Churchill's Spy Files

by Nigel West

  The Italian tanker is now at Gibraltar and is being minutely examined. Statements are being taken from the Italians concerned with the attacks. The complicity of the Spanish Government, or at any rate Spanish officials in the neighbourhood of Gibraltar, will it is hoped be proved, and will provide more formidable material for protests to Spain than any we have previously used.

  The interrogation of the Tanker’s engineer has provided interesting information. He has told us that the German Sabotage Service in Spain attempted to procure him to continue his sabotage activities against the Allies on behalf of the Germans, after the armistice with Italy, and also asked him to provide details of the Gibraltar water supply, presumably with a view to sabotaging it. Adequate precautions have been taken long since to deal with this type of plan.

  An officer of the Security Service is on his way to Gibraltar to conduct an expert examination of the tanker and its equipment.

  E COMMUNIST ACTIVITIES.

  Further investigation of the activities and associations of D.F. Springhall, the late National Organiser of the Communist Party who in July was sentenced to seven years’ penal servitude for offences under the Official Secrets Act, has disclosed other contacts in other Government departments. A girl clerk, employed in highly secret work in MI6, was seen by Springhall in April this year, and was asked for details of the work she was doing. She claims to have refused to supply them and we believe this claim to be true, but it was nevertheless thought prudent to remove her from her work in view of her membership of the Communist Party and has admitted loyalty to it.

  Another contact of Springhall was Captain O.L. Uren, a young officer employed in the Balkan Section of SOE. Uren volunteered to help the Communist Party and was put in touch with Springhall. After a number of introductory meetings, Springhall asked for a written statement of the make-up and functions of SOE and Uren supplied him with a detailed and accurate account. This revealed the identity of the then Head of SOE, the location of Headquarters, organisation, policy and methods of work of SOE with the Allied Governments. The association of Uren and Springhall was only brought to an end by the arrest of Springhall. Uren appeared before a court martial on October 21st. The findings of the court have just been announced and Uren has been sentenced to seven years’ imprisonment.

  This Department has not been entirely immune from Springhall’s attentions, for he is believed to have been in touch with a late member of our canteen staff. Enquiries are proceeding. He was also receiving information, some of it of a highly secret character, from officers in the Navy and the Army. A number of cases are under investigation.

  While Springhall was perhaps acting without the Party’s authority in these matters, the Security Service has good cause to know that the more official underground organisation of the Party continues to have a measure of success in obtaining information about the policy of the Government, forthcoming operations and the development of new and secret weapons and devices. Two new anti-submarine devices were betrayed to the Communist Party, one by an officer and another by a civilian engaged on instructional work. Two radio devices for use in paratroop operations were disclosed by a technician engaged in their manufacture. In those cases no prosecution has been possible, both because the evidence, though clear, was not legally admissible and because the source of the information would have been imperiled. Many similar cases of leakage to the Communist Party are known to us.

  A common feature of all cases of this nature, which, by their growing numbers and seriousness, are viewed very gravely by the Security Service, is that the offender sets loyalty to Communism (and thence to Russia) above every consideration of duty, honour and allegiance to his own King and country. The study of these cases goes far to support the conclusion that every Communist has a ‘soft side’ in this respect and is better not employed in any capacity which gives him access to confidential or secret material. It is interesting that the above growing conviction of the Security Service should have been confirmed by a comment made by Captain Uren in his own defence during his trial, its gist being that, although he knew it was in no way necessary for Springhall to have it, he disclosed to him vitally important information in order to demonstrate that he had complete faith in Springhall and to persuade Springhall to trust him in return as a sincere believer in Communism. If this creed, which has now found open avowal, is general among members of the Communist Party, the possible reactions on national security can scarcely fail to be serious.

