Houseboats on the Nile Once Gave Refuge to German Spies

Wartime German spies lived in houseboats when they weren't trying to cross the desert or sending messages to radio operators who weren’t listening. Could the boats have been preserved for posterity?

Houseboats on the Nile Once Gave Refuge to German Spies
A houseboat on the Nile / Khaled Desouki / AFP via Getty Images

The houseboats must go, the Egyptian government ordered. In July, it set about removing the last of the elegant floating homes moored along the Nile shore in Cairo’s Kit Kat district — named for a vanished night club once popular among Egyptian intellectuals and British officers. The boats got in the way of development, authorities say. But demolishing them erases a remnant of the city’s history. They’d been home to the celebs of another era, a scene of movies and novels.

At the least, the government should have picked one houseboat to preserve as a museum to a legendary spy affair. The curators would have painted the woodwork pale green and installed in the living room chintz furniture and a cabinet with a gramophone turntable, a wireless transmitter hidden beneath it.

It was on such a houseboat that on July 25, 1942, German spies Johannes Eppler and Heinrich Sandstede were arrested. The legend of the spies’ careers was published after World War II in several accounts, with minor variations, and echoed in later works of history as established fact.

Then there’s the true story, as revealed in documents that were declassified a lifetime after the war. The legend and the truth line up at some points — and diverge in many others.

Legend has it that Eppler was “a spy of exceptional daring and competence,” as Maj. Alfred Sansom wrote in his memoir, “I Spied Spies.” Sansom commanded Britain’s Field Security, a relatively overt counterintelligence unit, in Cairo during the war. Sansom himself was “one of the shrewdest counterespionage agents of World War II,” war correspondent Leonard Mosley wrote in his 1958 book on the spy affair, “The Cat and the Mice.”

Eppler, according to Sansom, was the son of European parents living in Egypt. After his father died, his mother married a wealthy Egyptian and had another son. Both boys were brought up as Egyptian Muslims, and Eppler gained a second identity as Hussein Gaafar.

In 1937, according to Eppler’s memoir, “Rommel’s Spy,” the German Embassy in Egypt asked him to fly to Beirut. As befit a storybook secret-agent-to-be, he spent his first night with a “lovely Hungarian” woman he met in a bar. The next evening he met two agents who recruited him for the Abwehr, Germany’s military intelligence agency. (In Mosley’s account, the woman was a Vietnamese “of great beauty.” She seduced Eppler, then introduced him to Abwehr recruiters.)

In Berlin, Eppler had a personal interview with Abwehr commander Wilhelm Canaris. A series of high-level assignments followed. Eppler’s account places him in Iraq during the pro-Nazi coup of spring 1941, then back in Berlin to translate in the meeting between Hitler and Hajj Amin al-Husseini, the exiled Palestinian nationalist leader and former mufti of Jerusalem who sought a promise of Nazi support for a unified, independent Arab state.

In the spring of 1942, Eppler flew to the Italian colony of Libya for his next mission. In eastern Libya, near the strategic, British-held port of Tobruk, two armies were dug in: Britain’s 8th Army, facing westward, and a combined German-Italian force under Gen. Erwin Rommel, facing east toward Egypt. Rommel was preparing an offensive and wanted intelligence from British headquarters in Cairo.

In Libya, Eppler was reunited with Count Laszlo Almasy, the famous Hungarian desert explorer and an old acquaintance from a dangerous escapade in a vast southern Egyptian dune in 1935. Almasy was now serving in the German army. He and a small team of soldiers took Eppler to Egypt. With them was also Sandstede, Eppler’s radio operator, who spoke fluent English and carried papers identifying him as an American named Peter Muncaster. (In some versions of the story, Muncaster was his real name.)

The men set out in early May from the Libyan oasis of Gialo, riding in captured British trucks for the long, risky journey, heading south through the desert to avoid impassable dunes, then pivoting toward the northeast to Asyut on the Nile in Upper Egypt. In his memoir, Eppler paints himself as Almasy’s right-hand man on the expedition. At Asyut, Almasy turned back, leaving Eppler and Sandstede to continue by train to Cairo. The duo carried a supply of British banknotes, a wireless transmitter and a copy of “Rebecca” by Daphne du Maurier, a novel that would serve as the cipher key for their radio messages.

The first night in Cairo, Eppler went to the Kit Kat Club to watch the famous belly dancer, Hekmet Fahmi. Later that night he shared her bed on her houseboat — not for the first time, according to his memoir — and recruited her as an accomplice. The next day, she helped him rent his own luxurious houseboat under his Egyptian name, Hussein Gaafar. He and Sandstede moved in and installed their radio transmitter.

