1This article will discuss illicit trade in the Mediterranean in the interwar period and the ways in which it unfolded. By illicit trade, I mean transactions which infringe national laws or interstate agreements. The focus here is on the arms trade and the smuggling of Jews out of Europe to Palestine.
2While there existed international conventions regarding drugs and certain aspects of human trafficking, there were no similar regulations regarding the arms trade or the smuggling of people who were migrating of their own free will. The League of Nations had established two international laws aimed at controlling illegal trade: The 1925 Geneva Opium Convention was a key international treaty aimed at controlling the production, trade, and use of opium and other narcotic drugs1, and the 1933 Convention on the Suppression of the Traffic in Women of Full Age.2
3The arms trade was subject to national laws, be they the laws of the country from which the arms were exported, or those of the country to which arms were arriving, or to interstate agreements, like the Non-Intervention Agreement as in the case of the Spanish Civil War. Regarding the migration of Jews from Europe to Palestine, the laws involved were laws of the countries to which they arrived or passed through.
4The business interest in circumventing national laws, sanctions and embargos rests on the prospects of earning profits higher than those which can be obtained on a market which is not subject to such measures. Regarding the states’ motives, prospects of economic gains are important drivers too, while balancing their security interests may be another. But we also have to pay attention to the specific characteristics of the 1930s which made it attractive for state operators to engage in such business. While their involvement is often explained as a mere response to windfall opportunities, we will also discuss another aspect of the same business, namely its role for the state as an instrument to increase its supply of hard currency. Recession, rising protectionism, and a turn from global trade to organized barter trade increased the need to be inventive in order to keep the ship of state afloat. In the domain of preparation for war, a particular premium was placed on trade which could increase the supplies of Sterling, Dollar and gold which often were the only currency accepted to obtain arms, war materials and strategic raw materials. This trend gained pace in tandem with the rising tensions in the international system and an increasing fear of a new systemic war, a fear not unfounded seen from our vantage point: soon the decades after the Great War would be labelled the interwar period, the Great War become the First World War, while the new systemic war would leave its name in history as the Second World War.
5The international system of the 1930s had been increasingly unstable since Japan’s attack on China and its invasion of Manchuria in 1931. In the Mediterranean it was Mussolini’s drive for revisions and colonial control over African land that unleashed a similar chain reaction of instability. It began in the early 1930s with his escalation of the war in Libya against the local population to annihilate all resistance and it continued with Italy’s preparation for a war against Ethiopia and its later attack on that country in 1935. In the western Mediterranean, Rome sided with Franco in the Spanish Civil War which began in 1936 and was joined by Germany, while in the Levant it was the Zionist efforts to establish a Jewish state in Palestine and the reactions and resistance to that project in and around the British-held mandate of Palestine which was the main driver of instability, culminating in the so‑called Arab Revolt of 1936–39. It was at the same time that some of the new semi-independent states in what is now called the Middle East, such as Iraq and Egypt, began to seek suppliers to replenish their arsenals with modern weapons. All this interacted with the shock waves caused by Germany’s short‑of‑war conquest of Central Europe in 1938 and 1939 which would seriously and increasingly impact the interstate relations established by the Versailles system. It was in the same period that the implementation of Hitler’s war against the Jewish people in Europe created a market for human trafficking. These conditions created a strong demand not only for arms but also for expertise in circumventing interstate agreements and in crossing national boarders without permission. This created a space for actors who were close to the state or state-like units at one end of the transaction and willing to defy another state or an international regime at the other end.
6Prodromos Bodosakis-Athanasiadis was one such person. He was born in Bor in Cappadocia in the Ottoman Empire in around 1890. He began his career in port city of Mersin in Cilicia during the First World War and was successful to such a degree that a legend from his Anatolian homeland tells that he was so powerful that it was if he was heading a government within the government. He continued his career during the Entente occupation of Istanbul (1918–1922) and the French Mandate of Cilicia (1918–1921). He went on in Greece after the 1923 exchange of populations and would remain a prominent actor in Greek business until his death in 1979. In this article we will use him as a tracer to uncover a major network which moved arms and women and men across the Mediterranean and as an exponent of the confluence between state business and smuggling.
7Bodosakis was an Ottoman Greek. His destiny was anchored in Ottoman society and his early career in the province of Cilicia. After the Empire entered the war, it took Bodosakis a period of only four years to make his dramatic rise in wealth and power, an achievement that was extraordinary also compared to the trajectory of others who thrived in the same period. He started from his position as a hard-working miller with a keen sense of business and ended his wartime career as the main supplier of the Ottoman Army in Cilicia and the Baghdad Railway. In this period, he developed strong networks which in time would include some of the most powerful men of the Empire such as Enver Pasha. He was also introduced to Mustafa Kemal, the later Atatürk and founder of modern Turkey. It was under the aegis of powerful men like these that he advanced to become the official contractor for the Ottoman Army and the units working to complete the Berlin–Baghdad Railway; and in 1917, during a ceremony held at the railway station in Adana, Enver Pasha decorated him with the highest order ever given to an Ottoman Greek.
8As for his networks that pointed to the future, he established close relations with prominent persons from the Anatolian Railway Company under Deutsche Bank and the construction firm of Philipp Holzmann, who were working frenetically to connect Germany to the Middle East by railway.
9But his networks were not confined to high politics and big business alone. He was also operating out of the province in the direction of the Arab lands relying on already existing Cappadocian networks there, thus getting to know the notables in the area. As the logistics of his operations were enormous, he also created a huge network of unnamed men who facilitated delivery and transportation in a region stretching from the Mediterranean coast of Anatolia to Mesopotamia and the lands of Iraq, Syria, Lebanon and Palestine.3
10In the wake of the exchange of populations between Greece and Turkey and after he had settled in Greece he would also function as a contractor for the Greek armed forces. During the dictatorship of Metaxas, he became party to an informal coalition which assisted the Dictator in running the country’s economic and political affairs.
