Empire of Secrets: British Intelligence, the Cold War and the Twilight of Empire. Calder Walton

the Younger: ‘Necessity is the plea for every infringement of human freedom.’

      ALLIES AND ENEMIES: BRITAIN AND THE USSR

      If the greatest wartime successes of the British secret state were against its enemies, the Axis Powers, its greatest failure was its inadequate surveillance of its ally, the Soviet Union. Britain’s intelligence services – MI5, SIS and GC&CS – were not blind to the Soviet threat during the war, even after June 1941, when the two countries became allies. As early as 1942, Guy Liddell, the chain-smoking wartime head of MI5’s B-Division, was sombrely noting in his diary, which he dictated to his secretary at the end of every working day:

      There is no doubt that the Russians are far better in the matter of espionage than any country in the world. I am perfectly certain that they are well-bedded down here and that we should be making more active enquiries. They will be a great source of trouble for us when the war is over.⁶²

      The problem for the British intelligence community was that investigating an ally was an extremely delicate matter. Liddell noted in his diary in 1943 that if MI5 did try to investigate the Soviet threat, which he increasingly felt was necessary, but got found out, there would be ‘an appalling stink’. As soon as the Soviet Union entered the war in June 1941, the Foreign Office placed an embargo on all British intelligence-gathering efforts on it. Apparently allies do not spy on allies – an honourable, but totally naïve, assumption when it came to the Soviet Union. We now know from Soviet archives that Moscow devoted as many resources to gathering intelligence on its wartime allies, Britain and the United States, as it did on its enemies, the Axis Powers.⁶³

      Despite Britain’s intelligence services effectively having their hands tied by the Foreign Office in terms of spying on Moscow after June 1941, they tried to devise ways around the embargo. GC&CS concocted an ingenious method of sidestepping the ban, using intercepted German communications that discussed Soviet matters to gain information. MI5 also undertook measures to continue investigating the Soviet threat, opening a new department, F-Division, to investigate ‘subversive activities’ – the main focus of which was communism and Soviet activities. F-Division was led by Roger Hollis, a pre-war entrant to MI5 recruited from a tobacco firm in the Far East, who had left Oxford before taking his degree – he was described by Evelyn Waugh as a ‘good bottle man’ at Oxford. As we shall see, Hollis went on to become a Director-General of MI5, and was falsely accused of being a Soviet agent. In reality, he, arguably more than anyone else in the British intelligence community, took seriously and attempted to investigate wartime Soviet espionage, arguing that the leopard had not changed its spots. Rather than the Soviet embassy in London, which was now a forbidden fruit, the main priority for Hollis’s F-Division was surveillance of the British Communist Party. This was never going to be sufficient to detect Soviet espionage, for Soviet agents knew to distance themselves from overt communist organisations, but given the restrictions imposed on F-Division, it was the only legitimate avenue left open to it. One of Hollis’s personal triumphs was in 1942, when he organised the installation of bugging equipment in the headquarters of the British Communist Party in King Street, London. These eavesdropping microphones, codenamed source ‘Table’ or ‘special facilities’ in MI5 records, were almost certainly telephone receivers modified so as to be always switched on, thus picking up ambient conversations. As we shall see, they would provide MI5 with crucial intelligence in the post-war years about various anti-colonial ‘liberation’ leaders who communicated with the British Communist Party.⁶⁴

      Towards the end of the war, SIS also started to focus on the Soviet threat. In 1944 it set up a new department, Section IX, the precise remit of which was the ‘collection and interpretation of information concerning Soviet and communist espionage and subversion in all parts of the world outside of British territory’. Unfortunately, the second head of Section IX (after John ‘Jack’ Curry, seconded from MI5 to SIS) was none other than the high-level Soviet penetration agent Kim Philby. Philby was arguably the most successful of the five so-called ‘Cambridge spies’ – the others were Guy Burgess, Donald Maclean, Anthony Blunt and John Cairncross – who had been recruited by Soviet intelligence before the war and then manoeuvred themselves into sensitive positions in the British wartime administration, including its intelligence services, by portraying themselves as trustworthy members of the Establishment – four of the five went to Trinity College, Cambridge. In fact, because so few pre-war MI5 and SIS officers had university degrees – most had military backgrounds, often with colonial experience – the perverse situation was that at the start of the war Soviet intelligence actually had more recruits from British universities working for it than Britain’s own intelligence services did. Coupled with their respectable backgrounds, another reason Philby and the other members of the ‘Cambridge Five’ were able to penetrate to the heart of wartime Britain was that MI5’s background checks at the time were totally inadequate: they were based on a process called ‘negative vetting’, meaning that they depended on whatever information MI5 had in its Registry. It did not carry out its own active background checks. This process overlooked a simple fact: that it was possible for agents to make themselves invisible to MI5 by deliberately distancing themselves from organisations whose membership would lead to their names being filed in its Registry – which is exactly what the five Cambridge spies did.⁶⁵

      The story of how Philby got himself appointed as the head of Section IX is the epitome of deception and subterfuge. By a process of skilfully outmanoeuvring his rivals, particularly his immediate superior, Felix Cowgill, and playing one faction in SIS off against another, he made himself the most obvious candidate for the post. As one of Philby’s wartime colleagues in SIS, Robert Cecil, later recalled of his appointment, ‘the history of espionage contains few, if any, comparable achievements’. From his position as the second head of Section IX, Philby was able to betray all of the most important British efforts to counter Soviet espionage in the immediate post-war years to Moscow. In the years to come he would establish himself as Whitehall’s leading expert on Soviet espionage. Before his eventual exposure in the early 1950s, he was even being tipped as a future Chief of SIS – the consequences of which for Western intelligence in the Cold War can scarcely be imagined. The post-war diaries of MI5’s Guy Liddell, only declassified in October 2012, show that he struggled to come to terms with the defection of Burgess and Maclean, and the suspicion cast upon Philby, whom he trusted. Philby has justifiably been described as the greatest spy in history.⁶⁶

      HORIZON SCANNING

      As Britain’s wartime intelligence machine began to refocus on the Soviet threat, one area provided more information than anywhere else about the operational methods used by Soviet intelligence. From 1940 onwards, the two states of Iraq and Persia (Iran) were jointly occupied by British and Soviet forces, and this led to exceptionally close collaboration between the two Allied intelligence services. Iran’s capital Tehran was also the setting in November 1943 of the famous meeting of the ‘Big Three’, Churchill, Roosevelt and Stalin, which symbolised, at least outwardly, the collaboration between the Allies. However, as Churchill later claimed, it was in Tehran that he realised for the first time how small the British nation was:

      There I sat with the great Russian bear on one side of me, with paws outstretched, and on the other side the great American buffalo, and between the two sat the poor little English donkey …⁶⁷

      From late 1944 onwards the British collaborated with Soviet intelligence in running a double agent, codenamed ‘Kiss’ – one of only two double agents run by British and Soviet intelligence together during the war, the other being Silver (see pp.50–3). Kiss, an Iranian national recruited by the Abwehr in pre-war Hamburg, was run from the inter-service British intelligence centre based in Baghdad, Combined Intelligence Centre Iraq (CICI). Under the guidance of his British and Soviet controllers, he radioed false information on British and Soviet troop movements in Iraq and Iran to the Abwehr. However, the real importance of the Kiss case, as is revealed by his MI5 file, was the proximity it gave British officials to their Soviet counterparts, allowing them to study their methods at close quarters – as the Soviets doubtless did to the British too. MI5’s DSOs in Tehran and Baghdad used the opportunity to gather as much information as they could on their Soviet opposite numbers, particularly