The Defence of the Realm

by Christopher Andrew

  Despite some early tension between MI5 and SIS and the difficulties of reconciling the sometimes conflicting interests of deception, security and intelligence-gathering, the Twenty Committee worked remarkably smoothly. Masterman had a gift for creating consensus. At only one of its 226 meetings was a disagreement pressed to a vote.88 From its very first meeting it began to suspect the astonishing truth that, in Masterman’s words, ‘we actively ran and controlled the German espionage system in this country’. The Abwehr’s instructions to SUMMER and TATE in the autumn of 1940 suggested, even if they did not prove, that the only German agents then operating in Britain had already been turned by the Security Service. The B1a-controlled SNOW network was asked to act as SUMMER’s paymaster, and TATE was given contact details of the double agent RAINBOW.89 Though the Twenty Committee and B1a remained alert to the possibility that there were German agents at large outside its control, it did not occur to either that the Security Service itself – had been penetrated by two of the Abwehr’s previously most successful agents.90 Though Folkert van Koutrik and Jack Hooper chose to remain inactive, both were a serious potential threat to the Double-Cross System.

  Despite their ignorance of van Koutrik and Hooper, however, the Twenty Committee and B1a were acutely aware of how easily the System could go wrong. In January 1941, SUMMER, who was living under guard in a house near Cambridge, attempted to escape. He attacked the only guard on duty, telling him unhelpfully, ‘It hurts me more than it hurts you,’ tied him up and tried to make his getaway on a motorbike belonging to another guard. Strapped to the motorbike was a canoe in which SUMMER planned, optimistically, to cross to the continent. ‘Fortunately’, wrote Masterman, ‘the motorbike, being government property, was not very efficiently maintained,’ and broke down.91 The MI5 Regional Security Liaison Officer (RSLO) in Cambridge reported to Dick White that the pursuit of SUMMER was quickly over:

  At the first cross roads we came to we met some roadmen who stated that they had seen a man on a motorcycle carrying a canoe turn left down the Newmarket Road. We proceeded until we got to Pampisford Station, where we met Mr F. Brown, a roadman of Pampisford, who said that he had seen the man on the motorcycle with the canoe – in fact he had seen a lot of him because the man on the motorcycle had fallen off just by him and he had helped the man to throw the canoe over a hedge.92

  SUMMER was caught soon afterwards and his career as a double agent brought to an abrupt conclusion. Comic-opera though his escape attempt was, it emphasized the danger that a successful escape could undermine the whole Double-Cross System.

  B1a strongly suspected that SUMMER was not the only double agent who, if the opportunity presented itself, might well return to the German side. Elaborate plans were therefore made to remove most to secret locations in North Wales in the event of a German invasion, which early in 1941 was still regarded as a real possibility. The operation was initially codenamed ‘Mr Mills’ Circus’ in honour of the B1a officer originally put in charge, the Old Harrovian and Cambridge engineering graduate Cyril Mills, son of Britain’s leading circus-owner, Bertram Mills. The officer responsible for the North Wales end of the operation, Captain P. E. S. Finney, sometimes used circus metaphors in his correspondence with Head Office, writing from Colwyn Bay in April 1941: ‘I have now completed arrangements for the accommodation of the animals, the young and their keepers, together with accommodation for Mr Mills himself.’ All were to be housed in hotels at Betws-y-Coed, Llanrwst and Llandudno, whose owners had been vetted.93

  The top priority of ‘Mr Mills’ Circus’ was SUMMER’s friend TATE, who, it was believed, ‘would probably attempt to escape in case of an invasion’.94 Next came SNOW who, in Masterman’s cricketing metaphor, had hitherto ‘always batted at number one’ but slipped down the batting order in January 1941 after a visit to Lisbon to meet his German case officer, Major Nikolaus Ritter (alias ‘Dr Rantzau’). The main purpose of SNOW’s meeting with Ritter was to introduce him to CELERY, an MI5 agent posing as a new recruit to the Abwehr’s agent network. On his return from Lisbon, however, SNOW claimed that he had been accused by Ritter of double-crossing him and had admitted doing so. But there were many contradictions in SNOW’s account, which did not square with CELERY’s version of the trip. In the end, B1a concluded that the most likely explanation was ‘that SNOW had not in fact been “rumbled” at all, but had invented this part of the story because the complications of his position were getting too much for him’.95 SNOW, it was believed, was so confused about his loyalties that it was difficult to determine whether he was ‘(a) genuinely friendly to this country, or (b) really pro-German, or (c) anxious to work with both sides and come out on the right side in the end’. A German invasion, however, would almost certainly resolve SNOW’s mental confusion: ‘As he is a great believer in German efficiency, it is highly probable that he would attempt to join the Germans immediately if invasion occurred. He should therefore be arrested on the first news of invasion and transferred to a safer part of the country . . .’96 SNOW’s case officers also found him personally tiresome, with disagreeably plebeian habits which included ‘only wearing his false teeth when eating’.97

