Alongside KGB espionage, the other big issue of the time was relations between the Western sigint allies. In 1985 the United States cut off the intelligence flow to New Zealand, one of the ‘second party’ members of UKUSA. Similarly to the ‘cut-off’ that Kissinger had imposed on Britain in 1973, this was triggered by wider defence issues, rather than sigint specifically. New Zealand was sensitive about nuclear weapons, given that the south-west Pacific had been used for many years by both the Americans and the French as an atomic test zone. In 1985 David Lange’s Labour government introduced a general ban on ships carrying nuclear weapons entering New Zealand’s harbours. This effectively excluded many American naval vessels which routinely carried nuclear depth charges. Washington was keen to deter other countries from following a similar course – perhaps creating a Pacific nuclear-free zone – and earmarked New Zealand for exemplary punishment. Intelligence was the chosen instrument.24
A remarkable confrontation now occurred. Paul Cleveland, the American Ambassador in Wellington, informed Lange that henceforth his country would not be receiving NSA’s precious sigint jewels. Lange responded tartly that they were not jewels by any means, and the intelligence cut-off was probably a good thing, since he would now ‘have more time to do the crossword’.25 Cleveland, flabbergasted by Lange’s sangfroid, got to work on some of his Cabinet colleagues. He asked David Caygill, the Finance Minister, whether he realised quite how important the intelligence issue was. Caygill recalls, ‘I asked him what he meant,’ and Cleveland responded that it was all about ‘trust’, explaining that the UKUSA intelligence alliance depended on mutual confidence, and now that had completely evaporated. ‘We have not spied on each other,’ continued Cleveland. ‘If you go ahead with your policies we will not be able to trust you.’ Caygill later explained to Lange that what the American Ambassador had meant was that ‘The US would no longer feel any inhibition in conducting intelligence-gathering operations against us.’26 The new Director at GCHQ, Peter Marychurch, was particularly upset by this rift, having just spent a couple of years attached to New Zealand’s sigint agency, the Government Communications Security Bureau (GCSB).
Hitherto, relations between New Zealand’s GCSB and its bigger partners, GCHQ and NSA, had been close. Highly sensitive material, recently released only by accident, affords us a rare glimpse of their joint activities. When Helen Bain, the political editor of the New Zealand newspaper the Sunday Star-Times, asked for permission to look at Lange’s papers from when he had been Prime Minister, which had just arrived in the archives in Wellington, she was supposed to be given individual files, but by mistake an entire unsorted box was handed over. This contained a highly classified annual report from the mid-1980s that revealed the relationship of GCSB with its allies.27 Working closely with NSA and GCHQ, the New Zealanders were actually devoting much of their time to spying on allies, friends and neutrals. In 1985 New Zealand was reading diplomatic telegrams and telephone satellite communications from France, Japan and the Philippines, as well as a host of South Pacific island states. It was also intercepting the communications of some United Nations organisations in the Pacific, together with those of nongovernmental organisations such as Greenpeace.28
In many cases NSA or GCHQ provided ‘raw traffic’ that was of interest to the New Zealanders, or which matched their translation skills. A great deal of attention had been given to Japanese communications by the three partners. New Zealand’s GCSB had produced 238 intelligence reports on Japanese diplomatic cables, using ‘raw traffic from GCHQ/NSA sources’. However, it lamented that the recent implementation of a new high-grade Japanese cypher machine had seriously reduced its output. Diplomatic traffic from Fiji, Vietnam and Laos was being intercepted, as was South African military traffic and Argentinean naval traffic. The GCSB relied heavily on the collection capabilities of its British and American allies to provide French communications that were out of range of its own monitoring stations. American overhead satellites, including the new ‘Orion’, were crucial in this respect. After the Greenpeace ship Rainbow Warrior was attacked and sunk in Auckland harbour by the French secret intelligence service in July 1985, killing one of its crew, GCSB set in train a special collection effort in the region. NSA and GCHQ were asked to monitor targets in France, including certain Paris telephone lines. In short, all three allies worked closely together on a very wide range of targets, so, despite Lange’s apparent insouciance, New Zealand had in fact lost valuable material as a result of being banished in 1985.29 Both GCHQ and the Australian sigint agency, DSD, did their best to subvert the American ban by supplying the New Zealanders with sigint of their own.30
As had been the case with the Kissinger ‘cut-off’ in August 1973, NSA also worked gently to subvert the ban, and over time came to ignore it. In return, New Zealand agreed to host more elaborate satellite receiving stations on behalf of NSA. Nevertheless, in the short term this confrontation had profound effects on all the venerable Commonwealth countries which had helped to found the UKUSA sigint alliance and were known as the ‘second parties’. Odom now pondered some big questions, writing in his notebook: ‘If 2nd party status disappears – What then?’ He complained that Britain, Canada and Australia had made a fuss and tended to ‘over do [the] banishing of NZ’, but he also understood that they wished to be supportive of their Commonwealth ally.31 The situation also created fiendishly complex problems, because UKUSA sigint had become so closely wired together in the 1980s. Peter Hunt, Director of Canada’s sigint agency, the CSE, asked Odom’s advice about what to do with ‘integrees’, staff on loan from New Zealand’s GCSB who were embedded in the headquarters of his own organisation in Ottawa.32
This turbulence in Western sigint relations only seemed to confirm the wisdom of GCHQ’s decision to develop Zircon, offering Britain some measure of independence in the realm of sigint. Although NSA did not like the Pentagon decision to cut New Zealand off, in the 1980s there was general American disillusionment with all the UKUSA ‘second parties’ – especially with Canada. In the summer of 1985 Peter Hunt confessed that he had been having great difficulty persuading Canadian policymakers of the value of CSE’s sigint product, although this situation was now improving. Despite the fact that CSE had been helping NSA and GCHQ with increased covert collection from Canadian Embassies, when Odom met officials from the US Embassy in Ottawa to discuss intelligence cooperation they all agreed ‘how poor the Canadian effort is!’33 By contrast, NSA was increasingly impressed by the West European ‘third parties’, like the West Germans, who were achieving very good results against the diplomatic traffic of Eastern Europe countries like Czechoslovakia, using ground stations.34
In 1985 Odom decided to make improved NSA relations with the West Germans a high priority. Hitherto NSA had hesitated, since the German foreign intelligence service, the BND, was known to be penetrated by Eastern Bloc spies. But after the Geoffrey Prime affair in Britain and the damaging Pelton, Walker and Howard cases in the United States, the German security problems seemed less unique. ‘Sure, we knew they were leaky,’ recalls Odom, ‘but we felt we had a way of compartmentalising sigint carefully to deal with this.’ What mattered to him was that the Germans were investing more and more money in sigint, and were becoming a bigger player in Europe. They had already demonstrated their technical proficiency in some excellent electronic warfare projects conducted jointly with Israel. In the pragmatic world of sigint alliances, diversifying partners made perfect sense. However, GCHQ ‘went up the wall’ when they heard about it, Odom recalled with a wry grin, ‘since it undermined their specialness’.35
One of the top priorities for any Director of GCHQ is to ensure smooth dealings with NSA. Relations between intelligence chiefs are often rather personal. For example, ‘Pat’ Carter, who had been Director of NSA in the late 1970s, was exceedingly anglophile, and established a happy bond with his opposite number at GCHQ, Joe Hooper. By contrast, Bill Odom took an initial dislike to Peter Marychurch, who he referred to as ‘the Sheep’.
