By Stephen Dorril

Free Press

Copyright © 2002 Stephen Dorril
All right reserved.

ISBN: 0743217780

Chapter 1: The Second World War

During the war, MI6's counter-espionage Section V underwent an effective expansion. With a responsibility for the security of signals intelligence in the field, the section successfully exploited the use of what was known as ISOS (Intelligence Section, Oliver Strachey) reports -- the generic term for decrypted German signals intelligence traffic. MI6 had no history of counter-espionage work and learned how to use double-cross agents and mount 'l'toxication' or deception operations -- designed to confuse the enemy as to its true intentions -- from Paul Paillole, deputy of the French counter-espionage section of the pre-war Deuxième Bureau. Much had depended on the abilities of the section head, Felix Cowgill.

Cowgill had been recruited in March 1939 from the Indian Police, for whom he had made a special study of communism. He brought years of counter-espionage experience to bear on his post, but had no experience of Europe, having spent the previous twelve years running penetration agents in the Comintern's network in Bengal, most recently as Deputy Commissioner of Special Branch. It had been understood that he would eventually succeed the Deputy Chief and former head of Section V, Valentine 'Ve-Ve' Vivian, as the resident MI6 expert on communism and director of a new operational department dealing with the subject. Cowgill's ablest student within the Section was the successful head of its Iberian subsection, Kim Philby.

While Philby shared with his colleagues a genuine desire to defeat Nazism, he also acted as an agent for the Soviet Union's People's Commissariat for Internal Affairs (NKVD). His Soviet handlers' main priority was to ascertain what subversive and espionage work MI6 was engaged in against the USSR. As an essentially defensive 'vigilant' organisation, primarily concerned with security and threats, both external and internal, against the USSR, the NKVD's prime objective was to root out subversion from wherever it might originate. Philby recalled that as soon as he began to work in MI6 in July 1940, his Soviet control 'began to demand information...But I constantly reported that MI6 was not engaged in any subversive and espionage work against the Soviet Union...MI6 was not permitted to engage in it then; the USSR was Great Britain's ally. But Moscow didn't believe it, it didn't believe it for a long time.' To their general incredulity, Philby could only report, correctly, that MI6 did not have a network of agents inside the Soviet Union. The NKVD then assumed that if the British were not directly involved, they must be working through the Poles and the Czechs, but, once again, Philby had to disabuse them of that idea.

For a long time, Philby was viewed with deep suspicion by his Soviet handlers. It was a situation which only changed when it seemed certain that Germany would lose the war and he was able to report to Moscow what they wanted to hear. Senior MI6 officers had begun to think about the future and 'what the primary target of their activities would be after the defeat of the Axis powers'. They had come to the conclusion that MI6 'would have to deal with the secret service of the USSR and the intelligence services associated with Communist Parties in other countries -- in short, with international communism, whose authority, of course, had increased a great deal due to the imminent victory over fascism'. The Service's leadership had decided on a modest start to combat the future threat and had established a small archival and non-operational records section. It was given the task of studying past records of Soviet activity, primarily related to the struggle against international communism, and the collecting and collating of current material. It was a harbinger of work which, in time, acquired great significance. Its establishment, however, had not been prompted by Soviet activities abroad but by events much closer to home.

During April 1943, Security Service (MI5) watchers had tailed a long-term member of the Communist Party of Great Britain's (CPGB)Central Committee, Douglas Springhall, to a clandestine meeting with Ormond Uren. When arrested in June, Uren, a secret CPGB member who worked in the Hungarian section of the sabotage and resistance organisation, the Special Operations Executive (SOE), confessed to passing on to Springhall details of SOE communications and policy on eastern Europe to demonstrate that he was 'a sincere believer in Communism'. When another of Springhall's contacts, Olive Sheehan, a Customs and Excise clerk at the Air Ministry, was similarly arrested, she disclosed in her defence -- quoting a source in the Security Service -- that the British were withholding vital intelligence from the Russians.