11While Bodosakis was not a public figure he has left his name in the historical records in a number of countries. I first came across it when working on a project on Greek-German trade relations in the interwar period. As a rule, I would normally attempt to ignore information which did not relate strictly to my subject, which was my reaction this time too, when I first came across his name. But only to begin with. For, his name kept popping up over and over again and soon it became clear to me that the name of Bodosakis was synonymous with two things: the arms trade and advanced industrial production. One of my sources read for example that there was a great move in Athens for the purpose of smuggling arms to Jews in Palestine. The same source also read that “Richard, the well-known smuggler of arms, is now in Athens” and this “coupled with the presence of Stavsky, Dr. Perl and confederates and the large sum at the disposal of Krivoshein tend to confirm the view that with the next shipload of immigrants arms will be smuggled to Palestine”. It also stated that “the arms will in all probability be supplied by the firm of Bodosaky [sic], the notorious smuggler of war materials to Spain. He is a powerful person and uncrowned King of Greece. He is the managing director of almost all the important enterprises in Greece and has been decorated by the Greek Government for his contribution to the economic welfare of the country.”4 The words stemmed from a British agent sent to Greece in 1938 to investigate the routes of transportation of Jews to Palestine.
12A few years later, in 1940, Bodosakis made headlines outside Greece. The Greek arms trade received so much international attention that the American journalist Frank Gervasi started an investigation and published the results in the American weekly magazine Collier’s in 1940. In an article entitled “Devil Man”, featuring Bodosakis as the main character, Gervasi depicted the owner of the Powder and Cartridge Company as one of the most important arms dealers in the Mediterranean area. The trade was conducted in close collaboration with the Greek Government in order to bring hard currency to Greece and according to the article the arms trade was Greece’s second largest source of income, after tobacco.5
13This is confirmed by other sources. According to an American report from the 1940s, based on accounts from the inner circle of the decision-making body in Greek economic politics and on information from prominent businessmen, including Bodosakis himself, Greece entered into large-scale agreements for arms deliveries to Republican Spain, Turkey, Romania and China in the second half of the 1930s, and, after the outbreak of the war, Britain was added to the list.6 To this we should add markets in the Middle East, as we shall see.
14In relation to the Greek national economy, this must have been an important means of creating hard currency, something which caught the eye of the American Ambassador to Greece, Lincoln MacVeagh, who made the following comment on 27 September 1938:
- 7 Iatrides (ed.) 1980, p. 132.
On the financial side, the Government is still performing the same miracle of keeping the ship of state afloat that has been accomplished now for years by other and even more bankrupt countries, and which, so far as I know has never been explained.7
15An explanation of the “miracle” could be the considerable income from the arms trade which did not figure in the official statistics of national income but impacted the real economy. As we shall see, exports of arms and war materials financed a substantial increase of the ammunition production. In this way, the arms trade and Bodosakis did what the banks and financial institutions could not: convert Greek assets frozen in the Greek-German barter trade account in Germany, the so‑called clearing account, into purchase power on the world market. Clearing was a mode of trade that made it possible to exchange goods without the transfer of currency, in that payments for imports from Germany were placed on an account in Berlin and could be liquidated only by purchases in Germany.
16But it was also risky because this could make Greece dependent on Germany and create conflicts with other great powers, first of all Britain, and required that Greece balanced its security interests very carefully.
17In the following we shall examine this trade. We will start out with the Spanish trade which, in terms of earnings, was by far the largest operation he undertook. His operations rested on a certain measure of cooperation with the Greek State while its material base rested on a common interest with the second most powerful person in Hitler’s new regime in Germany, Hermann Göring. Göring was no stranger to the arms trade. He already played an important role in the arms trade with China and accepted the political resentment it entailed and the distrust it caused in diplomatic circles.8
- 9 Whealey 1989, p. 94; Kube 1986, p. 166.
18Shortly after the outbreak of civil war in Spain, Hitler made Göring solely responsible for the management of German-Spanish relations and his influence on the conduct of Spanish affairs became so dominant that Spain was at times referred to as “Göring’s economic fief”, meaning that it was primarily the economic aspects rather than the political dimensions of the Spanish Civil War that concerned Göring, to an extent that Franco’s military success became a matter of only minor importance.9
19Transactions between Bodosakis’ main enterprise, the Powder and Cartridge Company, and the Republicans constituted an essential element in the financial basis for his company’s expansion and hence also for its demand for machinery and steel from Germany, mainly from Rheinmetall-Borsig which would gradually come under Göring’s control until it became a part of his industrial complex in 1938. Total German sales to the Powder and Cartridge Company between 1935 and 1940 were big—amounting to somewhere between 45 million and 55 million RM.10
- 11 BA‑MA, WI/IC1.10.
- 12 BA‑MA, RM 11/3.
- 13 For a comprehensive analysis see Pelt, Heiberg 2005, pp. 87‑91.
20The fact that the Greeks were able to pay 15 per cent of the price for steel deliveries in hard currency, 50 per cent of the payments for machinery and tools and 100 per cent for patents in hard currency from Rheinmetall-Borsig can only be explained by the ongoing trade between the Republicans and Bodosakis because the Republic was in possession of the Spanish gold reserves and the deals were settled exclusively in hard currency and paid in advance.11 In this way, the Powder and Cartridge Company’s trade with the Republicans constituted an indirect source of hard currency for Germany, and, in effect, a very important one, meaning that the Germans received somewhere between 10.5 million RM and 13.5 million RM in foreign exchange from March 1937 to March 1939. This is in itself a highly significant amount, as the Reich’s overall reserves of hard currency and gold had fallen dramatically since the beginning of the Depression. In 1937 they reached a low ebb of 70 million RM, and reserves risked drying up completely in 1938.12 In this way, hard currency and gold, stemming from trade with the Greek Powder and Cartridge Company from 1937 to 1939, would represent between 15 and 19 per cent of the total reserves in Germany in 1937.13 All of which means that there existed a number of actors not only in German business but also in the political hierarchy who had an interest in defending this trade, first of all, Göring.
- 14 Iatrides (ed.) 1980, pp. 148‑149.
21In Greece the acceptance of Bodosakis’ trade must be explained by Metaxas’ willingness to let Greek economic and defence policies be run by people and institutions who had proved ready and able to act in accordance with his “German option”, i.e. his willingness to base the stability of the Greek economy and rearmament on Germany. The American ambassador described Metaxas’ power base in words more appropriate for a gang of mobsters: “about and behind the Dictator, [are] – Drossopoulos of the National Bank, Kanellopoulos of the Youth Movement, Diakos, ‘the eminence grise’, Maniadakis the sardonic reincarnation of Fouché, Bodossakis, the arms merchant et al.”14 While this is a strongly biased description revealing the Ambassador’s concern that Greece was leaning too heavily on Germany and his dislike of the Metaxas regime, it is undeniable that in the pursuit of his “German option” the Dictator had demonstrated that he was prepared to allow his own political goals and big business interests to blend. And to such a degree that they began to overlap, resulting in the emergence of a new informal and powerful domain outside the sphere of the traditional state apparatus. Furthermore, it is also true that he had empowered this domain with the functions of a cabinet on certain issues concerning rearmament questions, finances and foreign policy. Apart from Metaxas himself, his Private Secretary and personal aide, Ioannis Diakos, and some trusted ministers he had hand-picked, this domain included Bodosakis and the National Bank.
