April 4, 2011  -- Newly released spy documents reveal that in the midst of the Second World War, a small group of Nazi spies embarked on an ambitious plan to unleash a campaign of terror and sabotage on the United States from within its borders but failed miserably due to drunkenness, incompetence and a turncoat team leader.

The declassified MI5 files, released today by the British National Archives, detail the comical failing of the well-known June 1942 German plot to land eight Nazi operatives on U.S. shores -- four along the Florida coast and four others on New York's Long Island -- where they were to begin sabotaging U.S. factories, canals and railways and execute "small acts of terrorism" aimed at Jewish-owned shops. The spies had been trained in explosives at a special "Sabotage School."

The teams involved in Operation Pastorius, named for an early German settler in colonial America, were "better equipped with sabotage apparatus and better trained than any other expeditions of which the Security Service has heard," the report says.

However, the plan began to fall apart before the operatives even made the trip across the Atlantic. The documents show that while in Paris -- which at the time was occupied by the German military -- one of the spies got drunk at a hotel bar and "told everyone that he was a secret agent."

German intelligence believed the loose-lipped admission may "have contributed to the failure of the undertaking," the report said.

Once they made the crossing, the operatives' luck did not get much better. One team, which had been dropped off on Long Island still wearing their Germany military uniforms after the submarine that delivered them accidentally ran aground, was almost immediately caught by an unidentified U.S. military official. The Germans had just managed to change into their civilian clothes when the officer approached and offered him $300 to simply leave.

The stranded submarine itself was only saved from attack by the U.S. by what the report called the "laziness or stupidity" of American forces.

The Florida team made it to shore where they emerged from the sea wearing only bathing trunks and "army forage caps."

Both teams were eventually arrested after the team leader, George John Dasch, called up the FBI from a New York hotel "saying that he was a saboteur and wished to tell his story to [FBI chief J. Edgar] Hoover." His request was refused, but Dasch did come to an FBI building where he told the whole story -- a confession that took five 10-hour days.

One of the men in the Florida team "assisted authorities in causing his own arrest by going into an FBI office when 'Wanted' notices were already out for him, pretending that he had just arrived from Mexico and wanted to clear up his military service papers," the report said.

The MI5 author of the report said it was possible Dasch had planned his surrender as soon as he was given the assignment in Germany and used the operation as his personal escape route from Germany. Each saboteur was caught and sentenced to death, except for Dasch and another operative who had turned on the team. Both were later deported back to Germany, the file said.

The report notes that a third sabotage team was believed to have arrived in the U.S. around the same time as the first two and was "still at large." British intelligence expected still more teams to follow.

But according to the FBI historians, "So shaken was the German intelligence service that no similar sabotage attempt was every again made."

Germany's Post-War Chaos Plan and the Fourth Reich

Other MI5 files released today document what is referred to as Germany's plans to create post-war "world disorder" through acts of terrorism in order to create chaos in which the "Fourth Reich would re-emerge."

The plan, as told by a captured French Nazi spy who attended an SS conference in the last weeks of the war, was to use sabotage, assassinations and chemical warfare to continue the Nazi's fight long after the war had officially ended.

Other files show German intelligence training concerning a coordinated plan to poison food, chocolate, alcoholic drinks and even cigarettes in post-war Europe. Poison was to be injected into sausages and cakes and bread were to be laced with arsenic. The Nazis had also apparently developed brown pellets that, when placed in ashtrays, exploded with the heat from a cigarette or cigar, "killing anyone nearby," according to the National Archives.

"Nowadays it's easy to regard such schemes as impossibly far fetched," said former MI5 historian Christopher Andrew in a National Archives Podcast, "but at the time it was reasonable to believe that after the Allied victory there would remain a dangerous post-war Nazi underground which would continue a secret war."