From then onward, Eppler and “Muncaster” prowled the bars, cabarets and sporting clubs of Cairo, buying drinks for British officers to loosen their tongues. The spies were treated to much gossip, but no secrets. Eppler made a bid to get into British General Headquarters Middle East to steal documents — and failed. But Hekmet came through for them. By cultivating — and seducing — British officers, she brought “military information … of incalculable value,” as Sansom put it.

Yet the spies couldn’t pass it on. Every night, Sandstede sent out his call letters, expecting a response from the Abwehr wireless team near the front line in the desert, only to receive nothing in return. His transmitter, it seemed, wasn’t working.

Either through Hekmet’s contacts or through names provided by Almasy, Eppler met an Egyptian army signals officer named Anwar al-Sadat. (Yes, that Anwar al-Sadat.) Sadat visited the houseboat and found that the Germans had acquired a second transmitter and that it was in good working order. He was less impressed with the spies’ lifestyle and the presence — Sadat later wrote in his memoir “Revolt On the Nile” — of two “Jewesses” who “had been promised £200 for their services.”

What Eppler and Sandstede couldn’t have known was this: In late May, 1942, just after Rommel began his long-awaited offensive, the two-man Abwehr wireless team that was supposed to be on the receiving end of the radio communication was captured by New Zealand troops. Sandstede was broadcasting to an empty sky. Worse, the captured German radio broadcasters had a copy of “Rebecca” in English, a language that neither knew, clearly indicating that it was meant for cipher work.

An agent of an unnamed secret service passed this tidbit to Sansom, who was already tracking down the big spender who was paying in Cairo bars with British banknotes instead of Egyptian pounds. The trail led to Eppler, whom Sansom spotted in the Kit Kat Club lighting up his cigarette with a £5 note.

The final clue came when Sansom’s men arrested a woman who’d been spending nights on the houseboat — a French dancer from Beirut named Natalie, who was actually an agent of an undercover Jewish group and who told Sansom, “To serve my cause I will go to bed with anyone of importance.” Or perhaps she was Yvette or Edith, and she’d been working for the mainstream Zionist organization, the Jewish Agency, or for its bitter rival, the extremist Jewish group the British called the Stern Gang. Whatever her name, she reported seeing a copy of “Rebecca” on the boat. It all tied together.

Sansom, holding a Tommy gun, led the raid on the houseboat, as Egyptian police followed. Eppler and Sandstede were arrested on the spot and taken in for questioning.

By good fortune, another Abwehr station finally started responding to Sandstede’s call letters. Using the spies’ “Rebecca” cipher, British military intelligence sent a long message packed with false information. The deception contributed to the British victory against Rommel at El Alamein — the turning point of the war in North Africa.

The story became an accepted piece of World War II history and a fixture of popular culture. In 1980, People magazine interviewed Eppler and reported that he had come to Cairo with $5 million and that it took the British seven months to catch him. Michael Ondaatje wove the affair into his 1992 novel “The English Patient.” In the book, the patient turns out to be Almasy, not an Englishman at all. After bringing Eppler to Cairo, Almasy was terribly wounded in a desert airplane crash while trying to recover the body of the woman he’d loved. The real Almasy was gay and was in love with a German officer who was killed during Rommel’s retreat from El Alamein. But Ondaatje’s book was explicitly fiction. The other accounts claimed to be fact.

The real story of Almasy, Eppler and Sandstede lay hidden in documents that remained classified for decades. They include records of GCHQ, Britain’s signal intelligence agency and, most importantly, a file of the investigation of the affair by MI5, Britain’s counterespionage service. Almasy’s journal of the desert crossing fills in more details.

Though Almasy’s claim to the title “count” was questionable, he was a Hungarian aristocrat. And he was one of the great explorers of the vast desert west of the Nile in the 1920s and 1930s, possibly outdone in his discoveries only by the British army officer Ralph Bagnold. In 1939, when fascist Hungary was aligned with Germany, he left Egypt and returned to Budapest. There he became friends with an Abwehr officer who visited regularly. After Hungary went to war on the Axis side in November 1940, the Hungarian air force assigned Almasy to work with the Abwehr. One of his assignments was to get a couple of German spies to Cairo.

Eppler was born in Alexandria in 1914, the son of a German mother and an unknown father. After his mother married an Egyptian, he did in fact acquire the name Hussein Gaafar and a younger half brother. In 1937, he left for Europe, married a Danish woman and lived mostly in Denmark.

By 1941 he was in the German army — assigned to the topographical department, correcting maps of Egypt. There he met Sandstede — or “Sandy” as his friends called him — who was also 27 years old. Sandstede had dropped out of school at age 16, worked on farms in South Africa and Mozambique, prospected for gold and learned fluent English. Now his army job was filling in details on maps of East Africa.

From the map room, Sandstede and Eppler transferred to the Abwehr. Sandstede believed it was the only way to avoid being sent to the eastern front. From November 1941, they were working with Almasy to prepare for the journey.

