The Security Commission was in action again after Douglas Britten, an RAF chief technician, was sentenced in 1968 to twenty-one years in jail for giving the KGB highly classified information from RAF signals units in Cyprus and Lincolnshire. Partly because Britten pleaded guilty, his case attracted only minimal publicity. A Security Commission inquiry after Britten’s conviction, however, discovered a series of vetting failures. Twenty years earlier he had served six months’ hard labour for fraud; since leaving prison he had had a history of financial problems and a record as an ‘accomplished liar’. 95 By the time of the Commission’s report, however, Whitehall had become seriously concerned by the cost of increasing protective security and was disinclined to fund further improvements. In 1968 a costing exercise, initiated by the head of the home civil service, Sir William Armstrong, estimated that the total cost might be £40 to £50 million a year, and that it was at present impossible to judge its cost effectiveness. At FJ’s suggestion, a committee chaired by Armstrong’s predecessor, Lord Helsby, was appointed in 1969 ‘to review the scope of protective security and review what changes if any are desirable’. The head of C4 (then physical and document security) was made secretary of the Committee – but to little effect. Though the Helsby Committee produced some radical proposals, few were implemented.96
Doubtless to Wilson’s relief there were no spy cases during his first two administrations which came close to emulating the sensational publicity which had surrounded the trials of the Portland spy-ring and George Blake during the Macmillan government. The greatest espionage-related embarrassment of this period was Blake’s escape from Wormwood Scrubs after serving only five years of his forty-two-year sentence. The escape, it was later discovered, had been made possible by three former prisoners who had befriended him in jail: the Irish Republican Sean Bourke and the peace protesters Michael Randle and Pat Pottle. On 22 October 1966 Blake knocked a loosened iron bar out of his cell window, slid down the roof outside and dropped to the ground, then climbed over the outer wall with a nylon rope-ladder thrown to him by Bourke. Blake was later driven, hidden in the Randle family Dormobile, to East Berlin, where he was joined by Bourke before continuing to Moscow.97 Highly critical though press coverage of the jail-break was, Wilson was not greatly dismayed by it since the minister who attracted most press criticism was Roy Jenkins, whom he had identified as a potential rival. ‘That’, the Prime Minister told Dick Crossman, ‘will do our Home Secretary a great deal of good. He is getting complacent and he needs taking down a peg.’98 Jenkins later tried to put some of the blame on the Security Service: ‘We thought Blake had probably been taken out through London Airport on the run, but in fact he went to ground in Paddington for several weeks. I consider that MI5 and the Special Branch contributed little skill to the attempt to find him.’99 Security Service records tell a somewhat different story. FJ rang Jenkins’s private secretary on 28 October to say that it was believed ‘Blake had been in London at the beginning of the week’ (not that he had made for Heathrow), and that information received by the Service had been passed to Scotland Yard.