22According to his own account, Bodosakis started selling to the Republican Government soon after the beginning of hostilities in 1936. The first order signed in September was to deliver 5 million cartridges. Metaxas was enthusiastic about the trade because the Republicans paid in hard currency and in advance. Even before the original order was settled, a new order for 20 million cartridges was received.
- 15 Sotiropoulos 1970, pp. 153‑156.
23His terms for dealing with the Republicans were that the shipments should be paid for in gold or in hard cash and in advance, a so‑called “100% irrevocable credit”. Bodosakis in turn would arrange all the practical details necessary for war material to get through the international blockade of Spain. All shipments to the Republicans were declared bound for Mexico. As soon as the ship was loaded in Piraeus it would head for a desolate island in the Greek archipelago. When the name and papers of the vessel had been changed the ship would sail for Spain; if stopped en route the captain would claim that he was bound for Mexico.15
24Furthermore, Bodosakis stresses that he procured huge quantities of grenades, mines and powder from Germany. This was achieved with the help of the Greek government, which officially assured Germany that the equipment was meant for the Greek army.
- 16 Sotiropoulos 1970, pp. 157‑158. Bodosakis mentions that he invested all the money in the Powder and (...)
25In November 1937, Bodosakis flew via Paris to Barcelona in a Soviet aeroplane to sign a contract with the Republicans for the delivery of ammunition with a total value of 2.1 million British Pounds: this alone would have constituted about 12 per cent of the total Greek export that year.16
- 17 Koliopoulos 1977, p. 69, n. 5.
- 18 Gervasi 1940.
26According to rumours which the Greek Ambassador in London judged to be reliable, Greek ships were willing to be captured by the Nationalists if the price was high enough and thus to let the cargo fall into the hands of the rebels.17 This was very profitable because the Republicans had already paid for the arms before embarkation. Gervasi mentions that Bodosakis had a central role in this trade and that he was joint owner of a shipping company which travelled exclusively to Spain.18
27Bodosakis himself made no secret of his commitment to this two‑way trade. When the Germans, after several Francoist complaints, interviewed Bodosakis about his role in arms supplies to the Republicans, he confirmed that he did arrange for such shipments but that he acted in agreement with the Spanish Nationalist government and that he informed them in such a way that we they were able to capture the transports on the high seas.19
- 20 Berlin, 2 May 1938, Besprechung vom 2. Mai 1938 über die weitere Gestaltung der K.G.‑Ausfuhr, Polit (...)
28However, on 2 May 1938, Göring officially decreed that Germany would stop arms export to Greece and Mexico owing to the suspicion of resales to countries on the German blacklist.20 This must be seen as a reaction to the pressure put on his unique position within the German power hierarchy to show a certain consideration for Germany’s overseas political interests. This is corroborated by the fact that at the same meeting he decreed that Germany would stop the sales of arms to China, i.e. to Chiang Kai‑shek, in the interests of Japan.
29However, Göring’s main priority remained hard currency and to get a higher share of such incomes. Less than month after the suspension of arms sales to Greece, Greece and Germany entered into a new agreement concerning the arms trade, in which the Greeks accepted an increase of the hard currency quota from 15 to 35 per cent for the purchase of war material.21
- 22 Sotiropoulos 1970, pp. 176‑178.
30The same was true for Göring’s dealings with China. Here, he continued to deliver arms now in secrecy through the Ministry of Economy and other channels. At the same time, Bodosakis established contact with Chiang Kai‑shek through a certain Frau Hirscheimer and soon afterwards the Powder and Cartridge Company would receive orders from China.22
- 23 Sotiropoulos 1970, pp. 169‑170.
31The sources do not reveal whether this connection was made in cooperation with Göring. It is clear, though, that Göring received Japanese complaints that German arms were still finding their way into China through third countries. Göring responded to the Japanese Embassy by saying that he endeavoured to stop the resale of German arms from third countries; however, he “did not have the situation well in hand yet”.23 Greece was evidently one of those countries that was “not yet in hand”. While the Greek-German arms trade continued, the trade with the Republicans was decreasing, something which increased the appeal of finding new outlets which could generate hard currency.
- 24 AGMAE, R 1047/57a.
- 25 AGMAE, R 1047/57b.
- 26 BA‑MA, RW 19/3329.
- 27 AGMAE, R 1047/57b.
32This makes it relevant to investigate the networks of transportation that could facilitate such trade. As we have seen, Franco’s agents had meticulously mapped the networks which served to bring arms to the Republicans.24 According to these lists, Bodosakis was the official owner of the S.S. Draga and the operator of three or four ships together with Theophanidis, who also had a leading position in the Powder and Cartridge Company along with Alexandros Davaris.25 According to German sources, the “Alexandros Davaris” shipping company in Piraeus was owned by Bodosakis and Theophanidis.26 According to Franco’s agents, all their vessels were smuggling Jews to Palestine.27
33Years after the British agent reported on Dr. Perl and confederates’ activities in Piraeus, William Perl confirms that he, Abraham Stavsky, and Moses Krivoshein indeed used Piraeus to smuggle Jews from Vienna to Palestine and that in June 1938 the vessel Artemisia set off from the Greek port bound for Palestine with 386 refugees on board. Their Greek connection was a shipowner named Davaris “who proved in time to be a blessing for our entire undertaking”.28
- 29 TNA, FO 371/22371/762.
- 30 Perl 1978, p. 102.
