Churchill's Spy Files

by Nigel West

  Riis was followed by Sigurjon Jonsson, the 53-year-old captain of the Arctic, a three-masted trawler with a crew of fifteen, and his 26-year-old radio operator, Jens Palsson. Both had been recruited by the Abwehr during a visit to Vigo lasting two months in December 1941, when they had been entrusted with codes, a transmitter and instructions on the collection of military and meteorological data. As they would later reveal, they had been threatened with a torpedo attack on their ship unless they cooperated, so they had transmitted the requested information on eight successive days. Both men were arrested on 14 April 1942 after Jonsson had taken the apparatus ashore in anticipation of a voyage to England, and the episode was reported to Dick White in London:

  Major Ferguson rang up to say that the M/V Arctic was being held by the Navy in Iceland. Meanwhile Wise had managed to extract confessions from the Captain and the Wireless Operator and as a result of his investigations four persons are now under arrest in Reykjavik. These are:

  Sigurjon Jonsson – Captain of the Arctic

  Jens Palsson – W/T operator of the Arctic

  Marel Magnusson and Hallgrimur Dagland, residents of Iceland

  The story as understood so far is as follows:

  The Arctic started its Abwehr career at Vigo and is probably one of those ships run by the Schuchmann organisation. Its principal function is Naval reconnaissance and the Arctic is fitted with a short wave transmitter by which it can signal ships sighted on sea lanes or evidence of convoy movements. These signals are I understand picked up by Schuchmann’s organisation at Le Havre and there has recently been information from Secret Sources as having had 100% reception of such signals as were sent by the Arctic on its voyage from Vigo to Reykjavik.

  The Arctic carried to Reykjavik a cargo of oranges. It was not, however, intercepted by the Navy until it reached the Westman Islands on the continuation of its voyage from Reykjavik. It went to the Westman Islands ostensibly to collect a cargo of fish for transport to the UK.

  It is not clear how the further details of the story have been extracted, presumably by interrogation either by the Navy or Wise – and I gather that the Captain and the Wireless Operator together with the 14 members of the crew have been taken back to Reykjavik. Anyway the important facts emerging from their story are:

  (a) That on their first arrival at Reykjavik they had managed to smuggle a wireless set on shore and deliver it to a resident in Iceland named Magnusson. This is the man referred to above who is now under arrest.

  (b) That they were also able to smuggle a code book on shore and to pass it to a resident in Iceland named Dalberg. This is the man referred to above who is also under arrest.

  After discussion with Ferguson, and subsequently with Keith Liversidge, the following plan of action was agreed:

  (1)That we should request Wise to send Jonsson and Palsson to England as soon as possible for further interrogation.

  (2)That the two Iceland residents, whose cases must obviously be of considerable local interest, should be dealt with by Wise until such time as he could report that he had obtained sufficient information on their mission for his purpose, when they should be sent on here.

  (3)That careful examination should be given to the possibility of using the Arctic and its wireless transmitter as a XX station with all the possibilities thus offered of strategic deception in the war at sea.

  (4)That in view of (3) we should request Iceland to send us as urgently as possible complete technical specifications of the wireless sets in use by these enemy agents.

  The opportunity to exploit the Arctic’s established relationship with the Abwehr evidently appealed to MI5, which prepared an ambition deception scheme, code-named SPIDER:

  The capture of two German W/T stations, one in lceland and the other on board a trawler of 477 gross tonnage, the SS Arctic, which was taken in the Westmann Islands and is at present en route under guard to Reykjavik, offers good opportunities for strategic deception in the war at sea. The known facts under which we could operate those two German stations are as follows:

  (a) Complete knowledge of W/T procedure in the case of the SS Arctic station;

  (b) Probable knowledge of the procedure of the Iceland (0c) mainland station.

  (c) It is known that the Arctic left Vigo on 10 February 1942, and arrived at Reykjavik on 24 February 1942. It left Reykjavik in ballast on 10 April 1942 for the Westmann Island with a load of fish for the UK, its personnel having smuggled the Iceland W/T ashore in a sea bag on 9 April 1942.

