A Brief History of the Spy

by Simpson, Paul

  There was little they could do, though. Gouzenko’s material revealed one of the key Soviet agents involved with Moscow Centre’s attempts to obtain information about the American atomic program – something that the Soviets had been interested in for some considerable period.

  The Gouzenko papers specifically identified the scientist Alan Nunn May as one of the agents in place within the Manhattan Project, the code-name for the development of the atomic bomb. A member of the Communist Party of Great Britain since the thirties, Nunn May had offered information to the Soviets about the possibility of a ‘dirty’ nuclear bomb in 1941. When he was sent to Canada in January 1943 to work on the Manhattan Project, he became part of the GRU network run out of the Ottawa embassy by Colonel Nikolai Zabotin, and passed both information and samples of Uranium-235 to the Soviets, apparently in exchange for two bottles of whiskey and $700, which Nunn May said he burned. When he returned to Britain he was eventually arrested by MI5, and confessed. He would later be sentenced to ten years in prison, despite his barrister’s argument that at the time he passed the materials, the Soviets were British allies. The Soviets’ other key mole within the Manhattan Project would remain safe for a while longer.

  While the RCMP and MI5 were probing Gouzenko’s secrets, the FBI were dealing with revelations of their own when one of the longest-standing Soviet agents on American soil came in of her own free will and began blowing open various Soviet intelligence operations.

  Elizabeth Bentley, later known as the Red Spy Queen, had joined the CPUSA in 1935, and when she got a job working for the Italian Library of Information – a propaganda bureau for the fascist Italian regime – based in New York City three years later, she offered her services as a spy. NKVD agent Jacob Golos became her controller, although Bentley maintained that she was unaware that she was in the employ of Moscow Centre for at least two years. In 1940, when Golos was forced to register under the Foreign Aliens Registration Act, Bentley became the intermediary with his rings of agents, and took charge of Golos’ cover operation, the United States Service and Shipping Corporation. During the war, she ran the Silvermaster group, a network based around Nathan Gregory Silvermaster, an economist with the War Production Board, which passed information on German military strength and American munitions production, as well as other useful material, back to Moscow.

  When Golos died of a heart attack in 1943, Bentley, code-named Umnitsa (Miss Wise) by Moscow, continued with his spying activities, now reporting to Iskhak Akhmerov, the leading NKVD agent in the USA. The CPUSA General Secretary Earl Browder supported her desire to keep agents reporting via her, rather than directly to Akhmerov, but in June 1944 Browder changed his mind. ‘I discovered then that Earl Browder was just a puppet, that somebody pulled the strings in Moscow,’ Bentley would later say, suggesting that this was what led her to defect.

  Soviet intelligence began to become mistrustful of Bentley when she began dating Peter Heller, who they suspected worked for the FBI. They suggested that she emigrate to the Soviet Union, but Bentley refused. Instead, she visited an FBI field office in August 1945, but didn’t defect at that stage. After a row with her new controller, Anatoly Gorsky (who had come over to deal with the American networks following his successes with Philby and the other members of the Magnificent Five in London from 1940 onwards), she realized that she was in serious danger from Moscow Centre – and Gorsky indeed recommended that they get rid of her. When she learned that Louis Budenz, one of her sources, had defected, her mind was made up.

  Elizabeth Bentley began to tell her story to the FBI on 7 November 1945, and from that date onwards provided reams of information that would reveal the extent of Soviet infiltration of all levels of American society. She named around 150 agents working for the Soviet Union, including thirty-seven federal employees, and informed the Bureau that ‘the Russians are most interested in placing someone in the employment of the FBI, especially as a special agent . . . The Russians have been trying for two years to place someone in the employment of the FBI, with negative results . . . The FBI was the only government agency that they could not crack and money was no object to accomplish this.’

  Perhaps buoyed by the news that the Russians considered them impregnable, the FBI thought that they were on the verge of rounding up multiple spy rings, particularly when the information Bentley provided tallied with the material from Igor Gouzenko – but once again, Moscow Centre seemed to know everything ahead of time, and the various agents were no longer contacted by their Russian controllers. The reason? Once again, in his role with MI6, Kim Philby was kept in the loop – and passed on the bad news to Moscow, who cabled out to their American agents to ‘cease immediately their connection with all persons known to Bentley in our work [and] to warn the agents about Bentley’s betrayal’.