  Some of the double agents, notably GW, were trusted to make their own way to North Wales in the event of a German invasion and given car passes, petrol coupons and money for their journeys.98 Those who were not trusted, TATE and SNOW chief among them, were to be handcuffed and taken by car under armed escort to their chosen hotel. The handcuffs (later returned) were loaned by Scotland Yard.99 Tar Robertson informed Tin-eye Stephens: ‘If there is any danger of the more dangerous cases falling into enemy hands they will be liquidated forcibly’ –in other words, shot. If any one of them was able to contact the enemy, it ‘could blow our whole show’.100 The DG, Sir David Petrie, personally instructed TATE’s escort: ‘As it is of vital importance that TATE should not fall into the hands of the enemy, you must be prepared to take any step necessary to prevent this from occurring.’101 This and similar instructions to the escorts of other double agents are the only known occasions on which a DG has authorized executions (though in the event none was carried out). The legal justification was presumably that any double agent attempting to assist an invading army would have been regarded as, in effect, an enemy combatant.102 As fear of a German invasion receded, ‘Mr Mills’ Circus’ gradually wound down. Even TATE, though still not fully trusted, was regarded as unlikely to change sides once there was no longer any serious prospect of a German invasion. The untrustworthy SNOW, however, was imprisoned in Dartmoor and stayed there for the rest of the war.

  The success of the Double-Cross System depended not merely on capturing all, and turning some, of the Abwehr agents landed in Britain, but also on preventing the emergence of an alternative base for German espionage. The best potential base was the London embassy of Fascist Spain, where a number of pro-Nazi diplomats protected by diplomatic immunity were willing to spy for Germany in association with other Spaniards in London. Had the embassy become a successful base for German espionage, the intelligence collected would at some point have contradicted, and therefore risked compromising, the disinformation supplied by the double agents. The fact that Spanish espionage in the German interest achieved little of significance was due in large part to the Security Service’s successful penetration of the embassy. The Service discovered that it was up against mostly low-grade, somewhat eccentric opposition, and that embassy security was gratifyingly weak.

  The first breakthrough into what MI5 believed was ‘the heart of the Spanish espionage network’ came as the result of an SIS lead in the autumn of 1940. On 27 September Miguel Piernavieja del Pozo arrived in London on an espionage mission, posing as a journalist and observer for the Spanish Instituto de Estudios Politícos; he achieved instant notoriety by publicly forecasting a German victory. Shortly afterwards, following an SIS report that del Pozo was a German agent, the Security Service obtained an HOW on him. His intercepted phone calls and correspondence, combined with B6 survei
llance, led MI5 to categorize him as ‘a dissolute and irresponsible young man, aged 26, of the playboy type’, who had little or no knowledge of journalism, of the Instituto de Estudios Políticos, or – it soon transpired – of espionage. Del Pozo greatly simplified MI5 surveillance by writing to GW, the double agent whom the Abwehr believed was a fanatical Welsh nationalist recruited for them by SNOW. With the agreement of the Security Service, GW met del Pozo on 10 October at his flat in Athenaeum Court, Piccadilly. To his surprise, del Pozo handed him a talcum-powder tin containing £3,500 in large-denomination banknotes, over £100,000 at current values and probably the largest sum yet handed to a twentiethcentury British agent (other than funds intended for the Communist Party and other organizations). Part of this large sum, GW was told, was for his own personal use; part was to be held in safe-keeping for del Pozo and returned to him as and when required. GW was instructed to send weekly reports on the activities of the Welsh Nationalist Party and on arms and aircraft production to the hall-porter at the Spanish embassy, who would forward them to del Pozo.103

  Del Pozo revealed to GW at one of their regular meetings that he took his orders from a more senior Abwehr agent, Angel Alcázar de Velasco (a close friend of Franco’s pro-Nazi Foreign Minister, Ramón Serrano Suñer), who, despite knowing no English, was posted to the London embassy as press attache in January 1941. According to a Security Service assessment:

  Alcázar is a most remarkable character. He is of gipsy extraction and, as a boy, worked as a bootblack in Madrid. He was extremely ambitious and in order to earn money to educate himself he became a bullfighter. He joined the [Fascist] Falange at its inception and claims that his first real step-up in politics was his assassination of [a] Republican police officer . . .