34The British minister to Greece, Sidney Waterlow, confirms Perl’s account. While he does not mention Perl by name, he makes clear that Perl’s group die Aktion, was active in Athens, informing the Foreign Office that Perl’s man in Greece, Krivoshein, was controlling a secret organization with its headquarters in Athens and with the object of smuggling Jews to Palestine.29 To Waterlow’s frustrations we also must add his despair over the Greek authorities. Krivoshein was believed to have a good relationship with the Greek Ministry of the Interior and to have several Greek police officers on his payroll. This made it difficult for Britain to persuade the Greek authorities to stop the traffic.30
35The Greek connection, Perl tells, went back to the early efforts of his group to rescue the Jews of Vienna from the claws of Adolf Eichmann, then a lieutenant in the SS, who after Anschluss in 1938 was in the process of “cleansing Austria of Jews”. With the majority concentrated in Vienna, the future of the Jews in post-Anschluss Austria became a matter of great urgency both for the new Nazi authorities there and for the Zionists who strove to save them.31 Perl’s operation took off in earnest after he made Eichmann agree to take money in exchange for Jews provided that Perl and his group got them out of the newly annexed territories of the Reich and shipped them to Palestine. The group was planning mass emigration and persuaded the German authorities to allow them to buy 24,000 British Pounds from the German Reichsbank on the grounds that they were preparing to ship 2,000 Jews out of the Reich. The Greek smugglers were to receive 12 British Pounds for each person. The plan was to bring the Jews to Athens by train via Yugoslavia, and on ship from Piraeus to Palestine.32
36While Perl held Mr. Davaris in high esteem and praised his name in public, he never mentions Bodosakis explicitly. But we get an understanding of Bodosakis’ importance for Perl’s operations in an indirect way. At the beginning of their activities, Perl’s group got cheated by a group of swindlers and lost its hard currency. This created severe problems for their operations and left a group of Jewish refugees stranded in Fiume. It was in this situation that Mr. Davaris appeared as a deus ex machina, Perl tells. As soon his group made contact with the Greek shipowner, Mr. Davaris, in the words of Perl, proved to be a “blessing for our entire undertaking”. He immediately sent his representative, Mr. Constantine Nikolopoulos, who arrived at Fiume within 48 hours after the first contact was made. Perl and his people were met by not just a well-dressed man whose good looks and charm dazzled them, Perl tells, but also a person who “was extremely generous as far as money went”, because, Perl goes on, we concluded “the most unbelievable deal” with him. Mr. Nikopoulos promised that Mr. Davaris would send the ship to Fiume right away and as a down payment accept the hard currency Perl’s group had lost to the swindlers in Athens, for as Mr. Nikolopoulos said: “You have no chance of getting the money back […] but we have a much more powerful organization. We will get it from that small fry.”33
- 34 TNA, FO 371/22371/762.
- 35 Perl 1978, p. 102.
37This alone indicates that Mr. Nikolopoulos was a self-confident player who believed he belonged to a powerful network. And not without reason because the vessel which Mr. Davaris sent to rescue the Jews trapped in Fiume, S.S. Draga, was owned by Bodosakis. All of which indicates that Perl was dealing with serious players in the business of illegal transportations, because for people of this calibre in a trade where reputation is everything, it is of paramount importance to appear to be honest and act as the client’s man. And it worked. Perl’s group now placed their trust in Mr. Davaris, and it marked the beginning of a long working relationship of mutual benefit to both parties. This must be explained by the quality of the network: Mr. Nikolopoulos was connected to Mr. Davaris and Mr. Davaris to Bodosakis. In this way, at every stage there was someone to handle the various aspects of the business. Mr. Nikolopoulos took care of representation, Mr. Davaris of the logistics of the sailing operations, while it is reasonable to assume that it was Bodosakis who would see to it that the upper echelons of the police and the ministries would not interfere with the operations. Therefore it is not surprising that it required intervention from the highest level too to stop this trade, as Waterlow made clear in a report informing London that the Greek King had finally succeeded in putting an end to the traffic.34 This is confirmed by Perl, who states that British diplomatic pressure succeed in persuading the Greek Dictator Metaxas to punish by law, with long prison sentences, anyone involved in the smuggling of Jews into Palestine.35
- 36 Patek 2012, p. 9.
- 37 Perl 1978, p. 106.
- 38 Perl 1978, pp. 367‑371.
38Greece had been a point of departure for smuggling Jews to Palestine since 1934, with the journey of the vessel Velos in July from Piraeus to the coast off Tel‑Avis as the first one, later celebrated as the symbolic beginning of the unauthorized immigration of European Jews to Palestine, Aliyah Bet.36 But now, owing the new situation with the Greek Government under rising British pressure, it was decided to turn to another well-tested route, the Danube, to ship the refugees out of Vienna. The Danube was a free waterway, which made it possible to reach the Black Sea without the use of transit visas. From there it would be possible for the smugglers to pick them up and head for Palestine.37 From now on, Romanian and Bulgarian Black Sea ports became the hubs for smuggling Jews to Palestine while Greek ports—with the single exception of Corinth in March 1939—were no longer used. However, Greek vessels would continue to play an important role.38
39The cooperation between Mr. Davaris and Perl demonstrates how groups with widely different interests under conditions of extreme duress were able to combine their forces and form strong networks based on a considerable measure of mutual trust that lived up to the expectations of both parties. Mr. Davaris was offering his services in a space and under circumstances where uniform rules imposed by a single powerful state or sustained by international agreements were absent or not enforced. Such conditions left room for maneuver to non-state actors and created fertile conditions for coalitions between freewheeling agents and state representatives. Regarding the network in question, it connected people who were delegated power by the state in one place, to agents who knew how to circumvent state power in other places, like Perl’s group who made deals with Eichmann in Austria and cheated the British in Palestine. Such transactions also attracted a wide array of fortune seekers, like the swindlers who had tricked Perl’s people in Piraeus. For business reasons alone, a powerful and serious actor like Davaris would need to take upon himself the loss suffered by Perl’s group and mete out justice to eliminate the damage the swindlers could do to the reputation of his business—un unprotected profession where survival is dependent on reputation.
40We shall now turn our attention to the rising market for arms and war materials in the Middle East and the network that brought arms to Palestine, Iraq and Egypt. Since 1936 Palestine had been the scene of clashes between Jews, Palestinians and the British mandatory authorities. This war‑like conflict over Palestinian land, known as the Arab Revolt, raged until 1939. Regarding the arming of the Palestinians and their Arab supporters, scholars on the subject have had difficulties in identifying the sources from which they purchased their arms. But we have some important clues.
