The idea to use Salon Kitty for espionage purposes came from Reinhard Heydrich, but SD chief Walter Schellenberg did most of the work. Instead of infiltrating the brothel, Schellenberg decided to take it over.
Kitty Schmidt had been sending money to British banks with fleeing refugees ever since the Nazis took over. When she eventually decided to leave the country on June 28, 1939, SD agents arrested her at the Dutch border and took her to Gestapo HQ. There Schellenberg made her an offer she could not refuse: either cooperate with the Nazis or be sent to a concentration camp.
The SD closed the brothel for repairs and refurbished it with multiple concealed microphones in every conceivable place. Wires were led to a cellar and from there to a room with five monitoring desks and recording turntables. The idea was to entertain prominent guests with wine and women so they would disclose secrets or talk about their real opinions.
Berlin's vice squad ("Sittenpolizei") arrested dozens of Berlin prostitutes and selected 20 potential agents for their use. They were put through seven weeks of rigorous indoctrination and training. Among other things, they were trained to recognize military uniforms, and to glean secrets out of innocuous conversation. They were not told about the microphones but had to make a report after every encounter.
In March 1940, Schmidt was told to continue as if nothing had happened - except that now she had a special book of twenty additional girls she should show only to a specific kind of clientele. If a customer would use a phrase "I come from Rothenburg", she was instructed to show him the book and then let him make his decision and call for the girl he had selected. The girls would spend the night with the guest and depart later.
Salon Kitty became even more popular when selected guests in the military and diplomatic corps were told the "secret codeword" and monitors made thousands of records. One of the customers was Count Galeazzo Ciano, Foreign Minister of Italy, whose forthright opinions about the Führer were not particularly positive. Another one, SS commander Sepp Dietrich, wanted all the 20 girls for an all-night orgy but he dropped no secrets. Additionally, Goebbels had been marked as a client by some. He, apparently, enjoyed the 'lesbian displays' that were otherwise considered anti-social acts outside of that context.
Reinhard Heydrich also made a number of "inspection tours" although the microphones were turned off in those occasions.
However, British agent Roger Wilson, under his cover identity of Romanian press secretary Ljubo Kolchev, noticed when the wires were rerouted to another listening position. He became a regular customer of Salon Kitty, with a regular girl, and later arranged a wiretap to three cables. Now British intelligence heard some of the same conversations SD did. Wilson was later captured and sent to a POW camp.
When the war progressed, the clientele of Salon Kitty decreased. In July 1942 a bomb demolished the building the brothel was in and Salon Kitty had to move to the ground floor of the same building. Within the year SD abandoned the project and handed Salon back to Schmidt - with the threat that she would keep silent or face retaliation. The 20 girls stayed with her.
Kitty Schmidt did not talk about the matter even after the war. She died in 1954.
In 1976, these events were turned into the highly controversial film Salon Kitty, directed by Tinto Brass and starring Helmut Berger as Walter Schellenberg (re-named Helmut Wallenberg) and Ingrid Thulin as Kitty Schmidt (re-named Kitty Kellermann.)
- The Labyrinth: Memoirs of Walter Schellenberg, Hitler's Chief of Counterintelligence by Walter Schellenberg, translated by Louis Hagen (originally published as The Schellenberg Memoirs in London by A. Deutsch; Da Capo Press, 2000, ISBN 0-306-80927-3).
- Peter Norden. Salon Kitty. Südwest-Verlag München, 1970.
- Salon Kitty from "Spy Fact of the Day".
- Salon Kitty (1976) at IMDB
- Paul Lewis, 2008: Review of the AWE DVD release of Salon Kitty. DVDComparede:Salon Kitty