In light of the Springhall case, Vivian instigated a discreet inquiry which reported to Menzies in August 1943. Its conclusions ran counter to then current Foreign Office thinking and displayed the built-in prejudices of the security services. 'The contradictions between Great Britain and the Soviet Union', Vivian suggested,

are as great as those between Britain and Nazi Germany...Soviet Russia is our friend only while it can obtain benefit from this friendship. It does not trust us and will exert all efforts in espionage activities against us even in years of friendship. When it will obtain everything it can from a friendship, it will inexorably activate all the secret forces against the ideals for which Britain struggles...In this way our most dangerous enemy after the war can turn out to be the secret aggression of Soviet Russia...But we must not permit this error -- we cannot trust the Russians in the same way we can trust, say, the Czechs and Americans or give them information which might betray an important or sensitive source or allow officers of local Soviet intelligence to study our organisation anywhere.

On 13 August, whether by coincidence or design, Menzies met with the Permanent Under-Secretary at the Foreign Office, Sir Alexander Cadogan, who had responsibility for MI6 and for harmonising its overlapping, and sometimes conflicting, functions with those of SOE and MI5. Menzies warned Cadogan that he had 'Communists in his organisation'.

The Security Service wanted to take action against the Communist Party and, in particular, those working in government departments. In October, MI5's Roger Hollis, who monitored the activities of the CPGB, submitted a report to the Home Office in which he stated that the Service was 'aware that the Soviet Government was actively engaged at the present time in obtaining espionage information concerning the British Government'. The Soviet espionage organisations, Hollis revealed, 'seemed to operate through two channels: one directly through the Communist Party, utilizing the Party organisation and the Communists who are in the armed services and the Government to collect espionage data'. The second espionage group 'is apparently completely separated from the Communist Party and operates on...a diplomatic level'. This involved the Soviet embassy and the various trade commissions which enjoyed quasi-diplomatic immunity.

In a minute to Churchill on 28 October, Duff Cooper, the chair of the Security Executive, which nominally controlled the Security Service, outlined MI5's case. Churchill agreed with it in principle and, in November, the Home Secretary recommended that, in order to plug any leaks, 'all departments engaged on secret work should be advised to transfer known Communists, as notified by MI5, to other departments'. He had wanted the policy made public, but Churchill demurred, concurring with the advice of his unofficial intelligence adviser, Desmond Morton, that 'MI5 tends to see dangerous men too freely and to lack that knowledge of the world and sense of perspective which the Home Secretary rightly considers essential'. Churchill ruled that a secret panel of the Security Executive would decide what action was necessary on cases submitted by MI5. The existence of the panel was not finally notified to the secret departments until February 1944.

Close to MI6 in his intelligence work, but 'a greyer eminence than Menzies's, Morton was 'certainly no friend of the left'. He was 'deeply concerned with the spectre of post-war European communism', and this included a personal interest in the various governments-in-exile and national committees in London. In early April 1944, in the pre-planning period for the invasion of Europe, Churchill expressed concern that communist members of the French National Committee were coming to London. In a secret telegram to Duff Cooper, who had left the Security Executive for a post in Algiers, Churchill warned that the French representatives would not have access to any British secrets. He added: 'I suppose that you realise that we are weeding remorselessly every single known Communist from all the secret organisations. We did this after having to sentence two quite high-grade people to long terms of penal servitude for their betrayal, in accordance with the Communist faith, of important military secrets.' On the 14th, Churchill similarly minuted Cadogan: 'We are purging all our secret establishments of Communists because we know they owe no allegiance to us or to our cause and will always betray secrets to the Soviets, even while we are working together.'

While limited investigations, which consisted of little more than checking names against secret lists of known communists (negative vetting), did take place, there were no purges -- at least not in the secret establishments. Dissatis- fied with the Security Executive secret panel procedure, MI5 would not risk revealing its sources and only submitted one case. Cowgill later recalled that there had been one relatively low-level inquiry inside MI6 but it led only to the dismissal from Section V of a secretarial-grade assistant. Her schoolmaster husband had turned up in MI5 Registry records as a member of the Scottish Communist Party.