41In December 1936 the German Ambassador to Iraq, Fritz Grobba, was contacted by Fawzi al‑Qawuqji, a leading military man in the Arab Revolt, who wanted to obtain weapons with assistance from Germany. About one month later, in January 1937, a delegation representing the highest political level of the Palestinians visited the German Ambassador to reiterate the wish for German financial and weapons support. They were members of the Arab Higher Committee, the central political organ of Arabs in Palestine loyal to the Grand Mufti of Jerusalem, Hajj Amin al‑Huseini.
42Grobba turned down their requests on the grounds that it was Germany’s policy to maintain good relations with the British and that Germany could not support an uprising against them. Berlin supported Grobba, reiterating his words that Germany could not interfere in the dispute in Palestine and stated that for that reason “no official support of any kind can be approved.”39
43This answer is in line with an understanding of Germany’s policy towards the Middle East, according to which the only German interests in the area were economic, and that trade was conducted with an eye to avoiding a conflict with Great Britain. In this context the Middle East was seen as a British sphere of interest.40
- 41 Nicosia 2015, p. 81.
- 42 Parsons 2016, pp. 26‑31.
44However, Berlin’s stress on “official”—which is underlined in the text cited above—left a window open that “unofficial support” was perhaps possible. If this opening was to materialize, it was imperative to rely on lines of supply which made it possible for the Germans to deny any involvement and ensure that they were run by efficient and trustworthy people. Such demands made Fawzi al‑Qawuqji an obvious candidate.41 He was a Sunni Muslim from Syria born in Tripoli in today’s Lebanon, about the same age as Bodosakis, born in 1890. In 1912 he graduated from the war college in Istanbul and served as an officer in the Ottoman army during the war. He was stationed in Mosul, later in Beersheba in Palestine and spent most of the war there. He had made a good impression on the Germans and had excellent connections with high-ranking German officers.42
- 43 TNA, FO 371/23777.
- 44 Berlin, 31 March 1939, Bundesarchiv Abteilung Potsdam (BA Abt. Postdam, 0961)/ Auswärtiges Amt/6844 (...)
- 45 Parsons 2016, p. 153.
- 46 Nicosia 1980, p. 364.
- 47 Nicosia 2015, p. 86.
- 48 Arielli 2010, pp. 122‑123.
- 49 Athens, 2 July 1935, TNA, FO 286/1126/71.
- 50 Barros 1982, pp. 63‑64.
45We do not know if Bodosakis knew al‑Qawuqji, but they were on the same side during the First World War and operated in the same area. The reason for bringing this up is in connection with a considerable quantity of Greek ammunition confiscated by the Iraqi authorities in 1938.43 The illegal character of the delivery rules out the possibility that it was meant for the Iraqi army but makes it likely that the arms were destined for Palestine. Iraq provided a well-used channel for smuggling arms to the Palestinians.44 Furthermore, we have a strong hint suggesting that the confiscated freight was only one of many consignments. The source is al‑Qawuqji himself who in his memoirs mentions that in the summer of 1938 Grobba informed him that the German Ministry of Foreign Affairs was now willing to support Arab organizations involved in anti-British activities and that Grobba had promised him substantial material support. Al‑Qawuqji also states that it was in the same summer he made his first contact with the Abwehr, the German military intelligence service.45 This piece of information becomes extremely interesting if we take into consideration that in 1938 the Abwehr planned to send a secret shipment of arms to Palestine through Iraq and another through Saudi Arabia; and that the Germans supplied the Arabs with money. This was known only by Fritz Grobba, by the Abwehr and in the small circle around the people leading the Nazi Party.46 This points to Göring’s agency because of his previous record in trade of such nature and because he had learned from Ciano, Mussolini’s minister of foreign affairs, how to organize the supply of arms to Palestinians. It was top‑secret information to which Göring was privy: Rome provided the money while Arab organizations purchased weapons through Greek middlemen and had them smuggled to Palestine through Syria.47 It has been mentioned that the methods and networks in question could be same ones which were used during the period of the Ethiopian War when Greek businessmen cooperated with the Italian Military Intelligence Service to supply Italy with various sanctioned merchandise.48 This is indeed possible, but this time on a similar model based on cooperation between Greek middlemen with an experience in the arms trade and the Abwehr. We know, according to British reports, that there existed a possible Greek-German common interest in Ethiopia and that these suspicions included firms owned by Bodosakis.49 Furthermore, it stands as fact that the Greek middleman who brokered the first deal between Rheinmetall-Borsig and the Greek army in 1934 also wanted to cooperate with the German firm to supply Ethiopia.50
46It was probably for the same reasons that the British authorities wanted expert knowledge and decided to turn to Bodosakis for help with the investigation into the aforementioned confiscated arms in Iraq. They knew to their own detriment that he was both well informed and connected beyond their own capacities. Minutes from the Foreign Office reflected this by pointing out that: “it is amusing to see, that […] M. Bodosakis, […helping] to trace the smuggled arms discovered in the Iraqi customs […], is himself described as a notorious smuggler.”51
- 52 January 5 1943, German Inner-Intelligence Service, Secret, Ulius L. Amoss to Colonel William J. Don (...)
47Finally, we should mention that the chief of the Abwehr, Wilhelm Canaris, knew Bodosakis well and had played an important role in securing Bodosakis his prominent position in Greek-German relations a few years before; at a later date Bodosakis would tell US intelligence that he considered himself “an intimate” of Canaris.52 At the same time, Bodosakis was also involved in negotiations with German armaments firms about exports of war material to state customers in the Middle East.
- 53 TNA, FO 286/1142/71/28/37.
- 54 Tillmann 1965, p. 23.
- 55 IWM, FD 790/46.
48Sometime in 1937 Bodosakis informed the British authorities that the German steel and arms company, Otto Wolff, had invited the Powder and Cartridge Company to participate in exports of cartridges to Iraq and to cooperate in arms exports to Egypt and Afghanistan.53 The German firm did so in its capacity as a partner in a consortium established by leading German armaments firms including Bodosakis’ close business associate, Rheinmetall-Borsig, to arrange for sales of war material to Iraq.54 Bodosakis did not conceal that he was eager to cooperate with Germany. In October 1937, Bodosakis made clear that he wanted the Powder and Cartridge Company to serve as a platform for exports to “neighbouring states,” pointing out that his plant “is especially well geared for exports to the neighbouring states, because salaries in Greece constitute only about one tenth of what we have to pay in Germany. It is obviously the wish of the management of the Powder and Cartridge Company to negotiate seriously one day about cooperation in exports”55 minutes from Rheinmetall-Borsig concluded after a meeting with Bodosakis.