  While they may not have led to the great coup for which the FBI had been hoping, Elizabeth Bentley’s revelations were a bad blow for Moscow Centre. As well as blowing the cover of numerous useful sources, her 107-page testimony listed all aspects of Soviet tradecraft and operations in the United States. Coupled with Igor Gouzenko’s material, and the sudden loss of all of their agents inside the OSS when that organization was suddenly shut down at the start of October 1945, things did not look good for the Soviets. However, they still had their ace in the hole – Kim Philby, and the other members of the Magnificent Five. But even their time was running out.

  Igor Gouzenko and Elizabeth Bentley’s testimony and information may have given American and British counterintelligence organizations much to ponder, but one of the greatest sources of information about the Soviet activity in the West – and the one that led directly to the uncovering of Kim Philby’s spy ring – came from the Russians themselves. Even though much of the intelligence gleaned from it was discovered in the first few years of the Cold War, its existence, and the insight it gave into Soviet activities against the West, were factors in the emergence of the decades-long conflict, and the decision by President Truman to go pro-active in his dealings with the Soviets.

  On 1 February 1943, Soviet diplomatic communications came under greater scrutiny than before, when the US Army’s Signal Intelligence Service began the project that would later be code-named Venona. Based at Arlington Hall in Virginia, this code-breaking programme would eventually be as important to those fighting Soviet infiltration as the work done at Bletchley Park on the Enigma material was to the Allies during the Second World War.

  Put simply, the code-breakers on Venona were looking at literally thousands of messages that had been sent back and forth between Moscow and its diplomatic missions around the world. They realized that in addition to orders and reports for the various trade delegations and diplomats at the missions, there were instructions going to the representatives of the different Soviet intelligence groups: the NKVD, the GRU and the GRU-Naval (the Soviet Naval Intelligence staff).

  The process of breaking the code was painstaking, and progress was slow. A weakness in the Soviet cryptographic system was discovered within a year of Venona’s inception, and further breakthroughs followed in 1944, but it wasn’t until 1946 that cryptographer Meredith Gardner was able to read portions of NKVD messages. As William P. Crowell explained when the Venona project was declassified in 1995:

  The Venona cryptosystems . . . should have been impossible to read. They consisted of a code book in which letters, words, and phrases were equated to numbers. So a code clerk would take a plain text message and encode the message using numbers from the code book. This would have presented a significant challenge itself depending on how long the code book was used. However, the messages were further modified, in other words double-encrypted, by use of a one-time pad. The use of a one-time pad effectively randomizes the code and renders it unreadable. The key to the Venona success was that mistakes were made in the construction and use of the one-time pads – a fact that was discovered only through brute force and analysis of the message traffic.

  According to Oleg Gordievsky’
s history of the KGB, the sheer number of messages travelling between the USSR and the various missions worldwide was so great towards the end of the Second World War that Moscow Centre sometimes sent out the same ‘one-time’ pad again. (The cypher officer responsible was apparently shot.)

  As the work continued, more and more code names of Soviet agents were revealed – backing up information given by Gouzenko and Bentley – and the team at Arlington Hall were supplemented by British analysts as well as representatives from the FBI.

  By no means all the messages were decoded, but enough was revealed to allow investigators to pursue leads. A burned codebook, found on the battlefield at the end of the war, proved eventually to be useful when some of its contents correlated to Venona, but this only came to light nearly a decade after its discovery.

  The Soviets were, unsurprisingly, concerned about this work. Elizabeth Bentley mentioned in one of her debriefings that Moscow had been aware to a certain extent of the work going on there as early as 1944. In 1945, they managed to infiltrate an agent, Bill Weisband, into Arlington Hall, whose identity was ironically uncovered when the relevant instructions formed one of the Venona documents. However, even after his treachery was discovered in 1950, Weisband was never prosecuted for espionage since both the British and Americans agreed that the Venona project was too valuable to be mentioned even at an ‘in camera’ hearing.

