British Intelligence in the Second World War vol.4

v BRITISH INTELLIGENCE IN THE SECOND WORLD WAR VOLUME FOUR SECURITY AND COTJNTER-INTELLIGENCE

The authors of this, as of other official histories of the Second World War, have been given free access to official documents. They alone are responsible for the statements made and the views expressed.

BRITISH INTELLIGE.NCE IN THE SECOND WORLD WAR VOLUME FOUR

SECURITY AND COUNTER-INTELLIGENCE by

F. H. HINSLEY F'elkrw of'St John's College and Emeritus Professor of the History

ol' lnternational Relations in the Universily of Cambridge and

C. A. G. SIMKINS Sometime Scholar of New College, Oxford and of Lincoln's Inn, Barrister-at-Law

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(]ON'I'ENTS

rr11r

l,'irst prrblislrcrl r r;r;rr

lSllNorr(ito<;rr:ro

HMSO publications are available from:

Pt'elh<:e

IX

l.ist of' Abbreviations

xl

ff.liir#::f:tff ,,, .'lri* PO Box London,

PART I:

276,

SWg 5DT Telephone orders or_g73 gogo

Chapter r: Ohapter z: Ohapter 3: Chapter 4:

General enquiries or-873 oor r (queuing system in operation for both numbers)

ytY$:ril"tTfi

4e High Holborn, London, oor r (counrer service only) 258 Broad Street, Birmingham, Br zHE ozt,_643 374o Southey House, 33 Wine Streei, Bristol, BSr zBe liiTiiiOagoO g-zr Princess Street, Manchester, M6o gAS o6rg34 7zoi" 8o Chichester Street, Belfast, BTr dy (oz3r) zgga5r 7r Lothian Road, Edinburgh, EH3 9AZ ogr_zza

PART

4i"e,

(lhapter

HMSO's Accredited Agents

5:

(see Yellow Pages)

(lhallter 6:

and, through good boohsellers

British Library Cataloguing in publication Data A CIP catalogue record for this book is available from the British Library

Before the War The Twilight War The Fifth Column Panic The Re-Organisation of Security in the United Kingdom,June rg4o toJune rg4r

{r *:s

i[

OhaJrter 7:

Chapter 8:

tr ,&

The Decline of the Threat from Subversion to the End of rg4z The Defeat of the Abwehr's Offensive, June

s

79

r3r

PART

{1...

65

rg4o to the Autumn of rq4l, and the Consolidation of the Double-Cross System 87 Counter-Espionage Operations and the Development of Deception from the Autumn of rg4r to the End of rg4z Lo7 Disputes about Responsibility for CounterEspionage from June rg4r to the End of

ii

s.

47

II:

1942

k#-

3

29

III:

:,1

.t,i

r{

ir

(lhapter g:

i!!t.

,*

4|*i :l:,:

Oltalltcr ro:

'Ihe Development of Security Organisation Overseas to the End of lg4z r4r Counter-Espionage and Deception Operati
to the End

of

ry42

r57

I'AR'f IV: Pr.irrtcrl irr rlre

Ilcr

llrritcrl Kirrgrkrlrr lor, Mljenty,r Stirtiorrer.y { )llirr.

l)rl

(llrlptt.r'

111r44ti ( i7n r r/tt1;

ru

r r:

Sccrrt'ity ()t'girrrisirtiorr irr tlrt' Urrittrl KirrgrZ:t rlotrr irrrrl ()vt'r'st.ls irlicr r1y4l

vl

Ohaptcr I r: Chapter r3:

vll

(kx.urtcr-lisltiorralgc ()1rcr:rtions irr thc Unitcrl King
Chapter r7:

Security Precautions for Operation Oaerlord 247 Counter-Espionage Operations in the Field z6t

Security against Germany in the United Kingdom to rhe End of th'e War 273 Security against the Communist threat in the United Kingdom ro rhe End of the War 283

APPENDICES Appendix r:

ilhe German Intelligence Services .(l) f|r. Organisation of the Abwehr (ii) The Sicherheitsdienst

(iiii

Appendix z: Appendix 3: Appendix 4: Appendix 5: Appendix 6: Appendix 7: Appendix 8: Appendix g:

2gb zee 301

The CPGB's Volte Face in October rg3g 3o5 Technical Problems affecting Radio Communications by the Double-Cioss Agents 3og List of.Subjects Considered by the Security Executive Zrb Prosecutions under the Defence Regulations (i) The British Union liiy rne -"*-".riri il3 Abwehr Agents; Aurumn rg4o Z2r Two Seamen Agents Zzg Tole's Report jrn Bomb Damage at Coventry as submitted for Approval and as Approved gg, Some rg4z Spies .(i) P.".-y Double Agents 335

r".ty

(ii) (iii) Appendix ro:

ii;; F;u;T'il Abwehr

Simoes

Executed

Interrogatiolr Mctlrrxls (i)'l'lrt. l.olrrknr Rt,r.r.lltiorr Ct.trlr.t.