- 56 The two later deals were signed in September 1938 and April 1939. See respectively Nicosia 1980, p. (...)
- 57 Interrogation Report No. 1, Walter Deter, Secret, November 1945, Declassified per Executive Order 1 (...)
49The contract with Iraq was signed on 9 December 1937. It was written in three languages, Arabic, German, and Greek meaning that the Greek company must have been a party to the deal.56 This information stems from Walter Deter from Rheinmetall-Borsig who would become a close collaborator with Bodosakis when he was stationed in Athens soon afterwards. He was also the person who had established the contact with the Iraqi Ministry of War. Deter had a history in the Middle East and in late 1936 or early 1937 he was sent to Iraq because Rheinmetall-Borsig wanted an old hand like Deter to handle Iraq’s strong man, Bakr Sidqi (Bekir Sidki). He had come to power on 29 October 1936 through a coup d’etat, often regarded as the first military coup in the modern Middle East. He was known to be a very difficult person to please. It required a good deal of bribing of government officials, Deter tells, but it was a crucial means. However, it had to be carefully handled in order to reach the right people, usually someone from the official’s staff who made all the arrangements. Deter also needed to obtain information on rival firms, and here he drew on the “usual coffee-house channels”, he tells. His breakthrough happened with the assistance of two Greeks. They were acculturated to Iraqi mores and spoke Arabic so well that Deter did not realize that they were Greeks until he heard them speaking with each other. It was they who introduced Deter to Sidqi. However, before the order could be fulfilled, on 11 August 1937 Sidqi was killed by political rivals in the garden of the military airport in Mosul on his way to a visit to Turkey to attend military maneuvers. For that reason, Deter had to wait a few months before he was able to conclude the agreement.57
50We should stress here that until Germany’s occupation of Prague in March 1939, Berlin was careful not to transgress British interests in the Middle East in order to protect its own ambitions in Central Europe and it had to tread its path carefully. In this game, Bodosakis could be a useful partner. And the same would be true for Egypt in particular, because the British position there was challenged by an Egyptian nationalist movement which had strong sentiments for Germany.
- 58 Cairo, 17 August 1937, Dresdner Bank, streng vertraulich, to Dredsner Bank, Auslands-Sekretariat VI (...)
- 59 Tillmann 1965, p. 27.
51It was in such political circumstances that in 1937 German arms dealers in Egypt called for Greek help. The then representative of Rheinmetall-Borsig, Lykourgos Sarsentis, complied with the German request and went to Cairo. After several weeks of negotiations, Sarsentis arranged a meeting with Nahas Pasha, the Egyptian prime minister.58 Soon afterwards Sarsentis fell into disgrace with the German company while the German arms dealers failed to obtain British agreement to their plans.59
- 60 Athens, 4 August 1938, Hans Dyckhoff, representative of Auergesellschaft, draft of a letter to the (...)
- 61 Ramleh, 23 September 1938, the German Legation to AA, WIII 7333/38, PAAA, Gesandtschaft Athen No. 2 (...)
52That need not have impaired the prospects of success for the German firm. On the contrary, for the sacking of Sarsentis upgraded Bodosakis’ position and it was not long before Bodosakis was active in Egypt. In August 1938, Bodosakis negotiated with the Egyptian government for the delivery of two million gas masks. The negotiations were made in strong competition with the German gas mask company, Auergesellschaft, a high‑tech firm which was also involved in a project for the development of the German nuclear bomb.60 In the wake of Germany’s invasion of Czechoslovakia in March 1939 and as a result of rising tension between Germany and Britain, the German authorities prohibited Auer from supplying British-dominated Egypt. As a response, Bodosakis and Auer now joined forces and established a gas‑mask factory in Athens to serve as a platform for the German firm to export to Egypt.61
- 62 TNA, FO 371/23372. Germany started to sell Czechoslovak arms after Germany’s occupation of Prague i (...)
53After the outbreak of war, the British got increasingly suspicious about Bodosakis’ Middle Eastern connections. A few months into the war, rumours that one of Bodosakis’ high-ranking men (Theophanidis) was in Egypt gave rise to anxiety. British Embassy officials feared that the Powder and Cartridge Company was working for German interests in the Middle East. It turned out that the alarm had been triggered by two ex‑colonels who had contacted the Egyptian head of general staff, Aziz Ali al‑Mari, offering to sell Czechoslovak Bren guns.62 The ex‑colonels probably represented the Powder and Cartridge Company because Bodosakis had employed a number of officers after they had been purged from the Greek army in the wake of an abortive coup in 1935.
54At the same time, Germany’s Middle Eastern policy was becoming increasingly ambiguous because the official state foreign department, the Auswärtiges Amt and the Nazi Party’s foreign political office, Aussenpolitisches Amt der NSDAP were pursuing different objectives.
55The Nazi institution wanted Germany to join hands with anti-British Arab nationalism to exploit the fact that they saw Germany as an impartial Great Power without ambitions in the Middle East and as a victim, like themselves, of the “unfair” peace agreements made by the Great Powers after the First World War.63
- 64 Cairo, 24 June 1938, The German Legation to AA geheim, BA Abt. Potsdam, 0961/Auswärtiges Amt/68445, (...)
- 65 Beinin, Lockman 1988, pp. 195‑196 and 210.
- 66 Mitchell 1969, p. 20 ff.
56Aziz Ali al‑Masri was one such person who held these beliefs. He was born in Cairo in 1879 and made his early career in the Ottoman Empire. He was a champion of various Arab causes and had shown character in service. Sometime in 1938 he joined forces with Prince Nabil Abbas Ibrahim Halim, cousin of the Egyptian King Fouad, and the two of them became involved in arms negotiations with the Germans.64 At that juncture both men had already made themselves a reputation for their anti-British sympathies. Prince Halim had served as a pilot under Göring’s command during the First World War.65 Al‑Masri had won the hearts of a generation of future Arab army officers when he was a teacher at the Staff College and now he was reaping the fruits, masterminding a strong pan‑Arab and anti-British faction in the Egyptian army.66 All that gained in importance after the outbreak of the war and erupted in an armed rebellion against British dominance in Iraq. In April 1941, anti-British insurgents took power in Baghdad through a coup and made Rashid Ali al‑Kaylani the new leader. At the same time the German Afrika Korps was advancing in Libya, moving close to the Egyptian borders, and there were fears and hopes that Hitler’s troops would soon take Egypt and force Britain to evacuate its naval base in Alexandria.
