Following the Money: Ian Fleming and the Origin of Casino Royale

In February, Artistic Licence Renewed visited Estoril in search of the real-life origin for Ian Fleming’s debut Casino Royale. We joined author Larry Loftis at the Palacio Hotel and Casino Estoril on his media tour for the Portuguese release of his international bestseller INTO THE LION’S MOUTH: The True Story of Dusko Popov—World War II Spy, Patriot, and the Real-Life Inspiration for James Bond.

Article by Larry Loftis

FOLLOW THE MONEY. Seventy-six years ago Ian Fleming did, and sixty-four years ago today Casino Royale was published.

The year was 1941, and Lt. Commander Ian Lancaster Fleming—assistant to British Director of Naval Intelligence, Admiral John Godfrey—was returning with his boss from a trip to Washington to meet with FDR. On the layover in Lisbon Ian decided—or was ordered—to stay a few weeks. The action was somewhat peculiar since Naval Intelligence had no office in Portugal, and Godfrey returned immediately to London. The explanation, in part, had to do with Lisbon’s role in the world.

Yet, the question remains: What does that have to do with British Naval Intelligence and why was Ian Fleming there?

In February, I visited Lisbon and Estoril to explain that very question. By design, media interviews were held at Fleming’s favorite haunts: the Palacio Hotel, the Spy Bar, and Casino Estoril. In essence, I was following Fleming, who was following the money.

During World War II, only two countries on continental Europe were neutral: Spain and Portugal. As a result, Madrid and Lisbon were the command centers of espionage for many countries. At any Lisbon cafe, one might hear conversations in English, Russian, Japanese, Romanian, Spanish, or, of course, German. While neutral, Portugal leaned to the power winning the war—Germany. At one hotel in Estoril—the popular resort town just west of Lisbon—the flag atop the establishment was not Portugal’s, but Nazi Germany’s. At other venues, lavish receptions were held for German diplomats, businessmen, and sympathizers.

The Palacio (center) as Fleming and Popov knew it. To the left is the Parque Hotel, favored by the Germans. Casino Estoril is just left (off the photo) of the Parque. Courtesy of Câmara Municipal de Cascais.

Left: Nazi flag atop the Atlantico Hotel, Estoril.  Right: Nazi reception in Lisbon hotel. Courtesy of Câmara Municipal de Cascais.

During the war, only two men sat on both governing bodies (W Board and XX Committee) overseeing British double agents: Gen. Stewart Menzies, head of MI6, and Admiral Godfrey. Godfrey, Bond fans, is the link between Lisbon, Ian Fleming, and one very special MI6 agent, Dusko Popov. It was Godfrey who had approved Popov’s MIDAS PLAN—an audacious scheme to steal the Germans blind in a labyrinthine currency exchange—and it was Godfrey who knew when Popov was expected to receive $40,000 (roughly $600,000 today) from Abwehr Major Ludovico von Karsthoff.

Major Ludovico von Karsthoff’s villa today (photo credit: literary007.com)

Was there a risk in turning a playboy spy loose on the town with a king’s ransom in his pocket?

Without question. In all likelihood, Godfrey explained MIDAS to Fleming and asked Ian to follow the money until Popov delivered it to MI6 Lisbon chief, Colonel Ralph Jarvis.

On February 14, the first day of my media tour, I began with an interview at the luxurious five-star Palacio Hotel. I explained to the reporter that Fleming had stayed at the hotel on his U.S. outbound layover, and that Popov was staying there the night of their encounter the first week of August, 1941.

Conducting an interview with RTP TV at “Fleming’s table” in the Palacio Spy Bar. (photo credit: literary007.com)

Equally important, the Palacio was home to Fleming and Popov’s favorite watering hole, known today as The Spy Bar. The Palacio is proud of this heritage, and the bar menu highlights the Fleming-Popov-Bond connection, including hotel registrations of both men.

The Spy Bar as it was in the 1940s and today. Courtesy of Larry Loftis.

The Spy Bar Menu (photo credit: literary007.com)

Between interviews, I spoke with the two employees who have been at the Palacio the longest—concierge Jose Diogo Vieira (37 years) and bellman Jose Alfonso (54 years). While neither was at the hotel in 1941, they noted that two bartenders they had worked with during their early employment had been. “That was Fleming’s table,” Jose Diogo told me as we strolled through the bar. “The bartenders told me that Fleming and Popov favored it.” Naturally, I made it a point to conduct interviews there. With goosebumps.

Larry Loftis with Jose Alfonso

Larry Loftis with Jose Alfonso (photo credit: literary007.com)

On August 1, 1941, the London end of the MIDAS exchange was initiated and days later Popov received from von Karsthoff—in Lisbon—$38,000 (the German keeping $2,000 as his “commission”). That night—some time between August 3 – 8—Popov decided to keep the money on him as he hit the town. When he exited the Palacio elevator around dinner time, a sharply-dressed man was waiting in the lobby.

Ian Fleming.

The man took a particular interest in him, Popov noticed, and followed him to a bar and then to a restaurant. After dinner, with Fleming in tow, Popov headed to Casino Estoril.

What happened next should sound familiar. Fleming watched with keen interest as Popov humiliated—with the MI6 cash—a bête noire holding the bank at a baccarat table. The man, whose name was Bloch, was a wealthy boor from Liechtenstein who was fleeing the Nazis. Twelve years later, on April 13, 1953, the scene was re-created with the publication of Casino Royale. Popov became Bond, Fleming became Mathis, and Bloch became LeChiffre (fleeing the Russians). Bond’s bankroll? From MI6, of course.

Scene from Casino Royale - Illustration by George Almond courtesy of www.007magazine.com

Scene from Casino Royale – Illustration by George Almond courtesy of http://www.007magazine.com

The “delivery room” of James Bond—the baccarat table at Casino Estoril. At the very spot where Fleming watched Popov, I explain to Portuguese TV how Bond was born in their backyard.

To discover the inspiration of Casino Royale and James Bond, then, the guideline is simple.

Follow the money.

Incidental Intelligence

Larry Loftis is an attorney and the author of the international bestseller, INTO THE LION’S MOUTH: The True Story of Dusko Popov—World War II Spy, Patriot, and the Real-Life Inspiration for James Bond (Berkley-Caliber, 2016).

Watch Larry’s interview on Portuguese TV here

Ian Fleming, Lisbon, and the WWII Espionage Game

Cocktails, Casino and Canard: Ian Fleming and the Birth of Bond

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One thought on “Following the Money: Ian Fleming and the Origin of Casino Royale

  1. Fantastic article. The book is a great read and is highly recommened to all Fleming/Bond fans.
    One note- were not Switzerland and Sweden neutral as well?

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