Paul Fairly wore the uniform of a United States Navy officer in October 1940, though he was not in the Navy and he was not an officer. In fact, he ran errands for the British and their bespoke American espionage organization, the British Security Coordination.
For certain, running spies was not beyond the Navy or the Office of Naval intelligence, but not spies quite like Fairly, and certainly not spies working in tandem with a foreign power. Apart from principle, Naval intelligence would have been putting itself at too great a risk for too uncertain a reward to involve itself. The interdepartmental warfare taking place with the Federal Bureau of Investigation, along with other military intelligence agencies, and the State Department made Fairly a tenuous ruse.
There was, however, a "private" espionage ring attempting to validate itself in the eyes of the Roosevelt administration. The fabulously wealthy and well-connected New Yorker, Vincent Astor, not only had the president's ear, but the close attention of British Security Coordination. In fact, William Stephenson, who had come from London to New York that June to run British intelligence, took up residence at the St. Regis Hotel at the invitation of Astor, its owner.
FDR had plans for Astor’s interest in things clandestine, and the President had placed Astor in charge of the third Naval District, which had under its watchful eye the entire New York City region. The scion of one of Manhattan's greatest real estate fortunes had most recently been made a captain in the US Naval reserves at the direction of the President. Moreover, Astor had access to a veritable flotilla of yachts at his disposal through the New York Yacht Club, which would soon come in handy.
The ever fortunate Astor had been dealt three aces: close connections with British Security Coordination, the special attention of the President of the United States, and command of New York’s Naval nerve center. Unfortunately, his bona fides were lacking. His recent espionage sorties into the Pacific had proven notable for their timidity. A mission he undertook aboard his infamous and notorious yacht, the Nourmahal, into the secret Japanese environs of the Marshall Islands, had failed for lack of resourcefulness and opportunism – spy traits of the first order. His personal adventures in espionage turned out to be collegiate, prankish and inept. At the first inkling of Japanese rancor over the prying Nourmahal, Astor set a course for the safety of Diamond Head.
By contrast, the Fairly gambit was anything but sophomoric. The degree of craft involved in the impersonation of a naval officer augurs the work of an enterprising and practiced organization. The evidence would seem to indicate that by himself Astor would have been at sea. But the British Security Coordination -- working alongside Vincent Astor -- would have been enterprising enough to turn the civilian Fairly into a sailor, and an officer. Indeed, a long-time friend of the President, a man in charge of local naval authorities, with access to the New York Yacht Club like Astor would have been a perfect foil to British intelligence.
And such an association was very much in Astor's interest.
For the forces working inside Washington during the early days of America’s direct involvement in the war were engaged in a turf battle, the high dudgeon of ruthless bureaucratic empire building; and the two richest men in New York – Vincent Astor and Nelson Rockefeller – had cast themselves right in the middle of the contest, angling for empire.
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