The First Rough Draft of the United States’ Homegrown Nazis

IN 1943, Arthur Derounian, under the pen name John Roy Carlson, published the groundbreaking bestseller Under Cover: My Four Years in the Nazi Underworld of America, exposing the influence of right-wing extremist groups during World War II. New York Times book critic Orville Prescott deemed his “undercover detective work” “one of the most important individual contributions made by any American writer” to the survival of democracy. Derounian disappeared from the public’s consciousness by the 1950s. Yet, reading his work today feels like a Hollywood prequel script recounting a villain’s origin story.

The Armenian American journalist began writing about right-wing extremists for Fortune magazine just weeks after he found an antisemitic pamphlet in the New York subway in 1939. Despite being married with a newborn on the way, Derounian found the first event that he attended—a German American Bund rally at Madison Square Garden—“so alarming […] that it plunged [him] into a career as an investigator of Nazi activity.”

Derounian poured himself into his role. He moved to Little Italy to make his alias, George Pagnanelli, more authentic. Despite being terrified of guns, he enrolled in shooting lessons to prepare for the military drills overseen by the Phalanx, the “shock troops” seeking a “‘Christian’ [form of] government.” To ingratiate himself with local organizers, he helped with mundane tasks like folding flyers and picking up pamphlets before starting his own far-right publication, The Christian Defender. “The cruder it got,” he observed, “the more it slandered the Jew and assailed Democracy, the more popular it became.”

Derounian’s immigrant heritage had instilled in him a sensitivity to ethnic and religious hatred. Born in 1909 in the western outskirts of the Ottoman Empire, he moved with his family to Long Island in 1921 in the aftermath of the Armenian genocide. The 1933 assassination of Archbishop Levon Tourian marked the other defining moment of his life. Derounian stood by helplessly during a Christmas Eve mass in Manhattan as nine men from an Armenian faction surrounded the archbishop and stabbed him to death with double-edged butcher knives.

The murder not only set him upon a career as a muckraker, but it also called into question his faith in the United States as a safe haven from the “perverted nationalism” plaguing many parts of the world. Finding it difficult “to conceive that this frightful murder had occurred,” he saw his undercover work as an opportunity to help vanquish the forces “intent upon destroying every vestige of freedom in America.”

Derounian leveraged his standing as a bona fide “co-fascist” to gain access to others within these circles. When rebuffed by US Senator Burton Wheeler’s secretary, for instance, Derounian “uttered the magic words: ‘I am a friend of Lawrence Dennis’” to secure a meeting. Overcoming the instinct to jot down “verbatim notes,” he remained vigilant to avoid the appearance of snooping: “I have learned not to ask” for names or addresses, he assured his handlers at Fortune. “It’s dangerous.”

An episode from an American Nationalist Party rally illustrated the potential consequences of blowing his cover:

In the bar after the meeting, I fell into conversation with a short man with cropped hair and military bearing. […]

Without thinking, I took a slip of paper out of my pocket and scribbled down a note. A sudden change came over the man. His eyes narrowed with suspicion.

“What are you writing it down for?” he asked. “Who are you?”

“I just attend meetings,” I said. “I’m interested in the movement.”

“Why are you interested?” he persisted. […]

“Are you a Jew?” he said loudly. […] Three or four of the men who had lined the walls during the meeting put down their beers and edged toward me.

I faced my accuser, speaking with pretended annoyance.

“My name’s Pagnanelli, George Pagnanelli. I’m a Christian and I attend these meetings as a patriot. I want to protect Christianity.” The ring of hard-looking toughs on the goon squad had gathered closer around me by this time.

“Listen, you guys,” I said quickly. “I’m for America for the Americans just like you. That’s why I’m here.”

No one said anything. They just stood there, staring at me. “Look,” I said, “you can ask Dan Walker about me. Ask Pete Stahrenberg. They’ll tell you I’m okay. They know me.”

For a long minute no one said anything. Then one of the gang drawled: “Hell, leave the guy alone. He don’t look like no Jew to me.”

Derounian never took notes at a meeting again. But he pressed on, holding a day job while furiously typing at night. So dedicated to his mission, he skipped the birth of his first child to discuss “swastika buttons” at a nativist organization. He worked on the manuscript and started sending it out. More than patriotism drove him. “I am only aware of burning ambitions and exalted dreams,” he wrote in a diary entry. “I want to climb to the highest spires.”

