The Defence of the Realm (50 page)

The success of the Double-Cross System depended not merely on capturing all, and turning some, of the Abwehr agents landed in Britain, but also on preventing the emergence of an alternative base for German espionage. The best potential base was the London embassy of Fascist Spain, where a number of pro-Nazi diplomats protected by diplomatic immunity were willing to spy for Germany in association with other Spaniards in London. Had the embassy become a successful base for German espionage, the intelligence collected would at some point have contradicted, and therefore risked compromising, the disinformation supplied by the double agents. The fact that Spanish espionage in the German interest achieved little of significance was due in large part to the Security Service's successful penetration of the embassy. The Service discovered that it was up against mostly low-grade, somewhat eccentric opposition, and that embassy security was gratifyingly weak.

The first breakthrough into what MI5 believed was ‘the heart of the Spanish espionage network' came as the result of an SIS lead in the autumn of 1940. On 27 September Miguel Piernavieja del Pozo arrived in London on an espionage mission, posing as a journalist and observer for the Spanish Instituto de Estudios Politícos; he achieved instant notoriety by publicly forecasting a German victory. Shortly afterwards, following an SIS report that del Pozo was a German agent, the Security Service obtained an HOW on him. His intercepted phone calls and correspondence, combined with B6 surveillance, led MI5 to categorize him as ‘a dissolute and irresponsible young man, aged 26, of the playboy type', who had little or no knowledge of journalism, of the Instituto de Estudios Políticos, or – it soon transpired – of espionage. Del Pozo greatly simplified MI5 surveillance by writing to GW, the double agent whom the Abwehr believed was a fanatical Welsh nationalist recruited for them by SNOW. With the agreement of the Security Service, GW met del Pozo on 10 October at his flat in Athenaeum Court, Piccadilly. To his surprise, del Pozo handed him a talcum-powder tin containing £3,500 in large-denomination banknotes, over £100,000 at current values and probably the largest sum yet handed to a twentiethcentury British agent (other than funds intended for the Communist Party
and other organizations). Part of this large sum, GW was told, was for his own personal use; part was to be held in safe-keeping for del Pozo and returned to him as and when required. GW was instructed to send weekly reports on the activities of the Welsh Nationalist Party and on arms and aircraft production to the hall-porter at the Spanish embassy, who would forward them to del Pozo.
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Del Pozo revealed to GW at one of their regular meetings that he took his orders from a more senior Abwehr agent, Angel Alcázar de Velasco (a close friend of Franco's pro-Nazi Foreign Minister, Ramón Serrano Suñer), who, despite knowing no English, was posted to the London embassy as press attache in January 1941. According to a Security Service assessment:

Alcázar is a most remarkable character. He is of gipsy extraction and, as a boy, worked as a bootblack in Madrid. He was extremely ambitious and in order to earn money to educate himself he became a bullfighter. He joined the [Fascist] Falange at its inception and claims that his first real step-up in politics was his assassination of [a] Republican police officer . . .

By sheer force of personality, this self-educated ex-bullfighter immediately dominated and terrorised the Spanish colony [in London] and Embassy personnel – with the single exception of the Duke of Alba [the ambassador]. He behaved in a manner which, had he been a less formidable figure, would have made him ridiculous. He went to an interview at the Foreign Office wearing Falange uniform; he accepted hospitality at smart London clubs and insisted on paying for the drinks; he ate fish with his fingers at the Savoy; he gave a demonstration of bull fighting technique at the Turkish baths. The acutely embarrassed Spanish diplomats adapted themselves as best they might to the role of yes men, fearing Alcázar's power in Madrid. In addition he made no attempt to conceal his strong pro-German feelings and his desire for an Axis victory.

