The Defence of the Realm (72 page)

In January 1949 Attlee announced that, under the Purge Procedure, eleven government officials had been removed from sensitive work. Though ten had Communist connections, the eleventh – no doubt to the Prime Minister's relief – was found to be a Fascist, thus reinforcing official claims that the procedure was even-handed.
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By September the Purge Procedure had acquired still greater importance. ‘The event of the year', Liddell wrote later, was the first Soviet atomic test,
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about two years earlier than had been expected in Washington and London, which ended the US nuclear monopoly and began a new and much more dangerous phase in the Cold War. On 3 September a US weather-reconnaissance aircraft detected abnormally high levels of radiation over the North Atlantic. Over the next week the US Air Force and Royal Air Force together tracked the radioactivity as it was blown at high altitude across North America and the Atlantic towards the United Kingdom.
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The discovery was announced to the JIC by its Foreign Office chairman, William Hayter, under what Liddell described as ‘a melodramatic bond of secrecy':

Hayter cleared the room of secretaries and then said if there was anyone present who could not keep what was going to be said to himself, would he kindly leave the
room . . . It was then announced by [Sir Michael] Perrin of atomic energy that the explosion of an atomic bomb had occurred in Russia, it is believed somewhere in the vicinity of Lake Baikal.
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Though Liddell, like the rest of the JIC and the Prime Minister, wanted to keep the news secret,
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Truman announced publicly on 23 September that ‘We have evidence that within recent weeks an atomic explosion occurred in the USSR.' The shock caused by the Soviet Union's sudden emergence as a nuclear superpower was heightened by the triumph of Communism in the most populous state on earth. On 21 September Mao Zedong announced the establishment of the People's Republic of China.