Though spy scandals caused Wilson, unlike Macmillan, no significant political embarrassment, there were three cases involving Labour MPs (in addition to that of the as yet unidentified long-term KGB agent Bob Edwards) which would have caused a sensation if the media had discovered the Security Service investigation of them. The first was that of Bernard Floud, who had been elected MP for Acton in 1964. His case was part of a larger investigation into the possibility that before the Second World War Soviet intelligence had recruited a major spy-ring in Oxford as well as in Cambridge. One of the chief Oxford suspects was Floud, who had been an undergraduate at Wadham College from 1934 to 1937 and, though not formally a Party member, had been heavily involved in Communist campaigns. One of his Communist Oxford contemporaries, Jenifer Fischer Williams, revealed to the Security Service that Floud had advised her to join a civil service department from which she could secretly pass on valuable information to the CPGB, and had put her in touch with a Central European later identified as Arnold Deutsch, the recruiter and first controller of the Cambridge Five. (Ms Fischer Williams, who subsequently married Herbert Hart, wartime member of the Security Service and later professor of jurisprudence at Oxford University, also said that after a few clandestine meetings she had broken off contact with Deutsch.) The fact that in 1938 Floud had gone on a three-month visit to China with the leading Cambridge Communist James Klugmann strengthened D Branch’s suspicions of him. D3 wrote in March 1966:
The case for suspecting that Floud may have worked for the Russians as a talent spotter when an undergraduate rests on his early association with James Klugmann – who is known to have so acted – and certain analogies between the two men’s pre-war careers. It seems highly possible that what Klugmann was doing at Cambridge was echoed by Floud at Oxford. Floud’s direction of Jenifer Fischer Williams . . . lends credence to this hypothesis.100
Further investigations concluded that, while Floud worked in the Ministry of Information from 1942 to 1945, the CPGB ‘regarded him as an intelligent and amenable source of information’. At the post-war Board of Trade, where he rose to become assistant secretary, Floud was ‘reported to have organised and taken part in secret meetings of Communist civil servants until some time in 1948’, though there was no evidence of Communist involvement after 1952, by which time he had left the civil service.101 In May 1966 the DG, Furnival Jones, reported to the PUS at the Home Office, Sir Charles Cunningham, ‘On the face of it Mr Floud’s record is disturbing and he may well be extremely sensitive about it.’102
In July 1966 Jenkins and Wilson authorized the Security Service to question Floud.103 An ingenious variant of the soft man/hard man technique was devised for the start of the questioning on 4 August in a Service flat in South Audley Street. In Operation ROAST POTATO, A1 concealed a microphone in the flat which enabled the interview to be both recorded and monitored in real time at Leconfield House. The interview was to be begun by F4 (who used the name ‘Derek Hammond’) and listened to in Leconfield House by D3 (Peter Wright), who would turn up in the Service flat if he judged that a point had been reached at which Floud might be persuaded to confess by tougher questioning.104 In the event, no such point was reached and Wright did not put in an appearance.105 Floud began by asking if the interview was being taped. ‘Hammond’ replied untruthfully, as he felt bound to do, that he was ‘not conscious of this’. Floud, who was apparently being considered for appointment as junior minister, was understandably anxious that the interview might prejudice his career prospects. He told ‘Hammond’ that he hoped the Prime Minister would not be informed that he was being investigated. ‘After all,’ he added, ‘one is not wholly without ambition.’ ‘Hammond’ found Floud ‘uneasy, evasive and less than frank’ about his Communist activities at Oxford and in the civil service:
The explanation of his drift away from Communism has a ring of truth about it – unless it is a subtle cover story – and could be genuine. If this is so, his wish not to tell us the whole truth about his Communist past and about any work he may have done for the R[ussian] I[ntelligence] S[ervice] could spring from a natural desire not to prejudice his new career as a politician.106
After two further interviews with Floud by ‘Hammond’ and Wright, questioning was suspended in January 1967 after the death of Floud’s wife, a former student Communist whom he had met at Oxford.107 Two final interviews took place in March. On the 17th Wright confronted Floud with Fischer Williams’s account of his contacts with her at Oxford (largely confirmed by their Oxford contemporary Phoebe Pool, who had since become a colleague of Blunt at the Courtauld Institute).108 According to Wright, Floud immediately became ‘very agitated’ and took some time to recover his composure, but did not ‘break’. 109 At an interview three days later Floud was told that, because of lack of frankness about his past Communist associations, he was regarded as a ‘full security risk’ and could not therefore be given securit
y clearance.110 Floud can have been in little doubt that his prospects of a ministerial career had gone. Six months later he killed himself.111 Press reports made no mention of his questioning by MI5, and his family were convinced, probably correctly, that his suicide was the result of long-term depressive illness (of which the Security Service seems to have been unaware), exacerbated by his wife’s death.112 The collapse of his ministerial ambitions, following his failure to gain security clearance, however, probably added to his despair.
