Raoul Wallenberg and Mellaneuropeiska — Swedish economic “agents” in World War II

By Susanne Berger and Vadim Birstein

Raoul Wallenberg and his company fulfilled an important role in the Swedish official “Economic Defense Readiness” program (Rikskommissionen för Ekonomisk Försvarsberedskap). The fact that the Swedish military and its respective intelligence services oversaw this program may explain the claims that Wallenberg functioned as an agent of Swedish intelligence during World War II.

Many details of Raoul Wallenberg’s life, especially regarding his personal and professional background, remain unknown. Over the years, the information has been blended out by journalists, historians and researchers, as they distilled the essence of the Wallenberg story into its current, rather generalized form. Some of the lost facets of the story may not only help to explain the official handling of the case by Swedish and Russian authorities over the years, but may also provide helpful clues for the future investigation of Wallenberg’s fate.afds

In 2014, Jan Bergman, a Swedish author, claimed that Raoul Wallenberg’s company Mellaneuropeiska (or Meropa) was almost certainly a creation of the Swedish C-byrån (C-bureau), a Swedish intelligence agency that functioned under the Swedish Defense Staff during World War II.[1] The creation of Mellaneuropeiska was to have occurred as part of the close cooperation between C-byrån and members of the influential Wallenberg Family at the time. Bergman offered no evidence for this assertion. C-byrån was established in 1939, headed by Major Carl Petersén, and existed until 1946.[2] During the war, Petersén was principally responsible for contacts with the Western Allies, while his deputy, Major Hellmuth Ternberg, was in charge of information from Finland, Germany, Hungary, Turkey, and Switzerland. According to Bergman, Mellaneuropeiska served as a cover for a number of foreign intelligence missions, carried out by Raoul Wallenberg, due to his ability to travel throughout occupied Europe.

Bergman further argued that the deputy head of C-byrån, Hellmuth Ternberg, played a major role in Wallenberg’s recruitment for the humanitarian mission to Budapest in 1944. One reason for this claim was the fact that by the end of the war, C-byrån helped to support U.S. and British intelligence operations, especially in the Baltic region. In Hungary, Ternberg and this colleagues had developed detailed plans to assist the Hungarian resistance movement in an uprising against the Nazi government. Raoul Wallenberg, as well as his diplomatic colleague Per Anger, were in contact with the leader of the group in question.[3]

Just as importantly, Ternberg was acquainted with the leading members of the Wallenberg family, before and after the war, while his brother, Egon Ternberg, was one of Raoul’s godfathers.[4] Therefore, the connection between Mellaneuropeiska and C-byrån suggested by Bergman appears quite logical. However, a more careful analysis of currently available information reveals a slightly more complex picture of Raoul Wallenberg’s involvement in various activities than Bergman provides.

The Swedish Economic Defense Readiness Commission

During the years leading up to World War II, the Swedish economic and political establishment went on full alert. By 1937, the Swedish government had reorganized the National Commission for Economic Defense Readiness (Rikskommissionen för Ekonomisk Försvarsberedskap). One of the Commission’s main tasks was to ensure that Sweden would have adequate supplies of a wide variety of goods, especially medicines and food, for the country’s population during wartime. Formed in 1928, the Commission functioned under the umbrella of the Swedish Budget Office (Folkushållningsdepartementet).

The other focus of the Commission was to supply the Swedish Armed Forces with essential raw materials, including chemicals and strategic goods, such as fuel, as well as with important technical equipment. This equipment ranged from the very basic, like light bulbs and ammunition, to the highly sophisticated, like special optical sights to be mounted on rifles.[5]

The Commission was formally headed by a former official of the Swedish Finance Ministry Karl Samuel Levinson, who was Governor of the Capital City Area of Stockholm, and General Olof Thörnell, Swedish Supreme Military Commander. Other members included the chiefs of the Swedish Navy, Army, Air Force and, notably, the Swedish Defense Staff, including C-byrån. Heads of the National Board of Trade (Kommerskollegium) and the Board of Agriculture also played an important role (see Fig. 2).

In 1939, the Swedish Economic Defense Readiness Commission transferred some of its responsibilities to the National Agency for Reserve Goods (Statens Reservförrådsnämnd). The task of the latter was “to handle questions regarding the purchase and storage of imported goods on behalf of the [Swedish] government.” The procurement of these goods was considered essential for “[Sweden’s] business and the public, as well as for the country’s economic defense readiness.”[6]

In 1940, Walter Wehtje was one of its members, who at the time headed Atlas Diesel (now Atlas Copco), a producer of heavy machinery. The company was formed in 1873 by the banker André Oscar Wallenberg, Raoul’s great-grandfather, who founded Stockholms Enskilda Bank (SEB), Stockholm’s first private bank, in 1856.[7]

The National Agency for Reserve Goods had the right to make contracts with specific persons or companies. It also had the ability to provide quite large, independent credits to Swedish businesses engaged in international trade, plus it handled a number of questions related to gold and currency issues resulting from these transactions. For example, in 1945, the Swedish Reserve Goods Agency and the War Insurance Agency (Krigsförsäkringsnämnd) requested the transfer of 390 kg of Swedish-owned gold that had been stored by the Swedish Legation in Tokyo.[8] The gold had been acquired as payment by Japan for certain economic transactions, including the expenses incurred for maintaining the Japanese Legation in Stockholm. Swedish officials asked for arrangements to be made for Swedish diplomats and other personnel traveling home from Tokyo and Shanghai (via Moscow) to help transfer the gold. It would be interesting to see if similar deposits were stored in Budapest in 1944-45.

A Complex Web of Business and Intelligence Contacts

Mellaneuropeiska was part of the Banankompaniet business group (founded in 1909), owned by Swedish entrepreneurs Carl Matthiessen and Sven Salén. Mellaneuropeiska was founded in 1941, mainly as a response to the severe restrictions of the transatlantic trade with the U.S., South America, as well as the Far East after the outbreak of the war.

Banankompaniet was dependent on its South American connections for the importation of fruits and other food items. Therefore, it needed to find alternative business ventures in order to stay profitable. As a result, after 1939, the needs of the Swedish government and many leading businessmen like Matthiessen and Salén coincided to a large degree. It is becoming increasingly clear that Raoul Wallenberg and his Hungarian business partner, Kálmán Lauer, were tapped to lead Mellaneuropeiska with the idea that it could fulfill an important role in the official Swedish Economic Defense Readiness program, by providing vitally needed foodstuffs and raw materials, in particular from Hungary. As such, both men became official Swedish “agents” in the economic arena.