  1 November 1943

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  The arrest of Andrés Bonzo was fully justified in being mentioned by Petrie to the Prime Minister as it was one of the most remarkable, if undocumented, cases of wartime espionage of the entire conflict, and originated with Kim Philby in September 1943. At that time Bonzo, carrying an Argentine passport, was aboard the Spanish ship Monte Albertini retuning to Spain from Buenos Aires. He had travelled to South America on the Cabo de Buena Esperanze in June 1942 from Genoa, accompanied by his wife Maria and son Dario, and by José Trotti, a wireless operator. Bonzo described himself as a correspondent for La Stampa, but was actually an agent of the Italian intelligence service. However, according to an SIS source, Angelo Pozzi, in Buenos Aires, Bonzo was a senior figure in a local spy ring headed by Ricardo Prati, the assistant military attaché at the Italian embassy. Pozzi had approached the SIS station with this information, apparently in an attempt to penetrate any British organisation, and had been regarded with suspicion and scepticism, but nevertheless his information seemed to link Bonzo, employed as a lawyer by the Roman Catholic church, to an agent code-named FRANCISCO who appeared with some frequency in the intercepted Italian wireless traffic.

  When his ship docked at Gibraltar on 12 September Bonzo was arrested, and upon his arrival at Camp 020 he promptly supplied a lengthy and detailed statement describing his recruitment in Rome by the Italian foreign intelligence service, the Servicio Informazione Extere (SIE), his assignment in Argentina, and the SIE’s network of personnel across South America. In his account of the SIE’s operations and personnel, Bonzo described how his organisation was dependent upon funds provided by the Italian naval attaché, Eugenio Torriani who, unfortunately, had been killed in a car accident, thereby cutting him off from any financial support. A bitter row had then ensued, and Bonzo had decided to return to Rome to obtain further instructions from his superior, Colonel de Renzi, at headquarters in the Palazzo Baracchini.

  Born in Argentina in April 1896, Bonzo had been taken by his parents to Italy, where he had qualified as a lawyer and, during the First World War, had served with the 252nd Infantry regiment on Monte Grappa in the Italian Alps.

  In his confession Bonzo, who had been a reservist officer with the rank of captain with the 37th Infantry Regiment until he was called up in December 1940, identified his entire network, its agents, their methods, communications and cover addresses, and cooperated fully with his interrogators, developing a very comprehensive picture of the SIE, including its premises and staff. He also named members of his network in Chile and Uruguay so, by any standard, Bonzo’s material represented a major intelligence coup, although MI5 observed that ‘this story of Italian adventure in espionage is one of appalling muddle, personal rivalry and sordid intrigue’.

  The unforeseen complication in the Bonzo interrogation occurred in March 1944 when it was reported by SIS the Servicio Informazione Militare (SIM) representative in Buenos Aires, Major Prati, had boasted that he had recently seen a copy of the interrogation of Bonzo conducted in Gibraltar. This allegation, if true, amounted to a significant breach of security, especially as one detail, mentioning a ‘red-headed Jewess’ employed in Bonzo’s office, appeared to be authentic. Prati had claimed to have seen a photostat document, and although Bonzo had not been questioned in Gibraltar, the description sounded like one of two interim case reports issued by Camp 020, dated 1 and 16 November 1943. These had been shared with Joseph Lynch, an FBI liaison officer in Washington, who had distributed copies to the FBI represent
atives in Buenos Aires, Montevideo and Rio de Janeiro. Evidently one of these three copies had reached Prati, and once the FBI special agent in Argentina, Ken Crosby, had been eliminated, suspicion fell on Carl Spaeth in Uruguay, who had unwittingly passed a copy to a representative from the Argentine police.2 Soon afterwards, there was further evidence of a leak when details of Osmar Hellmuth’s case reached Argentina, and an FBI investigation in October 1943 concluded that the documents probably had been removed, copied and replaced from an unaccompanied State Department bag that had been sent to Buenos Aires. However, MI5 was not quite so confident, and Cyril Mills informed Liddell that:

  … strictly between ourselves this may be the Bureau’s official explanation of an occurrence which is highly embarrassing to them but I am not altogether satisfied that if it is the real one although I do not suggest that the FBI know what the real one is.