Indeed, Odom hated all the qualities that had prompted Whitehall to choose Marychurch. Following the tenure of his gung-ho predecessor Brian Tovey, GCHQ wanted a more stable and avuncular figure. Marychurch was not a great intellectual, but he was an effective administrator and a good diplomat. After he had spent a period of time as GCHQ’s representative in New Zealand, some were surprised to see him recalled to become Director. He had spent less time in London than many of his contemporaries, and so seemed rather disconnected from the big defence debates of the day. By contrast, Bill Odom prided himself on his intellectual toughness and his ability to talk global strategy, having been the right-hand man to Zbigniew Brzezinski, President Jimmy Carter’s National Security Adviser.36
One of the reasons Odom liked the West Germans was that they agreed with him that NATO armed forces in Europe had long been starved of sigint. Under existing rules, only when war actually broke out would high-grade sigint from UKUSA be released to the West Europeans and also pushed forward to commanders on the front line. The lack of current sigint support for front-line units was not only causing problems in Germany. One of the commanders of the main US sigint station in South Korea confided to Odom that there too, ‘The requirements of the field commander were their lowest priority,’ and that ‘NSA fought every attempt to collect and disseminate “tactical” intelligence’ to military formations. Bill Odom was a soldier at heart, and he wanted current sigint to reach those who would be in the front line if a major war ever broke out.37
In the early summer of 1985 Odom set out on a European tour to press this personal agenda. He took with him Peter Aldridge, Director of the National Reconnaissance Office, the agency which provided America’s spy satellites. On 7 June they met Peter Marychurch in Cheltenham, and discussed progress on Britain’s Zircon sigint satellite. Marychurch was forced to admit that GCHQ was hitting problems, partly of cost and partly of competency. This was likely to delay the project, and also pushed the British towards the use of more US contractors, for which he needed to ask their permission.38 One of the ironies of so-called ‘British’ space defence projects was that while they were supposed to increase national independence, they often needed backdoor American technical support to get them off the ground.39 There were other irritants in the relationship. NSA’s largest base overseas, Menwith Hill, set as it was on a remote spot on the Yorkshire moors, was proving to be an especially unpopular posting with NSA personnel, and Bill Odom noted that there were too few volunteers and too many draftees.40 The substantial cost of NSA sigint bases in Britain was a further factor that pushed him towards Continental Europe, since the price of operating from West Germany was lower.41
Britain’s Zircon satellite was also rattling Odom’s cage. A few days after his meetings with Marychurch he chewed over the whole matter of Anglo–American cooperation in a discussion with Dick Kern, NSA’s liaison officer in Britain. Odom expressed the view that the relationship with GCHQ ‘had grown too big’, and ‘needed to be managed better’. They agreed that the Zircon programme was an unwanted intrusion into the realm of space, which they did not want to share with any of their allies, and this was viewed as a problem. Ultimately, NSA wanted to monopolise the Western flow of sigint from space, giving America the ‘potential to turn off the flow in future’. Odom and Kern both felt that they needed to reconsider certain areas of cooperation with GCHQ, including the ‘integration of personnel’. All this was to be offset by improving relations with third parties like the Germans.42
A week later, Bill Odom headed to Bergen in Norway for a ‘European Principals Meeting’, an annual gathering of all the sigint chiefs in Western Europe, hosted this year by the Norwegian Chief of Intelligence, Rear Admiral Jan Ingebrigtsen. Significantly, the members of this elite club only stretched as far south as France, since NSA equated the reliability of sigint partners in Europe with their distance from the Mediterranean. The Greeks ranked bottom in this hierarchy, since their communications were known to be horrifically insecure. Odom was like a social anthropologist, and enjoyed recording the ‘traditional national suspicions and jealousies’ displayed by the cast of characters at the meeting in his daily log. He liked his Norwegian host, who he found ‘pleasant, dignified, and pro-American’. He also warmed to the Germans, who had come forward with a ‘most constructive proposal’ which most of the group was ready to accept. However, the British, he noted, ‘can’t accept happily their own loss of pre-eminence in this business’.43 Odom was especially fond of the German chief, Eberhard Blum, remarking that they ‘had a good talk, some good laughs, and a few reminiscences’. Blum, he noted, was inclined to defend NSA, even when other West German officials complained of the Americans’ ‘Big Brother’ approach, arguing that in fact they had always dealt fairly and generously with their smaller sigint partners. However, Blum was coming up for retirement, and Odom recorded sadly that while his German colleagues shared his views, they were rather more hesitant when it came to ‘putting down the British’.44