For the small group of those on either side of the Atlantic with access to VENONA the news of these two Communist triumphs coincided with the discovery from newly decrypted Soviet telegrams that plans of the first US atomic bomb had been betrayed to Soviet intelligence late in the Second World War by a British scientist, codenamed successively REST and CHARLES. The FBI quickly concluded that the scientist was the Germanborn Klaus Fuchs, who, unlike Alan Nunn May, had been at the heart of the MANHATTAN atomic project at the Los Alamos laboratories in the New Mexico desert and was currently working at Harwell.
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Though the Security Service also considered the possibility that the Soviet agent might have been Fuchs's Harwell colleague Rudolf Peierls, who had a Russian wife, Liddell noted on 20 September that the odds were ‘heavily on Fuchs'.
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The case was particularly embarrassing for the Security Service since Fuchs had previously been vetted by the Service on three separate occasions: before joining the British TUBE ALLOYS atomic project in 1941, the MANHATTAN project in the United States in 1943 and Britain's postwar atomic project in Harwell in 1947. On the last occasion there was a division of opinion within the Service. C Division, which was responsible for vetting, concluded that Fuchs was a serious potential security risk who should be immediately removed from atomic research. Some of the leading officers in B Division (counter-espionage) – among them Dick White, Roger Hollis and Graham Mitchell – argued that, on the contrary, the evidence against Fuchs was purely circumstantial and was outweighed by outstanding references from two of Britain's leading physicists, Professor (Sir) Neville Mott, a future Nobel Laureate, and Professor Max Born. The case was passed up to the DDG, Guy Liddell, who ordered a further investigation and obtained HOWs on both Fuchs and Peierls. When no further evidence against either emerged from the 1947 investigation, Liddell had concluded that ‘we have no case on which to make any adverse recommendation.'
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As was not uncommon with academic references, however, Mott had been economical with the truth. He later recalled how, while he had supervised Fuchs's research at Bristol University in the mid-1930s, Fuchs had enjoyed playing the part of the chief prosecutor, Andrei Vyshinsky, in dramatized readings of the Stalinist show trials, ‘accusing the defendants with a cold venom that I would never have suspected from so quiet and retiring a young man'.
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The receipt of the VENONA evidence of Soviet atomic espionage at Los Alamos by the Security Service on 12 September 1949
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prompted renewed and more intensive surveillance of Fuchs. His telephones were tapped and his correspondence intercepted at both his Harwell home and office, and many letters tested for secret ink. Concealed microphones were installed in Fuchs's home in Harwell, and three B Division officers relayed daily surveillance reports by scrambler telephone from a Newbury hotel to Head Office.
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Fuchs was tailed by B4 surveillance teams, who reported that he was a ‘bad driver' and difficult to follow.
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Though much was discovered about Fuchs's private life, including his affair with the wife of his line manager,
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the investigation failed to produce any evidence of espionage. Fuchs had, however, told the Harwell security officer, Henry Arnold, that his father had been offered an academic post in Communist East Germany (which he accepted soon afterwards). Liddell therefore thought that the most practicable solution would be to tell Fuchs ‘with the deepest regrets that it would be embarrassing both for us and for him if he remained any longer in atomic energy, but that we would do our utmost to find him other suitable employment'. Sillitoe, by contrast, remained anxious to secure a conviction.
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The only hope of a successful prosecution depended on using the information about Fuchs's espionage contained in the VENONA decrypts to persuade him to confess.
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When Skardon began his interrogation on 21 December, Fuchs flatly denied that he had given the Russians any information.
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Skardon's persistence, however, eventually made a successful prosecution possible. Instead of following normal procedure and attempting to achieve a speedy breakthrough, he correctly judged that Fuchs was more likely to confess once his confidence had been won. Had the strategy failed, Skardon might well have been severely criticized for his dilatory approach. At the beginning of his fourth meeting with Fuchs on 24 January 1950, this time at Fuchs's Harwell home, Skardon himself must have wondered whether he had made the right decision. Fuchs began the meeting by saying, ‘I will never be persuaded by you to talk.' After lunch, however, he abruptly changed his mind, told Skardon that ‘he had decided
it would be to his best interests to answer my questions'
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and admitted giving the Russians ‘all the information in his possession about British and American research in connection with the atomic bomb'.
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In the hope that Fuchs would provide leads to other spies, Skardon decided not to arrange with Special Branch for his immediate arrest. Fuchs was so reassured by Skardon's manner that he mistakenly believed that he would be allowed to remain at Harwell ‘or, as a possible second best, obtain . . . a senior university post'.
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Instead, on 1 March, Fuchs was sentenced to fourteen years' imprisonment. According to Chapman Pincher's sensational account of the trial, ‘In 90 minutes at the Old Bailey yesterday, a riddle was solved: How did Russia make the atomic bomb so quickly? Dr Klaus Emil Julius Fuchs . . . gave them the know-how.' What Fuchs had failed to realize was that, but for his confession, there would have been no case against him. Skardon's knowledge of his espionage, which had so impressed him, derived from SIGINT unusable in court.

Fuchs's conviction alarmed the leadership of the British Communist Party (CPGB), which feared damaging publicity about his links with other British Communists and was immensely relieved when the press failed to pick up the story. Security Service eavesdropping devices in the Party headquarters overheard the following conversation between the Party's industrial organizer, Peter Kerrigan, and Reuben Falber, later CPGB assistant general secretary:

PETER KERRIGAN (reading, apparently from press report): ‘He [Fuchs] seemed to have taken no active interest in politics in this country, nor is [he] known at any time to have associated with British members of the Communist Party in this country.' That's a bloody let-off!