At the beginning of the war, the central goal of Sweden’s political and intelligence establishment had been to avoid the country’s occupation by a foreign power, especially by Nazi Germany or the Soviet Union. By the end of 1942, as Germany’s military fortunes began to wane, the Swedish focus shifted increasingly towards curtailing Soviet expansionary aims in the Baltic countries and throughout Eastern Europe. Meanwhile, Swedish business leaders sought to position their country as best they could in the newly emerging post-war order. These varying priorities made for rather interesting and somewhat complicated alliances.

The Swedish shipping magnate Sven Salén, who was strongly pro-Allied, was a good friend and business partner of the influential Swedish banker Jacob Wallenberg, Raoul’s cousin once removed and one of his godfathers. Both men, in turn, maintained close ties to the prominent Swedish economist Per Jacobsson.[9] Since 1931, Jacobsson had served as an economic advisor to the Bank for International Settlements (BIS), located in Basel, Switzerland, which provided him with crucial international contacts, across a broad ideological and political spectrum.[10] These contacts included, among others, President of the German Reichsbank, Hjalmar Schacht, and the German diplomat Adam von Trott zu Solz, a leading figure in the anti-Nazi resistance.[11]

Jacobsson worked for Swedish intelligence throughout the war and repeatedly met with Hellmuth Ternberg on his trips abroad. Ternberg and other leading C-byrån officers, in turn, cooperated closely with the Abwehr, German military intelligence and counterintelligence service, including exchanging information about the Soviet Union.[12] A good example is C-byrån’s close working relationship with Alexander Cellarius, chief liaison officer of the German Abwehr in Finland and Estonia (Büro Cellarius).[13]

The Swedish Wartime “Crisis Program” and Mellaneuropeiska

Swedish Embassies and Legations played an important role in the acquisition of essential goods from abroad.[14] It is an often overlooked fact that during the war Raoul Wallenberg’s colleague Per Anger served as the official Trade Attaché at the Swedish Legation, Budapest. In this capacity, he dealt with all aspects of Swedish business activities in Hungary. He also had regular contacts with the Allied and Swedish intelligence representatives in Stockholm[15].

From 1941-1945, Mellaneuropeiska definitely functioned as an extended arm of the Swedish government’s official crisis program (Krisprogram), in economic matters. It is quite likely that Jacob Wallenberg groomed Raoul for this special task. The choice is not surprising if one recalls that Raoul was greatly interested in all aspects of Swedish international trade, as he indicated in a letter written to his grandfather Gustaf Wallenberg already in 1934: “I have expressed my interest in Swedish export and everything touching on international trade in general so many times that you know I’m in complete agreement about your plans for me.”[16]

After Gustav Wallenberg’s death in 1937, Raoul’s professional aspirations depended largely on Jacob Wallenberg and his brother Marcus, who together headed the Wallenberg banking and industrial empire. Raoul was eager to take on more serious responsibilities. In September 1939, he contacted Jacob Wallenberg to remind him that “during our last meeting you told me that the war would perhaps lead to a number of problems and that you possibly would want to use me in connection with solving them.”[17]

Aside from securing adequate supplies for the Swedish economy, these plans seem to have included, among other things, the protection of the financial holdings of friends and business associates.[18] For example, Matthiessen and Salén apparently actively assisted the family of the Hungarian industrialist Manfred Weiss to transfer their assets abroad.[19] Raoul Wallenberg’s plans in 1944, for an organization dedicated to the restoration of Jewish property after the war, also may have partly reflected these broader purposes.[20] All of this would have served to promote Sweden’s short and long-term interests, at home and internationally.

Mellaneuropeiska as an Official Swedish Business Agent

Jacob Wallenberg (“Juju”) and his younger brother Marcus (“Dodde”) Jr. held several important public positions during the war, due to the prominence of the family bank, and the great number of powerful industrial and commercial enterprises they controlled. In 1941, Jacob headed the Swedish government’s trade talks with Nazi Germany, while two years later his brother Marcus took the same role in the Swedish-British trade negotiations. One of Jacob Wallenberg’s lesser-known posts was with the Konjunkturinstitutet (The National Institute of Economic Research). The main task of this organization was to define and shape Swedish national economic policy (Fig. 2). Members included, among others, head of the National Board of Trade (Kommerskollegium), and Torsten Hérnod, director of SUKAB (Sveriges Utrikeshandels Kompensations Aktiebolag), the Swedish Foreign Trade Compensation Company.

A huge business consortium, SUKAB was comprised of all leading Swedish industrial enterprises, including those controlled by the Wallenberg family. SUKAB’s role was to coordinate Swedish trade across international boundaries, especially with the occupied territories, by arranging so-called “compensation” transactions, a form of barter. Mellaneuropeiska functioned under SUKAB’s broad umbrella and Raoul Wallenberg may have received some of his professional training at the company. A former director of SUKAB, Nils Jenselius, claimed that he met Raoul when the latter worked at SUKAB during the 1940s.[21]

The fact that in 1941 Raoul joined a small company like Mellaneuropeiska very much reflected the attitude of Gustav Wallenberg who had repeatedly advised his grandson that it was much better to hold a leading position in a small business, rather than having to compete to be heard in a larger enterprise.[22] Mellaneuropeiska may have been small but it fulfilled a vital economic task. In just three years, from 1941-1943, the company managed to import foodstuffs and other goods, mostly from Hungary, worth an estimated 10,000,000 SEK in (approximately $25,000,000 today).[23] It has long been overlooked that most of these transactions were facilitated with the help of German intermediaries, like the German businessman Ludolph Christensen who headed the import-export firm J. Nootbaar in Hamburg. In fact, it was Christensen who secured most of the transfer of goods through German territories that Mellaneuropeiska imported from Hungary.[24] Although not a member of the Nazi Party, Christensen had important connections to leading Nazi officials, such as SS General Karl Wolff. Lauer and Raoul Wallenberg later used these connections in order to try to secure — unsuccessfully — the rescue of Lauer’s relatives in Hungary. As he wrote in one of his letters, Raoul also intended to use Christensen’s contacts to determine Germany’s future plans in Hungary. It is unclear if these intentions were ever realized. The information would have been of some importance to both Swedish and Allied intelligence representatives.[25]

Contrary to most accounts, Mellaneuropeiska did not exclusively deal in foodstuffs. Shortly after its founding in 1941, one of the firm’s first official orders came from the National Agency for Reserve Goods. It requested the company to arrange the purchase of a combined 160 tons of fuel from Hungary.[26] At the time, gasoline was already severely rationed in Sweden. The company therefore functioned also in the role of a general business agent.