Within MI6 there was a natural suspicion born of senior officers' anti- Bolshevism and a belief that Stalin's Russia would not be a durable peacetime ally. When SOE suggested allowing NKVD officers to operate in parts of the British Empire in order to run their agents for the war effort, MI6 refused to countenance the idea. The NKVD was regarded as a potential 'enemy organisation', and Menzies expressed 'grave concern' at the effect co-operation in Europe would have on its networks. When, in turn, MI5 suggested setting up its own liaison arrangements with Soviet security agencies in London, Menzies advised that 'it would be a waste of effort and an embarrassment'. The Russians were 'more interested in penetrating our intelligence than in helping', he added. Mindful of the MI5 reports, Menzies admitted to James Angleton of the OSS's counter-espionage division, X-2, which liaised in London with Section V: 'We've been penetrated by the communists and they're on the inside, but we don't know exactly how' (my italics).

And that was the point. Despite the presence in its ranks of senior officers who had operated against the communists in India, MI6 lacked any precise intelligence on the modus operandi of the Russian Intelligence Service, its structure and its relationship with local communist parties. It is, therefore, more than a coincidence that in March 1944, a month before Churchill communicated his fears, Menzies had 'nominally' reconstituted the anticommunist Section IX. Its head was Jack Curry; his deputy was Harry Steptoe, recently stationed in Shanghai.

Philby had a low opinion of Curry, who was 'hampered by deafness', and thought his deputy 'a near mental case'. Fellow officer Malcolm Muggeridge liked Steptoe: 'A little cocksparrow of a man with a bristling moustache, a high voice, monocle and lots of suits, ties, hats and shoes', who was 'a master-hand at letting fall the technical terms of espionage (letter-box, chicken-feed, cover, etc.) thereby giving an impression of effortless expertise'. In contrast, the about-to-retire Curry was an experienced former MI5 officer who had co-operated with MI6's Vivian and Cowgill in the 18(b) policy of interning fascists. Phillip Knightley is probably correct in his assertion that Section IX's first role was a 'counter-espionage one' before it became an 'offensive espionage operation'.

Philby's Soviet controllers had immediately seen the significance of the new section and ordered him to work towards becoming its head. Luckily for Philby, the idea that in peacetime Section V would take over IX's functions caused a certain amount of friction with MI5, which had responsibility for counter-espionage. Section V thus became 'a fulcrum for the application of political leverage'. Philby exploited the feuds within the intelligence community and 'nearer home, the jealousy felt by Vivian for Cowgill'. He succeeded in ingratiating himself with the 'enfeebled' Vivian and effectively undermined Cowgill's standing with 'C'. During mid-May 1944, Philby was left in charge of Section V as Cowgill was absent in Canada and the United States, helping to negotiate a signals intelligence (SIGINT) agreement on co-operation on cryptanalytic exchanges -- known as BRUSA.

On the eve of the Allied invasion of France, Section V, whose staff roster had risen to 250 officers, became increasingly important to the Allied counterespionage effort. It had already begun analysing recently captured Gestapo files and the increasing volume of Axis security records which fell into Allied hands. The files were to be used in the capture of leading Nazi agents as the Allied armies moved into occupied Europe. Much of the early work of compiling and editing of this intelligence haul was undertaken by another former MI5 specialist on Communism, Robert Carew-Hunt. Covering a specific area, such as Spain and Portugal, the 'Purple Primers' listed 'all that was known about active members of the Abwehr and Sicherheitsdienst'. After GC&CS cryptanalysts had cracked the Abwehr ciphers, MI6's Registry overflowed with a self-updating trove of signals intelligence with names of officers, agents and safe houses. This success gave MI6 'the right to be the senior Allied counter-espionage service'.

