Well before Duff retired on 6 January 1988, all the internal candidates for the succession at the time of his appointment had ceased to be in contention. Duff’s choice as DDG (Organization) was Patrick Walker. Though Walker had not been in the running to succeed Sir John Jones, he had impressed Duff by his success as Director FX and by his insistence on the need for the Service to have a round-the-clock operational capability. By May 1987 Duff had concluded that he was ‘the only real contender’ to become the next DG.106 Walker’s nomination was accepted by the Home Office and Number Ten. He was the last DG with a colonial background. Among his recreations was cricket; playing for the MI5 team, he and Stephen Lander opened the batting together.
On 7 January 1988, the day after his retirement, Duff drew up ‘a sort of valedictory’ on his period as DG, which he sent to the PUS at the Home Office, Sir Brian Cubbon, who forwarded it with his personal commendation to the Home Secretary.107 Some of it, Duff believed, was ‘not suitable for Security Service eyes’ – though he later slightly relented and sent a copy to Patrick Walker for his personal information only. The core of what Duff considered unsuitable for Security Service eyes concerned its relations with government. Despite the emergence of a new generation of officers more at ease in Whitehall, Duff still saw a danger that the Service might return to old ways:
An eye-catching job advertisement in the Guardian in 1988. Guardian readers were unaware that the jobs were in MI5, which did not identify itself by name in such advertisements for another nine years.
It seems to me that in the past there has been a tendency within the Service to regard itself as being a thing apart, an entity that should exist in its own right and that should perform its given functions regardless of the views, activities, and indeed requirements of the government. In terms of maintaining a proper political neutrality, and of not being diverted from a proper concentration on the requirements of national security, it is right that the Service should maintain a certain detachment. But this must not be exaggerated. If the Service is to perform effectively and usefully, it must understand the politics and needs of the government of the day, and consider its own work in that context, and if it is to be able to make an appropriate contribution to the counsels of government, and to have its views listened to with attention, it must take pains to obtain and retain the esteem of ministers, officials, the military and the police.
This is possibly the most difficult lesson for members of the Security Service to learn. They are learning it – but unless they are encouraged from within and without the Service to join willingly and actively with other departments and agencies in the consideration and discussion of matters on which they have a contribution to make, or from which they can gain experience or advantage, they will slip back.108
Cubbon agreed, telling the Home Secretary, ‘The Security Service will slip back into its shell unless Whitehall itself is organised to encourage it in the opposite direction.’109
Duff was also concerned about the Service’s public image. That image had been severely damaged by the public relations fiasco of the unsuccessful attempt to prevent the publication of Peter Wright’s memoirs, which reached a humiliating climax in Australia late in 1986. The well-publicized proceedings in the New South Wales Supreme Court, some of which combined the entertainment value of Yes Minister and Fawlty Towers, ended in victory for Wright and exposed the Service to public ridicule.110 Duff saw no easy way to restore MI5’s reputation:
In the face of the sustained criticism and vilification of the last year or two, arising chiefly from the ramifications of the Peter Wright case, the Service has kept up its spirits pretty well. But these unremitting attacks do have their effect and my fear is that in the longer term the Service will be damaged in a number of ways.111
An example of the sometimes dismissive tabloid image of MI5 in the wake of the unmasking of Anthony Blunt, the treachery of Michael Bettaney, the Spycatcher affair and other damaging publicity (Bernard Cookson, Sun, 29 April 1987).
