Hitler's Lost Spy
contributor to the defence effort. This possibility resulted in the decision to build the nearby Williamtown air force base, completed in February 1941. The base remains today as the headquarters of the RAAF’s Tactical Fighter Group.
    It is probable that army exercises at Port Stephens increased alongside the growing apprehension attached to the escalating Japanese militarism. This paralleled intelligence recognition of augmented Japanese spying activity in Australia from the mid-1930s. Corresponding with this development was Emperor Hirohito’s decision by 1935 to lock the Japanese military into war with the West. This momentous development by Hirohito is detailed in David Bergamini’s outstanding book Japan’s Imperial Conspiracy.
    In late October 1938, while the 8th Infantry Brigade was training at Port Stephens, a lady was observed, somewhere in the district, whose conduct invited interest from army personnel. It is not known what the lady was doing to attract attention, if she was in the company of others, or even how she travelled to the area. But there was sufficient reason for someone, or some group, to organise enough effort to enable her to be identified. It was Annette Wagner. Following this identification, an immediate decision was made by Military Intelligence to place her movements and personal contacts under surveillance. Annette’s purpose in travelling to Port Stephens was not primarily to have a picnic.
    In assessing Annette’s undercover work, it appears that during her two-year period in Australia she committed only one known critical mistake – and only one of these is necessary. Later, there would be three other known mistakes, but these would probably have passed unnoticed had Annette avoided allowing herself to be identified at Port Stephens, or anywhere else.  Precisely what she was doing in Port Stephens, we don’t know, but observing what she could of the army training could be presumed. We also don’t know if she had been careless, or someone else had particularly good observation skills. It didn’t matter because the effect was the same: without knowing it, Madame Wagner had put in motion a process that would blow her façade.
    The evidence from her file strongly suggests that the surveillance imposed on Annette went undetected by her for a full year – until October 1939. Failing to recognise this surveillance was a further slip-up. Had she suspected the operation, she would have pulled out of the system or quickly found excuses to attempt a redress with the aim of working around it. Not to be aware that her movements were being monitored signified that her attention to detail would now, at least in part, be shared unknowingly by others – on the opposite side. This was an irretrievable error that would eventually produce only one outcome.
    The identification of Annette’s spying activities would have had, initially, little consequence for her directly as she had not broken a law. Had she been questioned about her presence at Port Stephens on that day – and she may have been – undoubtedly she would have responded with the right answers – a good spy is always prepared to confront and weave through unintended consequences. So at this instance, her attracting attention meant little. It would be the surveillance of her subsequent ‘out of hours’ conduct that would raise serious questions. But surveillance of an individual or a group is only as good as the ability to maintain secrecy and the relevance of the information it collects. Had Annette been aware of strange people observing her she would have altered her techniques and created useless and expensive diversions for the agents assigned to her.  However, Annette’s subsequent activities demonstrated that the surveillance applied to her was successful both in its operational conduct and the yielded results.
    The Port Stephens Naval Prospects
    Regardless of the

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