The Traitorous Code Clerk, Part Two
By David H. Lippman
July 2014

The story began in Part One.

The ambassador assigned to America’s most prestigious embassy was no ordinary diplomat. He was Joseph P. Kennedy, Sr., one of America’s most prominent figures.

The father of nine children, red-haired, freckled, and hot-tempered, Joseph Kennedy was a national figure. His grandfather was an Irish immigrant, his father an East Boston saloonkeeper and politician. Within two years after graduating from Harvard in 1910, Joe Kennedy owned his own bank. By 1914, he was a millionaire.

In the 1920s, Kennedy made even more millions through shrewd speculating on Wall Street, through methods that would later be ruled illegal. He made more money in Hollywood, merging two studios into RKO, and incidentally conducting a three-year affair with movie star Gloria Swanson. He also made money from banking, shipbuilding, real estate, and oil.

When Prohibition neared its end, Kennedy gained exclusive import rights for Scotch, as well as permits to manufacture whiskey for “medicinal purposes,” which could be turned into legal gin mills upon repeal.

A staunch Democrat, he was Roosevelt’s biggest financial backer in 1932, with a $50,000 donation of his own, and he raised $150,000 more. FDR rewarded Kennedy for his party loyalty by naming him chairman of the new Securities and Exchange Commission. Wall Street howled at a stock sharpie being appointed as top cop, but Kennedy knew all the scams and tricks, and nailed many violators in his year at the SEC’s helm.

In 1936, Kennedy put his name on a book ghost-written by New York Times columnist Arthur Krock, called “I’m For Roosevelt,” and raised more money for FDR’s successful re-election campaign. Kennedy was now a high-profile figure, and Roosevelt was aware of both the need to reward him for his continued service and keep him at a distance, so that Kennedy could not challenge FDR in the 1940 presidential race.

The suitable job was the Court of St. James. The incumbent, Robert W. Bingham, was dying of cancer in Baltimore’s Johns Hopkins Hospital, and the post was both prestigious and far from the American domestic political scene.

Kennedy wanted it, too, but for different reasons. Four previous Ambassadors to England had become president: John Adams, James Monroe, Martin Van Buren, and James Buchanan. Furthermore, despite his wealth, Kennedy had never been able to crack the snobbish elite of Boston’s Protestant society, because of his Irish working-class background. Kennedy saw the London post as a means to enter the highest level of British society and thus American society.

But while Kennedy had great genius as an organizer and businessman, it also required diplomatic skills – and Kennedy had few of those. Nevertheless, Roosevelt, aware that the move would be applauded by powerful Irish constituencies, gave Kennedy the appointment.

Kennedy headed for England with his staff on March 1, 1938, and was joined by his wife Rose and the family by May, living in a 36-room mansion in Knightsbridge. He was an immediate hit with the British: he and his large family were attractive and colorful; he made a strong impression on King George VI, Prime Minister Neville Chamberlain, and Foreign Secretary Lord Halifax; and he shot a hole-in-one on the second hole at Stoke Poges Golf Club in Buckinghamshire a few days after his arrival.

Ignored by the media – including Time and Life, both owned by Kennedy’s good friend Charles Henry Luce – were two negative aspects of his personality that would lead to his downfall. First was his support of appeasement of dictators Adolf Hitler and Benito Mussolini. Second, perhaps related, was his anti-Semitism, a common enough feature in Boston’s upper crust, be they Catholic or Protestant. But Kennedy’s anti-Semitism was serious. He habitually referred to Jews in derogatory terms, saying that while he knew individual Jews who were good, “as a race, they stink. They spoil everything they touch.”

When Kennedy met with German Ambassador to Britain Herbert von Dirksen, Kennedy reportedly told Dirksen that “it was not so much the fact that we want to get rid of the Jews that was so harmful to us, but rather the loud clamor with which we accompanied this purpose. [Kennedy] himself fully understood our Jewish policy.”

That September, as the Munich crisis developed, Kennedy spoke publicly for appeasing Hitler, arguing that the Nazi dictator was a strong bulwark against Communism. These statements angered the State Department. After the horrors of Kristallnacht on November 9, 1938, one of Kennedy’s aides returning from Germany brought to his boss stories of having witnessed official Nazi thuggery against Jews. Kennedy responded to the accounts by saying, “Well, they brought it on themselves.”