Similar transactions were carried out by Swedish companies operating abroad, part of a network of small Swedish firms all working to secure key goods for the Swedish wartime economy. One of them, Baltiska Oljeaktiebolag, controlled by the Wallenberg family, was heavily involved in the Estonian shale oil industry. In 1941, Baltiska Oljeaktiebolag shared an address for a few months with Mellaneuropeiska at Blasieholmsgatan 3, in central Stockholm, just around the corner from the Wallenberg owned Stockholms Enskilda Bank (SEB). Another company, Transskandia, which was formed in 1942, was located a few doors down. It was owned by Marcus Wallenberg’s friend, the lawyer Wilhelm Moberg and focused its attentions on Latvia.[27]

From July through November 1941, Blasieholmsgatan 3 was Mellaneuropeiska’s official business address. A former employee of Baltiska Oljeaktiebolag has stated that she worked in an office there with Raoul Wallenberg in the early 1940s.[28] However, it remains unclear if Raoul Wallenberg ever traveled to the Baltic region before 1944 or if he may have dealt with problems involving the Baltic countries.[29]

After the war, Kálmán Lauer claimed that Raoul Wallenberg had served as Jacob Wallenberg’s Private Secretary “during the time he [Raoul] worked for Meropa [i.e., Mellaneuropeiska].”[30] The claim has never been substantiated, but it is possible that Raoul dealt with Jacob in some confidential capacity, especially on the subject of Sweden’s supply situation during the war. To some extent, this was recently confirmed by the grandson of Marcus “Dodde” Wallenberg, also named Marcus Wallenberg, the present head of the Wallenberg business group. In a 2012 interview, he stated that Raoul would not have been permitted to join the family’s inner circle without his previously having mastered a series of “test” assignments, to see how he handled these challenges.[31] If Lauer’s assertion is true, ever since about 1939, Raoul may have learned important details about Sweden’s international trade relations, especially those involving Wallenberg family businesses.

“A Special Assignment for the Swedish State”

As the Swedish historian Bengt Jangfeldt has pointed out, Raoul Wallenberg was far more politically interested and engaged than he often let on to others.[32] Combined with the military training he received in the Swedish Home Guard (where he worked as an instructor), Raoul’s role in official efforts to secure Sweden’s wartime supply situation would have provided him with many valuable skills.[33] The image of Raoul Wallenberg as a rather bored, directionless young man before he took on the humanitarian mission to Budapest in 1944 may, therefore, have to be revised.

Like other Swedish companies engaged in wartime trade, Mellaneuropeiska may have also served as a useful cover for collecting certain intelligence information. This possibly explains the claim by the brother of one of Raoul Wallenberg’s closest friends during the 1940s, who said that “Raoul carried out special assignments on behalf of the Swedish state.”[34] It may be a reference to the role Mellaneuropeiska played in securing vital goods for the Swedish economy. It also opens up the possibility that, beyond that, Raoul conducted some type of confidential economic and other intelligence tasks for the Swedish government and possibly C-byrån. It provides also an added facet to Raoul’s contacts with American officials, in particular with Iver Olsen, the Office of Strategic Services (OSS) representative in Stockholm, as well as with R. Taylor Cole, deputy chief of the OSS Stockholm Station and later Chief of the OSS Secret Intelligence Section (SI) (from August to October 1944.)

Economic Intelligence Collection and the Role of Iver Olsen

In late 1943, Iver Olsen was appointed Financial Attaché at the American Legation. In addition to his OSS duties, he also from April 1944 served as Attaché for Refugees, representing the U.S. War Refugee Board (WRB).[35] It was in this latter capacity that he supposedly recruited Raoul Wallenberg for the humanitarian mission to Budapest. While Raoul’s assignment in 1944 was primarily humanitarian, it definitely included other aspects. Soviet officials had ample reasons to be suspicious of Wallenberg’s connections with Olsen. Olsen’s Jewish rescue operations in the Baltic countries, which received considerable support from the Swedish Defense Staff, including Hellmuth Ternberg, involved known Nazis and war criminals. These men later helped British and Swedish intelligence to establish secret anti-Soviet organizations in the region.[36]

The economic aspects of Olsen’s activities that so far have received limited attention from historians, as it relates to Raoul Wallenberg’s mission. In a detailed memorandum written in January 1944, Olsen requested from his superiors to be in full control of: “I. (a) Any matters in which the [U.S.] Legation is involved concerning the financing of underground movements in the occupied countries, … III. (a) The trade and capital movements in Axis and occupied countries. … III. (e) Information concerning whereabouts, activities and resources of important bankers, industrialists and other persons of significance in Axis or occupied countries … Any specific information regarding Axis looting in occupied countries.”[37]

Not surprisingly, it was Iver Olsen who pushed hard for the U.S. Treasury Department’s investigation of the Wallenberg brothers’ economic dealings with Nazi Germany. He especially insisted on the investigation of sales of ball bearings to Germany and the cloaking of German owned assets in the U.S., such as the Bosch group. Less well known is the fact that on May 23, 1944, Olsen reported to the U.S. Treasury Secretary that Sweden, and in particular the Wallenbergs, supposedly played a major role in Germany’s attempt to acquire large sums of neutral currencies.[38] Citing an unnamed source in Swedish intelligence, Olsen wrote that in the span of just a few months, Swedish intermediaries, such as the Swedish banking firm Josephson & Co., had allegedly obtained for German account about $5 million from Hungary, Bulgaria, Spain and Rumania (roughly $50 million at today’s value).[39]

Olsen also added that the Germans and their intermediaries obtained dollars in these countries “at a discount, through forced sale.” “The Enskilda Bank and Skandinaviska Bank”, Olsen continued, “are among large Swedish purchasers.” So were, apparently, ASEA, Electrolux, AGA Baltic and Nordiska Kompaniet, with purchases estimated at $1,5 million between them. Olsen’s claims and the official investigation of the Wallenberg family businesses make his selection and approval of Raoul Wallenberg for the humanitarian mission in Hungary all the more poignant.

