Churchill's Spy Files

by Nigel West

  The de Graaf case was unusual in many respects. He was born in Saskatchewan in November 1918 to Dutch parents – farmers who returned to Amsterdam in 1928 – and he acquired a British passport in 1933. When the Germans occupied the Netherlands he was employed as a bookkeeper, and in June he was interned at Schoorl because of his dual citizenship. After ten days in detention de Graaf applied for his release, on the grounds that he was more Dutch than British, and he was interviewed by the Sicherheitsdienst in The Hague. Threatened with incarceration at a concentration camp, and anxious to support his elderly parents, de Graaf agreed to his recruitment and underwent a lengthy training course in sabotage and clandestine communications. In 1941 he made contact with an underground escape line that assisted his travel via Toulouse, where he spent six weeks, to the Spanish frontier in February 1942. He stayed in Barcelona for two months, supported by the British consul. Upon his arrival in Madrid he presented himself at the British embassy, where he was employed by Sir Peter Norton Griffiths for eight months as an accountant in the office of the military attaché, Brigadier W.W.T. Torr.

  In December 1942 he sailed from Gibraltar for Gurock on the Llanstephan Castle and was arrested upon arrival when a search revealed the ingredients for secret writing. He was transferred to Brixton and then moved to Camp 020 where, during his sixth interview, he confessed to his role as a German spy, and admitted having sent three letters to his German controllers, one from Chalon and two from Toulouse.

  A detailed interrogation was conducted by Helenus Milmo, who reported on 12 February 1943 that:

  … since de Graaf’s arrival at Camp 020 very substantial progress has been made and we are now in a position to say that this man is an infinitely more important enemy agent than we had originally thought. We are still a long way from obtaining the full truth from him and the extraction is proving a laborious process but from the admissions so far obtained de Graaf has shown himself to be one of the best trained enemy agents who have so far fallen into our hands. Thus he has admitted to having received instruction in political propaganda work, secret ink writing, wireless telegraphy, codes, sabotage, and the use of firearms. Moreover he has confessed to having been in contact with an interesting and important variety of German Secret Service personnel and to have written no less than three letters to the Germans at a time when he was employed on highly confidential work in the British Embassy at Madrid whilst awaiting repatriation to this country.

  De Graaf’s admission to an espionage role, and having attended some forty classes on radio technique, opened the possibility of a prosecution under the 1940 Treachery Act, and a death sentence, but there was a complication, as the 020 commandant, Robin Stephens, warned on 27 February:

  The position has been reached where a case could be put forward for prosecution under the Treachery Act. The prosecution, however, is much complicated by the astonishing action taken by the British Embassy in employing this German spy for eight months in the Embassy with access to information on the escape routes. De Graaf relies upon a satisfactory recommendation from the Embassy to bear out his defence that he never intended to work against the Allies. At the same time it must be borne in mind that de Graaf has admitted possession of Pyramidon which was handed to him by the German Secret Service for purposes of secret writing.

  Thus, having conceded that he had been sent on a sabotage mission, de Graaf’s embarrassing defence was that he had never intended to spy, even though there was evidence from MI9 that he had compromised a major British escape network, having gained access to the information while employed by Brigadier Torr:

  Whilst employed at the British embassy in Madrid, this man was responsible for passing to the enemy information about an escape route from occupied territory and was directly responsible for the arrest by the Germans of probably the most important British agent operating this route who was responsible for the very marked success which it had achieved over the course of the last year.

  De Graaf’s assertion was that his sabotage mission had been to South Africa, and once it became clear to him that he could not obtain further instructions from his contact in Lisbon, as he had been directed, he had abandoned all thought of espionage. This may or may not have been true, but MI9 certainly did not want to acknowledge that a German spy had been working for them in Lisbon undetected for eight months. The issue was put before the Director of Public Prosecutions in March 1943 by Edward Hinchley-Cooke, and the decision was taken not to proceed with a prosecution. Accordingly, de Graaf’s future was referred to the Home Office, with a recommendation from Petrie that he should be isolated at Dartmoor:

  The case against de Graaf has become a more serious and formidable one than was originally suspected, and admissions have been obtained from him which prove beyond question that he is one of the best and most extensively trained enemy agents who have fallen into our hands since the beginning of the war. Thus he has received a very thorough training as a saboteur and is conversant with the most up-to-date German sabotage methods and equipment. He has been fully instructed in the use of secret ink and developers, codes and cyphers, firearms, political propaganda and has achieved a considerable proficiency as a wireless operator. In short he is an extremely dangerous man.