With Almasy’s small team of commandos, they did in fact set out from Gialo, on May 12, 1942. An Italian map showed flat, gravelly desert — near-perfect driving terrain — between Gialo and Upper Egypt. That was a mapmaker’s fantasy of terra incognita. The vast dunes of a sand sea blocked the way. Almasy was more afraid of the shame of failure than of death. He plotted a new route that would require every drop of fuel they could carry. They drove southeast to the immense plateau known as Gilf Kebir and found a pass through it. Almasy found Eppler and Sandstede unbearable traveling companions. The latter, he recorded in his journal, “drives … like a wild man,” and the two of them were “the most untidy fellows I have ever had with me.”

Almasy’s radio operator reported their position. The message was relayed from Libya to Berlin. The Germans had no idea that a British wireless operator intercepted it or that GCHQ’s codebreakers at Bletchley Park in the English countryside had cracked the Abwehr’s ciphers. The translator who got the decrypted message, 24-year-old Joan Alington, had read Bagnold’s book, “Libyan Sands: Travels in a Dead World,” about his desert expeditions — and therefore knew where Gilf Kebir was. The message meant that the Abwehr had someone operating out there in the desolate land.

By the time the information reached British intelligence figures in Cairo and a reconnaissance pilot was sent to search the desert, Almasy had left his spies at Asyut and was on his way back to Gialo. The search failed. But counterespionage officers — almost certainly including MI5’s man in Cairo, Col. G.J. Jenkins — were alerted that enemy agents had probably been brought to Egypt.

Two men with light hair and pale eyes got off a train in Cairo on May 23, 1942. The shorter, slight one with a mustache was Eppler; the tall, cleanshaven one was Sandstede. Hotels were full, so they spent their first nights in Cairo at a brothel. Then they rented rooms in an apartment, paying 75 Egyptian pounds for three months up front. Sandstede bought a radio as a cover for setting up an antenna for his transmitter. He began sending out his call letters, but got no answer, so he concluded that the tall buildings around their flat were blocking reception and that they needed another place to live.

In reality, the only Abwehr station authorized to answer was gone. The two-man wireless team had just been taken prisoner in the desert on the first day of Rommel’s offensive. (British records show that both of the POWs grew up in the German community in British-ruled Palestine and knew English. There’s no mention of them having a copy of “Rebecca.”)

Eppler and Sandstede had been outfitted with £3,000 in British notes, and 600 Egyptian pounds. This was a small fortune, albeit nowhere near the purported $5 million. But remarkably, neither the Abwehr nor Eppler had realized that unauthorized possession of British banknotes was illegal in Egypt. Black market money changers were paying under half of the official exchange rate. The two spies spent lavishly anyway, £20 a night at the Kit Kat Club and other nightspots — enjoying themselves and, they’d claim, hoping to make contacts who would provide information.

At the rooftop garden at the Continental Hotel, they asked the headwaiter to introduce them to a girl. After the evening show, he brought belly dancer Hekmet. She invited them to her tony houseboat, where they spent a night — platonically — each would later insist under interrogation. Hekmet’s lover, a British officer, had left a suitcase on the boat. Eppler saw it but decided opening it would be “a bit dangerous.” Inside, he would have found a map of the defenses of Tobruk — the Italian defenses from before the British conquered the town. As intelligence it was worthless anyway, revealing nothing about British defenses at Tobruk.

The duo liked the houseboat, though, and indeed rented one with chintz furniture and pale green woodwork. They hired a driver and two servants for the houseboat. Sandstede installed the transmitter under the gramophone, sent out his call letters and still got no response. He had a steady companion named Sandra. Eppler’s girlfriend was indeed named Edith, and for a German spy had the attraction of forbidden fruit: She was Jewish. She knew him only as Hussein Gaafar. Questioned later, one of the servants said that the girls did not spend their nights on the houseboat.

In late June, Rommel’s army took Tobruk. Britain’s 8th Army retreated from Libya, pursued by the Axis forces. At El Alamein, just over 60 miles from Alexandria, the British prepared their final defensive line.

Eppler and Sandstede were getting nervous. They’d been afraid to contact the pro-Axis Egyptian prince Abbas Halim, whose name Almasy had given them. They’d gathered no intelligence. In their respective diaries, they began recording fictional espionage efforts, including a false claim that Hekmet had given them information. When Rommel got to Cairo, they figured, their diaries would serve as evidence that they’d done more than buy drinks.

But the battle raged at El Alamein and Rommel never arrived. The spies were running out of cash and turning desperate. And their radio messages remained unanswered.

