The New Spymasters

by Stephen Grey

  At the time, the FRU was also running another agent, Brian Nelson, who had manoeuvred to become chief of intelligence for the largest Loyalist terror group, the Ulster Defence Association (UDA). In his position, Nelson could save lives, helping the army tip off people – mostly Catholics – whom the UDA planned to assassinate. But it emerged later that Nelson also played a more sinister role, using his contacts with the FRU not only to pass on intelligence but also to gather it for the UDA and its attacks.

  In 1989, Finucane, then aged thirty-nine, was murdered at home in front of his wife and three children, who hid under the dinner table. And it was not long before suspicion grew that Nelson had both known about the plan to kill him and helped to advance it. An agent working for the RUC Special Branch had also, it turned out, provided information about the threat to Finucane. This was much worse than McGartland’s account, and, by going along with crimes he could not prevent, Nelson was allegedly instigating murder.

  From Finucane’s death sprang a series of official inquiries, including three by police chief constable Sir John (later Lord) Stevens – latterly commissioner of the Metropolitan Police – which, over the course of more than two decades, gradually uncovered a picture of collaboration between Protestant murder gangs and elements of the British security forces. The inquiries also made public the hitherto secret existence of the FRU.

  The Finucane case illustrated the extreme dangers of running agents inside terror gangs. As the third Stevens Inquiry of 2003 concluded, ‘informants and agents were allowed to operate without effective control and to participate in terrorist crimes’.14 A Canadian judge, Peter Cory, who reviewed the Finucane case among others, said it was ‘an indication that both the Security Service [MI5] and RUC SB [Special Branch] saw agent security as taking precedence over the need to warn a targeted individual that his life was at risk’.15 And finally, in 2011, an investigation by a leading British criminal barrister, Sir Desmond de Silva, QC, into the Finucane case blamed ‘agents of the state’ but stopped short of accusing the British government of planning Finucane’s death. He found ‘there was a wilful and abject failure by successive governments to provide the clear policy and legal framework necessary for agent-handling operations to take place effectively within the law’. The prime minister, David Cameron, recognized the gravity of the case and apologized for ‘the shocking levels of State collusion’ that de Silva detailed.16

  * * *

  Another of the FRU’s top sources in the 1980s had the code name Melodius. His real name was Frank Hegarty and he lived on the Bogside, the Catholic enclave in Londonderry. Like Steak Knife, he was recruited by the FRU after they learned he was a man slighted. He had been sacked by Martin McGuinness as the local IRA quartermaster – essentially the man who looked after supplies of weapons and bombs. McGuinness, who was highly moralistic about sexual matters, had disapproved when Hegarty left his wife for his mistress.

  With coaching from the FRU, Hegarty began to regain the IRA’s confidence and, after a while, he resumed his former role. It was from this position that, in January 1986, he alerted the British to a large shipment of arms that had arrived from Colonel Gaddafi’s Libya and was stored in three separate hides in the Irish Republic.

  The shipment was so large, it was impossible to use the army’s usual tactic of tracking the guns through several hands before their seizure. There were too many guns to keep track of and the risk was high that some would be lost. Instead, Hegarty was removed for his safety out of Northern Ireland and resettled in Sittingbourne, Kent. Unfortunately, he left most of his family behind and he could not resist calling them repeatedly.

  According to one FRU insider, an MI5 phone tap picked up a record of Martin McGuinness, then a senior IRA commander, urging him to come home. ‘It became a famous tape. “Come back, you will be safe,” he said.’ This was echoed by the firebrand Protestant leader the Reverend Ian Paisley, who said that McGuinness had visited Hegarty’s mother. ‘He assured the mother, Rose, that if Frank came home, he could sort the matter out and all would be well,’ Paisley told the House of Commons. It was ‘a firm assurance for a mother’s heart torn about her son. She persuaded her boy to come home. A rendezvous was arranged by Mr. McGuinness.’17