  By sheer force of personality, this self-educated ex-bullfighter immediately dominated and terrorised the Spanish colony [in London] and Embassy personnel – with the single exception of the Duke of Alba [the ambassador]. He behaved in a manner which, had he been a less formidable figure, would have made him ridiculous. He went to an interview at the Foreign Office wearing Falange uniform; he accepted hospitality at smart London clubs and insisted on paying for the drinks; he ate fish with his fingers at the Savoy; he gave a demonstration of bull fighting technique at the Turkish baths. The acutely embarrassed Spanish diplomats adapted themselves as best they might to the role of yes men, fearing Alcázar’s power in Madrid. In addition he made no attempt to conceal his strong pro-German feelings and his desire for an Axis victory.

  By the time Alcázar arrived in London, del Pozo, according to Security Service surveillance, ‘was devoting his time almost exclusively to the girls at the Café de Paris and acquired such a reputation as a drunkard, waster and buffoon’ that in February he was recalled to Spain. Alcázar returned temporarily to Madrid in the same month. Though the Security Service asked for him to be declared persona non grata, the Foreign Office was reluctant to do so for fear of retaliation against British embassy staff in Madrid. It did, however, adopt delaying tactics which prevented Alcázar’s return to London until July 1941.104

  In May 1941, in an attempt to discover the extent of Spanish espionage in Britain in the Nazi interest, MI5 instructed GW to renew contact with the embassy porter to whom he had previously sent reports destined for del Pozo. In Alcázar’s absence the porter put GW in touch with Luis Calvo, a leading Spanish journalist. At his first meeting with GW, Calvo revealed that he was using journalism as a cover for espionage. ‘You and I’, he told GW, ‘are going to work very well together,’ and boasted that on a recent trip to North Wales he had obtained ‘very useful information’ on aircraft factories and aerodromes. B1g, which was responsible for countering Spanish espionage, believed that, but for GW, ‘it is at least doubtful whether we should have got on to Calvo at all, and certain that we should not have learned about him so soon.’ Other counter-espionage successes followed. B1g commented: ‘It is a remarkable fact that in the few months between September 1941 and the middle of February 1942, we . . . gained not only a general outline but a fairly precise picture of the [Spanish] Espionage network in this country . . .’105

  The B Division officer most actively concerned with the penetration of neutral embassies, particularly those most likely to assist the enemy, was Anthony Blunt. As Blunt informed Soviet intelligence, MI5 port security officers ‘were able to get hold of many [diplomatic] bags which were being carried out by couriers’:

  In some cases . . . it was possible to persuade the courier – extraordinary though it may seem – to put his bag in the care of the security officer at the port rather than leave it in the hotel overnight. This method works particularly well with the Spaniards and the Portuguese who go out from Poole or Bristol to Lisbon.106

  Within neutral embassies, Blunt informed Moscow, MI5’s best agent was an employee in the Spanish embassy who ‘gets us cipher tape, clear versions of cipher telegrams, drafts of the ambassador’s reports, private letters, notes on dinner parties and visitors, and general gossip about members of the embassy’.107 In December 1941 the employee was recruited as Agent DUCK. A post-war B1g report described DUCK as ‘of inestimable value’ with wide-ranging access to diplomatic documents, thanks to the fact that, ‘Most fortunately for us, the security arrangements in the Embassy were nil.’108 In January 1942109 and on at least two subsequent occasions,110 DUCK was able to walk out of the embassy with the current Spanish diplomatic cipher tape in a bag to hand over to an MI5 car waiting around the corner. Each cipher tape remained in use for some months, thus enabling GC&CS to decrypt communications between the embassy and Madrid. Another agent inside the embassy, run by Maxwell Knight’s section, sometimes let in Security Service staff through a window on nights when acting as firewatcher for ‘a little discreet burglary’.111

