Their Trade Is Treachery

by Pincher Chapman

  Crabb knew, as did the navy, that the Ordzonikidze had a ‘wet compartment’ – a chamber below the water line from which frogmen could operate unseen. I have been told that Crabb had previously attempted to survey the ship while it was in dock in Leningrad, having been taken there by submarine, but had been chased off by defending frogmen. Nevertheless, Crabb booked into a small hotel in Portsmouth with a secret service officer, who signed the register ‘Bernard Smith’ and gave his address as ‘Attached Foreign Office’, the standard cover for secret service operatives.

  It has been suggested that ‘Smith’ was an American CIA agent who was actually a Russian spy. The truth is that ‘Smith’, whose real name was almost as common, was a full-time British secret service officer sent down from the relevant branch in London. The next day, he suffered a slight heart attack but insisted on carrying on. On the morning of 19 April, the two went, apparently unobserved, to the point of entry not more than 300 yards from the cruiser. Crabb returned after a few minutes for an extra pound of ballast weight. Later, he took off and was never again seen alive by his colleague. He was forty-six and not really fit enough for the task.

  That same evening, James Thomas, then First Lord of the Admiralty, was dining with some of the Soviet visitors, one of whom asked, ‘What was that frogman doing off our bows this morning?’ According to the Russian, Crabb had been seen swimming at the surface at 7.30 a.m. by a Soviet sailor. As he had been forced to return for more ballast, it is possible that he had surfaced, but in 1963 another possible explanation was given to MI5, which had known about the Crabb project and given minor backup support.

  The KGB defector Anatoli Golitsin volunteered information to the effect that Soviet Naval Intelligence had known in advance of Crabb’s intentions. As a result, frogmen may have been waiting for him in the cruiser’s wet compartment, particularly as the ruthlessly efficient Serov was in active command of the security of the vessel. It is possible that Crabb was killed, though the evidence suggests that he died of drowning, perhaps during a struggle. The headless body washed up the following year was almost certainly his.

  The Russians made the issue public and the Labour opposition forced a debate, which greatly embarrassed Eden. Understandably, he was furious with the secret service, and shortly afterward, its director general, Sir John Sinclair, who was near retirement anyway, was removed. The man chosen to succeed him was Sir Dick White, the director general of MI5.

  The choice of Sir Dick, a career MI5 man, to head the rival organisation, which considered itself more senior, was interpreted as an additional reprimand by Eden. As a side effect, it meant that the top MI5 post fell vacant. White recommended that his deputy, Hollis, should fill it, and Eden agreed.

  So, to use an official definition of MI5’s task, Hollis took over responsibility for ‘the defence of the realm as a whole from external and internal dangers arising from attempts at espionage and sabotage, or from action of persons and organisations, whether directed from within or without the country, which may be judged to be subversive to the security of the State’.

  There was no way that the KGB could have foreseen the promotional consequences of the sad affair, but, if the leak about Crabb to the Russians, alleged by Golitsin, had come from a high-level penetration source inside MI5, the resulting situation was piquant, to say the least.

  CHAPTER 8

  DECADE OF DEFEATS

  IN 1960, HOLLIS received the knighthood, which is routine for the director general of MI5. It marked the start of an extremely harassing decade for his organisation because of the exposure of a spate of spies.

  The year 1961 opened with the arrest of the ‘Navy spy ring’, headed by a KGB officer calling himself Gordon Lonsdale. In September of the following year, an Admiralty clerk, William Vassall, was arrested and later convicted for imparting an enormous amount of secret defence material to the KGB. In 1963 came the Philby defection, to be followed a year later by the revelation that Blunt had been a most damaging spy during his five years inside MI5. In 1965, an aviation ministry official, Frank Bossard, received twenty-one years for selling aviation secrets to Russia.

