The Defence of the Realm (155 page)

The First World War established as one of the enduring characteristics of the Security Service its camaraderie and
esprit de corps
, the main theme of its 1919 victory celebrations and ‘Hush-Hush' Revue. It is difficult to imagine members of Lenin's Cheka (still less of its Stalinist successors) celebrating, as the programme for the ‘Hush-Hush' Revue did, ‘the jokes and laughter and the fun' which had punctuated their intelligence careers. Ever since the First World War MI5's sociable work culture has been singled out by retired staff members as one of their main memories of the Service.
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One 1953 recruit recalls being told by a personnel officer, ‘One of the best things about working here is that the percentage of bastards is extremely low.' The aloof management style of a number of the director generals selected by ministers and Whitehall committees during the Cold War did little to diminish the sociability of the Service as a whole. Despite the dip in morale produced by the post-Cold War cutbacks, twenty-firstcentury Staff Opinion Surveys recorded some of the highest job-satisfaction ratings in either the public or the private sector.

During its first century the Security Service had to reorient itself repeatedly to new threats to national security which, in most cases, were difficult, if not impossible, to foresee. For eighty years its changing priorities were largely determined by unprecedented upheavals in the political systems of the two largest continental powers, Germany and Russia. The threat to British national security from Germany, which dominated MI5 operations for most of its first decade, declined dramatically after Germany's defeat in the First World War, the abdication of the Kaiser and the foundation of the Weimar Republic with an army limited by the Treaty of Versailles to only 100,000 men. No one in August 1914 could have predicted that in the course of the war Russia would be transformed from Europe's most
authoritarian monarchy into the world's most revolutionary regime with a following in Britain which became and remained a major preoccupation of the Service until the closing years of the Cold War. Only a few weeks before the February 1917 Revolution which overthrew the Tsar, even Lenin declared, ‘We the old [he was forty-six at the time] will probably not live to see the decisive battles of the coming revolution.' The interwar rise of Hitler was equally unpredictable. When the former British ambassador to the Weimar Republic, Lord D'Abernon, published his two-volume memoirs in 1929, the only reference to Hitler was a footnote which mentioned that he had spent six months in prison in 1924, ‘thereafter fading into oblivion'. ‘You will not think it possible, gentlemen,' the German President Field Marshal Paul von Hindenburg told two of his generals in January 1932, ‘that I should appoint that Austrian lance-corporal Chancellor.'
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Even when the former lance-corporal became chancellor (his first fulltime salaried civilian job) a year later at the age of forty-three, almost no one except Hitler himself could have foreseen that he would rapidly transform Germany into the most aggressive power in the history of twentieth-century Europe. In 1936, however, the Security Service became probably the first department of government to issue a warning that the vast territorial ambitions set out by Hitler in
Mein Kampf
should be taken seriously as a guide to his future conduct: ‘It is emphatically not a case of irresponsible utterances which have been discarded by a statesman on obtaining power.' In the aftermath of the 1938 Munich crisis Kell personally delivered to Sir Robert Vansittart at the Foreign Office what was in effect a devastating indictment of the policy of appeasement pursued by the Chamberlain government. In the light of reliable intelligence which MI5 had provided over the last few years, there was ‘nothing surprising and nothing which could not have been foreseen' about the coming of the Munich crisis. British policy during the crisis had convinced Hitler of ‘the weakness of England'. There are few more remarkable examples of an intelligence agency telling truth to power than Kell's decision to inform Chamberlain that Hitler considered him an ‘arsehole'.
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Before the Second World War, as before the First, MI5 achieved considerably more than would nowadays be expected from an agency with such slender resources. Despite having only twenty-six officers at the beginning of 1938, it had succeeded in penetrating the German embassy, the British Fascist movement and the headquarters of the CPGB. By running Major Christopher Draper as a double agent against Germany, MI5 also discovered the cover address in Hamburg used by the Abwehr agent SNOW,
whose later recruitment as a double agent marked the first step in the creation of the Double-Cross System. Both before and during the Second World War, the Security Service was less successful against Soviet than against Nazi intelligence. In particular, it underestimated Soviet success in recruiting bright young British graduates as long-term penetration agents. Lacking the budget for a major staff expansion, MI5 recruited only two recent graduates in the decade before the war (each of whom later became DG) – significantly fewer than the British graduate recruits of Soviet intelligence. Even had the Service possessed greater resources and a better understanding of the NKVD's graduate-recruitment programme, there was not much it could have done to prevent ‘Stalin's Englishmen' (as Peter Hennessy later called them) penetrating the corridors of power. The woeful state of interwar protective security in Whitehall made it a soft target. Before the outbreak of war the Foreign Office had no security officer, let alone a security department. At various times during the 1930s, as well as failing to prevent the haemorrhage of classified documents from the Rome embassy, many of which the Centre forwarded to Stalin, the FO employed at least four Soviet agents: two young diplomats (Donald Maclean and John Cairncross) and two FO cipher clerks (Ernest Oldham and Captain John King).