Another interesting aspect of Wallenberg’s humanitarian mission was the protection of “Zukunftsmenschen” (“People of the Future”), as Kálmán Lauer put it in his correspondence.[40] It is known that Raoul negotiated in Budapest with Nazi officials for the rescue of a number of highly skilled technical workers of the Manfred Weiss industrial group. He also personally protected some leading Hungarian businessmen and scientists, going so far as to offer them sanctuary in his own home. In August 1944, the War Refugee Board asked Iver Olsen to forward a request to Wallenberg to determine the circumstances behind the kidnapping of Lipót Aschner, Director of the large electronics concern Tungsram, by members of the German SS. Aschner was taken to the Mauthausen concentration camp, from where he was freed in December 1944, after a payment of a ransom negotiated via Tungsram’s Swedish and Swiss affiliates.[41]

An OSS telegram from August 1, 1945 makes it clear that the U.S. and Sweden intended to cooperate closely in the furnishing of intelligence information about the Soviet Union and that Swedish companies were to have a significant part in this plan: “Swedes planning organize their future intelligence eastward, using representatives of large Swedish companies and industrial firms which have agencies and representatives in Russia, Baltics and Balkans. Economic Intelligence will be furnished us.”[42] Wallenberg businesses and their foreign affiliates obviously would have been involved in these plans. In return, Sweden was to receive detailed information about Soviet troop deployments throughout Europe.

Separate Peace Discussions and Other Intelligence Connections

There are other indications that Wallenberg’s mission served broader purposes. In his memoir, R. Taylor Cole stated explicitly that “our Hungarian interests and contacts occasioned a meeting with Raoul Wallenberg.” This appears to suggest discussions beyond the planned Jewish rescue activities.[43] Since September 1943, Cole had conducted frequent, highly secret exchanges with the Hungarian Minister in Stockholm, Dr. Antal Ulllein-Reviczky, who was very much pro-Allied.[44]

One of those meetings took place on December 1, 1943, just a day before Ullein-Reviczky was to attend a cocktail party at Raoul Wallenberg’s house. Ullein-Reviczky had first met Raoul Wallenberg during the latter’s business trip to Hungary in the early autumn of 1943.[45] At that very moment Ullein-Reviczjy was involved in highly secret and sensitive separate peace discussions via Turkey (Ullein-Reviczky’s in-laws were British diplomats living in Istanbul). These discussions involved representatives of the Special Operations Executive (SOE), Britain’s foreign sabotage organization, which at the time was headed by the British banker Charles Hambro.[46] He happened to be married to Marcus Wallenberg’s first wife. It has never been established if Raoul Wallenberg had any connections to these or any other separate peace discussions.

As had been the case in the Baltic operations, the Swedish Defense Staff and C-byrån also secretly assisted Allied intelligence aims in Hungary. Ternberg personally traveled to Budapest at least twice between 1943-1944. Very few details are known about these trips or Ternberg’s special Hungarian network.[47] It is well known, however, that in Budapest, Wallenberg had contacts with both Swedish and Allied intelligence representatives, including agents of the American Jewish Joint Distribution Committee (JOINT), a Jewish aid and rescue organization that financed Wallenberg’s mission. The Soviets were very suspicious of the activities of the JOINT and considered it a front for U.S. intelligence interests in Hungary.[48]

In September 1944, Wallenberg met Thorsten Akrell, special agent of the Swedish military counterintelligence (Försvarsstabens inrikesavdelning), when Akrell delivered several radio sets to members of the Hungarian resistance. Raoul Wallenberg and Akrell, most likely, knew each other well before 1944. Akrell worked closely with Carl Bonde, the stepson of Raoul’s paternal aunt, Ebba Bonde.[49] Carl Bonde headed Swedish military counterintelligence from 1943-1945.

Through the Swedish Legation, Budapest, Wallenberg also had contact to a group of Dutch and British officers who had escaped from German prisoners-of-war camps and who aided the Hungarian resistance as well as persecuted Jews. Some of the men, like British Warrant Officer Reginald Barratt, were close to the circle around the Hungarian Regent, Miklós Horthy, which maintained contacts with British intelligence representatives and was prepared to guard British and U.S. interests in the case of a Soviet occupation of Hungary. A few of these men later were later detained by Soviet military forces and, like Raoul Wallenberg, imprisoned in the Soviet Union.[50]

Recently, the historian Gellert Kovacs discovered that Swedish diplomats, apparently, played a significant role in providing Western Allies with intelligence collected by the Hungarian resistance.[51] For this, a radio transmitter supposedly located in the Swedish Legation, Budapest, was used.

Information from Budapest was passed on to the Allied air forces deployed on Malta and was used for bombing barges on the Danube River carrying vital oil supplies for the German Wehrmacht. Kovacs also cites reports about Raoul Wallenberg’s alleged use of his diplomatic car for the transportation of weapons and ammunition for the resistance.[52] If all this is true, the involvement of official Swedish diplomatic personnel, especially Raoul Wallenberg and Per Anger, in covert operations would have constituted a serious breach of Swedish neutrality.

Before Raoul’s departure for Hungary, Jacob Wallenberg apparently made sure to request special protection for him from his close acquaintance, the SS-Officer and Head of Foreign Intelligence, Walter Schellenberg.[53] It has never been clarified what steps, if any, Schellenberg took in response to Jacob’s request, if Raoul Wallenberg himself was aware of the request and if there was any contact between the two men. It is not known if Soviet representatives were informed about Jacob Wallenberg’s approach to Schellenberg.

A whole set of unsolved questions also persists about Raoul Wallenberg’s contacts with German Nazi agents and officials in Budapest and the deals he may have made in order to save lives. It is interesting to note that Franz Rudolf Gfrorner, head of the Abwehr group in Budapest, apparently, knew Wallenberg.[54] Gfrorner, in particular, collected information on the JOINT in Bucharest.