  On 25 May, a few days after Hegarty had slipped back into Northern Ireland, his body was found dumped by the roadside. His eyes were taped and he had been shot several times. Two days later the Irish News reported, ‘Most people who knew of his disappearance were baffled by his decision to return home to Derry three weeks ago, despite knowing that the IRA suspected that he had been involved in the Sligo and Roscommon arms find.’18

  McGuinness has always denied any role in the killing. In fact by then, he has said, he had left the IRA. He once told the Irish Times it was incorrect that he had told anyone it was safe for Hegarty to return:

  ‘That is not true, and the Hegarty family know that. I could articulate … exactly what happened, but if I did that it would be very hurtful and indeed very damaging to the Hegarty family,’ he said. He claimed one member of the family knew what had happened, ‘and I am not going to put that person in a predicament’. Speaking generally about his past, Mr McGuinness said people in Northern Ireland were not ‘obsessed by any of this’. He added: ‘The reality is that the past is a very, very dark place for everybody.’19

  In 1993, ITV’s Cook Report investigated the Hegarty murder as part of a wider look at McGuinness’s past. After the broadcast they got a phone call from a Freddie Scappaticci, the man later identified as Steak Knife. In a conversation recorded by the journalists, and not published until years later, Scappaticci said that McGuinness had both lured Hegarty home and been ‘the instrument of him being taken away and shot’. He went on, ‘He is ruthless. I can say this unequivocally. He has the final say on an informer, whether that person lives or dies … Hegarty was an affront. He [McGuinness] took it very personally … There is something quite wrong with his head … He would be praying in chapel one minute, go outside and think nothing about ordering a shooting.’

  The reporter asked how he knew so much.

  ‘Well, I was at the heart of things for a long time, right?’

  Scappaticci said he had served in the Northern Command, like McGuinness.20 He also said ‘a friend of mine’ was supposed to interrogate Hegarty, but McGuinness and two others had interrogated him instead and then McGuinness had ordered him shot dead.

  If Scappaticci really was Steak Knife and really was an FRU agent, then the ‘friend’ who nearly interrogated Hegarty, his fellow FRU agent, was perhaps Scappaticci himself. It is easy to see why the incident might have affected him so deeply.

  After he was named in the press as Steak Knife, Scappaticci was asked about the Cook Report tapes. He said he had not realized he was being recorded. ‘In relation to the contents, you have to understand that when I spoke to the journalists, I had been out of the movement for about three years. I felt disillusioned and it’s fair to say that I left on bad terms. A lot of what I said was untrue…’21

  By the 1990s MI5 had taken over the handling of Steak Knife from the FRU. It was obvious that his handlers had not approved his approach to ITV. At the request of MI5, who told the Cook Report that Scappaticci was a valuable informer, the tape was never broadcast and lay buried for ten years, until the Steak Knife story emerged elsewhere.

  * * *

  While British operations in Northern Ireland may prove the value of human intelligence and provide a model for how spies can be recruited against terrorists, those wishing to apply the lessons elsewhere should realize, first, how spying almost always worked in combination with some form of technical intelligence and, second, how spying was a sword whose blade came to be blunted over time.

  Some of the technical methods used to support spying have been mentioned already. Together with tips from agents, the British were forewarned about numerous ambushes and bombs, and, with advance knowledge, were able to defuse bombs and arrest perpetrators. But technical meth
ods also played a major role in suppressing attacks for which the spies had given no warning: for example, the invention of electronic jamming devices played a significant part in reducing remote-controlled bombs.

  Spying’s impact became blunted because spying was a victim of its own success. ‘It was like a soup of spies. So many agencies, so many agents. They were tripping over each other constantly,’ said one ex-FRU member.

  Giving evidence in Parliament, Lord Stevens described how things had got out of hand: ‘When you talk about intelligence, of the 210 people we [the inquiry team] arrested, only three were not agents. Some of them were agents for all of those … particular organizations [the RUC, MI5 and the army], fighting against each other, doing things and making a large sum of money, which was all against the public interest and creating mayhem in Northern Ireland.’22

  Many people used contacts with the British security services to their own advantage. In the case of men like Nelson, it was to collude in crime. But there were also positive purposes. The secret contact between the IRA leadership and SIS provided a channel that was ultimately used to hasten the peace process. But this was not spying. The IRA members involved – and the go-between, a businessman – were intelligence contacts, but they were not ‘agents’ – those who betrayed any secrets.

