Churchill's Spy Files

by Nigel West

  [Unfortunately the officer who acted as scribe for the FSP has been killed in a flying accident and, as it is a practical impossibility to forge secret writing, it appears that this sub-agent must needs come to an untimely and lamented end. The time of Agent No. 4 is chiefly occupied with a plan based on the creation of a very large underground depot for small arms and a complete system of underground communications. These are supposed to extend from the Chislehurst Caves and to connect through the London Underground Railway system to the main railway lines and the centres of our war industry. From the movements within the depot the agent will in due course deduce an imminent operation; the Germans will be invited to sabotage the communications, and it is hoped that they will believe themselves to have been responsible for its collapse. Alternatively they could be persuaded, by news of the depot, to regard a cover plan on the south-east coast as a real operation.]

  The communications between GARBO’s spy ring and the Germans have been established in various ways. The imaginary airman-courier of the early days still continues, but more and more GARBO tends to send his letters with their secret ink writing by air mail. In addition he has, since March of this year, been operating a wireless set for more urgent messages. The purchase of this set was arranged through Agent No. 4, who also recruited an amateur operator who is featured as a Communist and is supposed to be working for people whom he believes to be Spanish Reds. He is in fact, needless to say, one of our own operators.3 The purchase of the set gave GARBO the excuse to demand a safe cipher since the messages must be handed to the operator already enciphered. The Germans showed their trust by sending over the identical cipher then in use between certain German Secret Service stations. Later these services changed over to a superior cipher, reputed to be unbreakable, and the Germans have now decided to entrust GARBO with a cipher based on the one newly introduced. This is not only remarkable evidence of confidence, but may also, quite possibly, provide a means of breaking the unbreakable.

  The finance of the case has also presented some novel and interesting features. It is always difficult for the enemy to pay their agents, since the transfer of large sums of money may well direct attention to the recipient. GARBO himself is, in Teutonic eyes, a high-souled idealist who works for motives of political conviction, but none the less he and his family must live and his subagents must be paid. Fortunately we have made contact with some Spanish fruit merchants who desire to get rid of sterling in return for pesetas in Madrid. The consequent transaction has worked to admiration. We receive sterling in London, the Spaniards receive pesetas paid into their account in Madrid, the Germans pay the pesetas and everyone is happy. So far we have received for GARBO about £8,000 from the Germans, the major portion in the manner described.

  The GARBO spy system may therefore be said to be working smoothly and efficiently. He has certain useful though notional contacts, especially a friend in the Ministry of Information, his sub-agents provide him and the Germans lavishly with reports, he himself can pass information by letter, courier or wireless. Some estimate of the volume of the work entailed can be made by considering that he and his assistants have already written upwards of 250 secret ink letters and received 53 letters with questionnaires. Over and above this, he has since March been communicating by wireless. Apart from the work done by those of our officers who forge the letters of the sub-agents and from the work of the case officer, who spends his entire time in controlling, organising and developing the case, living GARBO’s life and thinking GARBO’s thoughts, GARBO himself works on an average from six to eight hours a day drafting secret letters, enciphering, composing cover texts, writing them and planning for the future. Fortunately he has a facile and lurid style, great ingenuity and a passionate and quixotic zeal for his task. This last quality has indeed caused an outburst of jealousy on the part of his wife, who, considering herself neglected, was with difficulty persuaded not to ruin the whole undertaking by a public disclosure.

  Such in brief outline is the GARBO case. It will be noticed that he has already fulfilled many or most of the functions which we expect our double-agents to perform. The size of his organisation and the volume of the traffic prevent the Germans from seeking to establish other agents (whom we might not control); the system used for his wireless messages should assist materially in the breaking of German ciphers; through him we are enabled to send such credible misinformation as we wish to the other side, and we have ample evidence from secret sources that our messages are eagerly awaited and implicitly believed. We conceal what we would have concealed, we expose what we would have the Germans known from the questionnaires, we gain valuable Intelligence information of enemy intentions; finally we are in a position to give verisimilitude to deception and cover plans – and this, as we pass more and more to the offensive, puts a weapon of the highest value into our hands. In fact GARBO could, if mistakes are not made, and if his credit is not recklessly expended, hold almost unlimited potentialities for good, especially in the sphere of deception. There seems no reason why his undertakings should not only continue but be developed to an even higher pitch of beneficent activity.