Despite all the stringent preventative measures, some Swedish protective documents issued by Wallenberg’s humanitarian section of the Swedish Legation, apparently, ended up in the hands of Hungarian and German Nazis.[55] This fact obviously fueled Soviet suspicions of Wallenbderg’s activities.

Similarly, even though after the German occupation of Hungary in March 1944 all trade with Sweden was officially suspended, the Hungarian authorities acquired important war materials, such as a large amount of ball bearings, from the Wallenberg-controlled company Svenska Kullagerfabriken (SKF). September 1944, SKF headquarters in Göthenburg, Sweden, decided to hand over all European inventories to German authorities.[56] Soviet authorities strongly objected to this handover and threatened to place SKF’s Purchasing Director in Budapest, Ferencz Pirkner, on trial.

It remains unclear if Swedish representatives received any concessions from German or Hungarian officials in return, or if Raoul Wallenberg had any knowledge or involvement in these arrangements. Swedish author Staffan Thorsell has suggested that the continued deliveries of Swedish ball bearings throughout 1944 may have helped to secure the release of four leading Swedish businessmen of the L.M. Ericsson and Swedish Match companies controlled by the Wallenberg family.[57] The men were part of a group of seven so-called “Warsaw Swedes,” who had been detained by the German Secret Police (Gestapo) in Poland in 1942 for their aid to the Polish resistance.

The Importance of Russian Archives

Unfortunately, much of the Swedish source material needed to solve the questions about Wallenberg’s contacts and activities has been lost or destroyed, especially documents from the wartime Swedish intelligence services. Some of the relevant files remain inaccessible in a number of private archives, including those of the Wallenberg family.

It is important to remember, however, that all these questions could almost certainly be answered by documentation that has been preserved in Russian archives. The Soviet foreign and military intelligence services had an extensive presence in foreign capitals during the war and undoubtedly reported about all these events in great detail. Yet, very little substantive information has emerged from Russian sources that would clarify what exactly the Soviet leadership knew about Raoul Wallenberg’s various connections and how they assessed this information. This includes relevant Soviet foreign intelligence reports from Stockholm and Budapest, as well as those of Soviet military intelligence, and military counterintelligence SMERSH units operating in Hungary in the years 1944-45. Russian officials have acknowledged that these files contain information about the work of the Swedish Legation, Budapest and its diplomats in those years.[58] Recently the Central Archive of the Russian Ministry of Defense revealed information that it keeps appointment notebooks of the German Reichsführer-SS Heinrich Himmler.[59] This is an example that many important documents about the World War II period remain locked away in various Russian archival collections.

Raoul Wallenberg’s status as a member of Sweden’s (and Europe’s) most powerful business family probably played a decisive role in Stalin’s decision to order his detention. The Soviet leader may have hoped that Raoul would prove useful to him in some way, perhaps as a means of pressuring Sweden and the Wallenberg family after the war. However, in the aftermath of Raoul Wallenberg’s arrest by Soviet authorities, Swedish officials in both Stockholm and Budapest apparently found it expedient to distance themselves from his activities and to abandon him to his fate.

[1] Jan Bergman. Sekreterarklubben: Svenska kvinnliga spioner under andra världskriget [Secretarial Club: Swedish Female Spies during World War II]. Stockholm: Norstedts, 2014. Pp. 346-50. Bergman cites the fact that C-byrån formed and administered several such front companies.

[2] C.G. McKay. From Information to Intrigue. Studies in Secret Service Based on the Swedish Experience 1939-45. London: Frank Cass & Co., 1993. Pp. 29-30.

[3] In 1944, Swedish intelligence provided a secret signal plan to be used by the Hungarian opposition group MFM (Magyar Függetlenségi Mozgalom). The MFM was led by Dr. Géza Soos, an official in the Press Department of the Hungarian Ministry of Foreign Affairs. P.38 in Susanne Berger. “Swedish Aspects of the Raoul Wallenberg Case (2001)”; also Göran Rydeberg. “Raoul Wallenberg – Historik och nya forskningsfält.” (August 2002), http://www.raoul-wallenberg.eu/wp-content/uploads/2010/03/RWhist.pdf.

[4] Entry in Raoul Wallenberg’s baptismal record. The document was first discovered in 2008 by Louise Schlyter, former Curator of Culture (Kulturintendent) at the Cultural Activities and Recreation Department at the City of Lidingö. In 1940, Egon Ternberg (1890-1953) served as Swedish Naval Attaché to Finland.

[5] Transcript of a Statens Reservförrådsnämnd meeting, February 8, 1940. SE/RA/420377, vol.4. Riksarkivet (Stockholm).

[6] Historik, Statens Reservförrådsnämnd, Richards Ritums, March 1964. SE/RA/42037. Riksarkivet (Stockholm).

[7] Walter Wehtje (1897-1990) later became a director in the Wallenberg family investment fund, Investor. He also served on the board of SEB from 1953 to 1969. His daughter, Olga Wehtje (b. 1930), married Marc Wallenberg Jr. (1924-1971). Their son Marcus (b. 1956) currently heads the Wallenberg business sphere, together with his cousin Jacob Wallenberg (b. 1956), son of Peter Wallenberg (1926-2015), younger brother of Marcus.

[8] Svensk Numismatisk Tidskrift. April 3, 2006, pp. 13-14. In 2002, an official Swedish Commission investigated the deposits of valuables in various Swedish Legations abroad during WWII. However, the Commission focused mainly on valuables stored by individual persons, such as persecuted Jews and citizens of the countries for which Sweden served as the official protective power. It did not discuss the so-called “country deposits”, meaning deposits owned by the Swedish government or foreign entities. The Commission’s final report does not mention the Swedish Legation in Japan. See “Utredningen inom Utrikesdepartementet om depositioner vid svenska utlandsmyndigheter vid tiden för den nazistiska förföljelsen och andra världskriget [The Ministry of Foreign Affairs Investigation of Deposits at Swedish Missions Abroad at the Tme of the Nazi Persecution and World War II].” Ds 2002:50, pp. 44-74; https://data.riksdagen.se/fil/763B4E1C-98EA-401A-A21F-B5078DA937B4.