  The German intentions with regard to the Arctic were that the trawler should report her departure from Reykjavik and course outward bound. If the behaviour of the Arctic on its voyage Vigo–Reykjavik may be taken as a model, one is to report weather conditions and shipping movements observed during the voyage. This is corroborated by the confession of the skipper and W/T operator.

  2. It is suggested that if this station is worked under our control and corroborated by working the Iceland station as well, it should be possible to mislead the enemy to a major extent. This would involve sailing the SS Arctic under guard with a British operator to monitor the transformation to be carried out by the Arctic’s present operator. It is essential in view of the fact that the set has already worked that the original operator should operate the set himself. He has confessed and therefore will probably cooperate.

  3. It is suggested that the plan for strategic deception should be conceived on a short-term basis with definite naval objectives. It has been suggested that the object should be the luring of the German major units from Trondheim during the passage to Russia of one of the convoys, by the giving of a false position of the Home Fleet. The plan so far put forward is that the Arctic should leave Reykjavik on a date to be fixed and on a given day sight the Home Fleet en route towards Reykjavik (This should probably not be done until the Home Fleet has left Scapa in view of the danger of a PRU check of the message). After an appropriate interval according to the position in which the Arctic makes the signal, the Iceland station should report the arrival of the Home Fleet, specifying a similar number and type of units. A message should also be provided for the lceland station so that if an enemy reconnaissance comes over lceland after that, he can announce that the Home Fleet left a few hours before on a westerly course.

  4. To create the proper mis-en-scene the vital signals regarding movements of the Home Fleet we must envisage a period of some fourteen days during which that Iceland station must establish contact with the German control and supply, in accordance with German instructions, daily weather reports and some information (which may be checked by PRU) about Iceland and military forces and ships in port. It should be appreciated that it may take anything up to a fortnight or three weeks to establish a satisfactory two-way contact on the part of the Iceland station, and until this has been done the Arctic will probably have to remain in port.

  5. If it is impossible to sail the Arctic in the manner set out above, a similar but weaker deception might be worked with the Iceland set only.

  6. In order satisfactorily to plan the details of this operation it will be necessary for SIS to send an intelligence officer experienced in this work and a wireless operator at once by air to Iceland there to get into touch with Major Wise, who is at present conducting investigations into the enemy agents concerned, and with other necessary authorities.

  7. If this plan is approved in principle, authority is requested for the following:

  (a) Air passage for the officer and wireless operator mentioned above;

  (b) The sending from the time contact is established of regular and accurate weather reports.

  (c) The sending of the reports mentioned in paragraph 4 above, which will have to be accurate insofar they can be checked by PRU. If the agent is to see the arrival of the Home Fleet, he must be in a position to see the arrival of the other ships.

  (d) A decision at the appropriate moment and before the Arctic would have to sail of the time and position in which the Home Fleet is to
be sighted and what units are to be reported.

  (e) Provision to be made by ACIC for assistance in operating this plan, which may involve the loan of a wireless operator to the shore station once or twice a day, and the provision of personnel to control the Arctic’s voyage to England; this will include the provision of a wireless operator to ensure that the Arctic’s own operator does not double-cross us.

  The proposal of SPIDER was welcomed at MI5, where on 22 April John Marriott, then secretary of the XX Committee, assigned Richmond Stopford to the case and liaised with Ewen Montagu at the Admiralty to bring the four Arctic suspects to Glasgow for further interrogation, and send an MI5 radio operator, Ronnie Reed, to Iceland. However, four days later, Marriott had learned about COBWEB, and hastened to alert Stopford:

  We last night received a cable from Iceland informing us that a certain Ib Riis Icelandic national landed in north-east Iceland from a German submarine on 5 April 1942. He is at present under arrest and has stated that he brought with him a wireless transmitter, code books and secret ink, all of which he buried. He was originally recruited in Copenhagen by Kapitan-Leutant Otto Kiesel alias Knudsen and another German named Edward Franz. Both men are known and are either members of the Abwehrstelle in Copenhagen or Hamburg. Riis had stated that he was originally to go to Greenland, that this was changed to Iceland via Portugal, but that finally he went to Iceland direct. He was given a course in Hamburg in wireless, codes, inks, etc. and left Heligoland on 29 March 1942 in U-252. Wise has sent a party to collect the set and code books from their hiding place and he has been cabled to keep the body and belongings in Iceland until your arrival. No further details are yet available at this end but Riis may prove to be a valuable reinforcement for you.