(ii)

Olrrrgr

olo

(i) l)scaJrcrs (ii) A Parachutist

Appenclix

Appendix l3: Appendix r4i Appendix r5:

PART V: Chapter r4: Chapter r5: Chapter r6:

A1ryt:rrrlix r r I Six Spics Oarrglrt

336 337 33{)

ll4

I

in r94g

and r944

List of Important Items'which it is Undesirable for Visitors to see' The SHAEF Directive on CounterIntelligence The Case of King Kong Double-Cross Agents Run in the Field rg44 to rg45

lndex Numhered notes to the text are to

343 345 347

349 373 379 385

be

found at the end of each chapter.

IX

I'RE,ITACE

rf

I I IS ll(x)K forms part of rhe series entitled British Inteltig,'ru', in the Second World War, of which the first three I r- v'lumes, dealing with the influence of intelligence on strategy and operarions, have already been publisheJ. In the (:ourse. of producing- it we have enjoyed the piivileges rhar were extended to the authors of the earlier volumes, arid have been governed by the same conditions. These privileges and conditions were set out in the prefaces to Volumes I, tt a.rd ItI and are here recapitulated. we.have been granted unrestricted access to the intelligence recrlrds for the inter-war years and the second world war, as well as to other relevant archives, as a special measure. If any archives have.escaped our attention we are satisfied that ouersig'ht on our part is the sole explanation. No constraints have been piiced on us while carrying out our research. on the contrary, in obtaining Access to the archives and consulting membe.r o? the war-timE intelligence community we have recEived full cooperation from the Hist'rical Section of the cabinet office urri upp.opriate Sovernment departments. I' preparing the results of our research for publication, however, we have observed the ruling that was liid down by the liecrctary .f state for Foreign Affiirs on 12 January .g7ti in a written re.ply__t. a parliamenrary quesrion. ih. reply"aduised war'-tirne..intellige.nce staff on the extent to which th.y ,r".. absolve
xt

itrtt:lligc.trt'c lu:ltttitlttt's :rrrrl witlr rc$t)e('t to irrrlivirlrrirls r.crlirirrs essential. It has, llr)wt:vt:r', rlir:ralcrl rlrc sysrt:rrr wc hirvt: :ukr1lr.e
ABBREVIATIONS Ao

Ar.rslarrds Organisation

AR(;OS

All Russian Co-operative Society

llso

British Security Co-ordination

BU,I}I.JF'

British Union (of

'(;'

or CSS: Head of the Secret Service Chief of the Air Staff Combined Chiefs of Staff (Anglo-American) Combined Intelligence Centre Iraq Committee of Imperial Defence Chief of the Imperial General Staff Chiefs of Staff (British) Chief of Staff to the Supreme Allied Commander

(:AS

ccs CI(]I ctD

clcs cos

COSSAC

Fascists)

(Designate)

cP(;B

Communist Party of Great Britain Combined Services Detailed Interrogation Cenrre Consular Security Officer

csDrc

cso Dt' DMI DNI DPP

Direction Finding Director of Military Intelligence Director of Naval Intelligence Director of Public Prosecutions Defence Regulation

DR DSO

Defence Security Officer

F'AK

Frontau fklirungs Kommandos

t'A't'

Frontaufkliirungs Truppen

l.'Bl

Federal Bureau of Investigation

FI.JSA(;

Notional lst US Army Group

(lO and CS

Government Code and Cypher School

(;Po

Hl)t:

General Post Office

Hr)(s)[:

Home Defence Executive (not to be confused with the HD(s)E) Home Defence (Security) Executive (first name of the

HP(;

Home Policy Committee

Security Executive)

tRA

ls() lsos lssn

lrish Republican Army n
I

rrlr.r'-Servicr-s St.r'rr r'it y

lI r;r rrl

.lill

oint lrrtclligerrce ( irrrurriltee ( .f apancsc I rrsllirtrl l,'i li h l rl rr lrrrr ist

KO

Kriegsorganisatiorr (ol' t.he Allwchr')

LCS

London Controlling Section Liaison Officers Conference London Reception Centre

.f

l(

r

LOC LRC MEDC

MEIC

MI NID NSDAP OB

OKH

oKw OSS

PPU PWE

PART I

.f

Middle East Defence Committee Middle East Intelligence Centre Military Intelligence Naval Intelligence Division National Sozialistische Deutsche Arbeiter partei Ossewa Brandwag Oberkommando des Heeres (High Command of the

German Army) Oberkommando der Wehrmacht (High Command the German Armed Forces) Office of Strategic Services (US) Peace Pledge

of

Union

Political Warfare Executive

RCMP Royal Canadian Mounted Police RSHA Reichssicherheitshauptamt RSHA (Mil Amt) Reic_hssicherheitshauptamt Militirisches Amt RSLO Regional Security Liaison Officer RSS

Radio Security Service

SCIU

Special Counter-Intelligence Unit Security Control Officer

SCO SD

Sicherheitsdienst

SE

Security Executive

SHAEF SIC

SOE

Supreme Headquarters Allied Expeditionary Force Security Intelligence Centre Signals Intelligence - the general term for the processes of interception, analysis and decryption and the intelligence they produced Security Intelligence Middle East Special or Secret Intelligence Service Special Operations Executive

