In 1963 responsibility in Israel for running agents, Lotz included,
was transferred from MI to the Mossad. His new bosses in the
Mossad were at a loss about what to do with this marriage. Moreover,
his new case officers were dissatisfied with his behavior. Lotz was
now drinking too much and had become egregious in his expendi-
tures; at that time, a regime of thrift was ascendant in the organiza-
tion. But Israel needed and wanted Lotz in Cairo. He had proven him-
self an invaluable agent. So despite his second marriage and his
habits, Isser Harelapproved the continuation of Lotz’s operation.
Lotz returned to Egypt in the summer of 1962, with Waltraud fol-
lowing a few weeks later. General Gahourab was there to meet him at
the airport and drove him personally into Cairo, where a lavish party
was thrown in his honor. The festivities did not prevent Lotz from
making his first transmission to Tel Aviv. He disposed of a virtually
limitless spending account, which he used to buy presents for friends
in high places, throw parties, and buy horses and stables for the riding
school he planned to open. Lotz and his wife enjoyed themselves im-
mensely. During the day, they rode with friends, and their active so-
cial life led to ever widening contacts with members of the elite. They
established good relations with Brigadier General Fouad Osman and
Colonel Mussa Said, key figures in Egyptian military intelligence. Os-
man was head of security for rocket bases and military factories and
was accordingly responsible for the defense of precisely those instal-
lations that Lotz wanted to find out about. One of Nasser’s closest ad-
visers, Hussein El-Shafei, often told Lotz of important state decisions
even before most government officials knew about them.
Lotz also became very close to many Germans and former Nazis liv-
ing in Cairo, and with one couple the friendship was genuine. Another
friend was Gerhard Bauch, who claimed to be a former Nazi officer but
was suspected of leading a more surreptitious life. On one occasion
General Osman told Lotz that Bauch was forever lurking about and lis-
tening to every word that was said. He added that officially Bauch was
in Egypt as an industrialist, but was actually spying for West Germany.
Egypt allowed him to operate freely because President Nasser wanted
good relations with West Germany. Osman said that the information
Bauch acquired in Egypt was passed on to the U.S. Central Intelligence
Agency (CIA). Osman even advised Lotz to be careful in his relations
with Bauch because, as a fellow German, Bauch might try to exploit164 • LOTZ, WOLFGANG06-102 (03) H-P.qxd 3/24/06 7:24 AM Page 164