Intelligence agencies, like governments, need, from time to time, a measure of good fortune. So far as its operations against Soviet intelligence in the 1930s were concerned, MI5 did not have it. In the summer of 1934, at the very moment when Kim Philby, who had graduated from Trinity College, Cambridge, in the previous year, was putting the NKVD in touch with his Trinity friend Guy Burgess, MI5 was pursuing an investigation at the College. Its target, however, was not the student body but a Trinity fellow, the Russian physicist and future Nobel laureate Pyotr Kapitsa, who there was good reason to suspect (even though the suspicions were probably unfounded) was engaged in scientific and technological espionage. With limited resources, MI5 was right to concentrate on Kapitsa, who was in contact with the leading Cambridge Communist academic Maurice Dobb, rather than on Dobb's former pupil Philby. Though MI5 did not suspect any of the Cambridge Five until 1951, it came quite close before the war to catching their two leading controllers, Teodor Maly and Arnold Deutsch. During 1937, while Olga Gray was working as an MI5 agent for Percy Glading, the CPGB organizer of the Woolwich Arsenal spy-ring, she met both Maly and Deutsch. Had they remained in England, Deutsch in particular would probably have been tracked down because of his recurrent security lapses. As a result of the paranoia which swept through the Centre during Stalin's Terror, however, first Maly, then Deutsch was abruptly recalled.
By January 1939 only one NKVD officer remained in London. Kell drew the understandable but false conclusion that ‘[Soviet] activity in England is non-existent, in terms of both intelligence and political subversion.'
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He failed to make allowance for the remarkable motivation and determination of the Five and other agents even after they had been abandoned by their pre-war case officers. All the Cambridge Five went on to get jobs within the intelligence agencies or within other corridors of power, whence they provided so much classified material that the Centre sometimes had difficulty in keeping up with it.

The Second World War began badly for MI5. Kell had stayed on too long as director (longer indeed than the head of any other twentieth-century government agency or department), had forgotten the lessons of the previous war and could not cope with the huge increase in wartime work. His immediate successor, Jasper Harker, was not up to the job. Under Sir David Petrie, however, the Service entered a golden age. In the Second World War the British intelligence community produced better (and better-used) intelligence than that available to any combatant in any previous conflict. It was taken by surprise by the extent of its own success. Though the breaking of the German Enigma machine cipher has since become perhaps the best-known intelligence success in British history, at the outbreak of war the cipher was widely regarded as unbreakable – even in Bletchley Park. Frank Birch, who became head of Bletchley's naval section, was told ‘it wasn't
worthwhile
' trying to crack Enigma.
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MI5 found similar difficulty in coming to terms with the astonishing fact that, in the words of J. C. Masterman, chairman of the Twenty Committee, ‘
we actively ran and controlled the German espionage system in this country
.' But for that success, the FORTITUDE operations, the greatest deception in the history of warfare, on which the D-Day landings depended, would have been impossible. Masterman saw the Double-Cross System in the tradition of the Great Game, though – unlike Kipling – the game he had in mind was cricket. His friend, the Yale professor and wartime OSS officer in London Norman Holmes Pearson, called the Double-Cross System ‘the greatest test match of the century'. The ingenuity of the deceptions practised by B1a owed much to the sense of fun which was already a distinctive strand of MI5 culture in the First World War. ‘Breaking rules is fun,' Masterman had written before the war, ‘and the middle-aged and the respectable have in this regard a capacity for innocent enjoyment at least as great as that of the youthful and rebellious.'
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GARBO and his case officer, Tomás Harris, made such a successful partnership partly because of their shared sense of the absurd. Like
ULTRA, the Double-Cross System was one of the best-kept secrets in British history. Even Churchill was not told until the spring of 1943. While Bletchley welcomed the Prime Minister's personal interest in its work, the DG, Sir David Petrie, preferred to keep Churchill at arm's length for fear that he might try to interfere. At some point, possibly after the war, King George VI was also told. Masterman was informed that his classified report on the Double-Cross System, written in the summer of 1945, was still in the King's private despatch case at the time of his death seven years later.
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Guy Liddell was well aware, as head of counter-espionage during the Second World War, that post-war Soviet intelligence would prove a more difficult target than the wartime Abwehr. He wrote in November 1942: ‘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 investigations. They will be a great source of trouble to us when the war is over.'
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Liddell did not suspect, however, that the areas where Soviet intelligence was ‘well bedded down' included the intelligence community. With very few exceptions (of whom Hollis was the most notable), Anthony Blunt was popular with staff at all levels of the Security Service. Liddell was so impressed by Guy Burgess, who was recruited by Blunt as an MI5 agent, that he would have liked him to become an officer. As a wartime SIS officer, Kim Philby too successfully ingratiated himself with MI5 both by the use of his considerable personal charm and by claiming to have told the head of SIS Section V, Felix Cowgill, that he had been ‘quite wrong' to withhold some Abwehr decrypts from MI5. When Philby, by then head of Section IX, was posted abroad late in 1946, Liddell was ‘profoundly sorry' to see him go.

