The Defence of the Realm

by Christopher Andrew

  Gray found it a gruelling trip. On her return, Knight wrote later: ‘As may be readily understood, she was tired, suffering from some nervous strain; and rather disposed to feel that she had done enough. Her health suffered something of a break-down, and she retired from the scene.’ Gray still had the confidence, however, of Pollitt and Glading; following a period of convalescence, she was asked to become Pollitt’s personal secretary at CPGB headquarters. After a few months working for Pollitt in 1935, she found the strain of her double life too much and told Knight she wanted ‘to drop my connection with the Communist Party and return to ordinary life’. Knight did not try to dissuade her, but she agreed, at his request, to keep in touch with Glading and other Party officials. Over lunch with Gray in February 1937, Glading asked her to lease a flat in her name but at the Party’s expense and make it available for occasional private meetings for Glading and his associates. Though the lease would be in her name, all expenses would be covered by ‘the Party’. ‘To be quite frank’, wrote Knight later, ‘Miss “X” was none too keen to be drawn again into the Party’s activities,’ but he persuaded her to do so and, with his help, she found a suitable flat in Holland Road. Knight correctly deduced that this time Gray was being asked to assist with espionage.83

  In April 1937 Glading visited the Holland Road flat with a ‘Mr. Peters’. ‘Nothing was discussed in front of me’, Gray told Knight, ‘and I gathered they had merely come so that “Mr. Peters” could meet me. He was obviously a foreigner, but I cannot say what nationality.’ ‘Peters’, she reported, had a distinctive appearance: 6 feet 4 inches tall, with a moustache, ‘shiny grey complexion’ and gold fillings in his front teeth. Gray also picked up from Glading some details of his career. ‘Peters’ had been chaplain to an Austrian regiment during the First World War before being taken prisoner by the Russians and joining the Bolsheviks.84 Gray reported that Glading was also working with another man, who was short and ‘rather bumptious in manner’: ‘Glading dislikes him personally but he has to tolerate him for business reasons.’ Three years later the NKVD defector Walter Krivitsky identified ‘Peters’ and his shorter colleague as Teodor Maly and Arnold Deutsch.85 It was another quarter of a century, however, before Deutsch was discovered to be the chief recruiter of the Cambridge Five and Maly was identified as one of their controllers.86

  Deutsch’s and Maly’s operations in 1937 included running a spy-ring inside the Woolwich Arsenal, where Glading had been employed until his dismissal nine years earlier. As Gray discovered, the flat she had leased was mainly intended as a place to photograph ‘very secret’ documents ‘borrowed’ from contacts inside the Arsenal. On 18 October two further Soviet illegals, introduced to Gray as Mr and Mrs ‘Stevens’, arrived at the flat to test the photographic equipment, which was to be used by Mrs ‘Stevens’. Gray reported to Knight that the couple were ‘clearly foreigners’, that Mrs ‘Stevens’ spoke to her husband in French, and that she was ‘by no means an expert photographer and . . . decidedly nervous about her ability to use the apparatus effectively with only a small amount of practice’. Gray was able to note some of the document titles and serial numbers visible on the photographs, thus making it possible to identify some of the classified material on defence technology smuggled out of the Woolwich Arsenal. After one photographic session Mrs ‘Stevens’ was followed by Security Service watchers from Holland Road to Hyde Park Corner, where she was seen meeting her husband and a man later identified as George Whomack, a gun examiner at the Woolwich Arsenal.87 Soon afterwards Glading told Gray that Mr and Mrs ‘Stevens’ had returned to Moscow because their daughter was ill, but that Mr ‘Stevens’ was expected to return after Christmas. In the meantime Glading took over the photography.