Save for the personal tragedy with which it was associated, the investigation of Floud was of less importance than it seemed to the Security Service at the time. There was – and is – no evidence that he had any Communist contacts after 1952. His pre-war contacts with Soviet intelligence are also unlikely to have been of great significance, though it would have been very different if, after he had put Jenifer Fischer Williams in touch with Arnold Deutsch, she had decided to become a long-term penetration agent in the Home Office. She had been placed third out of 493 applicants in the 1936 civil service entrance examinations (the highest ranking so far obtained by a female candidate), quickly established herself as a high-flier, and in 1939 was appointed private secretary to the PUS at the Home Office, Sir Alexander Maxwell. In 1940 she was asked by the Director, Jasper Harker, who was unaware of her Communist background, to recommend the names of suitable recruits to the Security Service.113 Had Fischer Williams become an NKVD agent, Harker’s request would have represented an extraordinary recruitment opportunity for Soviet intelligence. It had been reasonable to speculate, when the Security Service investigation of Floud began, that he might have been a member of a major Oxford spy-ring recruited before the Second World War on the Cambridge model. The investigation, however, uncovered no evidence of an Oxford recruitment remotely comparable in importance to the Cambridge Five.114
The Security Service was unaware, at the time when Floud committed suicide, that two other Labour MPs, one of them a minister, were agents of the Czech StB. As the Centre seems to have recognized, until the suppression of the Prague Spring by the tanks of the Warsaw Pact in August 1968 the StB residency in London was often more successful than the KGB in approaching British politicians and trade unionists, who tended to be both less suspicious of Czechoslovaks than of Russians and sympathetic to a people betrayed by the West at Munich in 1938.115 The most worrying intelligence of StB penetration of parliament concerned the case of John Stonehouse, successively Parliamentary Secretary at the Ministry of Aviation, Parliamentary Under Secretary of State for the Colonies, Minister of Aviation, Minister of State for Technology, Postmaster General and Minister of Posts and Telecommunications in the Wilson government. In July 1969 US liaison reported that Josef Frolik had said during debriefing that, though he had never seen any StB report on Stonehouse, he was ‘90 per cent sure’ that he was a Czech agent. When questioned by the Security Service in the United States on 1 August, Frolik no longer seemed ‘90 per cent sure’. He told his debriefers he was ‘not sure that Stonehouse is an agent’ – only that one of his StB colleagues had been ordered to make an approach to him. When Security Service investigators interviewed Stonehouse on 4 August, they found him ‘as calm and assured as anyone in his position could be expected to be in the circumstances’. He dismissed any suggestion that he had ever assisted Czech intelligence in any way. The Service reported to the Prime Minister that ‘There is no evidence that Mr Stonehouse gave the Czechs any information he should not have given them, much less that he consciously acted as an agent for the [StB].’116 On the evidence available in 1969, that was a reasonable conclusion. It was, however, incorrect. A decade later another StB defector provided convincing evidence that Stonehouse had indeed been a Czech agent.117 Had that information been available in 1969, Wilson would have been faced with an intelligence scandal worse than the Profumo affair.