To provide a secure outlet for future complaints by discontented intelligence officers, Mrs Thatcher announced in November 1987 the appointment of an ‘ombudsman’ or ‘staff counsellor’ for the intelligence services to whom any of its members could take ‘anxieties relating to the work of his or her service’. 112 For the Security Service to win public confidence it also required a statutory basis. Duff argued, as he had done since his early days as DG: ‘A good Security Service Act is now essential.’113 Before he became DG the main impetus for reform of Security Service management had come from Whitehall, sometimes encountering opposition from the Service. After 1985, however, pressure for putting the Security Service on a legal footing came from the Service itself and was initially resisted by Whitehall. Nothing better epitomized the transformation of the Service during the 1980s than its ultimately successful campaign for the passage of the Security Service Act of 1989.114
1
Operation FOOT and Counter-Espionage in the 1970s
Operation FOOT, the mass expulsion of Soviet intelligence officers from London in September 1971, marked the major turning point in Security Service counter-espionage operations during the Cold War. As a retrospective Service report on FOOT recalls: ‘The steady and alarming increase in Soviet official representation in the UK during the 1950s (from 138 in 1950 to 249 in 1960), accompanied as it was by a proportional increase in the number of Russian intelligence officers (IOs) threatened to swamp our then meagre resources.’1 To expand its counter-espionage capability, the Service was authorized in 1962 to recruit an additional fifty officers, 150 ‘other ranks’ and a hundred in secretarial and clerical grades.2
However Soviet representation continued to grow and it soon became clear that the only effective way of containing the R[ussian] I[ntelligence] S[ervice] threat lay in a limitation of the number of Russian officials. We therefore set about a long and painstaking process of educating the Foreign and Commonwealth Office and other departments at all levels about the reality of the threat and the need to impose a ceiling on the numbers of Russians. An important feature of this programme of education was the consistent and well-documented presentation of recommendations for the expulsion of individual Russians and for the refusal of visas to others. Not all our recommendations were accepted but between 1960 and 1970 we secured the expulsion of 25 Russians for engaging in inadmissible activities and the refusal of about 40 visas.3
Some senior FCO officials, however, persuaded themselves during the later 1960s that the threat from the KGB was declining rather than rising. In May 1967 the future PUS, Sir Denis Greenhill, told a Service symposium that, in the less tense climate of East–West relations which had followed the Missile Crisis, he expected the Golden Age of the KGB to draw to a close and its influence to diminish.4 His timing could scarcely have been worse. The newly appointed KGB Chairman, Yuri Andropov (later the only intelligence chief to become Soviet leader), was one of the leading advocates within the Politburo of the Soviet invasion of Czechoslovakia in the following year.5
The first major success of the Security Service campaign to ‘educate’ Whitehall on the threat of Soviet espionage was the decision by the Wilson government in November 1968, three months after the crushing of the Prague Spring by the forces of the Warsaw Pact, to allow no further increase in the size of the Soviet embassy. The KGB and GRU, however, managed to circumvent this ceiling by sending more ‘working wives’ to the embassy and stationing more intelligence officers in other Soviet offices in London, in particular the Trade Delegation. Service attempts to limit the growth of the Trade Delegation ran into ‘considerable opposition’ from both the Department of Trade and Industry and the British embassy in Moscow.6 The Conservative victory at the June 1970 general election greatly assisted the Security Service campaign. The incoming Prime Minister, Edward Heath, and his Foreign Secretary, Sir Alec Douglas-Home, were convinced that the size of the Soviet intelligence presence in London had become ‘a real threat to our national security’. For som
e months Douglas-Home hoped to resolve the problem by private negotiation. But when he raised the issue with his Soviet opposite number, Andrei Gromyko, in the autumn, Gromyko gave the absurd reply: ‘These figures you give cannot be true because the Soviet Union has no spies.’ In December Douglas-Home wrote to Gromyko formally requesting a curb in ‘the scale and nature of the intelligence activities conducted by Soviet officials in this country’. He received no response.7
Within the Foreign Office, the strongest support for the mass expulsion of Soviet intelligence officers came from George Walden, who became Soviet desk officer shortly after the election. Walden was convinced that Moscow would not take British diplomacy seriously until the British government summoned up the nerve to deal with its bloated espionage network in London:
The Russians knew that we were swamped with spies and that we didn’t dare to do anything about it. The will to resist their pressures in the field of espionage was rightly seen by the Russians as a gauge of the country’s resolution overall, and by 1970 the KGB regarded the British as broken-backed.8
By the spring of 1971, most if not all FCO under secretaries and heads of department had been won over to the Security Service proposal for a mass expulsion of Soviet intelligence officers if, as seemed increasingly likely, private persuasion failed.