The ‘most constructive proposal’ that the BND had brought forward was a scheme code-named ‘Sigdasys’, which aimed to improve the flow of operational sigint to NATO’s front-line commanders in Europe.45 Peter Marychurch was dead against it, since the British had long been hesitant about sharing sigint with military units in peacetime.46 Ironically, Sigdasys was just what the British Army’s electronic warfare operators on the front line had been requesting for years. This was because their own short-range ‘Y’ units were having a tough time listening in on the Soviets, since Warsaw Pact radio security had continually improved, making eavesdropping difficult. ‘Traditionally,’ they noted, ‘the signal intercept service has been the primary source of tactical intelligence,’ but now its value was fading as Soviet divisional headquarters refined their communications security.47 By the 1980s, tactical listening was reduced to direction-finding work against front-line formations.48
GCHQ’s trenchant opposition to the German proposals at Bergen brought out Bill Odom’s intense dislike of Peter Marychurch. On 11 June Odom went home, and penned his thoughts on the various European sigint chiefs, including the Director of GCHQ:
Peter Marychurch, my UK counterpart, is the least attractive of the lot. A tense, nervous, slightly insecure civil servant, he has as his main task to stay fully entangled with the US system, to try and act as our equivalent in Europe, to stand between us and the other Europeans if possible. He and his immediate subordinates hold, in my view, a vastly inflated view of their own competence and talents.49
Predictably, the abrasive Odom had got his way at Bergen, and noted with ill-disguised delight that this would ‘embarrass the GCHQ coalition’. Conflict, he wrote, ‘abounds in our bilateral ties’ with GCHQ at every point, including resources, security and UKUSA third party rules. Re-evaluating the Anglo– American sigint relationship was now a higher priority. For the Americans, the key question was whether geographic access to Britain and its overseas bases was worth the cost. In his own mind Odom had already answered the question, adding that the USA was not getting very much in return for ‘this excessively entangled bilateral connection’.50 A notoriously impatient man, he now observed: ‘Socially, I no longer find the British amusing, merely a pain in the ass.’51
Odom was a soldier with very considerable military experience, and he wanted to see sigint used to support fighting. He was absolutely correct about the need to push sigint further forward, a lesson underlined by Britain’s own experience in the Falklands and again in the Gulf in 1991, where operational commanders were indifferently served. Odom had been instrumental in the development of the US Army’s Intelligence Support Activity, an innovative special forces unit that combined SAS-type operations with short-range sigint. This unit, which made use of listening equipment in helicopters, had been used successfully in Italy during the mid-1980s as part of efforts to find the NATO commander General James Dozier, who had been kidnapped by leftist terrorists.52 Odom was always keen to see sigint actually used in the field. Typically, in Jun
e 1985 he pushed hard to use it tactically against the New People’s Army, a Marxist guerrilla group in the Philippines.53
However, Odom was impulsive, and had only come to the world of sigint recently. By contrast, the affable Peter Marychurch had spent decades at GCHQ, and knew more about the complex world of secret listening. It was soon clear that Marychurch also knew much more about the hazards of working with the West Germans. Only a month after the Bergen meeting, Odom’s close friend Eberhard Blum retired as President of the BND, to be succeeded by Heribert Hellenbroich, the long-serving and respected head of Germany’s domestic security service, the BfV. At forty-eight years old, Hellenbroich seemed set to follow an upward path, not dissimilar to that of Britain’s famed spymaster Dick White, who had successfully headed MI5 and then SIS. Alas, this was not to be. On 27 August 1985 the BfV was hit by an extraordinary spy scandal when one of Hellenbroich’s immediate subordinates, who was also a close friend, defected to East Germany. This triggered a general panic, with some of the West’s most valuable agents in East Germany hurriedly defecting in the other direction, for fear that their identities had been compromised and their lives were in danger. The West German Chancellor Helmut Kohl ordered an inquiry, which discovered that Hellenbroich had kept his friend in his post despite his notoriously heavy drinking and personal problems. Hellenbroich was summarily dismissed, becoming the shortest-serving BND chief in the agency’s history.54
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