The Defence of the Realm

by Christopher Andrew

  The first section of the KGB London residency to resume something like normal operations after the expulsions, albeit slowly and on a reduced scale, was Line X (scientific and technological intelligence, or S&T). During 1972 plans were made to renew contact with six of its most highly rated agents: the veteran HOLA (Melita Norwood), a secretary in the British Non-Ferrous Metals Research Association (BNFMRA) recruited in 1937;64 HUNT, a civil servant recruited by Norwood in 1967; ACE, an aeronautical engineer; NAGIN, a chemical engineer; STEP, a laboratory assistant; and YUNG, an aeronautics and computer engineer. Evidence from KGB files later provided by the defector Vasili Mitrokhin suggests that the reactivation of the six agents was a lengthy business, probably preceded by prolonged investigation to ensure that none was under Security Service surveillance. By 1974 Line X at the London residency had nine operations officers, seven fewer than before Operation FOOT.65

  The peak of Mrs Melita ‘Letty’ Norwood’s career as a Soviet agent was long past. In March 1945, when the BNFMRA won a contract on the TUBE ALLOYS (atomic bomb) project, Norwood was working as personal assistant to its director and gained vetting clearance.66 Though the Security Service had received earlier, unconfirmed reports that she had been a pre-war Communist, her 1945 vetting ‘interview did not substantiate those concerns and raised the possibility that some of the information held by the Service about Melita might have referred to her sister Gertrude’,67 who had joined the CPGB in 1931 and been an active student Communist at the London School of Economics at a time when Melita was a member of the Independent Labour Party.68 After Norwood was publicly exposed as a former Soviet agent in 1999, a Security Service assessment of the intelligence she had provided on TUBE ALLOYS concluded that ‘its significance to the Soviet atomic bomb programme would have been marginal’. 69 Though that was a reasonable interpretation of the evidence in Service files, BNFMRA records at the National Archives and other British sources, the Centre had arrived at a different conclusion in 1945. Norwood’s atomic intelligence, it told the London residency, was ‘of great interest and a valuable contribution to the development of work in this field’. 70

  A review of Norwood’s case in 1951, which re-examined pre-war reports that she was an active Communist engaged in ‘especially important’ secret work led Director B (John Marriott) to conclude ‘that the [1945] vetting of this lady was unsatisfactory’. 71 Her security clearance was revoked, though her access to atomic intelligence had been effectively terminated in 1949 when BNFMRA’s classified contract came to an end.72 Letty Norwood, however, remained an active Soviet agent, even though her access was reduced to commercially sensitive but unclassified information. According to Vasili Mitrokhin’s notes on her KGB file, some of the S&T which she supplied ‘found practical application in Soviet industry’. (His notes give no further details.) In 1958 Norwood was awarded the Order of the Red Banner by the KGB. Two years later she was rewarded with a life pension of £20 a month, payable with immediate effect. HOLA, however, was an ideological agent who did not work for money.73

  By 1965 the Security Service had strong grounds for suspecting her past involvement in espionage. It was now known that there had been a wartime Soviet spy in the BNFMRA and it had also been discovered that Mrs Norwood was related to a BNFMRA metallurgist connected to the atom spy Klaus Fuchs. (Not until Mitrokhin’s defection, however, did the Security Service discover that in the middle of the Second World War Norwood and Fuchs had the same female Soviet case officer, Ursula Beurton, née Kuczinski.)74 In 1965 letter and telephone checks on Norwood authorized by an HOW revealed no evidence of espionage and were discontinued after a year. D1/Inv noted in April 1966: ‘The investigation has proved unrewarding. Such information as we have gleaned seems to suggest that Norwood is a harmless and somewhat uninteresting character.’75 A4 surveillance revealed that she left home at 8.30 every morning to catch the train to the BNFMRA HQ in Euston Street and spent the whole day in the office (including the lunch break) except for about ten minutes’ hurried shopping before returning home to Bexleyheath between 6.30 and 7 p.m.76 Letty Norwood seemed to have few friends. By contrast, her husband Hilary, a science master at Bexley Grammar School, had many friends (most of them Communist) and, unlike Letty, was an active Party member. Mrs Norwood’s only identified Communist contact, apart from her immediate family, was an elderly doctor whom she had known since both were members of the pre-war Independent Labour Party: ‘Her contact with him seems to be only out of kindness of her heart for old times’ sake.’77