The KGB attempted to discredit one of the few public figures to campaign publicly for a reduction in the Soviet intelligence establishment in London, the former Tory MP Commander Anthony Courtney, by circulating photographs of his seduction by an Intourist guide in a Moscow hotel room fitted with a concealed KGB camera. The operation, codenamed PROBA,9 merely increased support for Courtney’s campaign among Conservative backbenchers. The minister in Edward Heath’s government whom the Service found hardest to win over was the Home Secretary, Reggie Maudling, to whom it reported. Like the previous Wilson government, Maudling initially took the view that a public protest over Soviet espionage would simply prejudice more important issues in East–West relations: ‘After a mass expulsion the government would be the laughing stock of the British public and we should all look very foolish.’10 The Home Secretary, however, was eventually convinced by the Security Service case. FJ noted, after meeting him on 24 May 1971, that Maudling ‘was surprised that we were able to identify so many Russian IOs so positively’ and ‘much struck by the size of the effort needed to follow an IO’. 11 In a joint memo to the Prime Minister on 30 July, Maudling and Home argued that the numbers of KGB and GRU officers were ‘more than the Security Service can be expected to contain’. 12 Based on the Service’s estimate of 130 Soviet intelligence officers in London, the FCO agreed on a target of a hundred expulsions.13 On 4 August Douglas-Home sent Gromyko what amounted to a final warning that the ‘inadmissible Soviet activities’ in Britain which had continued unabated since his previous letter to him eight months earlier must cease. Once again, Gromyko did not reply.14
The defection of Oleg Lyalin from the KGB London residency on 3 September provided what the Service regarded as ‘a convenient additional justification’ for the mass expulsion of Soviet intelligence officers.15 On 21 April 1971 Lyalin had walked into Hampstead police station, claiming to be a member of the Russian Trade Delegation. He asked to see Special Branch officers, identified himself to them as a Soviet intelligence officer and said he had important information to reveal. He was subsequently debriefed in a safe flat by Security Service officers during the first of many meetings which continued until his defection.16 Lyalin disclosed that he was the senior representative in the London residency of Department V, the section of KGB foreign intelligence specializing in sabotage and covert attack ‘in periods of crisis or war’:17
It was his task to select and report on sites to be used for the infiltration by air and sea of Soviet sabotage groups and to build up a locally recruited support organisation. In 1971 he completed a comprehensive plan for the seaborne landing of a sabotage group (or groups) at Hayburn Wyke on the north Yorkshire coast. At the same time he was giving consideration to the selection of a dropping zone for an airborne landing north of the Caledonian Canal. Using locally domiciled agents recommended by his Department V predecessors, Aleksandr Savin and Vladislav Savin, he built up a network (including a Moscow trained radio agent) to support the arrival and operations of the sabotage groups to be infiltrated through Hayburn Wyke. He had the formation of a second support network in mind.18
Map provided by Oleg Lyalin after his defection, showing plans for the seaborne landing of a sabotage group (or groups) at Hayburn Wyke on the north Yorkshire coast.
Lyalin revealed that the primary purpose of the planned sabotage operations was to demoralize and terrorize the civilian population. By sabotaging railways, for example, Department V believed it could ‘make people too afraid to travel on them, thereby paralysing the economic life of the community’. 19
Lyalin told his Security Service debriefers that by the time he arrived in London he was already disillusioned with Department V and despised his fellow Line F officers (as the Department’s officers were known when stationed in residencies) for their fraudulent expense claims. He also wrongly believed that his cover had been blown when on arrival in London as, ostensibly, a knitwear representative in the Soviet Trade Delegation, he was met by his Line F colleague Vladislav Savin, whom he assumed had been identified by the British authorities. He told his debriefers that thereafter he fully expected to be contacted by the Security Service. In September 1970 Kentish Town police station attempted to contact Lyalin at the Trade Delegation, but only to verify his address in connection with a minor incident which had occurred some weeks earlier. Lyalin was out but called at the police station to confirm his address. He later rang 999 from a telephone booth in Highgate and, with the intention of offering information, said he wanted to get in touch with anyone who knew anything about the Soviet Union. The operator misunderstood the purpose of the request and offered to give him the number of the Soviet embassy. Lyalin rang off.20