  The Soviets could do little about Venona: they didn’t know which messages the Arlington Hall cryptographers would be able to read, so, as Gordievsky said, ‘It was immediately clear . . . that Venona represented a series of time-bombs of potentially enormous destructive force for its agent networks.’

  The biggest secret that Moscow wanted kept quiet was its access to American and British research into the atomic bomb. One of the first intelligence messages from 1944 that was decoded, in December 1946, related to code name ENORMOZ – the Manhattan Project – providing the Soviets with a list of the names of the leading scientists working on the atomic bomb. Other messages gave specific details about progress on the development of the device, which the Soviet agents planted at the top secret Los Alamos base in New Mexico hoped would enable their scientific counterparts to maintain parity with the American project.

  The main Soviet agent was Dr Klaus Fuchs, a German Communist Party member who had moved to England in 1933. He was brought on board the British atomic bomb project under Professor Rudolf Peierls in 1941. MI5 had been reluctant to give Fuchs security clearance, but eventually he was passed – at which point he immediately travelled to London to offer his services to the Russians! He would later claim that he didn’t know whether he was working for the GRU or the NKGB, protesting that he didn’t realize there was more than one branch of Soviet intelligence.

  Fuchs was sent across to America in December 1943, and transferred to the control of another key Russian spy, Harry Gold, to whom he passed numerous details on the bomb, supplementing the material that another Russian spy, David Greenglass, was providing. This would continue throughout the rest of the Second World War, with Greenglass leaving the Los Alamos headquarters in February 1946, and Fuchs heading over to the British Atomic Energy Research Establishment at Harwell, Oxfordshire, four months later.

  However, at almost exactly the same time as the Russians were benefitting from Fuchs’ treachery and exploding their own atomic bomb, the Venona transcripts were providing clues to both Fuchs’ and Greenglass’ identities. Fuchs was arrested and confessed in January 1950, while Greenglass admitted his role in June that year. Information that Green-glass provided would prove critical in winding up the Soviet network run by Julius and Ethel Rosenberg (see chapter 4).

  In addition to cutting off the Soviets’ inroads into the atomic establishment, Venona also crippled one of their major operations in Australia. Since 1943, the NKVD residency in Canberra had great success penetrating the Australian Ministry of External Affairs, which gave them access to a lot of British secrets. Jim Hill and Ian Milner, the two best Soviet agents there, were compromised by the Venona material. Early in 1948, MI5 sent their Director-General, Sir Percy Sillitoe, accompanied by Roger Hollis, to conduct an investigation, maintaining the cover story that a British mole in Soviet intelligence had passed on the agents’ details, rather than risk compromising Venona. The loss of these agents was such a serious blow to Moscow Centre that by the time the KGB Resident Vladimiri Petrov defected in 1954, they had still not been able to achieve more than minor breaches of Australian security.

  However, perhaps the most damaging discovery of the Venona material as far as the Soviets were concerned was the seemingly trivial item that a Russian agent, code-named Gomer (Homer in English), had been travelling from Washington to New York in 1944 to visit his pregnant wife. When this final piece was put into place, it meant that Homer could only be one person: Donald Maclean. And with Maclean would go the whole of the Magnificent Five.

  Kim Philby had stayed in MI6 after the end of the war, becoming head of the Secret Service station in Turkey from 1947 to 1949 (using that position to betray any British agents who attempted to use the Turkish border crossing to gain access to the Soviet Union), and then was sent as MI6 representative in Washington from 1949, during which time he had access to both American and British case files. Not long before his recall in 1951, he passed over information about three groups of six agents who were parachuting into the Ukraine – sending them to their deaths, noting in his diary that ‘I can make an informed guess’ as to their fate.