  As Sir Martin Furnival Jones, Hollis’s successor, admitted to the Franks Committee on Official Secrecy, the discovery of any long-term spy marks a defeat for MI5 because he should have been detected before he did so much damage. Nevertheless, the undercover detective work behind the cases I have mentioned was projected in Parliament and elsewhere as a triumph for MI5, as it was again by Mrs Thatcher following her parliamentary statement about this book. The truth about all these cases, which to a large measure has been suppressed, reveals that MI5 had very little to crow about.

  In the first place, all the spies concerned were detected only because of leads handed to MI5 by the Americans, who had procured them from Soviet bloc intelligence defectors or other chance informers. Secondly, there are hitherto unknown aspects of the cases suggesting that the MI5 investigations that followed the tips were penetrated and, to some extent, even controlled by the KGB. In that context, I shall deal briefly with them here, introducing new material that has come to light during my inquiries. In 1958, a high-ranking Polish intelligence officer with strong liaison links with the KGB began to write letters to the CIA signed with a word that translated as ‘Sniper’ and giving the names of many Polish agents operating against the West. For the best part of two years, until he eventually defected, ‘Sniper’, whose name was Michal Goleniewski, supplied a mass of information including a statement that the Russians had a productive spy in Britain with a name like Huton. This spy was connected with the navy and had been recruited by Polish intelligence while serving in the naval attaché’s office in the British embassy in Warsaw and had then been grabbed by the KGB.

  MI5 had little difficulty in identifying the spy as Harry Houghton, a clerk in the Underwater Weapons Establishment at Portland, Dorset. The naval attaché in Warsaw had submitted an adverse report about Houghton’s reliability, but he had, nevertheless, been posted to one of the most secret of all defence establishments. Houghton was placed under close surveillance, especially when he visited London on the first Saturday of every month, usually going by train to Waterloo. There he was seen to hand over a package to a man identified, from the number of his car, as Gordon Lonsdale, a Canadian running a business lease-lending juke boxes to cafes and pubs. Houghton’s main source of secret documents was Ethel Gee, a filing clerk in the Portland drawing office, who was also his mistress.

  Houghton’s treachery was far more damaging than was publicly revealed at his trial. In addition to extremely secret details of antisubmarine warfare, he sold to the Russians sensitive facts about the performance of Dreadnought and other nuclear submarines.

  Jim Skardon, who had been promoted from interrogation to being the officer in charge of the ‘watchers’, mounted a massive surveillance operation involving scores of men and women, many cars and, on occasion, helicopters. Lonsdale was followed to his bank in Marylebone, where he deposited a briefcase and an attaché case. The Prime Minister, Harold Macmillan, spoke to the chairman of the bank to secure permission for MI5 to examine the bags. The attaché case was found to contain a cigarette lighter mounted in a 6-inch-diameter wooden block. When X-rayed, the block was seen to be hollow and contained one-time pads of the type used by the KGB spies. All the pages of Lonsdale’s one-time pads were photographed, and the cases were returned to the bank.

  Lonsdale had rented a flat in the White House in Regent’s Park, and a search there revealed nothing except a radio capable of receiving Morse from Moscow and a set of headphones for listening to it. His transmitter had to be located elsewhere. By clever surveillance, Lonsdale was followed to a house in Ruislip, the home of Peter and Helen Kroger, who were posing as booksellers. There, after a difficult search, the security men found the transmitter.

  The MI5 men had rented the flat next to Lonsdale’s in the White House, and by means of probe microphones they knew the times when Lonsdale was listening in to mes
sages from Moscow. By entering his flat when he was out, they found that he had used some pages from his one-time pads, and from their photographs they were able to decipher the Moscow instructions, which confirmed that he was a spy.

  For reasons too technical – and, I am told, still too secret – to be dealt with here, MI5 officers on the case concluded that the KGB had been alerted to the photographing of Lonsdale’s one-time pads, a leak that could only have come from a source inside MI5. The radio traffic from Moscow to Lonsdale suddenly diminished, and the only messages sent to him concerned Houghton, whose codename was ‘Shah’. Yet, because of the complexity of the Lonsdale–Kroger setup, the investigators were sure that there must be other members of the spy ring apart from Houghton and Gee.