While the events on the western front remained the top priority, by the summer of 1944 British and American cryptographers had already begun to focus on the future. Bradley F. Smith speculates that besides dealing with the sharing of Axis-signals, the Brusa agreement 'embraced neutral and even Allied military SIGINT' -- i.e. Soviet traffic. The question of when Britain began to target the communications of its then chief ally remains a sensitive subject. In his official history of British Intelligence during the Second World War, Professor Hinsley asserts that, in the wake of Germany's attack on the USSR in June 1941, work on Soviet communications, codes and ciphers ceased for the duration of the war. Is this true?

At Bletchley Park, GC&CS continued to read the output of German intelligence organisations which had broken Soviet codes, particularly those gathering signals on the eastern front. In particular, it was reading the cipher of the Luftwaffe, whose signals intelligence organisation was listening to Soviet communications and passing them back to Berlin. More importantly, Smith has uncovered documentary evidence that, in early 1943, Bletchley began directly intercepting Soviet traffic.

This change reflected the views of officials at the highest levels of the intelligence community. A member of the Joint Intelligence Staff, Noel Annan, recalled that as early as February 1943, the chair of the Joint Intelligence Committee (JIC), Victor Cavendish-Bentinck, had written an indiscreet memorandum which had an 'off-the-cuff whiff of prescience about the postwar world'. Cavendish-Bentinck wrote that

since Stalingrad our immediate strategic objectives had changed. Until then it had been in our interest to do all we could to take pressure off Russia. Now that the tide had turned, it was in our interest to let Germany and Russia bleed each other white. We would find it easier to effect a landing in Europe, and Russia, however sentimental the British people might be about her, was likely to be a troublesome customer at the end of the war.

Cowgill told Philby that fifteen people were already working at GC&CS on Soviet ciphers and that Menzies had proposed adding more people to work on deciphering. That Bletchley had been engaged in this area was confirmed by Menzies's Foreign Office adviser, Robert Cecil. He recalled that with the dissolution by Stalin of the co-ordinating body for worldwide communist parties, the Comintern, on MI6 instructions GC&CS had been 'intercepting and decrypting the instructions that were being sent from the Kremlin to partisan groups and resistance movements under Communist control as to the tactics to be adopted as the day of liberation drew nearer'.

The first steps in a Anglo-American intelligence alliance acting against the Soviet Union began in the months before D-day when order-of-battle (OB) specialists met in London. The British team, led by Col. F. Thornton and Maj. N. Ignatieff, who both 'harboured engrained hostility to the Soviets and deep suspicion of Stalin's future intentions', exchanged intelligence with their American counterparts on the ability of the Red Army to tie down German units. Liaison officers, such as Col. Firebrace, who dealt with their Russian counterparts in London on intelligence matters, held similar prejudiced views. They were unwilling to admit that the Soviets had been 'generous' in handing over material about their own forces and information on the German divisions on the eastern front. Instead, they reported 'the most negative possible view of the Soviet intelligence-sharing effort' until this was 'gradually formalized and then served as the basis for a general conclusion that the prospects for "post-hostilities" co-operation with the USSR were extremely bleak'.

These negative views were taken on board by the chiefs of staff, who were also beginning to consider the nature of the postwar world. In August 1943, they had established a Post-Hostilities Planning Sub-Committee (PHP) chaired by Gladwyn Jebb, who was in immediate conflict with the chiefs' insistence on the identification of the Soviet Union as the only potential enemy after the defeat of Germany. Jebb described PHP members as 'would-be drinkers of Russian blood'.

Even with 'special security treatment', Moscow was quickly informed of the PHP deliberations because one of the 'Ring of Five', Foreign Office official Donald Maclean, was passing on details of the main discussions. Soviet news agencies soon began referring to 'nests of Fascist opposition' in the West. Diplomats attacked the reports, but a deputy under-secretary, Geoffrey Wilson, observed that there was more to the Soviet complaints than officials might suppose. 'If we make the necessary allowance for Soviet terminology...it has an element of truth in it. The people who, whether consciously or unconsciously, are doing their best to wreck the Anglo-Soviet alliance, are by no means confined to "obscure people without honour in their own country".' In a reference to the PHP, Wilson noted that 'the suspicion and even hostility of the Service Departments towards Russia are now becoming a matter of common gossip'.