  As with counter-espionage operations against Germany and the running of the Double-Cross System, SIGINT was also crucial in revealing the activities of Spain’s London embassy. In January 1942 decrypted telegrams from the Japanese ambassador in Madrid to Tokyo revealed that Alcázar claimed to be running a twenty-one-man agent network in Britain. Reports from some of the agents were cited in ISOS decrypts of reports to Berlin from the Abwehr station in Madrid. Only two of the agents were Spanish: Luis Calvo and an unnamed individual whom the Service believed must be the Spanish embassy porter contacted by GW. Calvo, who, unlike Alcázar, had no diplomatic immunity, was arrested on 12 February and quickly admitted his dealings with GW.112 He was able to throw little light on most other members of Alcázar’s spy-ring, some of whom were identified by B1a as fictitious sub-agents of GW which it had invented to deceive the Abwehr. The Service gradually realized that Alcázar’s other agents were his own fraudulent inventions. He later admitted to SIS that for two years he earned about £4,000 a month by selling bogus intelligence to the Japanese as well as the Germans, some of it from another non-existent spy-ring in the United States At one point, on Alcázar’s instructions, his secretary even succeeded in selling some of his fabricated intelligence reports to the SIS Madrid station.113 The Spanish embassy in London, however, no longer represented any potential threat to the Double-Cross System.

  2

  Soviet Penetration and the Communist Party

  On 4 September 1939, the day after Britain declared war on Germany, deeply depressing intelligence on Soviet agent penetration arrived at the Foreign Office. The PUS, Sir Alexander Cadogan, received what he described as a ‘very unpleasant’ telegram from the British chargé d’affaires in Washington, Victor Mallet, which gave ‘a line on the “leaks” of the last few years’.1 The telegram contained allegations of Soviet penetration made to Mallet by the American journalist Isaac Don Levine, who had collaborated with the Soviet intelligence officer Walter Krivitsky, who had defected to the United States, in a series of sensational magazine articles. Krivitsky, Levine revealed, knew of two major Soviet agents operating in London: ‘One is King in the Foreign Office Communications Department, the other is in cypher
department of Cabinet Offices but name unknown.’ According to Krivitsky, King was ‘selling everything to Moscow’. The other agent had bought forty or fifty planes for the Republican side in the Spanish Civil War. Mallet reported:

  Krivitsky knows his name, I understand, but likes him and so far won’t tell it, because the man was not acting for mercenary motives but through idealism and sympathy for the ‘loyalists’ [Republicans] and may now be on our side owing to Stalin’s treachery. This man is a Scotsman of very good family, a well-known painter and perhaps a sculptor. He was sent on a trip ostensibly to Holland with his wife and mother-in-law whom he left there and then went on to Yugoslavia where he bought the planes and arranged for their transfer to Spain.2

  Though Krivitsky’s description of the second agent, as reported by Levine, turned out to be confused and misleading, the agent in the Foreign Office Communications Department was quickly identified as the cipher clerk Captain John King. Cadogan asked Jasper Harker and Colonel Valentine Vivian, head of Section V (counter-espionage) in SIS, to conduct a joint investigation and was shocked by the ‘awful revelations of leakage’ which they uncovered.3 Initially, however, it seemed unlikely that there would be enough admissible evidence for a prosecution.4 On 25 September Harker and Vivian subjected King to ‘a “Third Degree” examination’ (psychological pressure rather than physical brutality).5 Cadogan wrote in his diary next day: ‘I have no doubt he is guilty – curse him – but there is no absolute proof.’ Unaware of the legal limitations of the evidence against him, King cracked under further interrogation. At a trial in camera at the Old Bailey in October, kept secret for the next twenty years, King was sentenced to ten years’ imprisonment. Harker and Vivian suspected others in the Communications Department, but failed to find enough evidence for prosecution. Two officials, however, were dismissed for ‘irregularities’. Cadogan agonized for the remainder of the year about how to remedy the appalling breaches of security uncovered by Harker and Vivian. ‘I shall be glad when it’s over!’ he wrote despondently on 30 November. The Foreign Secretary, Lord Halifax, decided that he had no option but to move all the existing members of the Communications Department to other jobs and bring in fresh staff. Halifax broke this ‘most painful’ news to the Department on 1 December and, in Cadogan’s view, ‘he did it very well.’6