  Unaware that Mrs Norwood remained a disciplined and dedicated Soviet agent, active Security Service investigation of her ceased in April 1966,78 a year before she recruited HUNT to the KGB. In order to detect her contacts with the KGB it would have required intensive long-term physical surveillance on a scale which would have scarcely been practicable in the pre-FOOT era when A4 resources were seriously overstretched. For security reasons, Norwood tended to meet her Soviet controller only four or five times a year, usually in the south-east London suburbs, to hand over Minox photographs of BNFMRA documents.79 The Service had no proof of her career as a KGB agent until the defection of Vasili Mitrokhin in 1992.80 Even then, since Mitrokhin’s notes from KGB files included no original documents, the evidence would have been insufficient for a successful prosecution.

  When the London residency renewed contact with Letty Norwood in 1974, her case officer discovered that she had retired from the BNFMRA two years earlier. Since she no longer had access to S&T material, contact was discontinued. Norwood, however, retained a high reputation in the Centre as probably its longest-serving British agent with a very productive record which had included intelligence on the British nuclear programme. According to a report which reached the Security Service a quarter of a century later, HOLA’s file had been used in the FCD as a ‘study/training aid to show how a productive case could be developed from inauspicious beginnings’. 81 Letty Norwood remained throughout her career a dedicated Communist and true believer in the Soviet Union. After ceasing to be an active agent, no longer needing to conceal her political beliefs, she became an open Communist and joined the Party. A number of reports of her CPGB activities were entered on her Security Service file.82 During her first visit to Moscow with her husband in 1979, forty-two years after her recruitment as a Soviet agent, Mrs Norwood was formally presented with the Order of the Red Banner awarded to her over twenty years earlier.83 She was also offered but refused a further financial reward, saying she had all she needed to live on.84 Even when publicly exposed as a KGB agent in 1999, she told an interviewer that she had no regrets: ‘I would do everything again.’85

  The intelligence supplied by HUNT, whom Norwood had recruited as an agent while he was working for the Department of Trade and Industry in 1967, which was most highly rated by the KGB, seems to have been on British arms sales (though Mitrokhin’s brief notes on his FCD file give no details). After he was put on ice following Operation FOOT, KGB contact with him was not re-established until 1975, and even then it thought it safer to do so via a French agent, MAIRE, rather than an operations officer from the London residency. In the late 1970s the London residency gave him £9,900 to found a small business, probably in the hope that he could use it to supply embargoed technology. By 1981, however, the Centre was dissatisfied with the quality of HUNT’s intelligence and apparently fearful (wrongly) that he was under Security Service surveillance.86 He died soon afterwards from a heart attack. The Service did not discover HUNT’s existence until Mitrokhin’s defection eleven years later. Another source in the 1990s claimed that, at one stage in his career, HUNT had produced ‘very valuable copies of departmental classified telegrams’. A Security Service investigation concluded, however, that ‘It is unlikely that [HUNT]’s activities caused any significant damage to the UK.’87 Nor, in the Service’s view, did STEP,88 NAGIN89 and YUNG.90