Just five weeks after D-day, the PHP's 'wild acolytes' recommended that, if faced with a hostile Soviet Union, German help might prove 'essential' to Britain's survival. On 27 July, the chief of the Imperial General Staff, Viscount Alanbrooke, wrote in his diary after meeting the Foreign Secretary, Anthony Eden: 'Should Germany be dismembered or gradually converted to an ally to meet the Russian threat of twenty years hence? I suggested the latter...Germany is no longer the dominating power in Europe -- Russia is. She has vast resources and cannot fail to become the main threat in fifteen years from now. Therefore, foster Germany, gradually build her up, and bring her into a federation of Western Europe.' These views reached the ears of Foreign Office officials. In August, Senior Foreign Office official Orme Sargent reported that the chiefs of staff and 'certain high-placed officers' were speaking of the Soviet Union as 'enemy number one', and even of 'securing German assistance against her'.

These were not isolated opinions. In Washington, the former Director of Military Intelligence and head of the British Military Mission, General F. H. N. Davidson, enquired of one of President Roosevelt's confidential advisers 'whether the United States could be counted on to march with Britain in the "next war" against Russia'. At that stage, such a view was regarded as belligerent and the response from the White House was distinctly disapproving.

The chiefs of staff presented their long assessment to the Foreign Office in October, noting that 'we cannot afford to eliminate from our mind the conception of an expansionist and perhaps eventually aggressive Russia'. A British diplomat in Moscow, Frank Roberts, thought that the chiefs were 'not only crossing their bridge before they come to it, but even constructing their bridge in order to cross it'. Officials were worried that the 'simple military mind' would signal an all-out preparation for war with Russia. Despite Foreign Office objections, the chiefs sought Eden's agreement that contingency planning for a war with Russia would be allowed to continue but confined 'to a very restricted circle'. Such ideas were too sensitive for the Foreign Office, which limited the circulation of PHP texts -- though Donald Maclean received copies -- and ensured that hostility to the Soviet Union was downplayed. Eventually, the Foreign Office withdrew from the committee; a decision 'welcomed' by the military planners who were now free to persist with their 'anti-Russian extravagances'.

Following the success of the invasion of the Continent and the realisation that the end of the war was in sight, it became evident that the control or independence of the countries of Europe ultimately rested on the strength of Russian arms. In October 1944, Churchill continued with his policy of asserting a right to be heard on Europe's future and struck his famous 'percentage' deal with Stalin. It accepted that the Soviet Union would have an almost free hand in Romania and Bulgaria in return for Stalin's recognition of British predominance in Greece and of joint Soviet and Allied influence in the future of Hungary and Yugoslavia. What set the pattern for the immediate postwar world, particularly in relation to what was about to happen in eastern Europe, was not, however, the actions of Stalin but Churchill's plan for Italy, over which he was prepared to have 'a good row' with the Russians.

In a policy that undermined East-West relations, the Soviet Union was not allowed a role in the Allied military government in Italy. Churchill saw the country 'primarily as a joint Anglo-American responsibility' and did not bother to consult Moscow on the surrender terms which Stalin, quite reasonably, viewed with deep suspicion. 'Hawks' among the British diplomats, who already saw the Cold War on the horizon, ensured that they only 'informed the USSR but did not consult it' on major policy issues. Churchill lacked the foresight to see that his stance on Italy was bound to be interpreted by Stalin as a harbinger of things to come. Stalin had little alternative but to interpret Churchill's attitude as an insult, which he repaid in kind by refusing the Allies a role in eastern Europe.