By the time Alcázar arrived in London, del Pozo, according to Security Service surveillance, ‘was devoting his time almost exclusively to the girls at the Café de Paris and acquired such a reputation as a drunkard, waster and buffoon' that in February he was recalled to Spain. Alcázar returned temporarily to Madrid in the same month. Though the Security Service asked for him to be declared
persona non grata
, the Foreign Office was reluctant to do so for fear of retaliation against British embassy staff in Madrid. It did, however, adopt delaying tactics which prevented Alcázar's return to London until July 1941.
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In May 1941, in an attempt to discover the extent of Spanish espionage in Britain in the Nazi interest, MI5 instructed GW to renew contact with the embassy porter to whom he had previously sent reports destined for
del Pozo. In Alcázar's absence the porter put GW in touch with Luis Calvo, a leading Spanish journalist. At his first meeting with GW, Calvo revealed that he was using journalism as a cover for espionage. ‘You and I', he told GW, ‘are going to work very well together,' and boasted that on a recent trip to North Wales he had obtained ‘very useful information' on aircraft factories and aerodromes. B1g, which was responsible for countering Spanish espionage, believed that, but for GW, ‘it is at least doubtful whether we should have got on to Calvo at all, and certain that we should not have learned about him so soon.' Other counter-espionage successes followed. B1g commented: ‘It is a remarkable fact that in the few months between September 1941 and the middle of February 1942, we . . . gained not only a general outline but a fairly precise picture of the [Spanish] Espionage network in this country . . .'
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The B Division officer most actively concerned with the penetration of neutral embassies, particularly those most likely to assist the enemy, was Anthony Blunt. As Blunt informed Soviet intelligence, MI5 port security officers ‘were able to get hold of many [diplomatic] bags which were being carried out by couriers':

In some cases . . . it was possible to persuade the courier – extraordinary though it may seem – to put his bag in the care of the security officer at the port rather than leave it in the hotel overnight. This method works particularly well with the Spaniards and the Portuguese who go out from Poole or Bristol to Lisbon.
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Within neutral embassies, Blunt informed Moscow, MI5's best agent was an employee in the Spanish embassy who ‘gets us cipher tape, clear versions of cipher telegrams, drafts of the ambassador's reports, private letters, notes on dinner parties and visitors, and general gossip about members of the embassy'.
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In December 1941 the employee was recruited as Agent DUCK. A post-war B1g report described DUCK as ‘of inestimable value' with wide-ranging access to diplomatic documents, thanks to the fact that, ‘Most fortunately for us, the security arrangements in the Embassy were nil.'
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In January 1942
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and on at least two subsequent occasions,
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DUCK was able to walk out of the embassy with the current Spanish diplomatic cipher tape in a bag to hand over to an MI5 car waiting around the corner. Each cipher tape remained in use for some months, thus enabling GC&CS to decrypt communications between the embassy and Madrid. Another agent inside the embassy, run by Maxwell Knight's section, sometimes let in Security Service staff through a window on nights when acting as firewatcher for ‘a little discreet burglary'.
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As with counter-espionage operations against Germany and the running
of the Double-Cross System, SIGINT was also crucial in revealing the activities of Spain's London embassy. In January 1942 decrypted telegrams from the Japanese ambassador in Madrid to Tokyo revealed that Alcázar claimed to be running a twenty-one-man agent network in Britain. Reports from some of the agents were cited in ISOS decrypts of reports to Berlin from the Abwehr station in Madrid. Only two of the agents were Spanish: Luis Calvo and an unnamed individual whom the Service believed must be the Spanish embassy porter contacted by GW. Calvo, who, unlike Alcázar, had no diplomatic immunity, was arrested on 12 February and quickly admitted his dealings with GW.
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He was able to throw little light on most other members of Alcázar's spy-ring, some of whom were identified by B1a as fictitious sub-agents of GW which it had invented to deceive the Abwehr. The Service gradually realized that Alcázar's other agents were his own fraudulent inventions. He later admitted to SIS that for two years he earned about £4,000 a month by selling bogus intelligence to the Japanese as well as the Germans, some of it from another non-existent spy-ring in the United States At one point, on Alcázar's instructions, his secretary even succeeded in selling some of his fabricated intelligence reports to the SIS Madrid station.
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The Spanish embassy in London, however, no longer represented any potential threat to the Double-Cross System.

2

Soviet Penetration and the Communist Party

On 4 September 1939, the day after Britain declared war on Germany, deeply depressing intelligence on Soviet agent penetration arrived at the Foreign Office. The PUS, Sir Alexander Cadogan, received what he described as a ‘very unpleasant' telegram from the British chargé d'affaires in Washington, Victor Mallet, which gave ‘a line on the “leaks” of the last few years'.
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The telegram contained allegations of Soviet penetration made to Mallet by the American journalist Isaac Don Levine, who had collaborated with the Soviet intelligence officer Walter Krivitsky, who had defected to the United States, in a series of sensational magazine articles. Krivitsky, Levine revealed, knew of two major Soviet agents operating in London: ‘One is King in the Foreign Office Communications Department, the other is in cypher department of Cabinet Offices but name unknown.' According to Krivitsky, King was ‘selling everything to Moscow'. The other agent had bought forty or fifty planes for the Republican side in the Spanish Civil War. Mallet reported:

