The Night the FBI Collared a Nazi Spy at the YMCA

In The Scruffy Citizen by Jack Neelyleave a COMMENT

On some of those July days, it rained just enough to steam everything up and make the soot smear. Knoxville was too distracted during wartime to make the joint look nice. Business came before beauty.

Pro baseball was crippled by war, but that afternoon at Caswell Park was a game between Alcoa and the oddly named Frolics Inn, a cobbled-together team starring some former Smokies who were too old for the Army, like Knoxville-born Carl Doyle, who’d done some pitching in the the big leagues before the war.

The second-run Roxy Theatre, on Union Avenue at Walnut, was playing the year-old movie Young & Willing, starring Susan Hayward and William Holden, who’d been in town three weeks earlier in his lieutenant’s uniform, along with Al Jolson and Benny Goodman, for a war-bonds rally at the university.

At the Tennessee was Andy Hardy’s Blonde Trouble, the latest Mickey Rooney comedy. At the Riviera, The Bridge of San Luis Rey. In all, you could see a dozen movies downtown that Wednesday night. The Bijou was showing a movie of wartime intrigue: The Imposter.

The man everyone knew as Walter Othmer, 35, worked quietly as an electrician for Briscoe Electric, at 722 Market St., near the Pryor Brown Garage. He lived at the YMCA, at Clinch and Locust. The Y offered simple, dormitory-like accommodations for guys who were new to town. 

A thin man with wire-rimmed glasses and a very small mustache, Othmer impressed everyone as a humble, friendly fellow who missed his wife and kid back in Germany.

That Wednesday night, the local office of the FBI, on the fourth floor of the Holston Building, got word from the Washington office to close in. Special agent J.R. Ruggles and his men went to the YMCA and knocked on Othmer’s door. He gave up without a fight, and went with the agents to their offices three blocks away. There, with little resistance, he confessed that he had been a spy for Nazi Germany.

The true story of Walter Othmer surprised his neighbors at the Y, even the few who had heard him say nice things about Adolf Hitler.

His full name was Maximilian Gerhard Waldemar Othmer. Born in Germany, he moved to America in 1929. He soon became an American citizen. However, living in Trenton, N.J., in the mid-’30s, Othmer became a leader in the pro-Nazi group Friends of New Germany, later the German-American Bund.

He’d returned to Germany on at least a couple of occasions, once in the winter of 1936-37. In November, 1938, he returned to enroll in an espionage training course. He became an expert in writing with invisible ink.

In early 1940, during the Lend-Lease program, the United States, not fully at war, offered major assistance to the British, mostly by naval convoy. Despite his pro-Nazi background, Othmer found work as an electrician at Camp Pendleton, near Norfolk, where he was able to watch the ships leaving the harbor, bound for Great Britain. By messages in invisible ink, somehow conveyed to a drop box in Milan, Othmer alerted the Germans, who did their best to torpedo them.

In November 1941, he got on a watch list as a possible “Gestapo agent of the Nazi Secret Service.”

Othmer claimed he quit spying after Germany declared war on the United States in December 1941. After that, his espionage would have been treason. But in February 1942, he received a payment, via Shanghai, of $500 for services rendered.

In early 1943, U.S. authorities issued an “individual exclusion order” to ban Othmer from Norfolk. About the same time, there was filed a petition to cancel his U.S. citizenship. One bit of evidence against him was his persistent interest in acquiring a painkiller called Pyramidon, an ingredient in an effective invisible ink.

He moved to Knoxville, a city of some interest to Nazi spies. It was home of Fulton Sylphon, which assembled a key component for the Norden bomb site, a known target of Nazi espionage. Knoxville was near Alcoa, a major supplier of material for war planes. It was home to the Tennessee Valley Authority, America’s biggest government-controlled energy source, which was involved in the war effort on several fronts.

And there was Oak Ridge. Othmer applied for work at the Clinton Engineer Works, then only dimly understood to be part of a major weapons effort that would become more famous as the Manhattan Project. He was declined because of his German background.

The FBI was tracking him. By some accounts, it sounds as if Briscoe Electric had been instructed to hire Othmer.

In the summer of 1944, in the weeks just after D-Day, the FBI was trying to root out agents of the Abwehr, Nazi Germany’s intelligence organization. Mark Felt was studying Othmer’s file in particular.

“Though Othmer claimed to be a minor agent,” Felt later wrote, “his dossier suggested he was one of the most valuable Abwehr spies in the United States.” He sent word to the Knoxville office to arrest and interrogate Othmer.

Othmer refused to name other spies. But on his way to the federal pen in Atlanta, Othmer told agent David Scruggs, “You have been kind to me. Now I want to do something for you.” He told him to check through a steamer trunk in storage at the Y, in particular for a German book called Weyers Taschenbuch der Kriegsflotten, an illustrated guide to warships. Tucked in it was a negative photo of a typewritten page. It was a key to a Nazi code Othmer had used. The find, Felt said, was “an important link to other Nazi espionage cases.”

Othmer was found guilty and sentenced to 20 years in federal prison. He was apparently free and living with his wife in suburban Richmond, 15 years later, when he died of cancer at age 50.

Three decades after the war, Agent Felt, who had become the FBI’s associate director, was more concerned about the clandestine machinations of his own government. At age 91, the agent who set in motion the arrest of Waldemar Othmer in Knoxville would be revealed as the previously secret Watergate source known as “Deep Throat.”

Contributing Editor & Writer | jack@knoxhistoryproject.org |

Jack Neely is the director of the Knoxville History Project, a nonprofit devoted to exploring, disseminating, and celebrating Knoxville's cultural heritage. He’s also one of the most popular and influential writers in the area, known for his books and columns. The Scruffy Citizen surveys the city of Knoxville's life and culture in the context of its history, with emphasis on what makes it unique and how its past continues to affect and inform its future.

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