  ‘Stevens’ failed to return to England. In hindsight, the Security Service no doubt wished that it had asked the Special Branch to move in earlier and arrest the couple before they left the country, rather than waiting until it had gathered more evidence about the spy-ring inside the Woolwich Arsenal. Mr ‘Stevens’ was later identified as the NKVD illegal Willy Brandes, an Eastern European with several aliases who travelled on a Canadian passport.88 In Brandes’s absence Glading felt he had been left in the lurch. On 20 January 1938 he complained to Gray that he had ‘stuff parked all over London’ and, because of ‘Russian dilatoriness’, was afraid he would have to borrow money to pay those looking after it. Glading told Gray to ‘get the flat ready for something important’ and said next day that there was ‘urgent photography to be done’. On 21 January, according to a later case summary, Gray ‘rang up and stated that Glading had just left her flat and was proceeding to Charing Cross station where at 8.15 p.m. he was to meet a man from whom he would receive the material to be photographed’.89 Glading was arrested by the Special Branch at Charing Cross Station in the act of receiving classified documents from Albert Williams, a hitherto unidentified spy at Woolwich Arsenal, who was also arrested. Soon afterwards, the Special Branch arrested two of Glading’s other contacts in the Arsenal, George Whomack and Charles Munday. Evidence at their trial at the Old Bailey included a mass of incriminating documents and photographic material found at the homes of both Glading and Williams. In March Glading was given six years’ imprisonment, Williams four and Whomack three: all light sentences by the later standards of espionage trials. Munday was acquitted. Olga Gray was congratulated by the judge for her ‘extraordinary courage’ and ‘great service to her country’. After the trial she was invited to lunch at the Ritz by an unidentified colonel (probably Harker), who thanked her and presented her with a £500 cheque. Soon afterwards she left to start a new life in Canada under a new name. In old age she told an interviewer that she felt she had been ‘dumped’ and looked back nostalgically on the days when she had worked for Knight and ‘the adrenalin really flowed’.90

  With only twenty-six officers at the beginning of 1938, it is unsurprising that the Security Service failed to follow up systematically all the clues generated by the Woolwich Arsenal case. One such clue was a diary entry by Glading for 13 January 1936 which included a list of six names: among them Sirner (also transliterated as ‘Sirness’) and Steadman. Valentine Vivian, head of SIS counter-intelligence, whose help was sought by the Security Service, identified the two names as a reference to Melita ‘Letty’ Norwood, née Sirnis, a secretary in the British Non-Ferrous Metals Research Association (BNFMRA).91 This information was independently confirmed by one of Maxwell Knight’s agents in the CPGB, codenamed M2, who reported that Sirnis also used the name Steadman (her suffragette mother’s maiden name):

  This girl is rather a mysterious character. She is a member of the Hendon Communist Party. She is also a member of the Cricklewood branch of the Association of Women Clerks and Secretaries. She is quite an active person in her trade union but a certain amount of mystery seems to surround her actual Communist Party activities. She has a husband about whom nothing is known except that he looks rather like Charlie Chaplin . . . Lettie also has a sister [Gertrude, also a Communist] who is very like her. They are both tall, fair, quite nice looking, and of a rather superior type.92

  In April 1938 M2 supplied a ‘rough sketch’ (in fact a good likeness) of Melita Norwood and reported that she was ‘of a type definitely suitable for underground activity . . . it is also certain that she is doing some especially important Party work’: ‘Lettie has recently told her [Communist] Party colleagues in the Association of Women Clerks & Secretaries that she will not be able to undertake any open Party work for some little time.’93

  Melita Norwood had first come to the attention of the Security Service in 1933 when HOWs on a Communist militant and the Anti-War Council had revealed anti-war letters written by her, which began ‘Dear Comrade’ and ended ‘Yours fraternally’.94 The Service, however, had no idea that Norwood was recruited as a Soviet agent in 1937. After the Woolwich Arsenal case the NKVD put her ‘on ice’ for a few months, fearing she had been compromised by her contact with Glading, but, when no action was taken ag
ainst her, resumed contact with her in May 1938.95 M2’s reports that Norwood was an active Communist engaged in ‘especially important’ secret work were not treated by the leadership of B Branch with the seriousness they deserved – a lapse which was all the more surprising since Olga Gray had just strikingly demonstrated how effective an agent a good secretary could be. Like Gray, Norwood was good at maintaining her cover. Her boss, G. L. Bailey, assistant director (later director) of BNFMRA, subsequently called her ‘the perfect secretary’ with a strong ‘sense of honour and duty’. Though well aware that Norwood was an enthusiastic socialist and a ‘staunch supporter of the “under-dog” ’, he was ‘convinced that she is not a Communist’.96 Had M2’s reports been followed by further investigation, Norwood’s career as a spy might well have been nipped in the bud. Instead she became the Soviet Union’s longest-serving British agent, supplying Moscow at the end of the war with some of the secrets of the British atomic-bomb project.97

  Save for Glading and the Woolwich Arsenal spy-ring, most of the Soviet agent network recruited in the mid-1930s survived intact. The network was, paradoxically, saved from more serious damage by Stalin’s Terror, which was at its peak in the Soviet Union in 1937 with, at the very least, a third of a million executions and the largest peacetime concentration camps in European history. After Trotskyists, the largest number of alleged ‘enemies of the people’ to be pursued abroad by the NKVD came from the ranks of its own foreign intelligence service. In the course of 1937 all the Soviet intelligence personnel who had taken part in the Woolwich Arsenal case were recalled to Moscow and were thus out of Britain when the arrests took place in January 1938.