  By far the most productive of the Line X agents reactivated after FOOT was the aeronautical engineer, codenamed ACE, who had first com
e to the Security Service’s attention in October 1964 as a result of his contacts with a Soviet delegation visiting Farnborough Air Show. Various other contacts between ACE and Soviet officials (not an uncommon occurrence in the aircraft and airline businesses) were recorded over the next four years, but no evidence emerged that he was a Soviet agent and Service interest in him lapsed in 1968.91 Late in 1981 a French agent in the KGB codenamed FAREWELL revealed that the London residency was running a Line X agent, codenamed ACE, whose work was highly praised in Moscow, especially by the Soviet Aviation Ministry.92 But no connection was made with ACE, and FAREWELL’s information was too general to provide a significant intelligence lead. ACE’s career as a KGB agent came to an end with his death in 1982. ACE’s identity was not discovered until after Mitrokhin’s defection a decade later. According to Mitrokhin’s notes on his multi-volume KGB file, ACE was Ivor Gregory, a senior aircraft engineer who had been recruited for money by Line X of the London residency in 1967.93 His ‘product file’ alone consisted of about 300 volumes, each of about 300 pages. Most of these 90,000 pages comprised technical documentation on new aircraft (among them Concorde, the Super VC-10 and Lockheed L-1011), aero-engines (including Rolls-Royce, Olympus-593, RB-211 and SPEY-505) and flight simulators. ACE’s material on the flight simulators for the Lockheed L-1011 and Boeing 747 was believed to be the basis for a new generation of Soviet equivalents. ACE also recruited under false flag (probably that of a rival company) an aero-engines specialist codenamed SWEDE.94 The Security Service investigation of Gregory was hampered by the fact that he had been dead for ten years by the time it received Mitrokhin’s notes on his KGB file. An initial assessment in 1992 concluded: ‘He must have saved the Soviets millions of roubles in research and development, not least in the field of flight simulators. His motivation it seems was financial.’95 There is no evidence in the files, however, that the Service attempted to identify and talk to ACE’s former employers to establish exactly what he did have access to – probably because the case was an old one and the Service had many more pressing current priorities. Unsurprisingly, therefore, subsequent assessments of ACE’s significance fluctuated. A 1996 assessment suggested that Gregory had passed information on commercial aviation only to Russians with whom he had ‘legitimate dealings’ and was not involved in espionage. The most recent assessment in 2003 concluded, on the contrary, that the suggestion that Gregory ‘was an unwitting tool of the Russians is completely unjustified . . . He was quite clearly aware of what he was doing and was guilty of knowingly working for a foreign power.’ There is no evidence that Gregory had access to classified information. But, as the 2003 assessment concluded, ‘this need not have prevented him causing significant economic damage.’96

  The intelligence from KGB files provided by Vasili Mitrokhin in 1992 suggests that there were fewer new British Line X recruits during the 1970s than in the decade before Operation FOOT. The most important new recruit was, almost certainly, Michael John Smith (codenamed BORG), a Communist electronics engineer. The secretary of the Surrey Communist Party in the early 1970s, Richard Geldart, later described Smith as an ‘out-and-out Tankie’ – a hardline supporter of the crushing of the Prague Spring by Soviet tanks in 1968: ‘Not to put too fine a point on it, he was the total nerd. There was socialising going on, but he was not part of it.’97 A Line X officer at the London residency, Viktor Alekseyevich Oshchenko, made initial contact with Smith in a pub near Smith’s flat at Kingston-on-Thames in May 1975. On instructions from Oshchenko, Smith left the Communist Party, ceased trade union activity, became a regular reader of the Daily Telegraph, joined a local tennis club and – as his KGB file quaintly puts it – ‘endeavoured to display his loyalty to the authorities’. 98

  Michael John Smith first came to the attention of the Security Service in November 1971 at the age of twenty-three, when surveillance of the CPGB revealed a membership application from a ‘Michael Smith’ in Birmingham. Both the Service and the local police, however, failed to identify him. In January 1973 the Service received a report that an engineer called Michael John Smith with an address in Chessington had attended a district congress of the CPGB in Surrey. Because the surname was so common and the address was different, no connection was made with the Birmingham Smith. By a remarkable coincidence, the Surrey Communist Party contained another Michael John Smith and the 1973 report, like some subsequent reports, was wrongly placed on his file. In July 1976 the Michael John Smith recruited by Oshchenko began work as a test engineer in the Quality Assurance department of EMI Defence Electronics, a job which required a normal vetting (NV) security clearance giving him access to material classified up to secret. Since C Branch, because of the filing error, had no knowledge of Smith’s Communist background, he was given the clearance. In the spring of 1977 the Service’s earlier filing error was corrected when it was discovered that the Smith working for EMI had been active in the Surrey District Communist Party from 1973 to 1976. The C2 adviser to EMI, a List X firm (that is, working on classified government contracts), did not, however, raise the case with them until February 1978 – a delay understandably criticized in a later Security Commission report. After a series of discussions between the Service, EMI and MoD, Smith’s security clearance was revoked and he was moved to unclassified work.99