  The matter remained unresolved, and by August 1944, with the political position transformed in Italy, SIS pressed MI5 to release Bonzo on the grounds that ‘there seems no good reason to keep Bonzo in captivity and every reason why he should be released’. Even Colonel Stephens, Camp 020’s fierce commandant, conceded that Bonzo had been fully cooperative and had assisted in breaking another Italian, Philippe Manfredi de Blasis. Accordingly, on 12 December 1944 Bonzo was escorted to Liverpool where he was placed aboard a ship bound for Italy and deported, to continue his work as an intelligence officer, this time for SIM.

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  The detention of Osmar Hellmuth, an ostensibly innocuous insurance broker, was one of the great unsung intelligence coups of the entire conflict, and would have a profound impact in Argentina. He was arrested in Trinidad on the Cabo de Hornos on 29 October 1943, flown to Bermuda and the taken by HMS Ajax to Plymouth.

  Hellmuth was born in Buenos Aires to a German father and later became friendly with another member of the Argentine Yacht Club, Hans Harnisch, who had boasted of his Nazi connections, and in particular his friendship with SS Obergruppenführer Walter Schellenberg. Allegedly he had fulfilled the role of an intermediary, negotiating between President Castillo and Berlin, but after the military coup of April 1943, which had brought Pedro Ramirez to power, Harnisch had lost his influence. He complained to Hellmuth, who happened to know Ramirez because they had once shared a long rail journey together when the future president had been a mere commander of a cavalry brigade. Furthermore, Hellmuth was on particularly good terms with the president’s secretary, Colonel Enrique Gonzalez. Seeing an opportunity to exploit Harnisch’s contacts in Germany, Hellmuth asked him to intervene in the protracted talks that had been taking place over the fate of the Buenos Aires. This cause célèbre was a tanker bought from its Greek owners that required a safe conduct pass from the Germans before it could make the voyage through the Baltic from Gothenburg to Argentina. Harnisch not only offered his support to have the Buenos Aires put to sea, but suggested that he could also assist in the Ramirez government’s desire to buy German weapons.

  In September 1943 Hellmuth was appointed an auxiliary consul and given travel papers, ostensibly to fulfil an appointment at the Argentine consulate-general in Barcelona, but actually to negotiate with the SD, and embarked on the Cabo de Hornos for Bilbao early the following month with instructions, not from Harnisch, but from Hauptsturmführer Johannes Becker and Colonel Juan Perón, then an assistant to the Minister of War, General Edelmiro Farrell. Under the scheme agreed, Hellmuth would be contacted in Bilbao once he had checked in to the Carlton Hotel, and then he would be flown to Berlin to meet General Schellenberg, and possibly even Reichsmarshal Heinrich Himmler. He would be accompanied by Colonel Alberto Vélez, the new Argentine military attaché to Spain and Portugal, who would handle the weapons procurement negotiations once the Buenos Aires had been released. The complicating factor in all this preparatory work was the mutual distrust between the regular diplomats at the German embassy in Buenos Aires and Becker as the SD’s representative. Similarly, there was considerable rivalry between the various factions in the Ramirez government, all of which had different ideas about what should be negotiated in Berlin, and who should go there, but Hellmuth had been promised by his friend Gonzalez, and Ramirez’s foreign minister, Colonel Alberto Gilbert, that if his mission was successful he would become one of the president’s inner circle, or at least one of those who would be enriched.

  Although Hellmuth during his interrogation was given the impression that his detention had been opportunistic, it was in fact the culmination of a carefully prepared plan to capture a man who was suspected of being despatched to Berlin by either Ramirez, or people close to him, so an unofficial line of communication could be kept open in the event that his government was forced to sever diplomatic relations. Hellmuth’s arrest, of course, was the most flagrant abuse of his diplomatic immunity, but the excuse to detain him was a single letter, erroneously omitted from the diplomatic bag, from Harnisch addressed to a certain Dr Holm that served to introduce Hellmuth and listed various ‘precision measuring instruments’ which would be subject of future, profitable business. This reasonably innocuous letter was the pretext for Hellmuth’s arrest on the grounds that he was engaged in contraband, which was timed to take place shortly before his ship was due to sail. An attempt by another Argentine diplomat to send a telegram to Buenos Aires to report the arrest was also stymied by ensuring that Imperial Censorship did not clear the text for a further five days. By the time other Argentine diplomats had been alerted to find Hellmuth he had, for all intents and purposes, simply disappeared.