[9] Göran Rydeberg. “Raoul Wallenberg – Historik och nya forskningsfält [Raoul Wallenberg – History and New Research Areas]” (2002), http://www.raoul-wallenberg.eu/wp-content/uploads/2010/03/RWhist.pdf.

[10] From 1920 to 1928, Per Jacobsson (1894-1963) was employed at the League of Nations, then, from 1931, he served as head of the Monetary and Economic Department of the Bank of International Settlements. He also authored the Bank’s Annual Report. In 1956, Jacobsson became Managing Director of the International Monetary Fund. Incidentally, Jacobsson also briefly headed The National Economic Defense Readiness Commission from 1928-30. See “The Per Jacobsson Foundation at 40: Commemorating a Statesman in International Monetary Affairs,” in: The Per Jacobsson Foundation, (Washington, D.C.: The International Monetary Fund, 2004). P. 3; also, http://www.perjacobsson.org/bio.htm.

[11] Erik Carlsson. Sverige och tysk motståndsrörelse under andra världskriget [Sweden and the German Resistance Movement during World War II]. Lund: Lund University Press, 1998. P. 392.

[12] Göran Rydeberg. “Raoul Wallenberg and Swedish Humint Actions during WWII.” Paper presented at a conference in Budapest, September 2014, commemorating the 60th anniversary of the humanitarian action of Raoul Wallenberg. P. 13.

[13] Maj Wechselmann. De bruna förbindelserna [The Brown Relations] (Stockholm: Ordfronts Förlag, 1995). Pp. 90-100. See also, for instance, Jukka Rislakki. “Abwehr ja Eesti [Abwehr and Estinia].” Eesti Ekspress. September 30, 1999, http://paber.ekspress.ee/Arhiiv/1999/39/Aosa/Elu30.html.

[14] Axel Gjöres and Curt Nordwall. “Memorandum Regarding the Tasks of Statens Reservförrådsnämnd,” dated November 1, 1946. Riksarkivet, Stockholm; and Richards Ritums, March 1964, SE/RA/42037, Riksarkivet (Stockholm).

[15] See Susanne Berger. “Stuck in Neutral: The Reasons behind Sweden’s Passivity in the Raoul Wallenberg Case” (2004). P. 23, http://www.raoul-wallenberg.eu/articles/stuck-in-neutral-susanne-berger/. In this context, it is interesting to mention that Anger had family connections with Sven Salén. Per Anger (1913-2002) was the nephew of Karl Axel Anger, who was married to Birgit Ellen Mörner af Morlanda. Her sister, Dagmar Mörner af Morlanda, was Salén’s wife.

[16] Raoul’s letter to his grandfather, Gustaf Wallenberg, dated November 1934. In: Raoul Wallenberg: Letters and Dispatches 1924-1944, edited by Birgitte Wallenberg and Gustaf Söderlund (New York: Arcade Publishing, 1995). P. 120. After the early death of Raoul’s father, Raoul Oscar Wallenberg, his grandfather Gustaf Wallenberg oversaw his education.

[17] Gert Nylander and Anders Perlinge. Raoul Wallenberg in Documents, 1927-1947 (Stockholm: Stiftelsen för Ekonomisk Historisk Forskning inom Bank och Företagande, Banking and Enterprise No. 3, 2000). P. 56.

[18] In 1942, Per Jacobsson delivered an urgent message to Jacob Wallenberg from Hungarian Jewish business owners who were seeking temporary “Aryanization” of their companies, in order to protect them from confiscation by Nazi authorities. Sverige och Judarnas tillgånger. Slutrapport från Kommissionen om judiska tillgånger i Sverige vid tiden för andra världskriget [Sweden and the Jews. Final Report of the Commission on the Jews in Sweden at the Time of World War II]. SOU199:20 (Stockholm 1999). P. 198.

[19] C.G. Mckay. “Excerpts from McKay’s Notes on the Raoul Wallenberg Case” (2011), 37-42, http://www.raoul-wallenberg.eu/articles/excerpts-from-mckay%e2%80%99s-notes-on-the-case-of-raoul-wallenberg/.

[20] Regarding Raoul Wallenberg’s post-war plans, see Lévai, Raoul Wallenberg. Pp. 218-30.

[21] Archives of the Swedish Ministry of Foreign Affairs, Raoul Wallenberg case file, memorandum by Claes Carbonnier, July 19. 1951. The SUKAB office was located at Blasieholmsgatan 11, which also housed Marcus Wallenberg’s private residence.

[22] Archives of the Swedish Ministry of Foreign Affairs, Raoul Wallenberg case file, memorandum by Claes Carbonnier, July 19. 1951. The SUKAB office was located at Blasieholmsgatan 11, which also housed Marcus Wallenberg’s private residence.

[23] Swedish citizenship application by Kálmán Lauer, dated May 27, 1944. Riksarkivet (Stockholm).

[24] Susanne Berger, C.G. McKay and Vadim Birstein. “Raoul Wallenberg’s secret German contacts” (January 14, 2015), http://www.raoul-wallenberg.eu/articles/ludolph-christensen/.

[25] Raoul Wallenberg’ letter to Kálmán Lauer, July 29, 1944. Kálmán Lauer’s private papers. Riksarkivet (Stockholm).

[26] In September 1941, Mellaneuropeiska also handled a shipment of fur coats from Hungary for the Swedish Army. http://mnl.gov.hu/a_het_dokumentuma/ismeretlen_wallenbergiratok.html.

[27] Baltiska Oljeaktiebolag: This company was originally called Estländska Oljeskifferkonsortiet and it was founded in 1926 by Marcus Wallenberg Sr., with the Investor AB, Emissionsinstitutet AB, and Norsk Hydro as its main shareholders. In 1936, the company was reorganized into Baltiska Oljeaktiebolag. Since 1933, Estonia had heavily profited from Germany’s preparation for war. In 1939, half of all Estonian shale oil production was sold to Germany, and until 1940, the German Navy was Baltiska Oljeaktiebolag’s main customer. After the Soviet occupation of Estonia in the summer of 1940, Baltiska Oljeaktiebolag eventually suspended operations.Rurik Holmberg. “Survival of the Unfit, Path Dependence and the Estonian Shale Oil Industry,” Linköping Studies in Arts and Science, No. 427 (Linköping University, 2008): 106-108. Transskandia Aktiebolag: See records of the Swedish Patent — och Registreringsvrket (PRV), Sundsvall. Registration No. 41653, vol. E3A: 2987.