A few diplomatic figures had argued for a tripartite form of control which one senior official believed would 'mean that we and the Americans would have the day-to-day possibility of cross-examining the Russians on their intentions towards the Allied countries and Eastern Europe generally'. The military rejected such a plan, a decision that suited Stalin. Historian Herbert Feis has written that 'the Soviet Government was to maintain that the Italian set up was a good and fair model for use in nations liberated by the Red Army'. In one sense, Stalin was happy to see the British and MI6 interfere in Italy's political affairs since he was, according to one writer on Italian resistance, Charles Delzell, 'quite willing to leave events to Anglo-American management as long as he could exercise similar undisputed sway over his sphere of eastern satellites'. American officials realised that the decision to minimise Moscow's role in occupied Italy 'might give the Russians a convenient excuse later on to restrict Anglo-American activities in Romania, Bulgaria and Hungary'. Which is precisely what happened: the Americans reluctantly acknowledged that, given the Italian analogy, it was 'only natural and to be expected'.

MI6's Foreign Office adviser, Robert Cecil, had also turned his thoughts to the future. 'If the freedom, for which the West had fought, was to be preserved', Cecil concluded, then 'the task of keeping track of international Communist activities would soon have to be resumed.' In August 1944, Philby, who had expected to begin work on the illegal organisations of the Nazi Party and, when the war ended, to work in Berlin as chief of counterintelligence, was informed that Vivian wanted to appoint him the operational chief of MI6's anti-communist work in place of Curry.

Cowgill received no warning of Vivian's decision, and it was only on his return from a tour of inspection of SCI Units in liberated Europe on 23 October that he discovered that Philby had achieved his goal of heading Section IX. He had done so by stressing his willingness to collaborate with the Security Service, which was involved in an ultimately unsuccessful battle to incorporate Section V into MI5. 'At one stroke', Cecil bitterly recalled, Philby 'had got rid of a staunch anti-communist and ensured that the whole post-war effort to counter communist espionage would become known in the Kremlin. The history of espionage records few, if any, comparable masterstrokes.' Ironically, Cowgill would resign fromMI6 because of his 'opposition to the redirection of energies in British counter-espionage from Germany to the new Soviet threat'.

The creation of Section IX had been welcomed in the 'warren of woodenpartitioned offices and frosted-glass windows' of Broadway Buildings by senior officers because 'it seemed to hold out the prospect of a continued MI6 foothold in post-war counter-espionage work'. Older officers also saw an opportunity to 'stay at their desks drawing a salary for a few more years pending retirement'. Junior officers, who thought their superiors 'lunatic in their anti-communism', were happy that Philby had been promoted and pleased that 'at least one communist should have broken through and that the social prejudices of our superiors had, on this occasion, triumphed over their politicial prejudices'.

The new rapidly expanding anti-Soviet department was not yet fully operational, but Philby began to recruit staff, including Robert Carew-Hunt, head of Section V's subsection dealing with North and South America, who prepared background papers on communism, and Jane (Sissmore) Archer, a trained barrister from MI5's B Division, who was an expert on Soviet espionage and the Comintern.

Who sanctioned Menzies's expansion of the section or, for that matter, GC&CS's Soviet signals initiative is unclear. Cecil spent his last years trying to expose the inconsistencies and propaganda inherent in Philby's account while ignoring the more interesting question of why he allowed IX to expand at a time when the Foreign Office was still trying to dampen down hostility to the Soviet Union. Any official go-ahead would appear to have been the result of pressure from the military. Indeed, Menzies shared the military view on Russia and, according to future Chief Dick White, he 'ordered the resumption of operations without Churchill's knowledge because he knew that the Soviets would be a major problem'.

MI6 began to make use of captured Soviet soldiers liberated by the advancing Allied armies in the West. Nazi collaborators and former members of the Baltic Waffen-SS, who had sought refuge in Sweden as the German defence collapsed, were recruited by Swedish and British Military Intelligence -- 'neither of which asked too many questions about the Balts' wartime activities'. The first link between MI6 and former SS men, they were used to gather intelligence on the Soviet armies as they swept across eastern and northern Europe. By the end of the year,MI6 had made contact with resistance organisations in the Baltic states and renewed relations with anti-communist, pro-German exile groups such as the Promethean League and Intermarium, which the Service had sponsored before the war.

Copyright © 2000 by Stephen Dorril


Excerpted from M16 by Stephen Dorril Copyright © 2002 by Stephen Dorril. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.