  We had hoped that it would have been possible to prosecute De Graaf under the Treachery Act, but although we do not entertain the slightest doubt that de Graaf’s association with the German Secret Service is incapable of any innocent construction, the Director of Public Prosecutions has advised against criminal proceedings because he feels that the evidence available for use in a Criminal Court – and this of course excludes the confessions extracted at Camp 020 – might not be strong enough to satisfy a jury that de Graaf’s excuse for undertaking to work for the enemy is necessarily a bogus one. I may say that the excuse in question is the time-honoured one which the Germans instruct their agents to put forward if caught, namely; that he never intended to work for the enemy and only undertook his espionage assignments in order to escape to this country. In these circumstances the DPP has ruled against a prosecution. De Graaf, being technically a British subject and being detained under DOR 18(b), cannot remain indefinitely at Camp 020, but, as in the case of Boyd,2 we would be strongly averse to his spending the rest of the war with the disaffected British subjects whom he would meet in any ordinary place of detention for 18(b) cases. It is, in our view, wholly undesirable that proved enemy agents, whether they be British subjects or aliens, should be allowed to mix freely or at all with ordinary internees and detainees. The chances of leakage are considerable and no proper safe-guards against such leakages can be maintained. Further, as I think I have stressed on previous occasions, it would not, in our view, be in the public interest that it should become generally known how very difficult it is to establish a strong enough case for prosecution against a spy, or that there are in this country in detention a very large number of spies who are not and cannot be dealt with under the Treachery Act.

  We are therefore of the opinion that de Graaf should be moved to Dartmoor and should remain there for the duration.

  At the end of April 1943 de Graaf was driven to Paddington Green police station for a final interview, and then escorted onto the Cornish Riviera Express at Paddington station for the rail journey to Exeter, and Dartmoor prison, where he remained for the rest of the war.

  Although a highly abbreviated version of the de Graaf case was given to Churchill, he was never informed that, probably unwittingly, de Graaf had succeeded in penetrating MI9 in Madrid, and had betrayed an important British agent. When challenged about his employment, the Foreign Office’s security branch, headed by William Codrington, insisted that Norton-Griffiths had disregarded procedures by taking him on without the approval of the embassy’s security officer, Alan Hillgarth, and that the Passport Control Officer had known of the situation. Wherever the blame properly lay, de Graaf survived the experience and, having been refused a return to Canada, was repatriated to the Netherlands at the end of the
war.

  Whereas it had been almost impossible to prosecute de Graaf under the Treachery Act, MI5 encountered no such difficulties with Regeiro de Menezes, even though he was a fully accredited foreign diplomat whose espionage had been detected by that most secret of sources, TRIPLEX. Having arrived in London in July 1942 to work at the Portuguese legation with a junior rank, de Menezes had begun writing letters to his sister in Lisbon, enclosing another note using secret ink addressed to a man named Mendez. His mail had been included in the Portuguese diplomatic bag, which was surreptitiously opened and examined by MI5 as part of a joint SIS operation code-named TRIPLEX and supervised by Anthony Blunt. Although the precise nature of TRIPLEX was not explained in explicit terms, it is probable that Churchill either knew or guessed the sensitivities involved. That Blunt should have selected the de Menezes investigation to put before the Prime Minister is interesting as it illustrated at least six distinct MI5 techniques, including ISOS, the introduction of a woman agent provocateur, the penetration of the embassy by an agent code-named DUCK, physical and technical surveillance, and the exploitation of TRIPLEX.

  As Blunt would have known, the de Menezes case had involved a high-level discussion about the wisdom of revealing evidence to the Portuguese ambassador that might put TRIPLEX at risk. The proposal, discussed in January 1943, had been vetoed instantly by SIS’s David Boyle. Despite this reticence, TRIPLEX continued to supply the spy’s correspondence that, under ultra-violet light, revealed secret writing describing London’s air defences.

  De Menezes’s mission as a Sicherheitsdienst spy had been betrayed by an ISOS intercept even before he had landed, and he was watched inside the legation by an MI5 agent, and outside by MI5 surveillance teams. According to Jack Bingham, an MI5 officer who befriended him, he seemed particularly interested in anti-aircraft defences. In February 1943 the evidence was presented to Ambassador Monteiro, who was reminded that three other Portuguese, Gastao de Freitas,3 Manoel dos Santos4 and Ernesto Simoes,5 had been caught spying and, after he had consulted Lisbon, he agreed to withdraw de Menezes’ immunity. When arrested, Menezes claimed that he had spied under duress because he had relatives in Germany who were under threat. In his confession he identified Mendez as a man named Marcello who worked for Umerte, an Italian intelligence officer. He claimed to have been introduced to them by a Portuguese air force officer, Colonel Miranda, and also mentioned Ramos, a cipher clerk in the Portuguese foreign ministry. Nevertheless, he was convicted under the Treachery Act in April 1943, sentenced to death, and reprieved after a plea for clemency from his ambassador. He was imprisoned at Dartmoor and, on the instructions of the Lord Chief Justice, no public statement was made concerning the trial or the reprieve.

  As a result of the case the Policía de Vigilância e Defesa do Estado in Lisbon arrested twenty-three members of the Abwehr’s local organisation, including Kuno Weltzien, a figure who had long posed a threat to British intelligence operations in the Peninsula. De Menezes was freed and deported back to Portugal in December 1949.