  Although the GARBO story is now well documented and established, there are two aspects to it that have been overlooked hitherto. Firstly, there is the death in an air accident of the FSP officer who had been assigned the task of writing in secret ink from North Africa, an unanticipated setback that highlighted the impossibility of replacing a source whose handwriting had become very familiar to the enemy. Secondly the incentive to bring GARBO’s wife, Aracelli, over to London was her pregnancy. She could hardly remain in Portugal, with the very real risk of encountering an Abwehr officer, and claim not to have seen her husband for the best part of a year. However reluctant MI5 might have been to sponsor her travel, such an expedient was absolutely required if the deception was to be continued.

  The GARBO story may have been ‘well documented’, but Churchill was never told the agent’s true identity, and was not even informed of his existence until June 1943, more than a year after his arrival in England in April 1942. While GARBO himself only understood his role as a double-agent, and as a conduit of misinformation in a deception campaign, the Prime Minister was indoctrinated into his significance as a cryptographic ‘crib’ into enemy cipher systems. Some of GARBO’s traffic was repeated on the Abwehr’s Madrid–Berlin Enigma circuit. And he had been entrusted with the very latest hand cipher, which the Radio Security Service had previously assessed as extremely challenging.

  GARBO’s status as MI5’s star double-agent was not immediately obvious when he was first mentioned in the Third Report in June 1943 (Chapter 3), and then again in the fourth (Chapter 4) but as the case developed he made more appearances in Chapters 7, 10, 15, 16, 17 and 23. In October 1943 GARBO was the chosen instrument in a campaign designed to force the enemy to find new cover addresses in Lisbon, having been presented with evidence that a dozen had been compromised by tighter controls imposed by the British postal censorship authorities. This particular scheme was intended to harass the local Abwehr station and served to close down almost all the enemy’s postal routes until December 1944.

  Coincidentally, a Portuguese man, José Dias de Silva, turned up at the Lisbon embassy and explained to SIS that his home in the rua Antonio Pereira Carrilho was being used by the Abwehr as a cover address. He stated that he had been recruited by a friend, Antonio de Souza Lopez, who had also persuaded his girlfriend, Maria Estrella, to receive letters from England. Both the other addresses, rua Castillo 31 and rua José Falcao 22/1, were already well known to MI5, which concluded that all three addresses were compromised, and that news of de Silva’s disclosures would certainly reach the Germans. However, the consolation was that GARBO’s letters were virtually untraceable, in that they bore fictitious return addresses and were written on the purloined stationery of various London hotels. Thus the Germans could be confident that any British investigation of the letters would fail to expose the spymaster known to them as ALARIC,
so MI5 took the opportunity to make very public enquiries at all GARBO’s addresses, including a visit in October 1943 to Odette da Conceição at her home at rua Teofilo Braga 59. She was already known as the principal contact for GARBO’s courier, but when interviewed she flatly denied her role as a ‘cut-out’. Nevertheless her reaction was monitored on an ISOS decrypt, which prompted a substantial reaction from the Abwehr.

  Nearly all Lisbon addresses have been interrogated with regard to the origin of letters. This appears to be a general measure all over the country. In accordance with instructions addresses have replied satisfactorily. Nevertheless no more letters have arrived. Our representative has left for Lisbon.

  An inspection was conducted by an Abwehr officer dispatched from Berlin to review the collapse, and he recommended two significant changes that were introduced immediately. One was the permanent termination of all air mail correspondence with England, which meant total reliance on radio and couriers, and the second was the replacement of secret writing with micro-photography. In total, twenty-three Abwehr cover addresses in Lisbon were closed down, representing a major setback for the enemy.