But if MI5 misjudged the Five, so did the Centre. Though the Soviet Union had an unequalled ability before and during the Second World War to attract to its intelligence services well-educated ideological Western agents seduced by the myth-image of Stalin's Russia as the world's first worker-peasant state, it was not, as Liddell believed, ‘far better in the matter of espionage than any country in the world'. Soviet agent-running during and immediately after the Second World War was less sophisticated than it later became. Much of what the Five achieved was in spite, rather than because, of their handling by the Centre. The KGB later concluded that they were the ablest group of foreign agents in its history. During the Second World War, however, the Five increasingly fell victim to the paranoid tendencies of the Stalinist intelligence system. In October 1943 the Centre informed its London residency that it was now clear that all along
the Five had been double agents, working on the instructions of SIS and MI5. There were few more farcical moments in the history of Soviet intelligence than the Centre's decision to despatch to London an eight-man surveillance team, none of whom spoke English, to trail the Five and other supposedly bogus agents in the hope of discovering their meetings with their non-existent MI5 case officers. Perhaps to compensate for the failure of this impossible mission the team misidentified some of the visitors to the Soviet embassy in London as suspected MI5 agents provocateurs. The Five were not officially absolved of the charge of being British deception agents until after the D-Day landings. MI5's subsequent failure to recognize the gap between the outstanding achievements of the Five and the sometimes dismal quality of the Centre's management of them hampered its investigation of the case, which was not fully resolved until almost half a century after Philby's recruitment.

Many Labour MPs elected in the landslide victory of 1945, who were unaware of the still classified triumphs of the Double-Cross System, viewed MI5 with suspicions dating back to the Zinoviev letter of 1924, which they blamed for the fall of Ramsay MacDonald's first Labour government. Once the former chief constable Sir Percy Sillitoe became DG, however, Clement Attlee placed more confidence in MI5 than in some of his cabinet ministers, whom he excluded from the decision to build a British atomic bomb on the grounds that they ‘were not fit to be trusted with secrets of this kind'. It was Attlee who began the tradition that after every general election MI5 informs the incoming prime minister if there is evidence that anyone nominated for ministerial office is a security risk. Unlike subsequent prime ministers, he also asked to be informed of any sign of subversion among ministers' families. Attlee had more frequent personal meetings with Sillitoe than any other prime minister had with the DG during MI5's first hundred years. Sillitoe was instructed to inform Attlee whenever the Service had information that any MP of whatever party was ‘a proven member of a subversive organisation'. Though very little record survives of matters discussed when Sillitoe called at Number Ten, in 1947 Attlee told the DG he had no doubt that the Labour MP Stephen Swingler ‘was a C.P. member'. Attlee almost certainly also mentioned other ‘crypto-Communists' on Labour benches. Morgan Phillips, general secretary of the Labour Party during the Attlee government, kept a ‘Lost Sheep' file on pro-Soviet MPs such as Swingler.
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In 1961, after Labour had been out of power for ten years, Attlee's successor as Party leader, Hugh Gaitskell, following discussion with his closest associates, decided to give MI5 a list of sixteen Labour MPs who, they believed, ‘were in effect members of the
CPGB . . . or men under Communist Party direction', as well as the names of nine ‘possible' crypto-Communists. The DDG, Graham Mitchell, declined even to discuss the list, on the grounds that MI5 records ‘could be used only in the interests of the security of the realm as a whole' – and not to assist any political party.
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The Service has maintained that position ever since.