- 67 Mitchell 1969, p. 25.
- 68 Parsons 2016, p. 154.
- 69 Beinin, Lockman 1988, pp. 195‑196 and 210.
57It was in this context that al‑Masri made an attempt to meet the Germans outside of Egypt. The plan was that the Abwehr would bring him to Baghdad to join forces with the new anti-British regime there.67 At the same time, other prominent anti-British players from the region were in Iraq, among them the Mufti and al‑Qawuqji—the latter as commander of the desert forces fighting the invading British‑led troops.68 It soon came to an end, however. The British drove al‑Kaylani out of Iraq, occupied Vichy-controlled Lebanon and Syria, and al‑Masri was caught and court-martialed in 1941. In August 1942, Prince Halim was imprisoned by the British for, among other things, his close relations with the Germans.69
58The British were following the activities of Bodosakis and his associates in the Middle East with great discomfort. They were familiar with his cooperation with the German armaments industry and his activities as an international gunrunner; they had plenty of evidence that he was active in the lands under their control, and they feared that he was supplying groups which were working against their interests, such as Palestinians fighting for their land as well as the Iraqi and Egyptian nationalists. They dreaded the pro-German potential of the anti-British drive among all these nationalists. While they could not touch him in Greece, all that changed after Bodosakis left Greece in April 1941 just before the Germans took Athens.
59He arrived in Egypt on 24 April in the midst of Britain’s war against the Arab nationalists. While they left Bodosakis at large this time, it is also clear that he did not have an easy time. Not only were his plans for establishing war industries in South Africa obstructed but his old armaments complex in Athens continued to loom on the horizon and some questioned his motives for having left the installations intact to be grabbed by the Germans. Why did he not have them blown up? Or why was the equipment not shipped out of Greece before the enemy arrived?
- 70 Washington, 2 July 1942, from The Director of Naval Intelligence, J.B.W. Waller, “Greek American Fa (...)
60After half a year in British-dominated Egypt and South Africa filled with frustrations he decided to go to the US, arriving in New York on 6 November 1941. But his reputation travelled with him. It was a two-edged reputation, however. One was combined with suspicion: a report from the Director of Naval Intelligence written in 1942, entitled “Greek American Fascism”, referred to Bodosakis as “a thoroughly disreputable character, by some considered the most dangerous of all Greeks” because Bodosakis was considered “pro‑Nazi”. The report concluded that although Bodosakis was reported “to have adopted a pro‑United Nations front, he should still be considered suspect.” It ended: “He may try to open a munitions plant in Connecticut, it is rumoured.”70
- 71 Hatziotis 2005, p. 202‑205; December 1942, Secret, L. Amoss to Major David Bruce, Secret, CIA-RDP13 (...)
61The other side to his reputation highlighted his professional achievements and remarkable personality, making it possible for him to introduce himself as an asset to American interests. To enhance this impression, he shared his intimate knowledge of cutting-edge armaments-related German technology by handing over all the German blueprints of their ammunition he had managed to get hold of.71
- 72 Cited in Clogg 2000, p. 190; on Amoss, see pp. 121‑22; on Amoss’ life and career see also: http://a (...)
- 73 3 December 1942, Secret, L. Amoss to Major David Bruce, Secret, CIA-RDP13X00001R000100400001-9.
62Soon Bodosakis was communicating with the American secret services, the Office of Strategic Services (OSS). Ulius L. Amoss who would become director of the service’s Near East desk and was close to the future head of OSS, Colonel William J. Donovan, characterized Bodosakis as a “sort of [Basil] Zaharoff” and “a king maker and breaker who had double-crossed both sides during the Spanish civil war.” He considered Bodosakis “a man of extreme ability and no perceptible conscience”.72 A report dated 3 December 1942 stated that Bodosakis had become an OSS agent known as “Greek Irregular Agent No. 173”.73
- 74 Hatziotis 2005, pp. 207‑210.
- 75 Hatziotis 2005, p. 210.
63According to Bodosakis, he agreed to work for the OSS on the explicit condition that the arrangement would be kept secret, in particular from the British.74 He had good reasons to join the Americans. Being useful to them would facilitate his return to Egypt and strengthen his hand in the political battle for post‑war Greece. This was because it was precisely in this period, during the last year of the war, that Washington began to define its goals for post‑war Europe. Getting Bodosakis on their side provided a possible way to strengthen America’s position in the Greek political world and to counterbalance British power in the shaping of a new European order. Seen from the point of view of Bodosakis, his American connection also pointed to the future as a means to reduce his dependence on the British and give him back some of the leverage he had lost after the “German option” had expired. However, soon the British found out about his agreement with the OSS, something which made him decide to call off the deal.75 In the spite of that, the British continued to see him as an agent working to promote US interests to the detriment of London’s plans.
64This was for the same reason the British did not want him back in Egypt. As they could not move the Americans to prevent him from coming, it became a British top priority to have Bodosakis removed from the scene and expelled from Egypt. This involved Winston Churchill. A message was prepared for the British Prime Minster to be send to Rex Leeper, the British Ambassador to the Greek Government-in‑Exile, saying:
We cannot have the interest of the Army compromised by armaments magnates like Bodossakis manoeuvring for future profit. You should [see] what can be done to this evil‑doer. Make sure whether he is an American or not […] Why […] should this armaments profiteer start mischief-making on his own.76
- 77 TNA, FO 371/43730.
- 78 BMHA 1944.
65Churchill took the Bodosakis challenge seriously and it is obvious that the Prime Minister was convinced that he was an obstacle to British interests in the region, something he expressed in gross exaggerations: “We cannot have the lives of soldiers compromised for the sake of financial magnates and their far‑flung intrigues. Wealth must not be an obstacle to the struggling United Nations in their forward march.”77 And so it happened that soon after he had returned to Egypt, on 11 May 1944, Bodosakis was arrested.78
- 79 TNA, FO 371/43731, 24.5.1944.
66However, the case against Bodosakis was weak. The strongest evidence against him showed “him to be a thoroughly undesirable character” but the MI5 had nothing strong enough to justify his arrest. The “real” reasons, the security service concluded, for Bodosakis’ arrest, were that he had become a dominant feature in Greek politics and because he “actively prevented” the formation of a new Greek government under Britain’s favourite, George Papandreou.79
- 80 Iatrides (ed.) 1980, p. 552.