SSM

Service de Securiti Militaire

TIS

Theatre Intelligence

wr

Wit'clt:ss' l'elegralllr y

SIGINT SIME SIS

Secti
CIIAP'l'ER

I

Before the War ECURII'Y as it was defined by the British war-time Security Executive in rg4z -'the defence of national interests against hostile elements other than the armed forces of the enemy: in practice against espionage, sabotage and attempts to procure defeat by subversive political activity'r - has been almosi everywhere a major and a'continuing preoccupation of governments and their citizens since the Second World War. It was otherwise bef ore r g r 4. The need to protect the state against these threats has a long history - a history as long as that of government itself. But befr:onurrittcc of'tlre Oommittee of'Imperial Defence (CID), ;ith llalrlarrc irs t:hirirrruur. lrs ternrs ol'ref'erence were to consider the nllrrr(' irrr
4

ltqlqt,f |,ltf Wilt'

Ilelinv the Wur

sr,t[)crvisiort ol'trlit'rrs srrslxr:tt:rl ol'lx.irrg sll.it.s; iurrl wlrcllter. arry alteration shoul
and the war office firr rrrtaini'g i'firrrnati'' f r-.r' alrr.racr. The sub-commitree Tn Jury tg.rg. ir ii,".r.r"ir,o, ,t,. _reported evidence left no doubt rhat 'an E*terrrii."ryr,.--"i G..-u' espionage exists in this country'. But it also found tt *. ,ro organisarion for . . . accurareiy identify^ing its "t u"ji.uu. ou.;..tives'; and it recommended that this defeci shourd ";;;;b; ;;; by the creation of a Secrer Service Bureau. The purpor;;;i;;"Bureau should be: '(a) To serve as a screen between the Admiralty and the war office and foreign spies who may have information ttrai they *itn ," ,-.ti ,o ,t. Government.

(b)r'o. keep in touch through the Home office . . . with the chief of ficers of Police and if necessary t6 send agents to various purt, orcr.at with a view to ascertaining the natrire and scope ot'trr..rprorr$ Britain that is being carried on by forei[n agenrs.

(c) To serve as an inrermediary between the Admiralty and the War office on the one hand and ihe agenrs trr"t *. .-rir"y'i"'?"r.ig"

cbuntries on the other'.

The Bureau should be separate from any of the deparrments but should be in close touch.'ith th. Admiralty, rh. W;;i;h;e and the Home Office, and also with the pohcl ,h. p"rlf

customs authorities.3

";;

""a

The Secret Service Bureau b-.gll work on r October rgog under the nominal supervision of iltO the ,p..iut ,..tio., of the 5,

Military Operations Directorate that wals responsible for quesrions relating to enemy. aliens. within a monrh td r#;;lr#.li, r,ua agreed on a divisig" labour by which or,. & 1t._ ,oof. 9f responsibility for all activities in the united KifuJ;;;irit" tr," other dealt with foreigl ug."rtt and the colectiori of i.rt.liig.rr.. ,gro ihis iivision of labour was formalised in the i?.::a.During orvlsron ot the Bureau itself into the Home Section and the Foreign Section.

At the outbreak of war in rgr4 the Home Section, hitherto klgyl as Mo(t),

was mobilis.d ,inde, the war office Direcrorare of Military Operarions y9l-(S). fnJanuary rgr6 "r Ultiiury llntelligence it became part of the new Directorate.of as MI r and its relationship to the Foreign section, *hi.h-;;;[..i'.i"i., ,t. Director of Military Inte-lligence (DMI) as MI i *u, i.rrtt .. 1.;, defined. MI r(c) *as madE r^.rpiu,lirii" Ior r:ounrcr_cspiorrage outside the British tir'pire ,,r *..11 as lirr.trr
('()lurrc'r'-(:slrirrr:r14c

li'ks wit lr gover.ments within the Empire.a rr;r(i rhc rlc?arrrncrrr *hi.n then becam; Mi;;;iarmost .LJrrril wh'IIy rrccupied with<.un_ter-espionage strictly define"d urra 1r.othe ,utbreak ,f the First worrd war)"with tt. tt r.ui or runot"g. Irrm firreign agents. From rgr6 these threar, ou..rhadowed t' tlre minds of those responsible for security*.r. by the danger of p.litical subversion. on tire one hand, the ihrJar f;; enemv

fgents had been all but eliminated. Twelve ,pi", t "Jn";;;jof ,r,"y_ rhe existence of a German .r",*ork*l,l::,:?l^4^,11d, rrettrnd' spres had been detected. The arrest of the z r members of rnrs network who remained in the country at the outbreak of war had. crip.pled the German Secret Service; 3; ;pi";-;;u=.r.rt.d during the war, but by rgr6 it had become virtualry impossibre for Germany ro- mainrain age.rtr in Britain.s hu'd, symptoms of general war-weariness, the greater activity of pacifist groups and the rumbling of industriir unrest *.1.-ty trr"., emerging as grounds for inxiety governmenr's-diiquiet at the prospects of civil ,,-tjr11^^rhe a llsstlelce,. -disquiet that had increased since rhe Bolshevik revotutlon in Russia.in rgr7, which prompted a further e.,qui.y int. the Secret Service ai the errd oi rhe war. The war cabinet

