John Stonehouse, My Father

by Julia Stonehouse

  The CIA weren’t satisfied that the Frolik allegations were being taken seriously enough in the UK. James Jesus Angleton was convinced that Britain was crawling with communists and didn’t want to be caught out again. He’d made the devastating mistake of trusting MI6’s liaison officer in Washington, Kim Philby, who was a KGB spy.§ The pair had been friends for years, and the charming Philby listened while Angleton told him all the CIA’s secrets. Aside from their 36 official meetings in Washington – the records of which Angleton burned after Philby’s defection to Moscow – they had booze-fuelled lunches once a week, usually at a restaurant called Harvey’s, spoke on the phone three or four times a week, went fishing, and relaxed at Angleton’s home. As a direct result of Angleton’s misjudgement of character, hundreds of foreign CIA operatives died, including waves of anti-communist activists sent into Albania. The CIA couldn’t figure out how the communists acquired advance knowledge of the dates of operations, and the coordinates for the drop zones, and were waiting to shoot them. The Albanian communists had been told by the KGB, who had been told by Philby, who had been told by Angleton. Angleton became consumed by a paranoia that was matched by that of MI5’s Wright, and they determined that my father’s ‘case’ shouldn’t be dropped, and with the help of their British right-wing friends, and press contacts, they’d ensure suspicion fell on my father, and stayed there.

  One of their ‘foot soldiers’ was right-wing activist Geoffrey Stewart-Smith, who wrote to Czech émigré Josef Josten on the 19th December 1974, knowing that Josten had helped Frolik write his book. This was two days after Harold Wilson had said in the House of Commons there was no evidence my father was a spy or had been a security risk and in the letter Stewart-Smith offered Frolik and Josten money if they could provide any hard evidence that he was a spy. They couldn’t. His letter came into the hands of Frolik’s publisher, Leo Cooper, and he recorded that it said: ‘I am sure you are aware of the potential political significance of the fact of the public reaction if we could prove that Wilson was lying to the House of Commons – a British Watergate cover up?’9

  According to David Leigh in The Wilson Plot, the Sunday Express journalist, William Massie, said that after Harold Wilson’s election defeat in 1970 ‘a CIA officer and an MI5 officer met him together and showed him transcripts of the raw debriefing tapes made in Langley by Josef Frolik. These “revealed”, of course, that a senior Wilson minister, Stonehouse, had been a Soviet Bloc agent. They went on to tell him how Wilson had refused to let Stonehouse be interrogated, and had deliberately hushed the matter up. The implication was that Wilson too, had something to hide. As we have seen, it was the second attempt made by Intelligence men to “expose” the Stonehouse story and thus discredit Wilson. The two Intelligence officers added that President Johnson had already been warned to treat Wilson with “circumspection”. Massie’s newspaper was – not surprisingly – unwilling to print the story. But Massie told his editor, and others. It began to circulate underground in Fleet Street.’10

  One regular conduit for misinformation from the rogue right-wing elements in MI5/6 to the reading public was the satirical political magazine Private Eye. Under cover of hilarity, they continuously threw aspersions on Wilson, his political secretary Marcia Williams, and his friends including Joseph Kagan and Rudy Sternberg. My father was another of their targets. On the 14th May 2009, the Guardian published an article, ‘Private Eye “may have been used by MI5”’, which said: ‘Journalists who worked for Private Eye, the satirical magazine, believe that it may have been used by the security services to spread smears against the Wilson government in the mid-1970s. The most remarkable circumstantial evidence for this comes from the diaries of Auberon Waugh. His savage fortnightly flights of fancy were rarely taken seriously at the time, but a rereading of his diaries published in the magazine between 1974 and 1976 reveals allegations which are uncannily similar to the ones being regurgitated in the current MI5 controversy. For most people they were the first public intimations of the rumours. Mr Waugh, whose pieces regularly combine fact with rumour and personal prejudices, said yesterday that he had made up most of his stories. However, he added: “I think the Eye was probably used by MI5, but I only knew two people who were connected with it.” … Mr Richard Ingrams, who was editor from 1963 to 1986, said: “Looking back, it’s obvious that the Eye could have been used by MI5, but it’s hard to be concrete.”’11