  The prospect of mounting a sophisticated deception scheme in Iceland certainly appealed to the Admiralty, and on 26 April the Commander-in-Chief Home Fleet issued a secret directive, introducing an operation code-named BALDERDASH:

  It has been decided by the Admiralty that use shall be made of the two wireless sets captured with the trawler Arctic in an attempt to deceive the enemy.

  2. The general idea is to work the set which was landed in Iceland in such a way as to cause the Germans to believe that it is being operated by one of their agents. It will probably take some time to establish satisfactory communication with Germany and to establish confidence: it is hoped to effect this by the time PQ16 sails. The build up must include truthful reports of the arrivals of convoys at Reykjavik and a few bogus reports of convoy’s sailings so as to mask the actual movement of PQ16.

  3. If this initial success is achieved it is intended that the Arctic should be sailed for Fleetwood about two days after PQ16 sails. One or two days after the Arctic leaves Reykjavik she should transmit a report – in accordance with the instructions arranged by the Germans – that she has sighted the main surface forces of the Home Fleet steaming on a course for Hvalfiord. This report should, if possible, be transmitted near sunset in order to make D/F difficult and prohibit confirmation by German air reconnaissance.

  4. The agent, using the W/T set in Iceland, should report the arrival of the Fleet at Hvalfiord on the day on which PQ16 passes Jan Mayen Island. Subsequently, whether the absence of the Fleet from Hvalfiord is discovered by enemy air reconnaissance or whether the actual position of the fleet is revealed at sea by some form of sighting report, it is at present intended to continue with the ruse in order to confuse the enemy.

  5. Mr. J.R. Stopford and Mr. R.T. Reed, officers from MI5, will bring this letter to you. Under your direction they will control and advise on the conduct of this ruse.

  6. They will transmit a number of messages to the Germans containing information which must be accurate if it is subject to possible air reconnaissance confirmation. Other information which is not subject to easy confirmation need not be accurate, though it must, of course, be credible. Weather reports must form a part of these transmissions and they must be accurate.

  7. Should this ruse not be discovered by the Germans during the period of passage of PQ16 it is intended to consider its possible re-employment on a subsequent occasion.

  8. It is requested that you will assist the officers with the preparation of the messages which they will send with the object of building up a convincing picture in the enemy’s mind before PQ16 sails, and without presenting him with dangerous information. The intermittent assistance of one or more W/T operators will be required.

  9. The enemy W/T operator who belonged to the Arctic is being sent back to Iceland as it is necessary for him to perform the actual transmissions from the Arctic as in paragraph 3. He will be under the charge of one of the officers from MI5 during this part of the programme. Transmissions from the Arctic will include sightings of shipping and weather reports both before and after the sighting of the Fleet referred to in paragraph 3.

  10. It is desired that this ruse should be disclosed only to the absolute minimum of personnel; under your command.

  11. In order to preserve secrecy it is desired that the MI5 officers should send their signals through you prefixed ‘For DNI personal’.