d-;il^;fi;l

appointed a secret service commi*ee i" yu""ury"rirf, urt., receiving from Mr Walter Long, rhe First Lori of theAd"m iralty, a rnemorandum stating that while he was no alarmist, he firmly believed that 'the eleirents of unresr and what we call Bolshevism more.deep-seared than many of us believe . . . fl: i:11: 9.":.?J, be vrgilant and above all we must have an efficient ... .y. TT, Decret servlce on rhe civil side . . . under a Minister who can bring the facts to the notice of the cabinet'. The committ"., .o^irti.rg of'the Foreign Secr^etary, the First Lord, the Home Secr.tu.y, tt. secretary.of state for war and the chief s..r.tu.y 1o, il.rura, lgreed without delay. .Leaving the'militarr ;id.' fi"rt.^s...., service aside for larer investigition, ii-...o--"nded that a new fiecret service direcrorate for c"ivil inielligence should be created ar .nce, the need for it to be reviewed wlien sociar .""Jiii""s had returned to a more normal course; that it should b" dir;;;; by Sir Basil 'I'homs.n, the Assistant commissioner of porice in charge of' the specialBranch of-1he Metroporita'poli..; and that he should be resprnsible to the Home S....tu.y. War C"bi".;;;epted the recommendations in March ,or6.u '.he 'l'hc establishrnent b#..torare of Intelligence did 'f the .,"r little r,'re rhan regurarise the situation. rh?- special llr.rrr:h, wlrit'h harl riirrg rrce.n rhe ""irti"g orthrlty ,.rf,i.,riur.foi-o.,i_ trrrirrg rlrr r:orrslririrt:itii I,'t:lri;rrrs :rn
(i

llnlinr llv Wur

llr.lim tht Wur

the propagarrda ol'pa<:ilisr irnrl lalxxrr olg:rrrisariorrs. llrrr the Directorate had rlnly a llricl' t:xistcnr:e, 'l'hcl.e was t:orrl.irrual friction between 'I'hornson and the C,mrnissi'ner of the Metropolitan Police, who had disciplinary but not operational control of the special Branch. By cultivating close relations with the Press, Thomson artracred a good deal bf publicity, and his over-zealous enlistment of agents and informants incurred the hostile criticism that he was operating a secret political porice. By posting liaison officers abroad, moreover, and developing collaboration with the Police in foreign countries, he threaiene*d the established division of labour between home security and the responsibilities of the old roreign Section, which was then coming to be known as the special or Secrer Intelligence service (sIS). Foi these reasons the opportunity was taken to abolish the Directorate in rgzr when, as a result of financial stringenc/, the Cabinet ordered an enquiry into the whole field of &penditure on rhe

l)irct'tor ol' lrrrelligerrcc with rn
Secret Service./

The r gz r enquiry, carried out by a committee of officials under Sir Warren Fisher, the head of the Treasury, was instructed to make recommendations 'for reducing expenditure and avoiding over-lapping'. Its report, issued in July-rg2r, commented unl favourably- on Thomson's reports o.r reuoiutionary movements overseas: they had frequently contained 'misleading if not absolutely_ erroneous information regarding matters 5y .to means invariably within the purview of his wor[,. It noted, hurther, that for his information on this subject he was largely dependent on the sIS. And it recommended that the work of his'rirectorate should be reviewed with 'the object of ascertaining whether its incorporation in the general organisation of the Meiropolitan police would not result in an increase of efficiency and a iubstantial saving in the Secret service budget'.8 The commissioner of police followed the repo-rt in memoranda to the Home secretary. He insisted lp that the independence of the Directorate was a menace to the discipline of his force and that the intelligence it supplied ro the force was unsatisfactory. He also argued tliat the Direciorate had a reputation for espionage against labour organisationi which was resented;.public opinion accepted a secret Service for the Army, Navy and Air Force and even for the Diplomatic Service as a necessary evil, but was suspicious of anything approaching the continental-system of.domestic espionage. Thomsbn fought 6ack, but in october the Prime Ministef ruleJthat he should riire, that the-separate post of Director of Intelligence should cease to exist a_nd that the Special Branch should be rutty suborclinated ro the commissioner of P
m,achinery should be amalgamared under his introl. As a result of his representations Fisher was asked to revive the committee of officials in February rg2b.The commitree started 'with a mild disposition in favour of amalgamation', but it finally concluded in December l-g25 that in view of 'the heterogeneous interests, liaisons, traditions and responsibilities of the iifferent services, and the marked reluctance of the majority of those concerned to advocate any drastic change, a coalitibn would, if it were nor an actual failure, be no great improvement,. It recommended, how_ ever, that it should itself remain in existence as a standing committee (the secret service committee) to act as a court of appeal which.might help to bring about compromise and grearer cuoperation between the three secret servici organisatiois.e . Ar y3r perhaps-unavoidable when the SIS was"responsible for the collection of intelligence from foreign countriei, including intelligence about suspect persons and sulversive poliiical movements, when MI b was charged with the detection of espionage and of subversion directed against the armed forces, and when t6e special Branch at scotland yard dealt with subversion as ir affected the civilian population, confusion and friction continued. 'fhey came to a head in rg3r when Scotland yard and MI had 5 both taken the strongesi objection to SIS operations afainst Communist targets in the United Kingdom. The Secret S6rvice Committee was reconvened and accepted a proposal by Sir John Anderson, then Permanent Under-Setretary at ihe Home OTfice, that.responsibility for evaluaring all intelligence, other than that dealing with Irish and anarchist marrers, ihould be transferred from the Special Branch to MI5. The change, and the move of Scotland Yard's civilian intelligence sraff to MI 5, took effect on r5 October r 93 r , the Special Branch informing Chief Constables that it had lleen ma
Ittlwrt el '( i' artrl ro ttlr,t tr.rl t(, th.)lrglrolrt tlril volunrc