But the rejections rolled in. “I know what I’d do to some editors if I had a nail and hammer,” Derounian confessed after a series of negative responses. “When is my ship going to come in,” he wrote in a different entry. “I ask, I ask, and ask.” The toll grew worse over time: “I am frustrated,” he conceded in 1941, “my ambitions […] to have my book published are still unrealized.”

Anxiety over his finances exacerbated Derounian’s sorrow. “I feel ashamed of myself,” he wrote in 1939. “I’m one hell of a lousy breadwinner. I had no business making a woman pregnant.” In search of cheaper rent, his family moved multiple times during his reporting, including a stint at a “hell-hole.” In 1941, he began skipping meals to save money.

Money wasn’t the only strain on his marriage. When home, Derounian often ensconced himself in a separate room to type out his reports, causing his wife, Marie, to plead for his attention. “I hope you’ll not be away too long this time,” she asked in one handwritten note. “Think of me sometimes,” she wrote in another, reflecting her growing desperation. “I have tried to be a good husband,” he confessed on their fifth wedding anniversary, “but I could have been a better one.”

Interacting with hateful extremists further weighed Derounian down. “I am soured physically, psychically, mentally, spiritually,” he wrote on March 24, 1940. It’s easy to see why. “I have met with none but liars and cheats and hypocrites and the greedy and the envious, the selfish and the conniving,” he wrote almost a year later. “With them I must live my everyday world.”

Yet no matter how dire, Derounian refused to relent. “The dream of that book has kept me at this work, unpleasant and ugly as some of its aspects are,” he wrote in 1941. “That book will have to go through. It’s got to.”

And it did. Under Cover became the best-selling nonfiction book of 1943. Derounian received a civic award alongside Frank Sinatra, made frequent public appearances, and participated in radio shows across the country. Congratulatory letters poured in from luminaries such as Irita Van Doren and Vice President Henry Wallace. Impressed by Under Cover, Rabbi Stephen Wise asked Derounian to join Eleanor Roosevelt as a speaker at the American Jewish Congress.

Readers could see the seediness of the venues, hear the rancorous chants of “America for the Americans” at rallies, feel the crowd’s zeal for extremist rhetoric, and picture the rituals—some terrifying, others farcical. Derounian had a knack for capturing small but telling details, recording, for instance, how “Jewish accents were mimicked and […] aroused laughter.”

Employing a noirish style featured in the popular detective magazines of the day, Under Cover proceeded in a fog of war. Every few pages, readers were left to contemplate whether these extremists would spark a riot, sabotage a government facility, or unmask Derounian’s true identity.

He was doing the work that should have been done by real law enforcement. Obsessed with communists, the FBI, in particular, rarely pursued these organizations, usually acting only after others exposed the dangers that they posed. Ultimately, these extremists were their own worst enemies. They were too corrupt, amateurish, and decentralized to establish strongholds or coronate a charismatic leader. Despite their lack of organizational prowess, at their peak, they counted at least 100,000 avid supporters with 10 million others who were Nazi sympathizers.

Their real power rested not in their numbers, however, but in their cultural influence. Like many extremist platforms within contemporary democracies, their ideas thrived in the hands of savvier orators like Father Charles Coughlin, who inspired the antisemitic Christian Front, and Charles Lindbergh, the celebrated aviator who served as a spokesman for the 800,000-strong America First Committee.

Few people appreciated the perils more than Leon Lewis, the former executive secretary of the Anti-Defamation League, whose West Coast spy network is recounted in Steven J. Ross’s Hitler in Los Angeles: How Jews Foiled Nazi Plots Against Hollywood and America (2017), a Pulitzer Prize finalist.

Hollywood represented a major prize for the Far Right. Nazi propaganda minister Joseph Goebbels hoped that American movie studios would produce pro-German films. More diabolical plots included assassinations of renowned industry figures such as Louis Mayer, murder sprees in Jewish neighborhoods, and attacks on regional military sites.

A World War I veteran, Lewis recruited German American veterans to spy on organizations based in Los Angeles. Because government authorities often downplayed the intelligence he had collected at great risk to himself and his moles, Lewis’s network singlehandedly thwarted many of these threats using cloak-and-dagger tactics.

Derounian was less organized. He was also not a literary genius, splattering the contents of his notes onto the book’s pages in a mad rush that left little on the cutting-room floor. Yet Under Cover exemplified journalism’s venerable role as the “first rough draft of history.” His discoveries served as a wake-up call for his contemporaries and a permanent record of the reactionary forces lurking just beneath the surface of the world’s oldest democracy. “So you see, fascism in America is not dead,” Derounian warned in the closing pages of Under Cover. “It has been pretending sleep.” And now it has reawakened.