  In the New Year of 1944 MI5 reported that GARBO had been advised to seek accommodation outside the capital, in anticipation of the CROSSBOW secret weapon offensive.

  In May 1944 (Chapter 15) GARBO was mentioned as having been assigned the task of identifying the Allied invasion headquarters, and in June referred to his recent German decoration as a reward for his information, and to his role in SHAEF’s deception campaign that had succeeded in preventing reinforcements from being sent to Normandy. The next month, Chapter 17, there was much to say about GARBO. Firstly, ISOS intercepts addressed to Madrid showed that Field Marshal Gerd von Rundstaedt and Heinrich Himmler separately had expressed their warm approval of his reporting and, strategically more importantly, an acceptance of the concept of a further invasion in the Pas-de-Calais. Although GARBO himself was unaware of these accolades, he fully understood the problem presented by the Abwehr’s demand that he should report on damage inflicted by the V-1 flying bomb offensive. To avoid this task MI5 choreographed an elaborate charade in which it was alleged that GARBO had been arrested by the London police for showing too much interest in V-1 bomb-sites, thereby creating an entirely artificial crisis that required his organisation to suspend operations at a particularly vital moment. This expedient had two objectives: one was to persuade Aracelli that her husband really was at risk of detention, and the other was to suggest to the Abwehr that GARBO’s (entirely notional) deputy Pedro, based in Glasgow, could fulfil his duties during his temporary absence. ISOS revealed that the Germans were alarmed by this unwelcome development and withdrew the request for what was regarded in London as rather too sensitive CROSSBOW data that really could assist the enemy.

  The main storyline of the GARBO drama contained many sub-plots, some of them unplanned, and one such was the loss in an air accident of Pilot Officer Martin Grimaldi, the FSP officer attached to MI5’s B1(b) who had masqueraded as SIX, a South African posted to Algiers as a linguist soon after the TORCH landings, who was virulently anti-Communist. Known as Dick, his distinctive handwriting had become familiar to his German controller in Madrid, so when he was killed on 3 July in an air accident flying from Tiree to RAF Machrihanish at the end of his week’s leave in June, a similar excuse was found for his alleged demise in North Africa.

  The youngest of four brothers, sons of a vicar in east Devon who all joined the RAF, Martin Grimaldi had transferred to MI5 on the recommendation of a family friend, Charles Cholmondeley, a B Division officer. He had spent his leave with his eldest brother, Dr C.E. Grimaldi, who was serving as a medical officer on Tiree.

  On 4 July Guy Liddell confided to his diary that:

  T.A. Robertson tells me that young Grimaldi has been killed in an air accident. He was visiting his brother in the Outer Hebrides and the plane on which he returned has not been heard of. This is a real tragedy for us since, apart from being a nice little chap, he was doing very valuable work in B1(b).

  Grimaldi had been a passenger on a Fokker XXII aircraft that experienced an engine fire and crashed into the sea, killing the crew of five and all twenty passengers.

  SIX’s first letter containing secret writing, supposedly posted in Algiers, had been relayed to Lisbon in January 1943 and had been well received, even though the content had taken six weeks to reach its destination. This very convenient time lapse, of course, had been exploited by MI5 to make it appear that at the time of its composition the letter had included some high-level, accurate information. Supposedly ten such letters had been mailed to GARBO’s bank in London, who had deleted various incriminating items, such as the signature, addressee and the name of the Field Censorship official who had approved the innocuous content. Then GARBO had inserted the letter in the binding of a book, which had been passed to a seaman courier for posting in Lisbon to an Abwehr cover address in Madrid. In reality, the letter had been fabricated in London and then delivered in the SIS bag to Portugal, where the package was placed in the mail on a date that coincided with the arrival of a ship from England, thereby supporting the false narrative.

  In July 1943 GARBO reported that SIX’s mistress, Dorothy, had informed him that her lover had been killed in an air crash while travelling to his new posting. All his kit had also been destroyed, thus eliminating the risk that his supply of secret ink might have been discovered amongst his belongings and raised suspicions. Accordingly, both MI5 and the Abwehr closed their files on ‘Dick’.