  There were many blurred relationships. Liam Clarke, a veteran journalist in Northern Ireland, explained how the term ‘agent’ came to mean different things:

  Martin McGartland, who infiltrated the IRA in west Belfast, was an agent in the purest sense. He joined the IRA at the request of his handlers and did exactly what he was told; it involved no switch of loyalties.

  Several members of the IRA’s internal security team, like Steak Knife, were double-agents. They were trusted by the IRA to frustrate Crown forces, but were ‘doubled’ by the intelligence services to spy on the IRA, instead.

  After that, it gets more complicated. It is clear now that many of those who passed information to the authorities believed they were in charge of the relationship and didn’t tell all they knew. Many ‘worked their passage’ with the police, passing on this and that in return for favours, to settle grudges or to save their life. They may not have thought of themselves as agents at all, especially the loyalists.23

  A conflict, particularly a long-drawn-out civil war, is like an ecosystem: nothing can be seen in isolation and nothing is of itself decisive. Spying can help to suppress one group, but over time the group targeted by intelligence, whether consciously or subconsciously, evolves defence mechanisms. (For example, by a form of Darwinian ‘natural selection’, the weakest and easily targeted PIRA members would tend to die or be arrested, while the most security-conscious and secretive PIRA operatives would tend to survive and rise in the organization.) Steak Knife – and even Brian Nelson – probably on balance saved many dozens of innocent lives, even if, as some argue, they also cost the lives of others. I am aware that there were other significant agents in Northern Ireland – people of equal importance to Steak Knife whose existence may never be revealed. They too saved lives. But their success also gradually modified the enemy’s behaviour. Even with superb intelligence penetration at the highest level, the tight cell-based structure the IRA could develop meant that the detail of most attacks was not known in advance. And, as Clarke says, whether it was the money-motivated street source or the sophisticated leader seeking political options, few spies were pure agents delivering a simple one-way flow of intelligence.

  * * *

  I was discussing Margaret Thatcher’s campaign of ambushing the IRA with a former FRU officer. It was called, rather misleadingly, a ‘shoot to kill’ policy – misleading because soldiers usually shoot to kill. It was a euphemism for what was alleged to be an assassination programme.

  I suggested that, viewed thirty years later, in a world in which terrorist leaders were routinely killed by robotic drones, the startling thing was that there really had been no ‘shoot to kill’. Few senior leaders of the IRA were targeted at all.

  ‘But you know why,’ he said.

  ‘Rule of law. It would have been illegal,’ I replied.

  ‘Yes. There’s that. But something else too. You know it already.’

  ‘Our penetration of the leadership?’

  ‘You can’t imagine it, how far it went.’ Having implied that the level of penetration gave the leadership protection, he added, ‘But then the question was always: who was working for whom, which way round it was?’

  We talked about names; some of them surprised me.

  ‘If we were so successful, why did the war go on so long?’ I asked.

  ‘Like I said,’ the old agent-runner retorted, and perhaps he was just in a particularly dark mood, ‘I cannot be entirely sure. The question was: who was working for whom?’

  Spying then, even for those privy to its secrets, does not lend itself to a clear and unambiguous picture. There are many variables and those involved harbour many doubts. But, for all that, not everything is grey and uncertain. Looking through the mists of spying, it is possible to discern something of the shape of the thing.

  While we have seen elsewhere that veteran intelligence officers have real doubts about what good spying achieves, Ulster showed that, against the threat of terrorism, spying is not only possible but vital. There were compromises and dangers, and they needed careful thought; some things were handled incorrectly, even criminally, but ultimately the overall effort had impact.