  In reality an infuriated Hellmuth was told that he had been let down twice, once by Colonel Gonzalez, who had failed to include the incriminating letter in the supposedly sacrosanct diplomatic bag, and also by the German embassy, which, his interrogators hinted, had tipped the British off to the true nature of his mission. Outraged by what he believed was gross treachery, Hellmuth made the most comprehensive confession, naming Becker as the SD Chief in Argentina, and describing in considerable detail everything that had occurred before his departure. To assist the preparation of his statement he was given a typewriter, but MI5 also examined a pad on which Hellmuth made a first draft of everything he intended to include in his confession, plus a few additional items he decided to omit. The result was that MI5 could undertake a comparison of both versions, which assisted in his interrogation. When Hellmuth finally realised he had been tricked, and the implications of his admissions, he refused all further cooperation and remained a recalcitrant prisoner at Camp 020 for the next two years.

  Hellmuth’s very comprehensive confession provided the Foreign Office, which had been pressed by the indignant Argentine ambassador, Miguel Carcano, for an explanation for the arrest of what he called ‘a career Argentine diplomat’ with a splendid opportunity to exploit what might otherwise have been a very embarrassing diplomatic incident. In fact the Foreign Office would not admit that Hellmuth was a prisoner until 25 November 1943, and a fortnight later Carcano was summoned by Anthony Eden to be told that Hellmuth had admitted to being a ‘secret representative of a subversive German organisation in Argentina’ and that:

  … before the departure of Hellmuth, the British government was informed by a prominent member of the German colony in Buenos Aires that Hellmuth would soon travel to Germany via Spain in representation of a branch of the German espionage service in Buenos Aires.

  Technically this assertion was perfectly true, as the original tip to Hellmuth’s mission had originated from an ISOS sub-set code-named IZAK in October 1943, but the inference was that the British were referring to a willing source, and Colonel Gonzalez and Colonel Gilbert immediately jumped to the conclusion that the traitor had been Ludwig Freude, the owner of a construction business and one of the richest Germans in Argentina. Both men knew that Freude had used his influence, at the request of the German chargé, Erich von Meynen, to scrap Hellmuth’s mission, and wrongly concluded that their opponents had stooped to alerting the British, never suspecting that their own co
mmunications had been severely compromised.

  The consequences of this extraordinary episode were to be far-reaching. With the trump card of Hellmuth’s confession, Carcano proposed a face-saving exercise in which Hellmuth would be released so the Argentine government could revoke his diplomatic status and he then could be re-arrested. The British, on the other hand, had a counter-proposal: unless the Argentine government denounced Hellmuth publicly and severed relations with Berlin, a detailed statement on the whole affair would be released. Whatever the nature of the confidential discussions that followed, President Ramirez removed Hellmuth’s diplomatic status on 21 January 1944 and the next day cut its diplomatic links with the Nazis. Almost simultaneously, Colonel Gonzalez ordered the chief of the federal police, Colonel Emilio Ramirez, to crack down on any known German spies. None of this was enough to save Pedro Ramirez, who was deposed by General Edelmiro Farrell on 23 February, nor indeed to prevent Admiral Canaris being removed as chief of the Abwehr. The Hellmuth debacle was to be one contributor in a series of coincidental intelligence disasters that undermined the Abwehr’s status and led to the Abwehr’s absorption into the Reich Security Agency, the RHSA. One additional factor had been the embarrassment caused to the Spanish AEM, headed by Canaris’ friend General Arsenio Martinez de Campos, which demanded that much of the Abwehr’s structure in Spain be dismantled, and that it cease using German diplomatic and consular posts as cover. Dismayed, Canaris had flown to Biarritz to retrieve the situation, confident that the Abwehr had enjoyed the closest relations with its Spanish counterpart since the Civil War, but had returned to Berlin humiliated and empty-handed, leaving his KO in Spain severely depleted.

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