The perceived importance of having Wagner’s expertise in the fight against Japan was illuminated by a dramatic event unfolding in Portsmouth, New Hampshire, just as he and his team arrived. On May 15, 1945, a Nazi submarine, identified in a New York Times headline as “the Japan-bound U-234,” surrendered itself to the USS Sutton in the waters five hundred miles off Cape Race, Newfoundland. Inside the submarine, which was en route to Japan, was a cache of Nazi wonder weapons, “said to contain what few aviation secrets may be left,” as well as “other war-weapon plans and pieces of equipment.” One of the wonder weapons on board was Dr. Wagner’s Hs 293 glider bomb, meant for use against the U.S. Navy in the Pacific. Additionally, there were drawings and plans for the V-1 flying bomb and the V-2 rocket, experimental equipment for stealth technology on submarines, an entire Me 262 fighter aircraft, and ten lead-lined canisters containing 1,200 pounds of uranium oxide—a basic material used in making an atomic bomb. The specifics of the weapons cache were not made public, but the notion that the Nazis had sold the secrets of some of their most prized wonder weapons to their Axis partner Japan was alarming. The scenario was made even more forbidding by the fact that also on board the U-234 was a top Reich scientist whose job it was to teach Japanese scientists how to copy and manufacture these Nazi wonder weapons for themselves.
The scientist in the submarine was Dr. Heinz Schlicke, director of Naval Test Fields at Kiel. To the public he was only identified as a German “technician.” In fact, Dr. Schlicke was one of the most qualified Nazi scientists in the field of electronic warfare. His areas of expertise included radio-location techniques, camouflage, jamming and counterjamming, remote control, and infrared. The navy took Dr. Schlicke prisoner of war and brought him to the Army Intelligence Center at Fort Meade, in Maryland.
As for Dr. Wagner, the navy felt it needed to keep him happy so that his work would continue to bear scientific fruit. To soften the reality of his being a prisoner, his incarceration was called “voluntary detention.” Wagner and his assistants required a classified but comfortable place to work, the navy noted in an intelligence report, ideally in “an ivory tower or a gilded cage where life would be pleasant, the guards courteous, the locks thick but not too obvious.” The navy found what it was looking for in Hempstead House, a great stone castle on Sands Point, on the North Shore of Long Island, that was formerly the home of Daniel and Florence Guggenheim. The 160-acre estate had been donated by the Guggenheims to the navy for use as a training center. With its three stories, forty rooms, and sweeping view of the sea, the navy decided it was an ideal location. Hempstead House was given the code name the Special Devices Center, and Dr. Wagner and his assistants got to work.
There were more problems afloat in Washington, this time coming from the FBI. If Nazi scientists were going to work for the U.S. military, the Department of Justice said it needed to perform background checks. J. Edgar Hoover’s FBI looked into Dr. Wagner’s past, based on information collected by army intelligence in Europe, and learned that Dr. Wagner had “once belonged to the German SS,” the paramilitary wing of the Nazi Party run by Himmler. This meant that Wagner was an ardent Nazi. If he had stayed in Germany, as a former SS member and per the laws of the occupying forces, he would have been arrested and subject to a denazification trial. But the FBI was made aware of how badly the navy needed Wagner, and they labeled him “an opportunist who is interested only in science.” The FBI’s bigger concern, read an intelligence report, was how much Dr. Wagner had been drinking lately. The FBI did not consider Wagner to be a “drunkard” but blamed his near-nightly intoxication on the recent death of his wife.
The scientist in the submarine, Dr. Heinz Schlicke, became a prisoner at Fort Meade, where it did not take long for the U.S. Navy to learn how “eminently qualified” he was. Soon, Schlicke was giving classified lectures on technology he had developed during the war. The first was called “A General Review of Measures Planned by the German Admiralty in the Electronic Field in Order to Revive U-Boat Warfare.” The navy wanted to hire Schlicke immediately, but State Department regulations got in the way. Schlicke was already in military custody in the United States as a prisoner of war. He would have to be repatriated back to Germany before he could be given a contract to work in the United States, according to the State Department. The saga of the U-234 and its passenger made one thing clear: If the War Department was going to start hiring German scientists on a regular basis, it needed to create a committee to deal with the intricacies of each specific case. Finally, on May 28, 1945, Undersecretary of War Robert Patterson weighed in on the classified subject of hiring Nazi scientists for U.S. military research.