  One reason for C2’s lack of urgency was almost certainly, as a later Director K acknowledged, ‘the perception in K Branch that by the 1970s the KGB did not recruit members of the CPGB as agents . . . I remember absorbing it myself in my early years in the Branch.’100 Earlier in the Cold War, following well-publicized cases on both sides of the Atlantic in which Communists had either conducted or assisted Soviet espionage, the Centre had become much more wary about recruiting Party members. Lyalin had reported to the Security Service after his defection: ‘The KGB are not supposed to cultivate or recruit known Communists. If after recruiting an agent they discovered that he was a Communist, they would try to modify his behaviour as far as the outside world was concerned and renounce his Communist views.’101 But though Directorate K did not realize it for over a decade, Lyalin had been far too categorical. As in the case of Smith, the Centre was quite capable of making exceptions.102

  For a year before Smith lost his security clearance in 1978, he had been working on the top-secret Project XN-715, developing and testing radar fuses for Britain’s free-fall nuclear bomb.103 The KGB passed the documents on Project XN-715 provided by Smith to N. V. Serebrov and other nuclear weapons specialists at a secret Soviet military research institute codenamed Enterprise G-4598, who succeeded in building a replica of the British radar fuse. Smith’s intelligence, however, seemed too good to be true. Serebrov and his colleagues were puzzled as to how Smith had been able to obtain the radio frequency on which the detonator was to operate. This information, they believed, was so sensitive that it should not have appeared even in the top-secret documents on the design and operation of the detonator to which Smith had access. Armed with a knowledge of the radio frequency, Soviet forces would be able to create radio interference which would prevent the detonator from operating. The Centre, like the Soviet nuclear weapons specialists, also seems to have been suspicious of the ease and speed with which an engineer with a previous reputation as a staunchly pro-Soviet Communist had been able to gain access to one of Britain’s most highly classified nuclear secrets so soon after going through the motions of leaving the Party and switching from the Morning Star to the Daily Telegraph. Its suspicions that Smith’s intelligence on the radar fuse might have been a sophisticated deception seem to have strengthened when he told his controller in 1978 that he had lost his security clearance and, for the time being, could no longer provide classified information.104

  To try to resolve its doubts the Centre devised a series of tests to check Smith’s reliability. The most detailed, personally approved by the KGB Chairman, Yuri Andropov, and termed in KGB jargon ‘a psychophysiological test using a non-contact polygraph’, was conducted by KGB officers in Vienn
a in August 1979. Smith was asked more than 120 questions (all ‘yes’ or ‘no’) and his replies secretly recorded. Subsequent analysis of the recording reassured the Centre that he was not, as it had thought possible, engaged in a grand deception orchestrated by British intelligence. Though Smith had been led to suppose that the ‘psycho-physiological test’ was a routine formality, it had never before been used by the KGB outside the Soviet Union. The Centre was so pleased with its success that it decided to use the same method to check some other agents.105 The excitement of working for the KGB seems to have appealed to Smith. A hint of the exotic began to enliven a hitherto drab lifestyle. In 1979 he got married, took up flamenco dancing, began cooking Spanish and Mexican cuisine, and gave dinner parties at which he served his own home-made wine.106 Smith also began a campaign to recover his security clearance at EMI, even drafting a personal appeal to Mrs Thatcher, to whom he complained, ‘There is a cloud over me which I cannot dispel.’ He had made little progress in dispelling the cloud by the time he was made redundant in 1985. No doubt because of his lack of access to classified material, the KGB had broken contact with him at least a year previously, though it was later to recontact him.107 In November 1993 Smith was sentenced to twenty-five years’ imprisonment (reduced to twenty on appeal) for collecting and communicating material in the period 1990–92 while working for GEC ‘for a purpose prejudicial to the safety or interests of the state’. 108