&_,.',.

rtl

trT,,

tnF

vv

l

Mirristelial, inrlet:tl Prirrre Mirrisrcri:rl, apllrov:rl nrust l)re$snrably have beett olrtainctl firr tlris irnpoliiirrr rc-:uljrrstipent t,f' responsibilities, but no record of it has [cen lirunrl arirl the whole transaction seems to have been characterised by infbrmality. lupg3 of Februar{ rgga in an MI 5 file state that neither MI 5 nor the war office had any accurate rlcords of the process by wnich MI5 had ceased to be a small section of the wir office entirely under General staff control and had taken over certain civil duties from the Metropolitan Police on behalf of the Home office. sir vernon Kell had a_greed to take over these duties subject to the approval of the CIGS and the heads of the defence serv"ices which had been obtained by personal interview. It had been agreed that the designation MI 5 should be retained for such official convenience as it could affor^d,- without prejudice to the appropriate internal organisation of the Security Service. The primary motive for this re-organisation seems to have been the removal of friction. But the authorities may also have been concerned to_guard against the suspicion, which had been expressed so powerfully in rgzr, rhat they were permitting the development of a 'continental system of domestic espionagJ'. The important organisational consequences were left undefined, but it'was clearly understood that when dealing with subversive movements among civilians the head of MI5 would be accounrable to the Home secretary,_ who was constitutionally responsible for the internal safety- of the country and for upirolding the liberty of the subject and the rights of minorities .,nder the-law. However, the head of M^I b was not the servant of the Home Secretary, bui the servant of a number of ministers. The result of the new arrangements was that MI g, as the Security Service, became an inter-departmental and imperial intelligence service, without executive powers, working for and with the Home office, the Service departments, the Foreign, Dominion and Colonial Offices, the 'committee-of Imperial Defence, the Attorney General and the Director of Public Prosecurions and chief oificers of police at home and overseas. This was an anomalous position, which might become difficult if there were serious diiferences of opinion betweendepartments. Lord Hankey, secretary of the war cabinet and Cabinet rg16-19-38, would write in May rg4o* that MI was 5 'something of a lost child' and he had been u*lie for a long"time that its head wanred it to be attached to the committee of Im"perial Defence so that it would be within the sphere of the f,rime Minister.lo This re-organisation did not, however, affect the responsibility *

See

lrkrw, lrl, $(F4o

Itflorl

l,lr?

Wur

,l

ol'tlrc sls lirr r:ourrter-irrrclligerrce abroa<|. ()utside the three_mile linrits ol'the l.lrnpire r.he Sls ilcrnaine
t,

a
Ml 5 in any case depended trglvjiy for its intelligence i" dir.t urgirrg its security responsibilities within the Empire,ivas thus u io,,.rr..intelligence organisation of equal sratusio MI 5; the division of raDour Detween the two was geographical and not functional. tr

'fhe division of responsibility for counter-intelligence was to pr'duce renewed conhict berween MI 5 and tne Sts after the outbreak of war. In the few years befori rg39, however, friction

within the secret Service community subsiiJJ, a, i, irrJi.uted by the fact that though the secrer service committee remained in Detng,,rt drd not meetSgain after rggr. On the other hand, the inactivity of the secrer sJrvice co*triiite. may have increased the danger that MI 5 and the sIS, as servants of a number of different departments, would suffer from the inertia u.ra .r.gt..ittut uri.. when accountability is dispersed. Each underwent so"me expansion trom. 193.5 ln preparation for the outbreak of war, but from lack of rmaglnatlon or lack of funds, and probably for both reasons, neither. took adequate steps to earmirk and train a war ..r.ru. and nelther gave serious thought to the need for re_organisation to meet the demands which the-outbreak of war wourd --ut. ,rpo' it.

tg_z.f

M]

b's staff, which had been more than goo

ar the end ,f^By the First world war, had failen to 30. The transfer of the staff from scotland ?ardil ,e3,";;ught a ::|inilT]lisence rncrement and from rg34 the size

of the seiv'ice increased 'mall Its share of the SecreiV6te, slowly. mosr of which *us for slh.ies, rose from_Sf b,ooo in rg35-rg36.to f,5o,ooo for ,g3a. i" i.pr.rr,_ bel]93! MI 5 had g" ,e...taiiur and registry staff and a surveillance "ifi.".iiabour"rzo section of six men. In the same month, in a covering note with a report summarising informatio" ir"_ C.r_ man sources on the.development of G_6rman policy from 1936 onwards which reache.d thb Foreign Secrerar;, ;"A ,t.- pri_. MI 5 asked whethe-r, ,upu.i from the pi"."-;;; necess_ f[i1ister, Ity tor raprd re-armament', further measures should not be taken trl rlevekrp.the intelligence system and to provide u .o*pr.t.rrriu. review .f'.the. steps necessary to ensure security. wt.trrJr", not as a retult ol'this, M-l 5's sharci of the Secret Vote rose to f,qq.ooo for Ity rlrr,'rttrrr..k ,t'w:rr it h:rrt 83'fficerJ"un,t ,53 .iil1f.:il4l,. (,llrer' r'irrrks (:rlrrr'sr irll w'r'r:rr). 'l'lrcsij wcrc
llelira the

l(,

Ilelin'r tln Wur

Wu.r

ttcss ol' M

Itrur Branches: A Branch, resp
D Branch, which advised on the security of the munitions industry and public utilities and in war-time would carry out MI 5's responsibilities for travel control.

The head of the Service, Major-General Sir Vernon Kell, was in his 67th year. He had the confidence of his staff and, it appears, of the smali number of senior officials with whom he habitually dealt. His deputy, Lt Colonel Sir Eric Holt-Wilson, had joined the Bureau-in rgrz after seventeen years in the Army. He was 64 on the eve of war. The all important B Branch was directed by Mr O A Harker who hadjoined the Indian Police in rgo5 and had been Deputy Commissioner of Police in Bombay in the First. World War. He had been with MI 5 since rgzo. His Deputy, and in r94o his successor as Director of B Branch, was Mr Guy Liddell who had joined Sir Basil Thomson's Direttorate of Intelligence after servi"ce in the First World War and had remained at Scotland Yard until the transfer of the civilian intelligence staff to MI 5 in r93r' Between the wars recruitment to MI 5 was by personal introduction, which was thought to offer the best guarantee of the loyalty and integrity required in a Secret Service. Because the salaries which .oild be of?ered were acceptable only to men with a pension or some private m-eans, recruits were mainly drawn- from middleaged retiied officers from one or other of- the public services and ti'is had tended to produce a cerrain rigidity and lack of imagination. However, the new intake of the immediate pre-war years included a few younger men of more varied background. Two of them, Mr D G White and Mr R H Hollis, would hold senior posts during the Second world war and later in turn became head of the Service. In the sIS the section responsible for counter-intelligence (Section V) consisted of only two officers until December 1938; it was then increased to three. Until rg37 the Section had devoted almost all its time to the study of international Communism. The SIS's overseas stations gave low priority to counter-espionage work until after the outbreit of war, excePt in Holland and Belgium from the autumn of t938.

I

5,

ll

anrl tlre SIS was to lra ve damaging consequences only

alicr thc war had llrokerr out. Until the autumn of rg3g the evi
slight. MI 5 and the SIS were inclined to attribute rhe paucity of their evidence to the inadequacy of their sources of information because they did not know that it was due to the fact that the effort devoted to these activities by the Axis governments had been negligible in the case of Italy,* while restricrions by the German government on intelligence operations against the United Kingdom had lasted until late in ry37 in the hope that the United Kingdom could be persuaded not to intervene to thwart German ambitions in central and eastern Europe.lr But the fact that they did not know this was no reflection on their peace-time efficiency. On the contrary, their anxiety, though unfounded, testified to their lack of complacency. Although Germany had been forbidden by the Treaty of Versailles to have an intelligence service, as distinct from a counter-espionage organisation, she had resumed espionage activities in the United Kingdom from the mid-rg3os. Until the re-occupation of the Rhineland in r936 the SIS and MI 5 were not greatly disturbed, but this event gave a new impetus to AngloFrench liaison. In October rg37 the SIS drew the attention of all its overseas stations to the fact that there were serious gaps in its knowledge of the German espionage service, and of those of Italy and Japan. This followed upon discussions between the SIS and Ml 5 and the French counter-espionage authorities in which the l'rench reported that Germany had recently ser up a base in Holland for operations against France and the United Kingdom, and this was later confirmed by a reliable MI 5 source who rep
o *

t,ikc thc lxrtcrrtillity lirr t:otrllit't llelwectt lltctlt, tlte ttttllt'cpitt'c
Agurt lrorrr tlrr. lrrirl llir'tittiorr witlr Sir ()rw,rhl Morlr.y'r lltitirlr llrriotr ttl l;:trtirls,

b,rkrw, 1r

lll.