Eppler got in touch with his half brother and asked for help. The brother turned to a German he knew, named Victor Hauer. Before the war, Hauer had worked for the German Embassy in Cairo. When other German men in Egypt were interned — incarcerated as enemy aliens — Hauer had managed to stay free by getting a job at the Swedish Embassy, which, as the legation of a neutral country, looked after the interests of German internees. Hauer rendezvoused with the spies at another famous, now-vanished nightspot, Madam Bardia’s casino, and went with them to the houseboat, where Eppler told him that they’d been “directing Rommel’s advance” until their transmitter failed. Eppler liked telling impressive-sounding stories. He also told Hauer that the German navy had submarines powered by bottles of lightweight atomic fuel.

Hauer agreed to help. He brought them an American transmitter that German diplomats had stored in the Swedish Embassy. But that one didn’t seem to work either. Eppler said he needed to cross the lines to report to Rommel. Hauer again had a solution: A German woman in Cairo knew Egyptian officers who wanted to help Germany. Through her, Eppler met the deposed Egyptian military chief of staff, Aziz el-Masri, and an Egyptian military pilot and a signals officer who came to the houseboat. The signals officer took the American transmitter and left a phone number and his first name: Anwar. He did not reveal his surname: al-Sadat.

Hauer, however, was a cautious man. He considered that the battle could go either way and, as Jenkins would later report, began “playing the double agent.” After Hauer first heard from Eppler’s brother, he went to talk to a Jewish gynecologist from Germany in Cairo whom he knew “was a British agent.” The doctor told him to go ahead with meeting Eppler, and to keep him informed.

So Jenkins would soon report to the director of MI5 in London — and only to him.

The warning of spies smuggled by Almasy had just been borne out. “Hauer knew much more than he had told,” Jenkins explained to the MI5 chief, but it was “most undesirable” to involve the Egyptian police.

“I therefore decided to kidnap Hauer,” Jenkins wrote, in a tone of impeccable calm.

“Picked up on coming out of the Metro Cinema at 11:45 p.m.,” Hauer was blindfolded and taken to the British interrogation center for prisoners of war in a Cairo suburb. There he was given the choice of being shot for spying or telling what he knew. He wisely chose the latter. After interrogation, he was given a new name, the identity of a captured German soldier, and was sent to a POW camp in Palestine — thus removing the evidence of Jenkins’s methods.

“Both my own police and the Egyptians are still hunting for Hauer, whose disappearance was reported by the Swedish delegation,” Jenkins concluded, with a hint of satisfied irony.

Four days after the kidnapping — almost exactly two months after the spies arrived in Cairo — Egyptian police and British Field Security men raided the houseboat and arrested the inept Eppler and Sandstede. It’s quite possible that Sansom indeed took part in the raid.

The arrest of Anwar al-Sadat, El-Masri and the Egyptian pilot followed. Rather than being tried, they were interned for the duration of the war, a solution that avoided a public trial. The spies were held as prisoners of war.

While British intelligence did use captured spies to send false information in other cases, it does not appear that any fake messages were sent in Eppler and Sandstede’s name. Their arrest had no more effect on the battles than their “espionage.” Almasy’s journey to Asyut may have been the most daring of his career, but his cargo had been worthless.

An interrogation report notes that the book the spies were supposed to use as a key for their cipher was called “The Unwarranted Death.” Unless this was the title of an obscure edition of “Rebecca,” the use of that novel is a later embellishment that became a fixture in the spies’ legend.

Besides being questioned, the two men were kept in a tent with a microphone hidden in the tent pole. The transcript of their conversations while there includes Eppler saying to Sandstede that he hoped their girlfriends Edith and Sandra would be quickly released. “Those poor girls did not know anything about us, and they never did anything wrong,” Eppler said. The women were questioned and quickly freed.

Had Eppler been a better spy, had he provided intelligence that enabled Rommel to conquer Cairo, his Jewish girlfriend’s fate would have been quite different. The SS had already created an Einsatzkommando — a special operations command to carry out genocide — for Egypt.

Eppler’s postwar accounts are clearly one source for the legend. Mistaken memories, cover stories, misunderstandings, prejudices and rumors taken as fact likely contributed as well.

Does it matter? As a historian, I’d say that digging for the truth always matters. Besides that, the legend perpetuates a cliched James Bond movie picture of espionage in which their spies are all suave men while the women serve only as seducers.

The gap between legend and fact should teach us to practice skepticism toward reporting on intelligence work and the histories written soon after the events. The common sources — interviews and memoirs — are subject to the pitfalls of memory even when not warped by self-aggrandizement. Original intelligence documents are likely to stay classified for much longer than other government records.

If Jenkins ever read the early accounts of Eppler and Sandstede’s capture, he may have been angry or amused. As a real secret agent, he would not have emerged from the shadows to set the record straight. That would be about as likely as him emerging from the grave now, to ask for one Nile houseboat to be preserved as a memorial.

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