REUBEN FALBER: Phew!
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The Fuchs case led to a crisis in the Special Relationship. Already critical of British security, J. Edgar Hoover took it as a personal affront that, for legal reasons, Fuchs's statements, which were formal evidence for the prosecution, could not be made available to the FBI until his trial was over. He was further enraged by the Home Office's refusal to allow a Bureau representative to visit Fuchs after his conviction, largely for fear that he might disturb the close relationship between Fuchs and Skardon. Hoover informed London that he was ‘outraged at the lack of cooperation by the British Government and MI5 on the Fuchs case'. A bitter controversy followed. The SLO in Washington, Geoffrey Patterson, reported that he had had ‘some interesting interviews' with Hoover: ‘At times I feel like a sandwich – a very small bit of chewed meat between two crusts.' Lish
Whitson, the unfortunate FBI officer who had been despatched to London in an unsuccessful attempt to interview Fuchs, was summoned back in disgrace. On his return he discovered that his name-plate had been removed from his office door and that he had been posted out of Washington.
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During a visit to London on 27 March 1950, the SIS representative in Washington, Kim Philby, told Liddell (and, doubtless, the KGB) that Hoover remained adamant the FBI must interview Fuchs: ‘He was afraid that if it could not be agreed, Hoover was quite capable of reducing our liaison to a pure formality, regardless of the loss that it might be to his own organisation.'
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After Patterson sent a similar warning from Washington, Sillitoe called on Attlee to emphasize the importance of resolving the dispute, which might put the prospects for renewed atomic co-operation as well as intelligence liaison at risk, by allowing the Bureau access to Fuchs.
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The Home Office gave way, and two FBI officers, Hugh Clegg and Robert Lamphere, arrived to interview Fuchs on 19 May. Sillitoe, however, then revived the dispute by complaining to the FBI officers about the behaviour of the Bureau and delivering what Clegg claimed was a ‘dressing down'. A further furious correspondence with Hoover followed, and Patterson reported that he was being ‘officially boycotted'. The dispute calmed down in the autumn of 1950 after a ceremony at the Washington embassy in which Hoover was invested with an honorary KBE.
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The success of the FBI interview with Fuchs also helped to improve relations with the Security Service. Information from Fuchs made it possible to identify his most important Soviet intelligence contact in the United States as the industrial chemist Harry Gold, who provided further evidence on the Rosenberg spy-ring and other Soviet agents in America.
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As well as adding to the tensions of the early nuclear age, the Fuchs case produced pressure for active investigation – ‘positive vetting' – of those with access to important classified information, in addition to the usual checks based on Security Service files. After a discussion at the Cabinet Committee on Subversive Activities (GEN 183), chaired by the Prime Minister, on 5 April 1950, Attlee appointed a Committee on Positive Vetting under the senior Treasury official John Winnifrith, ‘to consider the possibility of listing a limited number of posts in regard to which positive vetting could be undertaken and to assess the risks and advantages of embarking upon any such system of positive enquiry'.
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The Security Service found itself in a dilemma. On the one hand it believed in the need ‘to make more searching enquiries' about those engaged in important secret work. On the other hand it continued to fear being overwhelmed by an expansion of the vetting system. Sillitoe told GEN 183 that if MI5 ‘were asked to undertake, either direct or
through the police, positive enquiries about the persons referred to them [by service departments], then even the numbers coming from the headquarters staffs would be far more than they could cope with'.
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Soviet atomic weapons, noted Liddell on New Year's Day 1950, had ‘thrown everyone's calculations out of date', and ‘would necessitate the revision of all former JIC assessments'. Within seven years, he forecast, ‘the Russians should have sufficient atomic bombs to blot this country out entirely.'
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The JIC feared that the Soviet Union might attempt a surprise nuclear attack much earlier. On 12 June 1950 it considered the nightmare scenario of a Soviet atomic weapon being smuggled into Britain and detonated in a densely populated area. The JIC believed that it would be comparatively easy for a Soviet atomic weapon to be broken down into its component parts, smuggled undetected into Britain on board a merchant ship, reassembled in as little as twenty-four hours, and detonated by remote control or time delay.
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Such fears were heightened by the unexpected outbreak of the Korean War less than a fortnight later. Communist North Korea's invasion of the South in the early hours of 25 June was as big an intelligence surprise as Pearl Harbor.
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In its early stages there seemed a real prospect that it might herald a Third World War. A secret committee in the Ministry of Defence (MoD) with the misleadingly innocuous title of the Imports Research Committee, examined the possibility of a Soviet atomic bomb being detonated ‘in a “suicide” aircraft flying low over a key point', such as London. Though less likely than a bomb arriving by ship: