After months of dispute over purposes and responsibilities, the Bureau was sub-divided. The home section, which was known as MI5 from 1915 and also after 1931 as the Security Service, was given the purview of counter-espionage, counter-subversion and counter-sabotage in Britain and its overseas territories. The foreign section, known as the Secret Intelligence Service (SIS or MI1c, also later as MI6) was charged with collecting human intelligence (HUMINT) from non-British territories. In addition, Indian Political Intelligence (IPI) was formed to monitor the activities of Indian nationalists, revolutionaries and anarchists and their allies not only in Britain but across Europe. There were also three divisions of Scotland Yard’s Special Branch, which had been formed in 1883 in response to Irish dynamite attacks in London. A draconian Official Secrets Act of 1911 was a further signal that national security was being treated more systematically, and also being kept determinedly from informed public comment.
Vernon Kell, the first Director of MI5, was a graduate of the Royal Military Academy at Sandhurst, whose father had been an English army officer and whose maternal grandfather was a Polish army surgeon. After his parents’ divorce, he travelled widely in Europe with his mother, visiting exiled members of her family and mastering French, German and other European languages. The War Office in the late 1890s posted him to Moscow and Shanghai to learn Russian and Chinese. There was no insularity about this multilingual man of action. He had the type of keen, alert efficiency that allows no time for showiness. The great hindrance to his work was that he had funds for only a small staff. Sir Edward Grey, Foreign Secretary when European war erupted in 1914, said with revealing naivety: ‘if we spend anything on Secret Service, it must be very trifling, because it never comes to my knowledge’. As Lord Eustace Percy noted, the ‘Secret Service’ account at the Office was devoted to the financial relief of impoverished British subjects overseas.24
There was a clear understanding by the new intelligence services of the benefits of watch-and-learn. In 1911 Heinrich Grosse was convicted of spying on the Royal Navy at Portsmouth, but the network of which he was part was left all but undisturbed. Identities were established, addresses, correspondence and activities were monitored. One or two individuals were arrested, when it was considered unavoidable, but the majority were allowed to continue transmitting inaccurate material. ‘In other words, we just played them,’ recalled Superintendent Percy Savage of Scotland Yard. Karl Ernst, a hairdresser at King’s Cross, who acted as the postbox for this spy network, was arrested in the first round-up of German agents in August 1914. Once the two nations were at war, it was no longer safe enough to keep him under surveillance: he had to be detained.25
England’s cabinet noir for intercepting and reading private and diplomatic correspondence, the Decyphering Branch, had been abolished in 1844 after parliamentary protests at the opening of the correspondence of the exiled Italian nationalist Giuseppe Mazzini and the sharing of their contents with the Austrian and Neapolitan governments. Perlustration was not resumed for seventy years. At the outbreak of hostilities in 1914, the Post Office (which was a government department, headed by a minister, the Postmaster General) employed a single censor intercepting, opening, reading and resealing suspect letters. By the Armistice in 1918 the Censor’s Office employed over 2,000 staff, who were expected to open at least 150 letters a day each.
At the outset of war MI5 comprised Kell, six officers, its chief detective William Melville (formerly the Metropolitan Police superintendent in charge of Special Branch), two assistant detectives, six clerks and a caretaker. Its initial priority was to catch spies and saboteurs; but from 1916–17 its political masters were equally anxious about civil unrest and subversion. By 1918 MI5 had a staff of over 800, including 133 officers. Jervis would have rhapsodized at the amplitude of their records: over 250,000 index-cards cross-referencing 27,000 personal files in its central registry by the time of the Armistice that halted the European war in November 1918. Similarly Kell’s counterpart at SIS, Sir Mansfield Cumming, numbered his staff (exclusive of agents) as 47 in June 1915 and 1,024 by October 1916.