[28] Statement by Gertrud Larsson, interviews with Olof Selling and Susanne Berger in 1999 and 2001.

[29] Vadim Birstein and Susanne Berger. “Blasieholmsgatan’s Secret” (November 1, 2016), https://www.vbirstein.com/2016/11/01/wallenberg-in-blasieholmsgatan/.

[30] Kálmán Lauer’s private papers, Wallenbergaktionen, 4, Riksarkivet (Stockholm). According to Carl Frostell, Jacob’s Private Secretary during the 1970s, Marcus Wallenberg employed up to five personal secretaries at a time. See Carl Frostell, I båt och bank med Jacob Wallenberg [With Jacob Wallenberg on a Boat and in Bank] (Stockholm: Carlssons, 1998). P. 37.

[31] Ingrid Carlberg. Det står ett rum och vänta påg dig [in English translation, Raoul Wallenberg] (Stockholm: Norstedts, 2012). P.171.

[32] Bengt Jangfeldt, The Hero of Budapest: The Triumph and Tragedy of Raoul Wallenberg (London: I.B. Tauris, 2014). Pp. 142-46. Raoul is also known to have admired the American film Pimpernel Smith (1941), in which a hapless British Archaeology Professor (played by Leslie Howard, a Hungarian Jew), supposedly not interested in politics, organizes the successful escape of leading German scholars and scientists from Nazi Germany.

[33] For a detailed description of Raoul Wallenberg’s activities in the Swedish Home Guard, see Lars Brink. När hoten var starka [When Threats Were Strong] (Gothenburg:Text & Bild Konsult, 2009). Chapter 5. Pp. 153-228.

[34] Susanne Berger’s personal correspondence with the family of Åke Burchardt, the brother of Raoul Wallenberg’s close friend, Björn Burchardt (2009). In addition, after Mellaneuropeiska had been black listed by the British government in 1942. This may have provided impetus for Mellaneuropeiska to enter into some type of reporting agreement with British and/or Swedish officials. Kálmán Lauer assured British diplomats in Stockholm that he and his company would “carry on business in the most loyal way and in accordance with the regulations of the war.” Archives of the Swedish Security Police (SÄPO), Stockholm. P 2819 Leslie Barber.

[35] The WRB was established in January 1944, on the orders of President Roosevelt, to assist the last surviving Jews and other persecuted minorities in Europe (see http://www.presidency.ucsb.edu/ws/index.php?pid=16540). When Wallenberg was sent to Hungary in July 1944, it was done in response to a formal request for assistance made by the WRB to the Swedish government. Wallenberg sent his reports from Budapest to Olsen through Swedish diplomatic channels.

[36] Tom Bower, The Red Web (London: Aurum Press Ltd.,1989), 42-43. See also Tore Pryser, “Var Wallenberg Spion for USA? [Was Wallenberg a U.S. Spy?]“ Dagbladet. February 3, 2001.

[37] Memorandum from Iver Olsen to Mr. Washington, January 19, 1944. The U.S. National Archives and Records Administration (NARA). RG 56, Entry 360 T, Box 21, Folder: Conferences, Mr. White’s Office, 1944. Cited in: Susanne Berger. “Swedish Aspects of the Raoul Wallenberg Case” (2000), p. 37, http://www.raoul-wallenberg.eu/.

[38] Letter from Iver Olsen to Harry D. White, U.S. Secretary of the Treasury, dated May 23, 1944. Cited in Göran Ahlström and Benny Carlson. “What Did Iver Olsen Tell Harry White? Sweden at the End of World War II from the ‘Olsen Angle’.” Lund Papers in Economic History. No. 98 (2005): 1-18, https://lucris.lub.lu.se/ws/files/4698790/4407047.pdf, and in Susanne Berger. “The Political Economy of Rescue.” Svenska Dagbladet. December 11, 2007.

[39] Interestingly, Raoul Wallenberg may well have known the firm Josephson & Co which was registered in Stockholm. He mentioned the name “Josephson” in a telegram he sent to Kálmán Lauer from Budapest in July 1944. In this telegram, written in German, Wallenberg referred to the rumors about possible separate peace negotiations between Germany and the Allies. He used the name “Ostfirma Josephson” (“Eastern Firm Josephson”) as a code name for one of the parties involved in the discussions, most likely Joseph Stalin (“Josephson”), indicating the Soviet Union. Telegram from Raoul Wallenberg to Lauer, dated July 22, 1944. Kálmán Lauer’s personal papers, Riksarkivet (Stockholm).

[40] Letters from Kálmán Lauer to Raoul Wallenberg, dated August 21, 1944 and November 24, 1944. Kálmán Lauer’s personal papers, Riksarkivet (Stockholm).

[41] Many of Wallenberg’s closest aides in Budapest worked for Tungsram and its partner firm, Orion. Berger. “Stuck in Neutral.” P. 32.

[42] A memorandum by OSS representative William Casey, later head of the CIA, to OSS London, dated May 3, 1944. William Casey. The Secret War Against Hitler. Washington, D.C.: Regnery Gateway, 2008. Appendix.

[43] Taylor Cole’s telegram from Stockholm to Director, dated August 1, 1945. NARA (Washington, D.C.), RG 226, Entry 210, Box 379.

[44] R. Taylor Cole. The Recollections of R. Taylor Cole: Educator, Emissary, Development Planner (Durham, N. C.: Duke University Press, 1983). P. 85.

[45] Ibid. P. 84. Some contacts were also managed through Andor Gellért, a Hungarian journalist and politician posted to the Hungarian Legation in Stockholm, who worked with the OSS. He later joined the OSS Budapest City Team, located in Bari, Italy. Both Gellért and Ullein-Reviczky also interacted closely with Per Anger.

[46] Vadim Birstein and Susanne Berger. “Not a Nobody: Choice of Raoul Wallenberg in 1944 Not Accidental.” March 19, 2012, www.raoul-wallenberg.eu; Antal Ullein-Reviczky. German War – Russian Peace: The Hungarian Tragedy, translated from the French by Lovice Ullein-Reviczky [Saint Helena (CA): Helena History Press, 2014]. Pp. 142, 145.

