Complex sentence: Fergus discovers that throughout Schutz's reports there are hidden notes about private experiments to develop polywater with this mutagenic effect--the continuation of a Nazi project to turn enemies of the Aryan "super race" into subservient "Untermensch".
Split into simpler sentences: Fergus discovers that throughout Schutz's reports there are hidden notes about private experiments to develop polywater with this mutagenic effect. His experiments continue a Nazi project to turn enemies of the Aryan "super race" into subservient "Untermensch".