vr

I

t

llrlin'r thr Wur

Auslandsnur:hrir:lrtcrr rrntl Altwchr',t :rnrl ol' lhc lat:t tlrat it was headed by Admiral Canaris anrl subortlinatcd to thc ()berkommando der Wehrmacht (OKW). Bur by the ourbreak of'war rhey had detected the involvement of an office in Hamburg in some 3o cases of espionage or attempted espionage, four of the agents involved being convicted under the official secrets Acts and a nrtn deported for failing to register as an alien. From what they learned from these cases they might have concluded that the Abwehr's efforts were also modest. The agents were of poor qualit/, their techniques elementary and their reports to Germany contained little of value. But MI 5 was not convinced that its findings were a reliable guide to. what the Germans were already achrtving or might be preparing to undertake. In three of the more r"r-io.r, cases- it investigated the agent was found to be operating as a post-box for spies in France and the United States; this poinled to the possibility that the more important agenrs in the United Kingdom were making their reports through third countries. Especially after rg37, an uncomfortably higti proportion of the cases detected came to light fortuitously - about a doren because the agents brought themselves to the notice of the British authorities - and this raised questions about the efficiency of the surveillance system. Among the methods of surveillance was the power to intercept poslat communication-s in the public inreresr. The legitimu.y of such interception under the warrant of a principal Sicretary of State was recognised by Acts of Parliament-parsed in r7ro, rg37 and rgo8, and the power was deemed to extend to telegrams and telephone communications.12 Used selectively in the inter-war years it constituted a useful weapon against both espionage and subversion. But its existence was well- known, and undei-cover organisations have the best of reasons for taking care to evade it by resort to other means of communication. These included diplomatic bags, private_ couriers, cover addresses and, increasingly between the wars if also only slowly, illicit wireless; and all or rirost of them made use of secret writing or codes and cyphers. whatever the vigilance of the security authorities, they couid never be sure that no users of such channels were escaping detection. The uncertainty was particularly acute in relation to the relatively new threat from illicit wireless communications. The need for a specialist organisation for the interception of illicit transmissions from the United Kingrlom was recognised in rgzB by the Standing Inter-Deparrmental Sub-committee of the cID on C.nsorship. I"t Altl"'tt,lix.r(i). Rcli'rrrrl lo;ts lltc Alrwclrl tlrrrruglrorrt tlris volrrrrr.. l'lrc N;rzi l':rrty strtttity org:tttis;tliott, llrt'sirlrt.rlrcitrrlilrrsr (Sl)), wlrirlr lrr;rrrrt,tlrc Alrwclrr,;s

,.._l,S,.j1l ll;l(l lls 0wll

liv;rl;rrul irr

rry,1.1

itr srrppl;rrrtr,r (rn,Aplx.rrrlix r (ii) lrul lrri)),

Ilfltn'e lltc

Wur

13

re(:otnrncn(lccl tlrat tlrt: War ()ffice should use voluntarv and runlxri
t4

lhlorc tht Wul

Belbre tlw

the Nazi Party in tlrc unite
had had to deal only with a profeisional espionage nerwork, with those it had confronted before rg3g, when (aJit believed) the German intelligence effort had been carried out on a 'total basis'. The problems it referred to, which it associated equally if less g5ently with Italy, were those arising from the totalitarian ideologies of these srates- In the rg3os Germu.ry and Italy operated party organisations for their nationals in the United Kingdom and carried out propaganda among persons of German and Italian birth who had acquired British citizenship. They also exerted_ a pgwerful ideological attraction upon some British nationals, as did the Soviet-dominated Comintirn. The most prominent foreign party organisation was the Gau Ausland of the National sozialistische Deutsche Arbeiter partei (NSDAP) which had been established for the purpose of ,welding together . . . all Germans abroad . . . into one griat bloc,. TherE was a branch in London from rg3r known as the Auslands Organisatioq (AO). By _rggf it had 288 members and some r,boo contacts and these numbers had grown to 3oo and e,ooo by ,gg7. The Fascio,. organised by the Direttore Generale degli italiini all'Estero, did similar work for the Italian colony in tTre united Ki_ngdom, with branches in most of the large towns. From rg35 MI 5 warned the departments that such orginisations, controil6I by .foreign governments, were a ready-irade instrument for espionage and sabotage. In July 1936 ihe Home and Foreign Secretaries, promptbd by MI 5, asked the Cabinet to considir whether'informal and friendly suggestions should be made to the German and Italian Governmenti'- that they should close down these party organisations, whose presence wai'considered unusual and undesirable'. The cabinet thought that this would be inopportune because of attempts then under way to promote contacts between the British, Fr_e_nch, Belgian, German and Itarian governments, but invited th_e_Home and Foreign Secretaries 1o biing the question up again. when they did so a year later ihe ca6inet agreed that the matter could nor be allowed to drift indefinitely, but decided that in view of the difficulries over quesrions relating to the spanish civil war no drastic action shouli be taken at th6 moment. A parallel attempt by MI b ro get the chiefs of Staff to put their weight behind the drive for aition was unsuccessful.lb MI5 accepted that, as Sir Robert Vansittart, then permanent under-secretary in the Foreign office, put it t'warrrs the end of 1937, the otrtlawing of the A(), whi<;h 'rnight lravt: lx:r:n rkrne in trunJraralivt: r[rict il ye:rr itgo, wrlrrl
Wor