67But, as we shall see, the “issue of Bodosakis” went beyond mutual recriminations among the Greek politicians in exile. It was interconnected with the control of the Greek intelligence service and Bodosakis’ communication with enemy-occupied territory. The American Ambassador to Greece, Lincoln MacVeagh, made this clear in a cable. He informed Washington that Bodosakis was a key person for the Greek intelligence service and for obtaining information from occupied Europe. Its functions and networks in occupied Greece were mainly based on contacts in the industries formerly owned by Bodosakis, while the personnel to a great part were “his men”.80
- 81 Iatrides (ed.) 1980, p. 552.
68The issue of Bodosakis’ intelligence network became increasingly acute as the plans proceeded to transfer the Greek Government-in‑Exile to Greece. It widened the rift in the Greek political world because the British-backed Prime Minister Papandreou was determined to take over the control of the Hellenic Intelligence Service from Bodosakis to weaken his rival Sophoclis Venizelos who was supported by Bodosakis.81
- 82 Clogg 2000, p. 117.
- 83 TNA, FO 371/43731, 26.6.1944.
69It was Bodosakis’ contacts with occupied Greece that caused worries because he used these networks for intelligence purposes and because he was suspected of working for the Americans. Leeper was convinced that the OSS had established a wireless contact which enabled Venizelos to communicate with the leaders of the leading resistance movement in occupied Greece, the EAM, behind Britain’s and Papandreou’s back. He also believed that the Americans had plans of landing in Greece and that the Venizelos-Bodosakis coalition wanted to use the OSS to form a government in Athens under the leadership of Venizelos.82 This moved the case back to top priority, and to a disillusioned Winston Churchill, who decided to make a last-ditch effort to avoid the unavoidable by putting his weight behind an ultra-short but unmistakable plea: “Please no release of Bodossakis.”83
- 84 Hatziotis 2005, p. 228.
70But Churchill’s intervention could not prevent the release of Bodosakis. In mid‑August 1944 he was released from prison. Now the British wanted to exile him to the Sudan while Bodosakis wanted to go to Turkey; in the end he and his wife were sent to Lebanon. But even after the liberation of Greece later that year, the British kept him in Lebanon because they would not allow him to return to Greece as long as Papandreou was Prime Minister, Bodosakis claimed.84 Finally, Bodosakis returned to Greece in April 1945. This also ends our examination of illegal trade in the Mediterranean in the interwar period. It marks the full circle of the conditions on which trade in this period was predicated. Illegal trade and circumventions of sanctions still exist but in relation to the Mediterranean, the post‑war period and in particular the Cold War created new and different modalities which require a new study to understand.
71Illicit trade in the 1930s involving Greek agents first of all responded to business opportunities created by the major conflicts around the Great Sea. These were local in terms of battle grounds and conflict zones but international and systemic in terms of interests and actors. The Spanish Civil War was the largest in terms of repercussions in the European state system and took the shape of a proxy war between Germany and Italy on the one hand and the Soviet Union and volunteers from various countries around the world on the other hand. The Arab revolt involved Britain, Zionists and Palestinians and various actors from the countries around Palestine. It also conditioned Britain’s role and overall standing in the Middle East, while both Germany and Italy had geopolitical interests at stake and stood to gain in the Middle East by supporting the Palestinians and Arab nationalism.
72In terms of business, the fact that the Spanish Government was willing to pay for arms in scarce currencies like gold, Sterling and Dollars made it such an attractive business that the Metaxas regime and Hitler’s second-in‑command, Göring, were prompted to cooperate with arms dealers and protect them from their enemies. This is why a private actor of Bodosakis’ calibre was able convince the Greek State to become a party to his business and himself to become a middleman for Göring. The arms trade with the Republicans was a commercial enterprise with a national, economic dimension because it created purchase power on the world market in such abundance that it enabled the new regimes in Greece and Germany to pursue their political goals in ways which would not otherwise have been possible. This is also why the arms trade became a political interest for its protectors because it contributed to enhancing the new regime vis‑à‑vis the old regime and bolster their the individual positions of its protectors in the state apparatus.
73With regard to smuggling Jews to Palestine and selling arms to the Palestinians as well as arming Iraq and Egypt, the economic gains were smaller. But there were also long-term prospects in the transactions with the Middle. East. In addition to his own gains, Bodosakis also wanted to make himself useful to the Germans and to the Greek national economy, hoping to secure the role of his firms and of Greece in the future as a platform for German exports to that region.
74Smuggling Jews to Palestine was a composite operation. At one end of the transactions it was conditioned by ideological factors, Hitler’s racial war against the Jewish people, and at the other end by Britain’s immigration laws in Palestine. The actors in the networks were driven by ideology too: the Zionists wanted to save Jews but also to increase the Jewish population in Palestine with able-bodied men and women to make a Jewish state in Palestine. For the shipping companies and the captains who facilitated the transport, it first of all constituted additional earnings to what they received from the Spanish trade, and acted as a way to compensate the shrinking market in Spain. The Greek State hardly had any interest in this business, but it offered additional income to individual civil servants.
75The interwar period was unique in the sense that some actors were able to move across the entire Mediterranean on both shores of the sea unobstructed, while others were not. Those who had a background in the Ottoman Empire and had established their careers there before it was partitioned into a number of new states were often able to navigate the sea and the lands around it as if there were no national borders, owing to the networks they had established during the Ottoman period, while to outsiders the Mediterranean had become a closed sea encircled by the nation states succeeding the Empire. The emblematic example of a person who was able to rely on the networks he had established in the Ottoman lands, is Bodosakis. His vast undertakings in the Empire and his strong networks enabled him to operate in the interwar period of nation states and multiple new borders around the Mediterranean as if there were no borders. But the trick that enabled him to exploit this potential to the level he did was the support he got from the state of his new homeland. It was for the same reason he mingled in politics: to establish reliable connections and ensure he got as many friends in the government as possible, as a means to optimize his business opportunities. Finally, these specific conditions of the interwar period created a specific dynamic which made actors who did not have a background in the Ottoman Empire want to cooperate with people who had one. This dynamic began to fade, and did so quickly in the post‑war period with the emergence of a bipolar international system and because people from the last Ottoman generation like Bodosakis began to disappear.
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