Writing to his good friend and fellow appeaser and anti-Semite Charles Lindbergh, Kennedy said his main concern over Kristallnacht was the bad publicity it generated for Germany, not the wanton destruction.

As 1939 opened, Kennedy continued to urge the Western democracies to do business with Hitler, even after Nazi troops goose-stepped into Prague. Worse, he told Bill Bullitt, now Ambassador to France, that if Hitler attacked the democracies, “Everything in France and England would go to hell,” and that his own interest was in saving his money for his children.

Kennedy’s repeated statements that war was inevitable and that the British would lose began to anger both his bosses and his hosts, even appeasers like Chamberlain and Halifax. When Hitler invaded Poland on September 1, 1939, Kennedy was astonished that even the British appeasers knuckled down to defeating Hitler with traditional British grit and determination. Kennedy changed his public views from defeatism to calling for a negotiated peace, suggesting in a cable to Washington that the United States, as a neutral nation, could serve as an honest broker.

Roosevelt shot that proposal down, but Kennedy continued to call publicly for a negotiated peace. The British did the only thing they could – they stopped inviting him to all the social events he so craved to attend.

Into this increasingly toxic situation arrived Tyler Kent, who got tapped to replace the late and unlamented Antheil. Kent left the Soviet Union on September 23, 1939, traveling through Finland, Sweden, and Norway to reach England. On the ground in Sweden, he traveled with Ludwig Matthias, a German native but naturalized Swedish citizen, who was now managing director of the Ultramare Trading Company of Stockholm. He was a suspected double agent, working for the Germans and the Russians, now allies of convenience under the Nazi-Soviet Non-Aggression Pact. Matthias gave Kent a cigar box to carry to England as a favor, to avoid British customs search, and Kent agreed. Matthias said he would pick it up in London.

Kent checked in at the Embassy on Thursday, October 5, 1939, and stayed at the Cumberland Hotel. There, Matthias came to collect his package. Matthias went upstairs to get his package, and returned in company with Kent, carrying a package about 10 inches by 16. This meeting was noted by two detectives from Scotland Yard’s Special Branch, who were following Matthias, believing him to be a German spy.

While it seems more likely that Matthias was a Soviet spy, not a German one, the British were clearly concerned that this suspicious man was socializing with a code clerk from the US Embassy, and began to watch both.

Kent was paid $2,250 to serve as a code clerk, less than the most junior Foreign Service officer. Kent moved from his hotel into a two-room flat at 47 Gloucester Place, paying £5 a week. From all accounts, including his own, Kent heartily disliked England, seeing it as run by the Jews he hated.

The US Embassy, in the newly-acquired complex at 1 Grosvenor Square in Mayfair, had a staff of 76, and vast amounts of cable traffic that required coding and formatting. Codes were named by the color of their code book bindings, and most of the messages went in “Gray Code,” developed late in World War I. Many of the State Department codes dated back to Ulysses S. Grant’s Secretary of State, Hamilton Fish. Vast amounts of traffic went between London and Washington, including personal messages between Roosevelt and First Lord of the Admiralty Winston Churchill.

Right away, Kent started stealing signal traffic, but he had one problem – nobody to sell or give them to. But from reading the correspondence between Churchill and Roosevelt, Kent decided that the President and the First Lord of the Admiralty were working to remove Chamberlain and put Churchill in power. This assessment, like Kent’s views on Jews and England, was wrong. But he remained infuriated by the English and the Jews, and that fury was heightened by his inability to gain the status, perks, and higher pay of a Foreign Service Officer.

Kent sought new employment – reaching out to American, British, and even Japanese news organizations, hoping to gain a job as a reporter in Moscow. And to keep up his conversational Russian, he connected with London’s White Russian community, which was centered on the Russian Tea Room, a café-restaurant at 50 Harrington Gardens, opposite the South Kensington Underground Station.

David H. Lippman, an award-winning journalist and graduate of the New School for Social Research, has written many magazine articles about World War II. He currently works as a public information officer for the city of Newark, N.J. We're always pleased to add his work to our Daily Content.