Frolik’s evidence in 1969 against another Labour politician, Will Owen, MP for Morpeth, was much more convincing. Though Owen’s official StB codename was LEE, he was also known by its London residency as ‘Greedy Bastard’. Frolik had seen some of Owen’s product while stationed in London in the mid-1960s:
‘Lee’ was interested solely in the five hundred pounds a month retainer which we gave him . . . In spite of the obvious danger, he was always demanding free holidays in Czechoslovakia so that he might save the expense of having to pay for the vacation himself. He even went as far as pocketing as many cigars as possible whenever he came to the Embassy for a party.118
It may well have been Owen’s close relations with the Czechoslovak embassy which had led the previous Labour leadership to place him at the top of its list of suspected crypto-Communists in 1961.119 What neither the Labour leadership nor the Security Service had realized before Frolik’s revelations, however, was that Owen was a long-serving Czechoslovak agent, recruited soon after his election in 1954 to the Commons by an StB officer working under diplomatic cover. Since then Owen had had regular meetings with successive case officers while taking his dog for an early-morning walk in London parks. Though only a backbencher, Owen became a member of the Commons Estimates Committee and provided what Frolik described as ‘top-secret material of the highest value’ on the British Army of the Rhine and the British contribution to NATO.120
When FJ informed the Prime Minister on 29 July 1969 of Frolik’s evidence that Owen was an StB agent: ‘[Wilson] described Owen as “a drip” . . . saying that he was an ineffective member of the House, moderately intelligent but very naive. It would not in the least surprise him to learn that Owen would pass on to anyone any information that came his way.’121 Telephone and letter checks combined with surveillance would have increased, probably greatly, the prospect of a successful prosecution – particularly in view of Owen’s regular early-morning meetings with an StB officer in a London park. Over the next few months, however, ‘The Prime Minister was emphatic that he would not authorise a telephone check at this stage.’ Though Wilson conceded that he might authorize one after Owen had been questioned,122 a telecheck then would inevitably have been less productive because Owen would have realized he was under suspicion. Wilson’s motives for thus diminishing the chances of a successful prosecution were probably twofold. First, as in the case of union leaders, he feared the potential for political embarrassment in what was expected to be an election year. Secondly, he had given an assurance to the Commons that ‘there was to be no tapping of the telephones of Members of Parliament’ and that, if developments required a change in this policy, he would make a statement to the House when the security of the country permitted. Wilson therefore feared that he would have to tell the House, possibly before the election, that he had authorized the tapping of an MP’s phone.123
The Legal Adviser, Bernard Sheldon, however, obtained the consent of the Attorney General, Sir Elwyn Jones, to a search warrant and police interrogation of Owen. When Owen was questioned in January 1970, he made a partial admission – acknowledging that he had been paid by Czech officials for information he had provided over a period of years, but claiming that he had only done so under pressure and denying that he had ever handed over classified information. When examination of his bank account revealed large sums on which he had never paid tax, he decided not to fight the next election and resigned his seat in April – thus greatly diminishing the political embarrassment to the Labour Party. Frolik was flown over from the United States with a CIA escort to give evidence at Owen’s trial on official secrets charges in May under the pseudonym ‘Mr A’. Though Frolik feared he might be poisoned while in London by his former StB or KGB colleagues, the Service considered that he performed well in the witness box. Since, however, he had seen none of the classified documents allegedly handed over by Owen, the judge dismissed this crucial part of his evidence as hearsay and therefore inadmissible. The defence successfully maintained that Owen was a foolish old man who, under pressure, had given information to the Czechs but had never betrayed classified information. Though Owen was acquitted, he
emerged discredited from a case which both judge and defence counsel said had been properly brought.124
Section E
The Later Cold War
Introduction
The Security Service and its Staff in the Later Cold War
The aloof management style of two successive DGs, Sir Martin Furnival Jones, and his predecessor, Sir Roger Hollis, combined with the unprecedented investigations of Hollis and Mitchell on suspicion of being Soviet agents, built up strong support within the Home Office in favour of an outside appointment following FJ’s retirement in 1972. The PUS, Sir Philip Allen, told the Home Secretary, Reggie Maudling, in January 1972, ‘My own view is that the Service would benefit from a breath of fresh air, and that it would particularly benefit from someone who had some political nous.’1 The case for a DG with ‘political nous’ was reinforced by the fact that the Prime Minister, Edward Heath, had taken a personal dislike to FJ at their first meeting after his election victory in June 1970.2 Allen’s candidate for the succession was a senior Home Office official, J. H. Waddell, who was considered unlucky not to have become a PUS.3 The main argument against an outsider, as Allen acknowledged, was the malign precedent set a quarter of a century earlier by Sir Percy Sillitoe, who ‘had a distinguished record as a Chief Constable, but was pretty disastrous as Director General of the Security Service’. 4
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