  Private Eye publishes every two weeks. On the 20th September 1974, two months before my father disappeared, Private Eye published: ‘Delicacy and good taste prevent me from mentioning the names of two Labour MPs who are at present under investigation by the Special Branch.’12 On the 15th November, five days before he disappeared, Private Eye ran a gratuitous and humourless character assassination, ‘Bungler Dashed’, and in their next issue two weeks later, on 29th November, they continued with ‘Bungler Dashed (2)’, and two weeks after that, on 13th December, ‘Bungler Dashed (3)’. At this point, my father was still missing, presumed drowned. On the 10th January 1975, two weeks after my father was discovered in Melbourne, the Eye’s Auberon Waugh invented the notion that on 17th December 1974 Wilson had announced in the House of Commons: ‘there is not a shred of evidence for believing John Stonehouse was a Czech spy apart from the first-hand testimony of his Czech spymaster.’ On the 4th April the cover headlines were ‘Stonehouse Arrested’, and ‘Missing Member Held’, with a picture showing the back of three men at a urinal, one appearing to be wearing a police helmet, and the man in the middle saying, ‘Can’t you see I’m having a nervous breakdown?’ All this negativity had a profound effect on my father, not to mention the family, and it no doubt had an influence on the readers’ opinion of my father.

  Private Eye’s Auberon Waugh told friends that he’d tried unsuccessfully to join MI5 after he left Oxford University in 1960, and in this whole sorry saga this seems to be a theme running through it, of men wanting to associate themselves with the world of spies. It’s a kind of James Bond complex. They love secrets, intrigue, being ‘in the know’ – having information other people can’t get hold of. It’s what makes them special. With the older generation, it has the ring of derring-do, characteristic of the comics they read as children with men having comradely army-like adventures as they did in the ‘Eagle’ comic, or ‘Boy’s Own’. It’s a kind of vicarious machismo, usually played out in the safety of comfy armchairs in London’s exclusive men-only private clubs like the Garrick or Whites. It’s a form of elitist escapism, with the added advantage that a man can feel he’s doing his patriotic duty in besmirching the ‘spy’ MI5 don’t have the evidence to convict – John Stonehouse.

  Meanwhile, the man himself never gave away any secrets. In public he spoke about ‘cant and humbug’ but didn’t go into details. In the February 1976 House of Commons debate on ‘Foreign Policy and Morality’, he said, ‘We should investigate other areas involving activities of our own secret service and foreign affairs officials,’ by which he meant a closed-session select committee. But he only talked in general terms, about ‘secret donations that have been made by British Governments to foreign political parties to enable them to win certain elections’, and, ‘I know of examples, which I should like to give to a select committee.’ He knew things, but never spilled the beans. What he knew made him disenchanted with the whole political system, and if he’d spoken about the specifics people might have had some sympathy for his internal conflicts. But he kept his mouth shut through it all. And that’s because he was a patriot, not a traitor, and certainly not a spy.

  * Under Labour Prime Minister Clement Attlee, and president of the Board of Trade (1947–51) Stafford Cripps, the British government sold Rolls Royce Nene jet engines to the Soviet Union, who reverse-engineered them to make the Klimov engine that became part of the MiG-15 fighter aircraft – responsible for bringing down between 139 and 1,106 American planes in the Korean War of 1950–53 (depending on which side’s account is believed). Harold Wilson followed Cripps as presiden
t of the Board of Trade, from April to October 1951. Prior to that, from 1947, Wilson had been secretary for overseas trade.