The months after the Armistice were a time of political instability, strange alliances and imponderable risk. Exterior perceptions might mislead. In the east London slum district of Limehouse, during the last months of the war, Irish nationalists combined with socialists to organize a militant constituency cohort led by a pharmacist called Oscar Tobin. One day in January 1919 a newly demobilized soldier, carrying a nondescript suitcase like the terrorist in Conrad’s Secret Agent, visited Tobin’s shop, went up the backstairs with him and laid plans for socialists to take control of Stepney Borough Council. Tobin was a Jewish Romanian who was to be refused naturalization as a British subject in 1924. To a watcher the confabulation above his shop might have seemed the inception of a revolutionary cell; but the demobbed soldier was Clement Attlee, and this was the first step in a political career that always upheld constitutionalism and culminated in his leadership of his country during the Cold War. History is full of misleading appearances. The balance between trust and treason, as Queen Elizabeth said, is seldom easy to get right.26
CHAPTER 3
The Whitehall Frame of Mind
The age of intelligence
At the acme of dynastical insecurity in November 1918, when the monarchies in Austria, Bavaria, Hungary, Prussia, Saxony and Württemberg followed the Romanov empire into extinction, Sir Basil Thomson, the bristling, pushy head of Special Branch at Scotland Yard, wrote a memorandum intended for the eyes of King George V. ‘Every institution of any importance has depended during the war for its existence on an intelligence organization,’ he began with his usual bounding confidence. The Foreign Office, the Admiralty, the War Office and the Ministry of Blockade all had departments collecting data, evaluating rumours, making predictions and trying to stabilize the future. Additional officials in Downing Street were amassing political intelligence for the Prime Minister, Lloyd George. His predecessor, Asquith, had fallen from power in 1916, Thomson continued, ‘not so much because he failed in policy, as because he had no intelligence organization to keep him warned of the intrigues and movements around him’. Similarly, among factors in the recent Russian revolution and overthrow of the Romanov dynasty, defective intelligence had a leading part: ‘Petrograd was in the hands of the revolutionaries before any hint of trouble was heard at Tsarsky’ (Tsarskoye Syelo, the imperial compound outside the capital). Thomson’s lesson for the Royal Household was terse:
(1) The only safe organizations are those that possess an efficient intelligence system.
(2) Those persons or organizations that have failed to develop such systems have been destroyed.
Statecraft had mutated. Europe’s age of intelligence had begun.1
Opposing power blocs had different explanations for these new necessities. Soviet Russia attributed the world’s great changes to the communist revolution of 1917, and to the irresistible impetus towards the dictatorship of the proletariat. The European powers attributed them to the convulsion of continental warfare in 1914–18. Certainly the clashes of the Russian, British, German and Austro-Hungarian empires, and of the French and American republics, had changed their governments’ attitudes to their populations. For centuries monarchs had levied troops to fight wars, governments had repressed civil disorder and reformers had tried to harness popular sentiments. But the military, industrial and transport mobilization of 1914–18 turned the civil population into a new concept called manpower. People of working age – women as well as men – were deployed as a war resource in factories and transport systems as well as on battlefields. The Defence of the Realm Act was enacted in London in 1914, and extended at intervals so as to manage the mass of adults to an unprecedented extent.
When the Russian revolution erupted in 1917, MI5 was focused on German espionage, subversion and sabotage. With the start of the Comintern’s international activities and the foundation of the CPGB in 1920 it changed target to Bolshevism. It rel
ied on the police officers of the Metropolitan Police’s Special Branch, which chewed communists, anarchists, Indian nationalists, pacifists, atheists, self-important but insignificant cranks, Soho rakes, unemployed marchers and mutinous merchant seamen in its greedy, indiscriminate maw. Special Branch reports were often unimaginative if not obtuse. ‘I should wait a long, long time before acting on the advice of the present authorities at Scotland Yard,’ wrote a Tory MP, Sir Cuthbert Headlam, at the time of a botched police raid on the offices of the Soviet trading agency ARCOS in 1927. Special Branch lost control of monitoring domestic subversion after the discovery in 1929 that it had been betrayed by two Bolshevik informants, Hubert van Ginhoven and Charles Jane. Complicated cross-jurisdictional clashes between MI5 and SIS were considered at ministerial level by the Secret Service Committee in 1919, and again by senior officials in 1921, 1922, 1925 and 1927. Committee members found it hard to adjudicate between the two agencies. A resolution was not reached until Kell’s organization was named as the lead national security service in 1931.2
MI5 was primarily an advisory agency, which existed to inform government decisions and to assess and manage risks. Its staff collected, filtered, indexed and filed information gleaned from confidential informants, passport and customs officers, intercepted mail, the garbled chatter heard by covert bugging of offices and telephones, watching of addresses, shadowing of individuals and surveillance of bank accounts, public meetings and publications. Counter-intelligence officers used this data to assess the risks posed by individuals who might be subversives or spies. They resembled historians scouring documentary fragments, unravelling confused memories, checking false trails, re-evaluating doubts and discounting persecution complexes. Their re-examination of past bungles was often more informative than success stories. In the search for long-term patterns, material from multitudinous sources was assembled, allowed to fester, pondered, evaluated, deconstructed, rejected and revised. Every intelligence service was a paper-driven bureaucracy. Officers in MI5, the Cheka, OGPU and the NKVD commissioned reports, compiled profiles, read and reread their dossiers. Every small detail was committed to paper. Successful counter-intelligence usually means following a paper-trail.
