Within two days of the Arnold sighting, Palmer sensed a marketing opportunity. He wrote to Arnold asking him to contribute his story to Amazing Stories, where presumably it would run alongside Shaver’s Lemurian mystery as “proof” of the “space ships” of Lemurians returning from other planets. Arnold provided Palmer with an account of his sighting, and would eventually work with Palmer on a book version. Palmer, who believed in Theosophical concepts like the Akashic record and the flying ships of interplanetary Masters, had already planned to turn the unidentified “discs” into spacecraft from another world within days of Arnold’s sighting.
Meanwhile, the “flying saucer” sighting overshadowed news of events on Maury Island in Washington where two men would soon claim to have seen a flying disc crash. This event would give two men a chance to expand the emerging flying saucer legend.
At the time, the AAF had requested that the FBI assist with its efforts to investigate the wave of flying discs—including numerous reports of crashed discs—that sprang up in the days after the Arnold sighting. By mid-July the FBI agreed to help, and they formalized the relationship by the end of the month. The AAF turned over to the FBI the telegram asking them to investigate Richard Shaver, and though it took a month, the FBI’s Chicago Field Division eventually set out for Lily Lake, Illinois to interview Shaver on orders from headquarters.
One of the reasons for the delay is that the flying disc story had taken a tragic turn. The Maury Island incident gave rise to the first UFO conspiracy theory, and once again Ray Palmer was behind it. Two men exploring Maury Island, Fred Crisman and Harold Dahl, found some rocks that they speculated might have been placed in “formation” by a flying disc. Or, more accurately, Crisman thought he could sell the story to Palmer, known to him beforehand (Crisman had sent Palmer an earlier letter claiming to have met Lemurians during World War II), as something weird. Palmer apparently hoped to use it as evidence as Shaver’s Lemurians until Arnold’s flying discs changed his plans.
Crisman and Dahl swore in an affidavit that they boxed up some strange metallic material found among the rocks—later found to be slag from a steel mill—and sent it off to what the FBI report wrongly called “Venture magazine” in Illinois. The FBI seems to be referring to Amazing Stories, edited by Ray Palmer of Venture Press, and published through Ziff-Davis. Palmer thus concocted a plan. He would send Kenneth Arnold $200 to investigate the rocks, and he promised Arnold more money for a new article.
Meanwhile, Arnold tried to interest two Army officers, Lieutenant Frank M. Brown and Captain William Davidson, in the material, but they showed no interest in it after meeting with Arnold, Crisman, and Dahl, but they took some of the slag with them for analysis. On July 29, an unidentified person, possibly a journalist (or maybe an FBI agent--the telegram was redacted), in Boise, Idaho sent a telegram to Brown asking him to look into Palmer, whose lavish payments for flying disc news seemed suspect. When the officers were killed in a plane crash on August 1, someone, probably Dahl, contacted local journalists in Washington to pass them a false story that the officers were transporting parts of a flying disc, and that their plane had been sabotaged to stop them from delivering the material.
The FBI would interview the men and determine that they were untruthful publicity-seekers looking to make a fast buck selling slag as “flying disc” debris. The men soon confessed to the FBI that the story was false and that they told the tale because Palmer had promised a cash payment to them for more flying disc parts. Indeed, Dahl told FBI agent Jack Wilcox that he had sent Palmer unidentified metal in early June but that Palmer had called him right after the Arnold sighting, concocting the flying disc story and manipulating him into agreeing that the debris was from a flying disc. However, one subsequent document said that the two men instead claimed that they would pretend the story was a hoax to avoid publicity. Richard Dolan makes much hay of this but the documents aren’t really in disagreement. The men told Wilcox that they had tried to tell Palmer that the story was a joke, and they told later investigators that the story of the flying discs had been made up by Palmer. They reversed themselves many times after that. Crisman and Dahl went on to allege to Gray Barker that the Men in Black tried to silence them, though Dahl would concede many years later that this too was a hoax.
Crisman and Dahl contacted Brown and Davidson at Palmer’s behest, while in contact with Arnold, who was disturbed by the outcome. Arnold was spooked, and Palmer had to calm his fears that someone was trying to assassinate flying saucer witnesses. According to FBI records, the Bureau had already come to believe that Palmer was orchestrating something since they considered his $200 payment to Arnold (with a promise of more to come) to be suspicious, “out of line for present public interest,” they noted.
This strange sidelight busied the FBI to the point that dozens, if not hundreds, of pages of memos and teletypes exhaustively chronicled the investigation. When it was over, the Chicago office finally got around to interviewing Shaver. He explained his whacky beliefs, and the FBI concluded that Shaver and Arnold may have been used by Palmer to transform ambiguous “disc” sightings into a space invasion: “…it should be noted that [REDACTED for RAYMOND PALMER, ARNOLD]’s employer, was from the start ‘exploiting’ the appearance of the flying discs, possibly to enhance the appeal of [REDACTED for SHAVER’s] stories. It is possible, therefore, that the entire flying disc theory was conceived by [REDACTED, but probably either RAYMOND PALMER or PALMER AND SHAVER].”
So why didn’t this information make the papers? That is a fascinating story of its own. As summer turned to fall in 1947, the FBI became increasingly frustrated that the AAF, in the process of divorcing itself from the War Department to become the Air Force, was acting haughtily and treating the FBI as its lackey. Experts consulted by the FBI told them that flying discs might well be AAF secret projects, and they recommended that the FBI consult about this with the Air Forces to avoid wasting taxpayer money investigating the government’s own projects. The Air Force, however, did not cooperate. Instead, they denied that Project Mogul or other secret projects might be behind sightings, and they declined to respond to some of the FBI’s questions. They also tried to redirect their attention, telling the FBI that flying saucers might be the work of “subversives” trying to create “mass hysteria,” even though the FBI had already ruled this out. This predisposed the FBI to thinking badly of the AAF, which they recognized was hiding some information.
Things didn’t get better when the AAF simply insulted the FBI.
“The services of the FBI were enlisted,” the AAF wrote in a September 3, 1947 letter not meant to be seen by the FBI, “in order to relieve the numbered Air Forces of the task of tracking down all the many instances which turned out to be ash can covers, toilet seats, and whatnot.” The FBI’s Harry M. Kimball obtained a copy of the letter and got angry. He recommended terminating cooperation with the AAF, citing the “ridiculous” work they offloaded onto the FBI and the “scurrilous” nature of their comments. The FBI leadership agreed, and cooperation was terminated by month’s end. With the termination, the FBI dropped its investigation into Shaver and Palmer, and the AAF, busy with its own problems, never inquired after it.
Sure, if you are conspiracy-minded, you could read this as an AAF cover-up, but the more parsimonious explanation is that the Air Force kept cases involving sightings of military projects for itself and shunted the grunt work onto the FBI.
The long and short of it is that the FBI uncovered the secret origins of the first flying saucer flap and discovered that Ray Palmer was orchestrating the creation of a space invasion, and they did nothing with that information, letting the Air Force twist in the wind and letting the myth of space alien invasion grow mostly out of petty bureaucratic power struggles.