  If it had not been for British intelligence and traitors among Irish Republicans, British rule in Ulster would have come to an earlier end, overwhelmed by the sheer ruthlessness and professionalism of what the Provisional IRA became. The underlying problems were political; spying did not solve anything. But it did suppress the revolt.

  From the war in Ireland, we learned the kinds of lessons about spying often unlearned in much of the Cold War spy game. It was a master class in targeted recruitment and engineered betrayal. Success here was one of the reasons that, after the debacle of Philby’s betrayal, British intelligence re-earned its reputation for high-quality HUMINT.

  From Ireland, we also learned that money can buy spies. Some in Ulster swore by it. In fact, there are recruiters who insist everyone has a price. ‘It is amazing what people will do for cash,’ said one ex-RUC operative. But we should also remember that handling the best of spies, using them in a meaningful way, almost always involves much more delicate things, including the art of friendship, which has to be patiently exploited. Throughout Steak Knife’s career, his intelligence was brought to the attention of politicians at the top of the UK government. The key lesson for politicians was not to interfere. Any attempt to hasten his rise through IRA ranks or make him spy more aggressively could have been fatal.

  * * *

  As the Berlin Wall came down, ending the Cold War, and as peace came to Ulster, the lessons learned from spying against the Soviets and non-state groups like the IRA needed to be applied and adapted to a whole new set of threats and enemies.

  As James Woolsey, in his confirmation hearing for the post of CIA director in 1993, warned, ‘We have slain a large dragon, but we now live in a jungle filled with a bewildering variety of poisonous snakes. And in many ways, the dragon was easier to keep track of.’24

  In this new jungle, new spies needed to be recruited and old tactics adapted. But the lessons of the past remained as relevant as ever, even if they were sometimes ignored.

  PART TWO

  New Spies (1989–2008)

  Chapter 4

  Thunderbolt

  ‘The Cold War is over: the most dangerous threat to a nation’s security comes from organized crime. What matters is using intelligence to crack the criminal at source’

  – Raymond Kendall, secretary-general of Interpol, June 19961

  On 4 October 1955, in the Troodos Mountains in Cyprus, a young man crouched, limbs aching, on a treetop branch of a thick-limbed Turkish pine. He had been there two hours, his face covered with a
mask. He was watching a path that led to a bungalow nestled up in the hills. Just before 6 p.m., he heard the cough and stutter of an ageing Land Rover. It wound up the zigzags to the hilltop. The boy reached for his rifle as the car crunched in the gravel.

  In the driver’s seat was Stanley Hollowday, the 52-year-old chief engineer of an open-cast asbestos mine on the terraces of the opposite hill. Sitting next to him was his wife, Zanina. They had married twenty-seven years earlier in the local village, Amiantos.

  Hollowday had forgotten to buy the newspaper that day and the couple had driven down to collect one. Stepping out of the car, Zanina recalled, they ‘walked to the edge of our garden to admire just a few minutes of the glorious sunset, in front of us a sky aflame and its reflection gilding below us in the valleys and hills. So beautiful and so still!’2

  Then she heard the outburst of the ‘horrid noise of gunfire, its echo surrounding us from all sides’. It was impossible to pinpoint where it came from. Their Alsatian dog, Ranny, was crouched at Zanina’s feet. She called out, ‘Let us go in, Stan, we seem to have trouble again in the village.’

  But Stan did not reply. Zanina called again and stretched out her arm to him. There was a bush between them and she was surprised not to see his head and shoulders. She heard him whisper, ‘I can’t Yana. I have been hit.’

  She saw him on the ground, two feet away. There was no blood. He said, ‘Phone, call the ambulance and police, open my collar and tie.’3

  * * *

  The youngster in the tree who pulled the trigger was a Greek Cypriot called Andrew (or Andreas) Antoniades. These were the early days of civil war between the British rulers of Cyprus and the rebel group called EOKA. The rebels believed that Hollowday was an undercover ‘chief of intelligence’ who was helping to get their members arrested.4 According to the Cyprus Mail, he was the first civilian British victim of an EOKA attack.