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In June 1941, Donovan was indeed named to the new post of Coordinator of Information – to the delight of William Stephenson and the rage of the military intelligence chiefs and Edgar, who called the appointment ‘Roosevelt’s folly.’ The British records show that, well knowing the extent of Donovan’s involvement with Stephenson’s team, Edgar began to treat the foreigners with ‘ill-concealed hostility.’ This developed into real enmity in late 1941, shortly before Pearl Harbor, with results that may have contributed to that national tragedy.

On August 14, 1941, nearly four months before Pearl Harbor, a senior FBI official sent Edgar a report on Dusan ‘Dusko’ Popov, a Yugoslav who had just arrived in New York. He was a double agent, dealing with the Allies and the Germans at the same time. And thirty years later, when he published his war memoirs, he would startle the world with the claim that he had warned the FBI in advance that the Japanese planned to attack Pearl Harbor. He had tried, he said, to give this information to Edgar personally, but had encountered only a stream of abuse.

Popov, the son of a wealthy industrialist, was twenty-nine in 1941. The ground had been laid for his wartime adventures when, while studying law in pre-war Nazi Germany, he forged a strong friendship with another well-to-do student, a German named Johann Jebsen. In 1940, when Jebsen came to Belgrade and told Popov he was working for the Abwehr, German military intelligence, he asked his friend to do the same. For both men it was the start of a tortuous and dangerous trail – one that would end in death for Jebsen.

Popov was openly opposed to the Nazis, and Jebsen’s role with the Abwehr was only a front. He was in fact anti-Hitler and had close links to the Abwehr chief Admiral Canaris, who, scholars now believe, was working against Hitler throughout the war. Asked by Jebsen to go to England as a German spy, Popov promptly made contact with British Intelligence. He was told to play along with the Germans and keep reporting back to the British.

Popov traveled to London by way of neutral Portugal, meeting his German control, Major Kremer von Auenrode,4 on the way. In London, Lieutenant Colonel T. A. ‘Tar’ Robertson, a senior officer in Britain’s domestic security service, MI-5, decided the Yugoslav was a potentially valuable asset. After an intense induction period, Popov returned to Lisbon to feed the Germans a mass of misleading information prepared by the British.

The Germans took the bait. Popov, code-named ‘Tricycle’ by MI-5, spent the first half of 1941 shuttling back and forth between Portugal and England, always returning to Lisbon with phony information for the Abwehr. In May that year, bemoaning Germany’s poor espionage presence in the United States, von Auenrode asked him to go to New York and set up a spy ring. Popov had little choice. He could hardly do otherwise if he was to retain the Germans’ confidence. The British, for their part, saw a way to take advantage of the situation.

Stewart Menzies, head of the Secret Intelligence Service, or MI-6, which handled foreign intelligence operations, now approved a plan. Popov would go to the States – as a ‘loan’ to Edgar and the FBI. If he did set up a spy ring, as the Germans hoped, the Allies would use it for deception from the very start. The collaboration, moreover, would strengthen relations with the FBI and give the Americans their own ready-made double-cross operation. Edgar, consulted at the highest level, agreed.

In Lisbon, as Popov prepared to leave for America, he picked up an intriguing piece of intelligence from Jebsen. At a meeting on the cliffs overlooking the Atlantic, Jebsen spoke of a recent journey he had made to Taranto, the Italian naval base that had been devastated in a sneak attack by British planes flying off aircraft carriers. The Japanese, Jebsen told Popov, had pressed the Germans for details of just how the British had carried out the operation. Germany’s Air Attaché in Tokyo, Baron Gronau, expected Japan to