  † Peter Wright spent much of his time in ‘the service’ trying to prove that the director general of MI5, Roger Hollis, was a KGB spy. He got this notion after being given a small exercise book detailing allegations of MI5/MI6 penetration which had once belonged to MI5 officer Ann Glass (who Wright misnamed Ann Last), the wife of Charles Elwell – the MI5 officer who interviewed my father at 10 Downing Street following Frolik’s allegation. When Ann Glass left MI5, she’d left the book behind. On the last page it was written: ‘If MI5 is penetrated, I think it is most likely to be Roger Hollis or Graham Mitchell.’ (Ref: Peter Wright, Spycatcher, page 189.)

  ‡ When Peter Wright was questioned on the issue of an MI5/6 plot to bring down Wilson, following the 1987 publication of his book, Spycatcher – which Margaret Thatcher tried to get banned – he suggested that his co-author, Paul Greengrass, had misunderstood him and that he himself hadn’t checked the proofs. More likely, Wright was feeling remorse at revealing what his ex-colleagues had been up to.

  § During the 1940s, 50s and 60s, at least five KGB spies were working in the British secret services and the Foreign Office: John Cairncross (MI6); Guy Burgess (Section D/MI6 then Foreign Office); Donald Maclean (Foreign Office); Kim Philby (MI6); and Anthony Blunt (MI5). Cairncross confessed in 1952 but wasn’t prosecuted; Burgess and Maclean defected to Russia in 1951 before they could be caught, with Philby following in 1963; and Blunt confessed in 1964, but was given immunity from prosecution and allowed to continue working as Surveyor of the Queen’s Pictures until his spying history was made public in 1979, upon which he was stripped of the Knighthood he had since acquired. The fact that none of these spies were identified in situ or put on trial didn’t give the CIA much confidence in the British secret services.

  21

  Fake News

  Having lived in the belly of the beast, I don’t see much difference between the way the British media handled information and the way the communist secret agents did. They both made things up or twisted the truth, either blatantly or in small, subtle steps. It’s like they were twisting a Rubik’s cube one square at a time – a quotation mark moved here, an omission there, an exaggeration here – and with all these small steps, information ends up 180 degrees in the opposite direction of truth. However, they differ in two respects. First, the information in the StB file was accessible to only a few people at the Czech embassy in London, not even to Frolik for example, plus a few people in Prague, while the whole point about media is to spread the word far and wide. Secondly, the StB files are remarkable in that agents never criticise their colleagues. One woman got mentioned for sending a bit of paper to the wrong department but, other than that, the agents kept their opinions of each other to themselves. In the file, at least. That’s because they were all in mortal danger of being fingered by their colleagues and ending up down a uranium mine or worse. They seem to have had some kind of code of practice where they didn’t criticise each other in the hope they could escape this tyrannical regime with their lives. The British media, on the other hand, criticise everyone, and everything, on a regular basis. There’s a reason for that – money. Negative press stories attract attention, just as indignant anger in posts online attracts ‘clicks’.

  When we got every newspaper on every day for two years the family became very attuned to lies, not only in our story but in others’ too. We knew how particular journalists approached their subjects and could even tell which legal advisor had been on duty overnight. It was like we had press X-ray vision. Over time, I’ve lost that skill, and now I’m like everyone else – I believe what I read. Most of it, anyway. Believing the press is a trap that’s easy to fall into. Even though I know – logically – that some of what I’m reading is fake news, I can’t identify the truth from the lies any more. It’s rather scary.

  All this is on top of the rather more mundane aspect of ‘fake news’ where the newspaper or media outlet simply omits aspects of a story that are not dramatic. In our case, this was seen very clearly in the reporting of the trial. Every accusation of the prosecution became a headline story, while the defence of that accusation was ignored. This is what’s known as ‘unbalanced reporting’ and it is endemic.