Krivitsky knows his name, I understand, but likes him and so far won't tell it, because the man was not acting for mercenary motives but through idealism and sympathy for the ‘loyalists' [Republicans] and may now be on our side owing to Stalin's treachery. This man is a Scotsman of very good family, a well-known painter and perhaps a sculptor. He was sent on a trip ostensibly to Holland with his wife and mother-in-law whom he left there and then went on to Yugoslavia where he bought the planes and arranged for their transfer to Spain.
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Though Krivitsky's description of the second agent, as reported by Levine, turned out to be confused and misleading, the agent in the Foreign Office Communications Department was quickly identified as the cipher clerk Captain John King. Cadogan asked Jasper Harker and Colonel Valentine Vivian, head of Section V (counter-espionage) in SIS, to conduct a joint investigation and was shocked by the ‘awful revelations of leakage' which they uncovered.
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Initially, however, it seemed unlikely that there
would be enough admissible evidence for a prosecution.
⁴
On 25 September Harker and Vivian subjected King to ‘a “Third Degree” examination' (psychological pressure rather than physical brutality).
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Cadogan wrote in his diary next day: ‘I have no doubt he is guilty – curse him – but there is no absolute proof.' Unaware of the legal limitations of the evidence against him, King cracked under further interrogation. At a trial in camera at the Old Bailey in October, kept secret for the next twenty years, King was sentenced to ten years' imprisonment. Harker and Vivian suspected others in the Communications Department, but failed to find enough evidence for prosecution. Two officials, however, were dismissed for ‘irregularities'. Cadogan agonized for the remainder of the year about how to remedy the appalling breaches of security uncovered by Harker and Vivian. ‘I
shall
be glad when it's over!' he wrote despondently on 30 November. The Foreign Secretary, Lord Halifax, decided that he had no option but to move all the existing members of the Communications Department to other jobs and bring in fresh staff. Halifax broke this ‘most painful' news to the Department on 1 December and, in Cadogan's view, ‘he did it very well.'
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Despite the accuracy of Krivitsky's intelligence on Captain King, Harker correctly concluded after investigation that, at least as reported by Levine, Krivitsky's information on the second Soviet agent was seriously garbled. He told the Foreign Office on 8 November: ‘We know the identity of the man who bought the aeroplanes for Spain, whom we believe not to be identical with the Scottish artist and idealist, who is a totally different person.'
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On 10 November Jane Archer (née Sissmore),
⁸
the Security Service's main Soviet expert, wrote to Vivian, ‘Personally, I am convinced from [Krivitsky's] articles, and the scraps of information that Levine has obtained from Krivitsky and given to our Ambassador in Washington, that if we wish to get to the bottom of Soviet military espionage activities in this country, we must contact Krivitsky.'
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Harker agreed. He told the Foreign Office on 20 November, ‘It is imperative that Krivitsky should be seen as early as possible.'
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Next month Krivitsky accepted an invitation to visit Britain.

By the time Krivitsky landed at Southampton in January 1940 under the alias ‘Mr Thomas', he had begun to suspect that he was walking into a trap. He was welcomed by a Russian-speaking Security Service officer, Major Stephen Alley, who invited him to tea. Because of wartime shortages, there was no sugar and Alley offered him a saccharine tablet. As Guy Liddell noted afterwards, Krivitsky ‘sheered right off this, obviously thinking it was dope or poison'.
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To try to put him at his ease, Harker, Archer and Vivian began the questioning on 19 January 1940 not in a Whitehall office
but in the relative comfort of his room at the Langham Hotel in Portland Place. The debriefing, however, began badly: ‘He obviously feared lest any admission from him of participation in Soviet espionage activities against the United Kingdom would lead to a “full examination” as understood by citizens of the U.S.S.R.'
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Krivitsky eventually admitted that he was aware of a Soviet intelligence network operating in Britain, but ‘was very anxious to point out that he himself was not responsible for the direction of activities against the U.K.', and wanted ‘to know what action we would take on his information, as he was convinced that anything we did in the way of arrests, etc., would at once be attributed by the Soviet Government to his activities'. Harker and Vivian assured Krivitsky that he would not have to give evidence in court and that whatever he told them ‘would be treated as regards its source with absolute confidence'.
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