  In the paranoid atmosphere of the Terror, Teodor Maly’s religious background made him an obvious suspect. He accepted the order to return to Moscow in June 1937 with an idealistic fatalism, telling a colleague, ‘I know that as a former priest I haven’t got a chance. But I’ve decided to go there so that nobody can say: “That priest might have been a real spy after all.” ’ Arnold Deutsch’s Jewish origins and unorthodox early career made him too an obvious suspect. He seems to have been saved by the Centre’s mistaken belief that he had been betrayed by another alleged traitor in the NKVD and was thus a victim rather than an accomplice of the ‘enemies of the people’. Deutsch was recalled to Moscow in November 1937.98 The recall of the Brandes couple in the same month was probably also related to the paranoia of the Terror rather than to the alleged illness of their daughter.

  Had Deutsch remained in Britain, it is quite likely that he, like Mr and Mrs Brandes, would have been identified and followed by the Security Service’s Observation section. Though an inspirational recruiter and agentrunner, Deutsch took some unusual risks and seemed unconcerned that some of his agents were well aware that their friends had also been recruited. The flight to Moscow of two of the Cambridge Five, Donald Maclean and Guy Burgess, in 1951 thus helped to compromise the other three.99 Deutsch showed a similar disregard for security early in 1936 by taking up residence in Lawn Road Flats, Hampstead, where a number of other tenants also had links with Soviet intelligence.100 In June 1937 Deutsch reported to a more senior NKVD officer that one of his agents, Edith Tudor-Hart, had lost a diary with important operational information which threatened to compromise his agent network.101 The blame, however, may well have attached to Deutsch himself. When later questioned by a Security Service officer in Vienna, Deutsch’s widow ‘replied without hesitation that her husband had once lost a notebook with addresses in it. He was worried about it and thought that he had left it in a taxi.’102 Had Deutsch not been recalled from Britain, his sometimes lackadaisical tradecraft might well have led to his identification by the Security Service. And had the Service’s Observation section followed him either to Lawn Road Flats or to a meeting with one of his agents, his whole network might have begun to crumble.

  Following the recall of their illegal case officers during 1937, the Five sometimes struggled over the next two years to remain in contact with the Centre but did not lose their commitment. In April 1938 the Centre handed over the running of its main British agents to the new head of the legal residency, Grigori Grafpen, who, unlike the illegals, was protected by diplomatic cover.103 In December, however, Grafpen, like many other NKVD officers around the world, fell victim to the paranoia of the Terror, was recalled to Moscow and later despatched to the gulag. The only remaining NKVD officer in London, Anatoli Gorsky, was poorly briefed even about the residency’s most important agents.104

  Kell confidently declared at a liaison meeting with the Deuxième Bureau, France’s pre-war foreign intelligence service, in January 1939 that ‘[Soviet] activity in England is non-existent, in terms of both intelligence and political subversion.’105 Though close to the truth so far as the operations of the legal residency in the Soviet embassy at Kensington Palace Gardens were concerned, it was none the less the most woefully misjudged assessment of the threat from Soviet espionage that Kell had ever produced. Donald Maclean, thus far the most productive of the Cambridge Five, was four months into his first foreign posting at the Paris embassy, in the early stages of a diplomatic career which some thought might take him to the top of his profession. In December 1938 Guy Burgess reported to the Centre, probably via Paris, that he had joined Section D of SIS, founded earlier in the year to devise dirty tricks ranging from sabotage to psychological warfare. He thus became the first foreign agent to become a member of a twentieth-century British intelligence agency.106 Despite its travails, the future for Soviet espionage in Britain at the outbreak of war was brighter than it had ever been before.

  1 Illegals were deep-cover intelligence officers or agents operating under false name and nationality.

  2 The first Soviet intelligence agency, the Cheka, founded six weeks after the Bolshevik Revolution, subsequently became the GPU (1922), OGPU (1923), NKVD (1934), NKGB (February 1941), NKVD again (July 1941), NKGB again (1943), MGB (1946), MVD (1953) and finally the KGB (1954). For further details, see Andrew and Mitrokhin, Mitrokhin Archive, p. xi.