  If the KGB had been alerted about the impending arrest of the known members of the spy ring, why were they not warned? Any warning to Houghton and Gee could have been very dangerous to the KGB’s source, as a complete cessation of messages to Lonsdale would also have been. The KGB would know that there was already enough evidence against Houghton and Gee for them to be prosecuted, and they were relatively small fry who could be ‘burned’, especially as they were not communists and were spying purely for money.

  So far as Lonsdale was concerned, it appeared that the KGB intended to withdraw him, along with the Krogers, in good time. As Hollis and a few others at the top knew, MI5 intended to run the case for a further three months in the hope of picking up more of the British agents whom Lonsdale was believed to be controlling. Instead, the case officers were driven to bring it to a close because, unexpectedly, Goleniewski had physically defected to the United States and it was argued that the KGB would assume that he would blow Houghton, and that the rest of the ring would be at risk and would be rapidly withdrawn to safety. In addition, they had become convinced that any other agents had been successfully switched to another, unknown Soviet controller. There was a last-minute move, the details of which are still secret, to catch some of these agents. It involved a 48-hour suppression of the news that Lonsdale and the rest had been arrested. Regrettably, the police announced the arrests prematurely for MI5’s purpose. Lord Wigg, who later had access to the facts, refers to this event in a couple of throwaway lines in his autobiography George Wigg: ‘Information about Lonsdale’s arrest was leaked and heaven knows how many members of the Soviet spy gang took the tip and got out of England.’

  The case officers’ decision to end the operation was taken only two days before they pounced. Fearing that Lonsdale and the Krogers had been warned of their danger, they were determined to give them no chance to flee the country.

  There is intriguing evidence that the KGB chiefs in London were in no way surprised when first news of the arrest of Lonsdale and company was flashed on the TV screens, which they were watching at 6 p.m. on a Sunday. They made no attempt to get in touch with the embassy or with anybody else.

  After Lonsdale was found to be really Konon Molody, a professional KGB officer (the dead male, Lonsdale, whose identity Molody had assumed, was known to have been circumcised, while Molody was not), he was interrogated in prison. He revealed little but when asked, ‘Were you taken by surprise when we arrested you?’ he replied, ‘We did not think you would do it so quickly.’ The belief that there were other Britons in the Navy spy ring was later supported by defector evidence that Lonsdale had been replaced by another ‘illegal’ controller who had never been detected. When the investigating team reported their suspicions that their operation had been ‘blown’ soon after it had begun, Hollis ridiculed the idea, saying that he was not prepared to consider the absurd possibility that there was a spy at any level in his organisation.

  • • •

  The arrest of William Vassall, the British traitor in the Admiralty later sentenced to eighteen years’ imprisonment in 1962, was presented as something of a triumph for MI5 even though it demonstrated that a homosexual, quickly recognised as such by the Russians, had been able to pass extremely sensitive secrets to the KGB for seven years. Facts that have been concealed provided further evidence of a high-level traitor in MI5 and strong suspicions, never adequately followed up, of another inside the navy who reached the rank of admiral.

  Though Vassall was a practising homosexual, clearly living far beyond his means, there was no suspicion of the existence of a spy in the Admiralty until the defection of Anatoli Golitsin from the KGB office in Helsinki in December 1961. After Golitsin’s big debriefing by the CIA, ten definitive allegations about KGB penetration of the British security and intelligence services were passed to MI5. Later, when Golitsin came to Britain and was interrogated by MI5 officers, this figure rose to 250!

  One of the early allegations, which I will call ‘No. 1’, referred to the recruitment in 1955 of a man in the naval attaché’s office in the British embassy in Moscow. This recruitment, Golitsin said, had been made under the personal supervision of Gen. Oleg Gribanov, then chief of the Second Directorate of the KGB, responsible for internal intelligence operations in the USSR.

  Golitsin stated that Gribanov, a ruthless operator known to his colleagues as ‘Little Napoleon’, had insinuated a man called Sigmund Mikhailski into the Moscow embassy staff as an interpreter and that he had been involved in the spy’s recruitment. While serving in Moscow, the spy had handed over handwritten notes about documents passing through his office. When he had been posted back to London, he had been switched to an even more productive post in naval intelligence, Golitsin said, being run there by KGB officers located in the Soviet embassy in Kensington Palace Gardens.

  In spite of this unusual detail, MI5 could not narrow the list of suspects to less than four. One officer put Vassall at the top of his list, but another, more senior, put him at the bottom because Vassall was known to be ‘a devout Anglo–Catholic and seemed to be of high moral character’.

  Among Golitsin’s first ten allegations was another, even more serious, which I will call ‘No. 2’. He said that he was certain that there was another naval spy at a much higher level because, shortly before he had left Moscow for Helsinki, he had seen three extremely secret British documents concerning naval plans. These were not summaries but photocopies of the originals, and they carried the initials of the few British officials who had been allowed to read them, though he could not recall those initials.

  One of the documents was stamped ‘Top Secret (Atomic)’ and had dealt with the organisation of a base on the Clyde for American Polaris missile submarines. The second concerned the reorganisation of NATO dispositions in the Mediterranean. The third was a report of an extremely secret naval committee.

  When the three original reports were withdrawn from the Admiralty files, interspersed among a wad of others and then shown to Golitsin, without hesitation he picked out the correct ones he had seen. The defector insisted that he knew the documents had come from another spy, much senior to the ‘No. 1’ man, also believed to have been recruited while serving in Moscow.

  A separate inquiry was set up to investigate the ‘No. 2’ spy. The sole suspect was a naval officer who later became an admiral. When the time came for him to be interrogated in the hope that he might break down and confess, Hollis, the director general, refused to allow him to be approached. He argued that the suspect was within two years of retirement and was in a post where he could do little further damage. Even if he confessed his guilt, a prosecution would be unlikely because of the damage to American and NATO relations.

  The case officers pointed out that the admiral could be offered immunity to induce him to yield information about his contacts and the extent of the damage he might have done over the years. Hollis remained adamant. The admiral has since died.

  While the inquiry into ‘No. 1’ continued, another KGB officer, Yuri Nosenko, defected to the United States in June 1962. While remaining in his post as a KGB officer in Moscow and in the Soviet delegation to disarmament talks in Geneva, he gave more precise details of ‘No. 1’, the spy who had been in the naval attaché�
�s office in Moscow. He said that the spy had been ‘a pederast and had been recruited by homosexual blackmail’. Nosenko then added, ‘He had access to the highest level in the British Navy and gave us all NATO secrets, including documents which had to do with a lord.’ He confirmed that General Gribanov had been personally involved in the recruitment and said that he knew this because, as deputy chief of a KGB department, he was a close friend of Gribanov.

  Vassall soon went to the top of everybody’s list because inquiries quickly confirmed his homosexuality. He also had access to documents ‘to do with a lord’ because he was working as a clerk in the office of the civil lord of the Admiralty. (Vassall was a classic example of the espionage value of a low-level agent who happens to be in the right place.)

  Vassall’s expensive flat in Dolphin Square was searched while he was at work. Cameras for copying documents were found in a bureau and cassettes of exposed film were discovered in a secret drawer in the base of a table. When developed, the films proved to be copies of more than 170 classified documents – just one haul for Vassall’s KGB controller.

  Vassall was arrested, tried and convicted after confessing that he had been compromised homosexually by KGB men, who had taken photographs of him while he was too drunk to appreciate what was happening and had then blackmailed him into spying for them. He gave information showing that, when he had returned to London, he had been run by the KGB top man, the ‘Resident’, Nicolai Korovin, who had also been involved in the activities of the Navy spy ring. After Korovin hastily returned to Moscow following the collapse of the known elements of the ring, Vassall had been taken over by his successor, Nicolai Karpekov.