  Fake news is absorbed not only by the general reader, but becomes source material for writers of books, then those books become a source of information for journalists, and the fake news is thus embedded and perpetuated. On the face of it, the biography of Michael Sherrard QC, the DTI inspector who spent two years examining my father’s businesses in detail, would seem to be a good source of information. But even his book is stuffed with factual inaccuracies, including the story that he was arrested at his apartment because someone thought he looked like Lord Lucan, complete with an invented dialogue between my father and the police. The following sentence has three inaccuracies: ‘Early in 1974, faced with exposure and ruin, both in finances and of reputation, he fled to America where he faked his death, leaving his clothing on a Miami beach and a suicide note for his grieving wife and daughter.’ But it was late 1974, 20th November; he left his clothes with Helen Fleming at the beach cabana and; far more importantly, he did not leave a suicide note. Had there been one, my father might not have been charged with life insurance fraud because everybody knows insurance isn’t paid out in the case of suicide, especially one confirmed by a ‘note’. Sherrard writes that, once in Melbourne, ‘as Donald Clive Mildoon, he set up home with Sheila Buckley, his secretary’. No he didn’t. ‘Mildoon’/Stonehouse had been arrested five weeks before Sheila arrived in Australia. Sherrard says that he was appointed ‘to inquire into London Capital Group Ltd, a business in which Stonehouse had been deeply involved. He had arranged to change its name from that of a charity, the British Bangladesh Trust.’1 No, he hadn’t. The British Bangladesh Trust (BBT) was never a charity. Sherrard is confusing it with the Bangladesh Fund charity which closed on 8th January 1972, before the BBT was first discussed.

  Sherrard continues in his 2008 biography: ‘The purpose of the Stonehouse investigation was to see if there was any impropriety in the way that the charity’s funds had been used in the light of the complex transfers of money between the companies with which Stonehouse was associated.’2 This conflicts with what he said in his 1977 DTI Report: ‘Although not strictly within our terms of reference, we kept a weather-eye open for any evidence of improper dealings with the funds of that charity or the possible mixing of such funds by Mr Stonehouse but our work did not reveal any hint of wrongdoing in this connection.’3 So was ‘the purpose’ of the DTI investigation to look into ‘any impropriety’ in charity funds or did Sherrard just keep ‘a weather eye’ on the subject? Either way, after finishing his DTI Report, in 1977, Sherrard was invited to the House of Commons to a meeting with the attorney general, the solicitor general, and the director of public prosecutions, held in ‘a tiny, windowless room’ with ‘dingy panelled walls’ and one chair – ‘a shabby arm-chair with springs bulging below the seat’, on which sat the attorney general. Sherrard told this ‘full legal panoply of state’ that, ‘We thought that he had not actually robbed the charity.’4 ‘Bad press’ in the form of a baseless rumour that began a week after my father disappeared in 1974 had such long legs that it ran for years and gained the interest of the ‘full legal panoply of state’ three years later. And it’s still online today that he misappropriated £600,000 of charity money. Anyone who thinks bad press doesn’t really have much impact has not had the misfortune to experience it.

  Under English law, newspapers can say what they like about a person when they’re dead and can’t be sued because the dead person no longer has a reputation to damage so can’t be defamed by libel or slander. When my father actually died, some of the more outrageous stories began to appear in print. Three days after his death, on the 17th April 1988, The People ran with ‘STONEHOUSE “GAVE” CONCORDE SECRETS TO RUSSIA’. This was a
completely unfounded story for which there has never been a scrap of evidence. Given that the concept for the Tu-144, or Concordski as it came to be known, was published in 1962, long before my father was involved in the Ministry of Aviation, and it had many entirely different engineering systems to Concorde, and a habit of crashing, it was an unlikely story even before the famous StB file revealed there was nothing to it. The source, according to the newspaper, was MI5, who ‘continued to believe that Stonehouse was a spy’. The former The People editor, Richard Stott, had met Frolik and is quoted as saying, ‘Frolik never had any direct evidence. But he remained convinced that Stonehouse was a spy because of what he heard inside the Czech embassy in London.’ Going with Frolik’s ‘homosexual’ reference, The People say: ‘He fell victim to a classic “honey trap” operation which exploited his bisexualism.’5