During meetings in a Security Service safe flat which began on 21 April 1971 and continued for over four months, Lyalin’s attitude was assessed as ‘always friendly but never relaxed’, frank and responsive to all the questions put to him with no intelligence topic off limits. He usually drank beer at a ‘steady rate’ during the meetings but did not become visibly drunk (as he regularly did after his defection). The debriefing sessions were recorded with a tape recorder which Lyalin saw being switched on and off. What he did not realize, however, was that a second, hidden tape recorder kept recording even when the other was switched off. Lyalin’s debriefers initially found it difficult to understand his motives. Though he accepted £10 or £15 at each meeting, he showed no interest in larger sums, and took considerable personal risks to stay in contact with his debriefers. Lyalin’s complicated private life added to the problems of dealing with him. He revealed in his first debriefing that he planned to leave his wife and marry his Russian lover. In May, after a heated argument, his wife was observed by A4 standing in front of Lyalin’s car to try to stop him driving away. Lyalin was summoned by the head of security in the London residency to discuss this episode and the scandal likely to result from his divorce. Lyalin appealed to the Security Service to arrange for his expulsion from Britain so that he could return to Moscow and try to ensure that divorce did not damage his career. He refused to defect to Britain but declared himself anxious to work in Russia as a British agent inside the KGB.21 The Service, however, believed Lyalin to be too unpredictable to be run for long in Moscow.22 To revive his flagging career as a KGB officer, the Service devised a scheme for him to recruit a bogus agent in the MoD, codenamed AFT, with access to classified information.23
The complications in Lyalin’s private life continued to increase, as he conducted a simultaneous affair with a married English woman, as well as with his Russian lover. On 27 August he had a ‘particularly frank session’ with his case officers about the three women in his life, revealing that his Russian lover ha
d hinted she was willing to live with him in Britain. Lyalin, however, said he was still determined to return to the Soviet Union. A few days later he changed his mind. In the early hours of 30 August, Lyalin was arrested for drunken driving in Tottenham Court Road, spent the night in a police cell after refusing to give a blood or urine sample, and was remanded on bail next morning at Marlborough Street Magistrates’ Court. At a meeting with his handlers in the safe flat on 1 September, Lyalin seemed unconcerned about his arrest, which the residency had reported to the Centre as a provocation stage-managed by the British authorities. But he was worried by a letter from a KGB colleague in Moscow saying that his estranged wife was claiming that Lyalin was disaffected with the KGB and that he would be in serious trouble if she told the authorities. Unhappily for Lyalin, the letter had been delivered in error to a colleague in the London residency who had passed it to the security officer. Two days later, having been ordered back to Moscow, Lyalin decided to defect. At 9.50 a.m. on 3 September Lyalin rang his English lover but failed to persuade her to leave her husband and move in with him. He then phoned his Russian lover, who agreed. At 2.15 p.m. Lyalin contacted the Security Service, saying that he wished to defect, together with a friend. After removing classified documents from a KGB safe in the residency, he and his Russian lover arrived at the safe flat and signed applications for political asylum.24
As well as revealing details of Department V’s sabotage plans in Britain, Lyalin provided a powerful insight into the success of the KGB London residency in detecting A4 mobile surveillance. In 1967 Lyalin’s predececessor, Aleksandr Savin, had recruited as an agent a disaffected clerk in the Greater London Council (GLC) motor licensing department, Siroj Hussein Hassanally Abdoolcader. Born into a well-to-do Malaysian family, Abdoolcader had arrived in London ten years earlier to study at Lincoln’s Inn. As a result of his repeated failure to pass his law exams and dissatisfaction with his social life, he became – according to a later Service assessment – steadily ‘more bitter and resentful’. In 1967 Savin struck up an apparently chance conversation with Abdoolcader in a pub, introducing himself as a Pole named ‘Vlad’ who had lived in England for many years. After further convivial pub evenings, with ‘Vlad’ buying most of the drinks, he revealed himself as a Russian and persuaded Abdoolcader to look up for him in GLC records the owners of a series of cars whose registration numbers he supplied. Among them were a number which belonged to A4 and the MPSB, which KGB officers were henceforth able to identify. When Savin was recalled to Moscow in July 1969, he handed Abdoolcader over to Lyalin, whom he introduced as ‘Alex’. Lyalin began to use Abdoolcader as a talent spotter, trained him in the use of dead letter-boxes and gave him presents and regular payments (mostly small, though one was £100). A fortnight after Lyalin’s defection, Abdoolcader was arrested with, in his possession, a postcard addressed to Lyalin and further details of A4 surveillance vehicles. He was later sentenced to three years’ imprisonment.25
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