  During the same period, Guy Burgess and Donald Maclean were able to pass over reams of information from the Foreign Office, with Anthony Blunt occasionally assisting Burgess with the material. Although Burgess was gradually becoming more dissolute, often under the influence of drink or drugs, he could still charm information out of unsuspecting colleagues, as he did in the Far Eastern Department of the Foreign Office before he was posted to Washington in 1950. Maclean was posted to Cairo in 1948, but his drinking also slipped out of control, as did other aspects of his behaviour. According to Gordievsky, Moscow Centre blamed both his and Burgess’ excesses on their concerns that the Venona information might compromise them. After a drunken rampage in Cairo in 1950, Maclean was sent back to Britain, where he seemed to pull himself together – and was able to provide the Russians with useful intelligence regarding the onset of the Korean War.

  As MI6 liaison with American intelligence and counterintelligence services, Kim Philby very quickly realized who code name Homer really was, but it was eighteen months before further decrypts would give enough clues for the FBI to gain sufficient evidence against Maclean. The field of suspects narrowed to thirty-five by the end of 1950, and just nine by April 1951. Philby tried to divert attention away from Maclean, but a crucial piece of evidence both cleared Philby’s suggested suspect and became the fatal one for Maclean. However, because neither the FBI nor MI5 wanted to reveal the existence of Venona in court (Fuchs and Greenglass had confessed, so it wasn’t necessary in their cases), there was a period during which MI5 tried to gain new evidence of Maclean’s treachery.

  Guy Burgess had been posted to Washington, and was staying with Philby (something that would compromise the latter tremendously after Burgess’ defection). However, he was spiralling out of control, and Philby used Burgess’ recall to Britain to get a message to Maclean, who had realized that his access to top-secret papers was being restricted, and that therefore he was probably under surveillance. When Burgess reached London he received a letter from Philby stating, ‘It’s getting very hot here.’ Burgess was finding it hard to deal with the situation, and Yuro Modin, his KGB controller, put pressure on him to defect alongside Maclean. Before MI5 could bring Maclean in for interrogation, Burgess and Maclean disappeared, travelling across the English Channel and then the continent before arriving in Moscow a few weeks later.

  News of both men’s departure sent the intelligence community into uproar. Anthony Blunt was under no suspicion and was able to gain access to
Burgess’ flat, where he disposed of a large number of incriminating documents (although he would inadvertently leave some handwritten notes which would lead directly to the unmasking of John Cairncross). Modin had tried to persuade Blunt to join Burgess and Maclean but he refused. (He would eventually confess in 1964, but gained immunity from prosecution.) Kim Philby, on the other hand, decided to brazen things out – but the CIA would have other ideas.

  3

  THE COLD WAR BEGINS

  By the end of 1945, President Truman had come to the conclusion that the Soviets could not be trusted, but he still hoped that in some way peace could be maintained. Despite the clear evidence of Soviet networks operating in America, thanks to the testimony of Oleg Gouzenko and Elizabeth Bentley, and the emerging material from Venona, he was reluctant to expose them publicly. However, events in the first few weeks of 1946 would start to educate the American people that the wartime alliance with the Soviets was not going to extend beyond the end of the conflict.

  In the USSR, Stalin was making it clear that he saw the way forward very differently from his erstwhile allies. In February 1946, he gave a speech to the voters of Moscow, in which he blamed the outbreak of the Second World War on ‘monopolistic capitalism’ and went on to say, ‘Perhaps catastrophic wars could be avoided if it were possible periodically to redistribute raw materials and markets among the respective countries in conformity with their economic weight by means of concerted and peaceful decisions. But this is impossible under the present capitalist conditions of world economic development.’

  A week later, the news of the arrests in Canada based on the Gouzenko information was released in America and a few days after that, political adviser George F. Kennan sent a briefing telegram from the US Embassy in Moscow, which would shape American foreign policy for much of the next forty-five years. It set out his belief that the ‘USSR still lives in antagonistic ‘‘capitalist encirclement’’ with which in the long run there can be no permanent peaceful coexistence’; that ‘Russians will participate officially in international organizations where they see opportunity of extending Soviet power or of inhibiting or diluting power of others’; and that ‘we have here a political force committed fanatically to the belief that with [the] US there can be no permanent modus vivendi, that it is desirable and necessary that the internal harmony of our society be disrupted, our traditional way of life be destroyed, the international authority of our state be broken, if Soviet power is to be secure.’