The arrest of spies was not the invariable first object of counter-espionage. It was often more profitable to watch and learn. If a spy was allowed to go free, watchers could study his methods and identify his contacts. That was why SIS betrayed its inexperience of domestic counter-espionage when, in 1927, its men arrested Georg Hansen, the Soviet handler of the spy Wilfred Macartney, three days after his arrival in England, before he had found his bearings or met his contacts. Arrests might lead to exciting public denouements, but counter-espionage officers prefer to accumulate and refine intelligence rather than arrest suspects, put them on trial and thus risk disclosure of their methods.
One early example of their watch-and-learn procedure can be given. Theodore Rothstein was ‘a short, stumpy, bearded, bespectacled revolutionary who looked like Karl Marx’. Before 1914 he had collaborated with Wilfrid Scawen Blunt’s campaigns against British imperialism in Egypt and India: during the war he was a triple agent working for Lenin’s Bolsheviks, British military intelligence and the Turkish secret service. In 1919 he wished Leonard Woolf, a former colonial official turned radical activist, to publish Lenin’s recent speeches and insisted on delivering the texts in person. Woolf was instructed to walk on the inside of the pavement along the Strand eastwards towards Fleet Street on a Wednesday afternoon, timing it so that he passed under the clock of the Law Courts at 2.30. At that exact moment he met Rothstein walking westwards from Fleet Street on the outside of the pavement. Rothstein carried in his right hand an envelope containing Lenin’s speeches, which, without either man speaking or looking at each other, he transferred into Woolf’s right hand. These precautions were in vain, for Rothstein was shadowed everywhere by Special Branch and the handover was seen. A few days later the police raided Woolf’s printers and seized the documents. Although Rothstein was kept under surveillance, he had been neither arrested nor dismissed from his wartime job at the War Office: officials judged that it was better to keep him in sight rather than expel him to Russia, where out of reach he might prove a dangerous opponent. This was a pattern of behaviour that was to be repeated in cases over the next century.3
In 1919 there was a sensation when the miners’ leader Robert Smillie, as a member of the Royal Commission on the Coal Industry, browbeat three coal-mining magnates, the Duke of Northumberland, the Marquess of Londonderry and the Earl of Durham, and quoted egalitarian extracts from the Christian gospels at them. ‘The public is amused by the spectacle, but few realize its sinister significance,’ commented Hensley Henson, Bishop of Durham. ‘The very foundations of the whole social fabric are challenged. The tables are plainly turned; and it requires very little to transform the Commission into a revolutionary tribunal, and Smillie into an English Lenin … preparing an immense catastrophe.’4
Lord D’Abernon, who was an eyewitness to the Russian advance into Poland in 1920, felt sure that ‘Western civilisation was menaced by an external danger which, coming into being during the war, threatened a cataclysm equalled only by the fall of the Roman Empire.’ He had little hope that the European powers would forget their rivalries and combine to prevent ‘world-victory of the Soviet creed’. The communist threat to ‘England’s stupendous and vital interests in Asia’ was graver than those posed by the old tsarist regime, judged D’Abernon, for ‘the Bolsheviks disposed of two weapons which Imperial Russia lacked – class-revolt propaganda, appealing to the proletariat of the world, and the quasi-religious fanaticism of Lenin, which infused a vigour and zeal unknown to the officials and emissaries of the Czar’.5