  * * *

  Petrie’s choice of ZIGZAG, MUTT and JEFF as the three most suitable examples with which to introduce the Prime Minister to the concept of double-agents is quite curious. The two Norwegians, John Moe and Tor Glad, had paddled ashore in Banffshire in April 1941. Their participation in an operation code-named OATMEAL, involving the Luftwaffe dropping them a wireless transmitter and £400 in cash, was ample proof that both men had been completely accepted by their Abwehr masters in Oslo, who demonstrably believed them to be at liberty and active on their behalf. Churchill would later hear more of them, and about BUNBURY, a daring act of sabotage. As would later emerge, OATMEAL had an unexpected aspect, as Liddell confided to his diary on 24 March:

  A piece of the parachute by means of which MUTT and JEFF’s wireless set was dropped some weeks ago has been picked up by a farmer near Loch Strathbeg. It only reached us quite fortuitously through an officer in AI-1(g) having given it to Room 055. The general instructions are that objects of this kind should be handed over to the air force by the police. I am going into this matter with RC. The officer’s suspicions had been aroused because of a report he had read of an interrogation of a German airman who claimed to have landed an agent here in November 1939 in a Dornier 18 off the Yorkshire coast, not far from Scarborough. This agent was equipped with a short-wave wireless set. At the end of April 1940 he picked up the same man from a bay just to the North of Flamborough Head. This spy was said to have given the Germans immensely valuable information at the beginning of the Norwegian campaign and also about a raid carried out in April 1940, on which advance information was given. There was a raid on 18 April from which five Hampdens and two Wellingtons failed to return from a flight to southern Norway. The signal for picking up a spy was to be the dropping of a bomb and as a bomb had been dropped in connection with the MUTT and JEFF enterprise the air force officer who brought in the bit of parachute thought it might have some significance from an MI5 point of view. The prisoner of war also spoke of another agent that he had landed at the beginning of the French campaign. This man wore civilian clothes and was provided with a squadron-leader uniform and a small transmitter. Landings from aircraft and also descents by parachutes had later gone out of fashion as they were thought to be too dangerous.

  Nothing more was ever heard of these alleged airborne infiltrations, so it is likely that the Luftwaffe PoW had fabricated the stories, perhaps in the hope of enhancing his own status with his captors.

  * * *

  As for ZIGZAG, he had departed on an Ellerman Line cargo vessel, the City of Lancaster, for Lisbon on 15 March, and the only way of monitoring his progress, first in Portugal and then in Norway, was through the interception of ISOS traffic, which occasionally mentioned his continued survival as a spy code-named FRITZCHEN. He would not be seen again until his triumphant return in June 1944, which would earn him further mention.

  _____________

  * Indicates redacted material here and throughout.

  2

  SECOND REPORT,

  2 MAY 1943

  The second report, dated 2 May 1943, is very domestic, covering two espionage cases, Frank Steiner and the Portuguese diplomat Rogeiro de Menezes; three double-agents, ZIGZAG, HAMLET and METEOR; and the problem of sabotage in Gibraltar. The final draft was approved by Richard Butler, head of the Director-General’s secretariat, on 2 May.

  Also described is BUNBURY, an act of sabotage to be carried out by MUTT and JEFF using material captured by the Germans from SOE networks in France. BUNBURY involved an explosion in August 1943 at the electricity power plant at Prospect Row in Bury St Edmunds, which was reported in detail by the East Anglian Daily Times, and resulted in claims broadcast on Nazi radio describing the incident and the deaths of 150 workmen. A week later the supposedly independent, Berlin-based Trans-Ocean News Service, which was controlled by Dr Goebbels’ propaganda ministry, repeated the story on its North America wireless system.

  Supposedly, a bomb placed beside a condenser had detonated causing widespread damage, and another device had been discovered and defused before it could explode. In reality, of course, the entire episode was an elaborate charade intended to build up the status of the two Norwegians.

  On 5 August Guy Liddell indoctrinated Sir Frank Newsam, the Permanent Under-Secretary at the Home Office:

  I saw Frank Newsam and explained to him Plan BUNBURY. He thought it possible that Watts, head of the explosives department, might be brought in. I said that if and when he was, we might consider whether it would be better to inform him of the true position in case he discovered that the whole business was a hoax and gave the show away. Newsam was I think pleased at having been brought into this matter.

  The scheme, supervised by Victor Rothschild and Len Burt, had been code-named BUNBURY in deference to the fictional character in Oscar Wilde’s The Importance of Being Earnest, and took place on 6 August, as Liddell recorded in his diary the following day:

  Len Burt i
s going down to investigate Plan BUNBURY which took place last night. I have not yet heard any details. Burt thinks that he may be able to help a bit on the press side since both the Ministry of Information and Frank Newsam think that they could not give the story to the press without arousing considerable suspicion. The Chief Constable is giving it to the local press and I have suggested that he should explain when doing so that he has approval from Censorship, as it is thought that the public need to be made aware that something is going on in their midst. It is hoped that this will stimulate security.

  However, the following week, on 12 August, Liddell noted that the local police were becoming a little too enthusiastic about the investigation:

  Victor Rothschild and Len Burt came to see me about Plan BUNBURY. Burt thinks it desirable to ease up the police a little, who are suspecting the Irish and the Poles. There is great activity in the eastern counties and I understand that guards at utility undertaking have been doubled. The local press have got the story but do not think it worthwhile sending to London, as they feel it would not be passed by censorship. We are doing our best to grease the wheels but cannot do this too obviously.