  12. The codeword for this operation is BALDERDASH.

  Thus the Admiralty’s scheme was to provide protection for a large convoy of thirty-five ships, destined for Murmansk and Archangel, and scheduled to sail on 21 May, which was assembling in Iceland, by pretending that the Home Fleet was operating in the same area. PQ16 was particularly vulnerable because of the lack of darkness at night during the summer months, and the poor protection from enemy aircraft. However, when Stopford reached Reykjavik he was disturbed to learn that before their departure for Scotland Major Wise had subjected his four prisoners to ‘violent third degree methods’, prompting a diplomatic incident and a formal court of enquiry to investigate the abuse. This, of course, was extraordinarily embarrassing and threatened to expose the Allied double-agent operations. Accordingly, Stopford had to persuade the local British military commander, a brigadier, to keep the matter quiet and he agreed upon the withdrawal of Wise and his staff. The British consul-general, Howard Smith, also reported to the Foreign Office that ‘highly irregular methods were used in interrogating the crew’, which were likely to create gossip, and a summary of the known events was compiled by Milmo as Captain Seddon was arrested in anticipation of a court martial:

  Following upon the receipt of information from most secret sources Major Wise was notified by MI6 by cable dated 13 April 1942 that the auxiliary schooner Arctic then sailing from Reykjavik to the Westmann Islands was working on behalf of the German Secret Service, and Major Wise was instructed to submit the vessel and her crew to a thorough examination. By a further cable from MI6 dated 16 April 1942 Major Wise was informed that the captain and wireless operator of the Arctic were considered very suspect and was asked to cross-examine the entire crew.

  By cable dated 18 April 1942 addressed to MI6 Major Wise reported that the captain of the Arctic, Jonsson and the wireless operator Palsson had confessed that they had been enlisted as agents by the German Secret Service in Vigo and had been supplied with a wireless transmitter and a code book with which to transmit weather reports and details as to shipping and convoys observed during their return voyage from Vigo to Iceland. Particulars of call signs and other technical information obtained were also given. Major Wise further reported that two Icelandic residents were implicated namely Magnusson and Dalberg, both of whom had been arrested. In Magnusson’s house there was found the wireless transmitter, in Dalberg’s house the code book. It was stated that the rest of the crew of the Arctic were being brought to Reykjavik for further examination.

  3. On the 19 April 1942 MI6 cabled to Wise their congratulations on the success of his interrogations.

  4. A full written report on the interrogations to date was sent to MI6 by Wise on the 19 April 1942. This report shows that the initial interrogations achieved no success, and that it was not until Jonsson’s fourth interrogation that the truth was extracted from hi
m. It is evident that up to this point the interrogating staff had performed an excellent job of work within a very limited time in a case where it was of the utmost urgency to obtain information with the minimum of delay both in the interests of the security of convoys proceeding through Icelandic waters, and for the purposes of LAND SPIDER. Captain Seddon, Major Wise’s subordinate officer, obtained detailed and what is believed to be substantially accurate information on the following essential points:

  (i) Who were the principals in the conspiracy?

  (ii) What were the instructions which they had received from the Germans?

  (iii) What communications had been sent already?

  (iv) Where was the wireless transmitter?

  (v) Where was the code?

  (vi) Particulars of call signs, frequencies and other technical information essential for the purposes of PLAN SPIDER.

  In the limited time available it was not possible to come to any conclusion as to the extent to which the remaining members of the crew of the Arctic were implicated, but Major Wise intimated that his investigations were proceeding.

  Meanwhile Plan SPIDER was being evolved and on 21 April 1942 MI6 (Major Cowgill) have his assent, subject to what might be construed as a mild protest, to the plan and to MI5 handling the case.

  6. On the 7 May 1942 a cable was received through M16 from Mr Stopford in Iceland informing us that unorthodox methods had apparently been used by Major Wise’s staff in conducting the interrogation of the crew of the Arctic, and that a Court of Enquiry had been called. It appeared that American Military Police had assisted and that Third Degree methods and violence had been employed. A further cable from Stopford stated that as a result of the finding of the Court of Enquiry, Captain Seddon had been arrested and that the British Military Commander had stated that the evidence warranted the arrest and Court Martial of Wise.

  7. On the 9 May 1942 the Foreign Office sent us for our observations a copy of a cable from the British Minister at Reykjavik dated 7 May 1942 in which it was stated that irregular methods had been used in the course of the interrogation. A copy of our reply to the Foreign Office appears at 7IA on the file. No other particulars of the allegations made against Major Wise’s staff were notified to us.