive’. On the black market they would have to know they were ‘duds’. ‘An hour later, we were with a really dirty crook. He took them for a quarter of their face value, but at least I was rid of them.’
The next day Eppler told Sandy what had happened; the latter’s reaction was pithy to say the least. ‘No radio contact, up to our arses in hot notes – if you ask me, some bastard is trying to set us up.’8
Meanwhile Sansom had the money left by Eppler at the Turf Club flown to England to be checked out by experts at the Bank of England. They traced the pound notes to deposits in neutral countries including Switzerland and Spain; the five pound note was a forgery, certainly a product of the German government.
The British security services were already aware that Germany was forging currency. Operation Bernhard was the codename given to the German plan to destabilise the British economy by flooding the country with forged sterling notes in £5, £10, £20 and £50 denominations. The plan was named after SS Major Bernard Kruger, who set up a team of counterfeiters from inmates at Sachsenhausen concentration camp, beginning in 1942. By the end of the war they had produced 8,965,080 banknotes including US dollars, with a face value of £134,610,810. The notes are believed to be amongst the best counterfeits ever produced.9
The scheme to destabilise the British economy was never put into effect; rather the currency were used to pay for strategic imports and to fund German secret agents operating abroad. One of the most famous and successful German spies, ‘Cicero’ Elyesa Bazna, a Turk of Albanian origins, was paid with counterfeit notes. L.C. Mayzisch wrote an account of his service as Bazna’s operator:
He had received from me notes to the value of £300,000, or rather over a million dollars at the then rate of exchange, in bundles of £10, £20 and £50 notes. After Operation Cicero was over I learned that nearly all these banknotes were forgeries …
The false notes were so well made that even bank managers fell for them. Our manager in Istanbul was not the only one to be taken in. It was only when they reached the Bank of England, and were examined by the experts of Threadneedle Street, that the truth was finally established.10
Sansom and Eppler were both shocked that agents should be given forged currency but it is clear it was near standard procedure within the Abwehr. However, the discovery did confirm Sansom’s suspicions that German agents were operating within the city. On his office wall he had a map of the city marked with pins where the forged bank notes had been used, and set up an operation to bring in anybody using Sterling.
Big as the operation was the panic situation in Cairo at the time allowed us to mount it relatively discreetly. It was easy to pretend it was just part of the security measures due to the flap …
We roped in hundreds of people, from British and Allied officers to pimps and shoe-shine boys. Most were indignant, and some – like the flight-sergeant celebrating his birthday with a fiver sent by his aunt – were even innocent, but many were clearly involved in black-marketing, drug-smuggling, robbery, and other crimes, and were very interesting to the Egyptian police. But not to me. Out of all the hours of questioning I did not get a single decent clue.11
See here for a list of abbreviations used in the below notes
1 KV/2/1467 13A p.2
2 Cooper, p.37
3 Sansom, p.113
4 ibid, p.113
5 KV/2/1467 13A Part II p.1
6 Sansom, p.114
7 ibid, p.115
8 Eppler, p.234
9 Jorgensen, p.110
10 Moyzisch, L.C., Operation Cicero p.202–203
11 Sansom, p.116–117