There was no English Lenin. The nearest home-grown version of him was the foolhardy Cecil L’Estrange Malone. Born in 1890, the son of a Yorkshire clergyman and nephew of the Earl of Liverpool, he entered the Royal Navy in 1905, and trained as a pioneer naval aviator in 1911. He flew off the fo’c’sle of a battleship steaming at 12 knots in 1912, planned the historic bombing raid by seaplanes on Cuxhaven harbour on Christmas Day of 1914 and commanded the Royal Navy’s converted packet-steamer from which the first seaplanes flew to drop torpedoes from the air and to sink enemy vessels in 1916. He became a lieutenant colonel aged twenty-seven, and the first air attaché at a British embassy – Paris – in 1918. With this reputation for derring-do Malone was elected as a Liberal MP in the general election after the Armistice. Crossing frontiers illicitly, making night marches through forests and swamps and armed with a Browning automatic, he reached Petrograd in 1919. There he met Litvinov, Chicherin and Trotsky, visited factories and power stations under workers’ control and was converted to communism. He forsook the Liberals and joined the CPGB at its formation in 1920. He was thus the first communist MP to sit in the House of Commons (two years before the election of Walton Newbold). In October 1920 Special Branch raided his flat in Chalk Farm, and arrested Erkki Veltheim, a twenty-two-year-old Comintern courier from Finland who was in possession of seditious literature. Although Veltheim was evidently staying as a guest, Malone pretended that he was a burglar who had broken in while he was away. The young Finn was sentenced to six months’ imprisonment, and then deported. During the police search of the flat in Wellington House, they found two railway-cloakroom tickets wrapped in plain unmarked paper inside an envelope addressed to Malone. The tickets led them to parcels containing a booklet, probably written by Malone, which was a training manual for officers of a British ‘Red Army’. It contained instructions on improvised guerrilla tactics, street-fighting, execution of provocateurs and traitors, machine-gun drill, building barricades by overturning buses and trams, blockading coal-mines, seizing banks and post offices, cutting telephone and telegraph lines, and instigating naval mutinies.6
At a meeting organized by the CPGB and the Hands Off Russia Committee, held at the Royal Albert Hall on 7 November 1920, Malone made an inflammatory speech e
xtolling the Bolshevik revolution and denouncing ‘the humbug’ of traditional parliamentary candidates. Capitalist manipulation of the proletariat was foundering, he averred: ‘the day will soon come when we shall pass blessings on the British revolution, when you meet here as delegates of the first all-British congress of workers, sailors and soldiers. When that day comes, woe to all those people who get in our way. We are out to change the present constitution, and if it is necessary to save bloodshed and atrocities we shall have to use the lamp-posts.’ From the Albert Hall stage he promised vengeance to an audience of over 8,000 Bolshevik sympathizers: ‘What, my friends, are a few Churchills or a few Curzons on lamp-posts compared with the massacres of thousands of human beings? … What is the punishment of these world-criminals compared to the misery which they are causing to thousands of women and little children in Soviet Russia?’ At this juncture there were cries of ‘Hang them’, ‘Burn them’ and ‘Shoot them’.7
Malone was arrested and tried for sedition. The prosecutor at Malone’s trial, Travers Humphreys, suggested that ‘young alien East End Jews of a disorderly type’ in the Albert Hall audience might have been roused by Malone’s violent exhortations. As to the revolutionary pamphlet, Humphreys warned that in many large British towns there were ‘persons of weak intellect, of vicious and criminal instincts, largely aliens, who will … act in response to any incitement for looting, murdering and brawling’. Malone was sentenced to six months’ imprisonment: his mother died of dismay a few weeks later. On his release he went abroad to recover, refused to respond to CPGB overtures and failed to organize a campaign to defend his parliamentary seat at the 1922 general election. Subsequently he travelled in the Balkans, visited Siberia, China and Japan, and rethought his ideas. As a Labour candidate avowing constitutionalism and disavowing extra-parliamentarianism, he was re-elected as an MP in a by-election of 1928 but lost his seat three years later. He then became an international wheeler-dealer, working for the Armenian oil millionaire Calouste Gulbenkian to extend Soviet influence in the Persian oilfields, and from 1934 served as the paid propagandist of Tokyo, running the venal East Asia News Service, defending Japan’s invasion and atrocities in Manchuria, acting as London agent of the South Manchuria Railway and operating the Japan Travel Bureau.8
Enemies Within Page 8