  3

  British Fascism and the Nazi Threat

  In the aftermath of the First World War, the newly established German Weimar Republic ranked much lower in MI5’s priorities than Soviet Russia and the Communist International. With an army limited by the Versailles Treaty to 100,000 men, a demilitarized Rhineland, chronic political instability and raging inflation, Weimar posed no current threat to British security. Versailles also forbade Germany to engage in espionage. The main interwar German intelligence agency, the Abwehr (‘defence’), was founded in 1920 as a counter-espionage service. Since other countries continued to spy on Germany, the Abwehr reasonably regarded the prohibition on German espionage, which it later disregarded during the Nazi era, as hypocritical.1 In Britain there were regular denunciations in the Commons during the 1920s of the activities of foreign, mostly Soviet, intelligence services, but successive governments upheld the convention (not abandoned until 1992) that there should be no mention whatever of SIS. In 1927 Arthur Ponsonby, former junior Foreign Office minister during the first MacDonald government, attacked ‘the hypocrisy which pretends that we are so pure’: ‘The Secret Service [SIS] is supposed to be something we do not talk about in this House . . . I do not see why I should not talk about it. It is about time we did say something about the Secret Service.’2 Such parliamentary outbursts were very rare.

  Though German espionage posed little threat after the First World War, MI5 had little doubt that, in any future war, it would play a major role. In the early 1920s the former head of the military Nachrichtendienst, Walter Nicolai, publicly defended the wartime achievements of German intelligence, arguing – like many other extremists in the Weimar Republic – that Germany had been ‘betrayed’ but not defeated in 1918.3 He continued to insist that Germany’s recovery as a great power would require it to defy Versailles and set up a strong peacetime intelligence service, which would be vital in time of war.4 MI5’s thinking on German intelligence was also str
ongly influenced by captured German war documents and interviews with POWs, which formed the basis for a remarkable report in 1922 by Kell’s deputy, Holt-Wilson. The experience of ‘total’ war from 1914 to 1918, argued Holt-Wilson, had shown that for the first time states were able to mobilize all their resources against their enemies. In peacetime also authoritarian states would henceforth be able to deploy a much wider range of covert resources to undermine their opponents.5

  There is still no detailed history of the illicit resumption of German espionage under the Weimar Republic.6 Despite its chronic lack of resources in the 1920s, MI5 did, however, discover some of the subterfuges used by Weimar to circumvent the ban on foreign intelligence-gathering. Elements of the disbanded intelligence services of the Kaiser’s Germany – the military Nachrichtendienst and the naval Nachrichten-Abteilung – were subsumed into official German commercial organizations, notably the Deutsche Überseedienst (German Overseas Service), where they continued to function as unofficial espionage agencies.7 MI5’s main leads to German espionage in the 1920s and early 1930s seem to have come from SIS. By 1922 SIS had a source in the Deutsche Überseedienst, codenamed A.14, who claimed to be responsible for paying its agents. A.14 stated that eighty-three full-time German ‘organizing agents’ were operating in Britain in 1922, with 188 part-time agents. He provided details of nine of the most important agents in Britain, some of whom were identified by MI5.8 However, in 1923 SIS assessed A.14 as unreliable, ‘self-glorifying’ and suffering from ‘acute megalomania’, and broke contact with him.9 A few years later SIS achieved a far more successful penetration of the Deutsche Überseedienst by recruiting a translator and administrative assistant who, it told MI5, was one of its ‘most trusted employees’. In 1927 the agent provided SIS with a list of more than seventy individuals involved with German espionage in Britain.10 MI5 informed SIS, probably with some pride, that over half the seventy names on the list were already known to it.11 Unfortunately, MI5 records on subsequent surveillance of the Überseedienst espionage network do not survive. In 1931 SIS recruited another ‘extremely well placed source’ (about whose identity it gave few clues to the Security Service) who supplied copies of questionnaires detailing German naval and military intelligence requirements on scientific and technical developments in British defence industry: among them aircraft construction; river mines; listening apparatus; echo sound engineering; anti-aircraft armaments; torpedoes; and the Vickers cemented steel works.12 MI5 failed, however, to identify the German naval intelligence network, the innocuously named Etappe Dienst (Zone Service), which operated in Britain and around the world during the 1920s and the 1930s, using members of German steamship companies and other businesses to collect a wide range of intelligence (with, at least in Britain, probably only moderate success).13 Like Germany’s wartime agents, those detected between the wars were not high-flyers and did not begin to compare in quality with the best of those recruited by Soviet intelligence.