  As GARBO grew in stature, the risks attached to him escalated, as became evident when ARTIST opened negotiations with SIS and hinted that he could make his defection more attractive by compromising the Abwehr’s best agent in England. Fortunately, on that occasion the crisis dissipated when, in April 1944, ARTIST had been abducted by the Gestapo and thrown into a concentration camp accused of embezzlement, his captors apparently unaware of his contacts with the British.

  A not dissimilar development occurred at the end of July 1944 when a very senior Abwehr officer, the Graf Josef von Ledebur, approached SIS in Madrid to negotiate his defection and was accommodated in an embassy safe house. Once again, his offered ‘meal-ticket’ was information about the Abwehr’s agents in London, mentioning specifically a Yugoslav who communicated to Karl Kuhlenthal by wireless. To complicate the matter, Ledebur was connected to Dr Otto John, a Lufthansa lawyer who had been implicated in the failed 20 July plot and had escaped to Lisbon, where he was in touch with SIS. Study of ISOS revealed that Berlin was particularly excited about the prospect of Ledebur’s treason and had suggested his credibility somehow be undermined by pretending he was in possession of false information.

  Aged 44, Ledebur was the third son of a wealthy landowner whose American wife, Gladys Olcott, divorced him in Vienna in 1943. His own engineering business had prospered and in 1929 he had been introduced by his younger brother, Frederick, to Charles Bedaux in Palm Springs, California. In August 1936, as a veteran of the first conflict, Ledebur was called up by the 11th Cavalry and was posted to Stockerau, near Vienna. In 1939, when his bicycle platoon was attached to the 45th Infantry Division, he participated in the Polish campaign. In 1940 his unit was then transferred to France and, based at Saint-Quentin, he took a few days’ leave in September at the Ritz Hotel in Paris, where he encountered Bedaux. He saw him again later in the year, but returned to his regiment, which was transferred to the Russian front, and he was wounded there in March 1942. When he had recovered from dysentery and an injured hand he was ordered to Paris, where Bedaux had arranged for his appointment as a liaison officer. Accordingly, he was installed as Bedaux’s ADC on the authority of Erich Pfeiffer and acted as a link between the Abwehr and a senior Bedaux executive, Alexandra Ter Hart, who was a Dutch Jew who had moved to France. Ledebur did not formally join the Abwehr until December 1942, a month after Bedaux’s departure for Algiers, and at that point he moved into the Royal Monceau Hotel in Paris and worked at th
e Abwehr’s headquarters in the Lutetia.

  Ledebur cultivated several of his Paris contacts as potential sources of information and gained a reputation for being able negotiate the release of internees. In March 1943 Pfeiffer sent him on a mission to Madrid to assist his agent Bastide penetrate de Gaulle’s organisation in Spain. When he returned to Paris later in the month he had accomplished little but found that the Abwehr had taken possession of the Bedaux commercial empire. By July Ledebur was in Berlin, on a new assignment to assist Colonel Hansen, who demanded a report on corruption within the Paris Abstelle. He also travelled to Madrid for the second time, to stay with Max von Hohenlohe in Zarauz, who confided that he had been in touch with OSS’s Allen Dulles in Switzerland. Upon his return, via the south of France, he found a new posting in September to the Abwehr headquarters in Berlin, where he was employed as Hansen’s aide and sent for ten days to the OKW to learn its intelligence requirements.

  His initial interviews with the British were arranged through an Italian intermediary, Count Mario Pinci, a Bank of Indo-China director who was identified by Ledebur as one of his sources, together with a French mining engineer, Pierre Bastide. In them Ledebur claimed to have proved his anti-Nazi credentials by assisting the escape from France of an SOE agent, the lawyer Michel Brault, who confirmed his story. The very first contact, made by mutual acquaintances in Madrid in June, was with MI9’s Michael Cresswell, who received a short verbal report on the Wehrmacht and deteriorating conditions in Germany and agreed to a further discreet meeting when Ledebur returned to Spain.