[47] It is known that Ternberg had at least one wireless operator stationed in Hungary. Rydeberg. “Raoul Wallenberg – Historik och nya forskningsfält.” P. 25.

[48] Raoul Wallenberg: Report of the Swedish-Russian Working Group. Stockholm, 2000. P.59; available at http://www.government.se/information-material/2000/01/raoul-wallenberg—report-of-the-swedish-russian-working-group-copy/. Soviet suspicion may have been deepened further by the fact that Wallenberg received considerable financial support for his mission from the JOINT. See Lévai. Raoul Wallenberg, 235.

[49] Count Carl Carlsson Bonde af Björnö or Carl C:son Bonde (1897–1990) served as captain in the Swedish General Staff in 1935, then he was military attaché in London in 1937-38. From October 1943 to 1945, the Western-oriented Bonde headed the Department for Interior Affairs (Försvarsstabens inrikesavdelning, military counterintelligence) at the Swedish Defense Staff. His father, Count Carl Gustaf Bonde af Björnö (1872 1957) was a Swedish Army officer. From 1920-41, he was married to Ebba Wallenberg (1896-1960), the daughter of Marcus Wallenberg Sr. and sister of the brothers Wallenberg. During WWII, Ebba Bonde was involved in anti-Nazi activities and aid to the refugees [Peter Tennant. Touchlines of War (Hull, England: The University of Hull Press, 1992. P. 76)]. Raoul Wallenberg was quite close to Ebba and visited her before his departure for Budapest.

[50] Susanne Berger and Catherine Schandl. “Det ungerska sambandet” [“Raoul Wallenberg’s unexplored intelligence connections”]. Dagens Nyheter. August 2, 2007; Vadim Birstein. SMERSH, Stalin’s Secret Weapon: Soviet Military Counterintelligence in WWII. London: BiteBack Publishing, 2012. Pp. 277-78.

[51] Gellert Kovacs. Skymning över Budapest [Twilight of Budapest] (Stockholm: Carlssons, 2013). P. 155.

[52] Ibid. Pp. 260-65.

[53] Nylander and Perlinge. Raoul Wallenberg in Documents 1927-1947. P. 76.

[54] Raoul Wallenberg: Report of the Swedish-Russian Working Group. P. 59. Franz Rudolf Gfrorner (1902-1952), an Austrian, served in the Abwehrstelle-Vienna since 1938. Later, in Budapest, as “Dr. Josef Schmidt” he participated in negotiations with the Jewish organizations about payments to the Germans for Jewish lives. Gestapo arrested him for keeping for himself the extorted gold and platinum. On Gfrorner’s activity in Budapest, see Alex Weissberg. Desperate Mission – Joel Brand’s Story (NY: Criterion, 1958). Pp. 30-36. On April 17, 1945, Gfrorner was arrested by SMERSH operatives and brought to Moscow. On February 11, 1952, the Military Tribunal of Moscow Military District sentenced Gfrorner to death as a Nazi spy. His plea for pardon was declined on March 27 [GARF (Moscow). Fond/Collection. 7523. Opis /Register 76. Delo/File 86. Ll./pp. 77–79; cited in: Barbara Stelzl-Marx. “Military Tribunals with the Army Unit 28990 and with the Moscow Military District: Sentenced to Death by Shooting.” In: NKVD/NKGB Activities and Its Cooperation with Other Secret Services in Central and Eastern Europe 1945-1989, ed. By Alexandra Grúňová (Bratislava: Nation’s Memory Institute, 2008). Pp. 318-34]. A month later, on April 30, 1952, he was executed. Interestingly, in 2001, the Russian Chief Military Prosecutor’s Office rehabilitated him, while most of former foreign prisoners who testified about Wallenberg in the 1950s, were not. See http://lists.memo.ru/d10/f216.htm.

[55] This issue was mentioned during an interrogation on March 17, 1945, of Hermann Grosheim-Krisko, former employee of the Swedish Legation in Budapest, by a SMERSH investigator. Document A11 (in Russian), Wallenberg Database of the Swedish Foreign Office, http://wallenbergdatabase.ud.se/. The precise circumstances of Grosheim-Krysko’s employment at the Swedish Legation, Budapest remain unclear. One needs to be very cautious regarding transcripts of Soviet interrogations, all of them were written down by Soviet investigators who phrased what the interrogated person said in their own words and with the goal to incriminate the prisoner. But in the chaotic conditions in Budapest immediately before the Soviet occupation in January 1945, German and Hungarian Nazis may have obtained some original Swedish protective documents, or most often forged copies, through the black market.

[56] Telegram from SKF Director H. Hamberg to Ferencz Pirkner, SKF Budapest (via the Swedish Foreign Ministry), from September 20, 1944. Riksarkivet (Stockholm), HP 2859. Cited in Berger. “Stuck in Neutral.” P. 36.

[57] Staffan Thorsell. Warszawasvenskarna: De som lät världen veta [Warsaw Swedes: Those Who Informed the World] (Stockholm: Albert Bonniers Förlag, 2014). P. 160. See also Staffan Thorsell. I hans majestäts tjänst – En berättelse från Hitlers Berlin och Stalins Moskva [In His Majesty’s Service: A Story from Hitler’s Berlin and Stalin’s Moscow] (Stockholm: Albert Bonniers Förlag, 2009). P. 133.

[58] In 1992, during a meeting of the Swedish-Russian Working Group that at the time formally investigated Raoul Wallenberg’s fate in Russia, Col. Vladimir K. Vinogradov of the FSB Central Archive (TsA FSB) stated that the reports from SMERSH operatives in Hungary for the years 1944-45 were available in the FSB archives, “including those concerning the work of the Swedish Legation in Budapest.” Vinogradov then provided a list of specific files in the FSB archive that Russian officials had supposedly already reviewed. Swedish officials were not permitted to study those files. Transcript of the Swedish-Russian Working Group meeting from June 18, 1992, Guy von Dardel Private Archive.

[59] Sven Felix Kellerhoff. “Warum Himmlers Kalender wichtig sind.” Die Welt, August 1, 2016, https://www.welt.de/geschichte/article157429768/Warum-Heinrich-Himmlers-Kalender-wichtig-sind.html.