rb

first'<:lass st<)rrn'. llut irr .f urre rg3ti, as the international situation continued to deterioratC, MI 5-took the precaution of advising chiel' (hnstables t' be ready, on the r..Lipt of instructiorrr, ,o learch Ao premises, arrest ail officials and known members, and take steps to preve,nt saborage, and inJanuary rg3g it asked them !o grgpare for similar emergency action against itiJ ttatian Fascio. In February.rg.gg it persuaded the Home"and Foreign secretaries to take the whole matter back to the cabinet. In MarJh the cabinet authorised th.e deportation of a rimited number of Ao officials; and nine of them were expelled in April.16 The Ao and the Fascio-incorporated only a small minority of the 7o,ooo German and Austrian nationals in the uK and of the tg:9?o ltalians. Of the former particularly, rhe vasr maioriry were political refugees whose ry-puihi.s could safely u. urr,l-.a to n. with Britain. But as the screening of foreigrr.., o' trrei, u.riu"t *as cursory or non-existent, and as it had alsolo be assumed that some of them would be open to blackmail or to upp.ut, -io't"r.rr, patri'tism,. their largb numbers obviously offiied favturable opportunities for the infiltration or later recruitment of agents. . Another potential threat was the emergence of Fascist oieanisati,ns for British narionals. Ir was first iaken r.ril;;it uii., trr. foundation of Mosley's Brltish union of Fascists (BUF) i., .!32. at a meeting a1,th9 Home Office in November rg33 attendedty the Permanent Under-secretary, the head of MI b:"til" Cl--lr.ior.. of the Merropoliran,police 1ld effeci 1^..presen-rative from special Branch it was__agreed that with from April ;;t Speciar should assume rhe same functions ii"rl.p-e.t of 5 YI P::l:l !ascrsm i,ld. that they alre.ady carried out in respect of communism: in vlew.ot the responsibility of the police for the maintenance of public o.g9l' special Branch should collect information on Fascirm, but MI 5 would colrate Special Branch's information with material obtained from other sources and be ..rpo^iui. ro,

evaluating it.l7

r ,

:ill ;i: Sr r"l;:#o'l; ;:l'Jl'i,;il":p',il:T;?f;..i1,:"iTff, of t l.n:Ji,^lT-

the aurumn rg37, was a source of'anxiety ro ,fr. irs increasing.anti_semitism and it, ."_puig" :l,T:tjj:iP.:::1r" of confrontarion with the Jewish community and the #b":,; rTg.yeme-ntr especially in the Easr End, constitured a threar to the abrlrty of the Police to maintain law and order. It was not seen as crnstituting a threat to national security, as opposed to law and rlrder. F'or one thing,- its increasing extiemism *", by a rler:li.c irr nremtrcrship- Afie"r rising "..o-panied by..f urre. rr;g4.,.rr.rirlx,rshi1l g,olxr S.,(xx) w,,r'il.r*r, t, by the iurnnrcr ol' rr;{tl, arrrl it t',',.rv..r'",l.,rrly r, irlxrut r r,o(x) hy thc

;r;;;if

iJ,"-"

&: 'l-:::11'i:li::::ll : i--

r(;

3(inv thr

Il{lne

Wu,r.

that the movenlent harl urntacts with trrc Axis powcls ol'a kind thatjustified alarm.rs There was reliable information, confirmed by ltalian archives after the war, to the effect that it had been subsidised by the Italian government in the early years.te But even after 1936, when it became more strongly orientated towards c.r-l""y, adding 'National socialists' to its title, adopting new unifbr-r'ri-ilu. to those of the ss and condoning_all HirG.'s actions at its meetings and.in.its paper,.Action, no evidence was found to suggest that-it was being-subsidised by Germany or that Germany .#"i.rt...rted in exploiting it for the purposes of intelligence and subversion. \o1h_as any such evidence come ro light sinde the end of the .'ar.20 In luly rg3g MI 5 still took the view that the BU, like several smaller groups which subscribed to the ideology of National socialism, and particularly to its violent anti-semitfi'm,* presented no threat to security so long as times remained nornial, but it warned that in the event of war the movement might become a serious danger. Its close association with the Nlzis made it probable that individual Fascisrs could be used by the Germans for espionage and sabotage; there was a risk that attempts would be made to provoke disaffection in the services through anti-Jewish propaganda and to foment anti-Jewish riots in some-ureas; ultrd the activities of the movement encouraged the Nazis in their belief that the British government would not have a united nation behind it. The IRA was another source which might be exploited by foreign intelligence services as well as being ithreat to iec.rrity in its own right. From the spring of 1938, whin it was raken o',r"i by an extremist group advocating the use of force to bring about the fusion of Northern Ireland with Eire, the IRA was kiown to be preparing {or an 'English campaign' of saborage and for guerrilla operations in Ulster in the event of, or even before, the outbreak of a.European war. In January rg3g it warned that the campaign would begin ,tt: British gevernment failed to give a sarisfactory i{ response within four days to the demand for the withdrawal oi British troops-from Northern Ireland; bombs duly exploded in London and the provinces on 16 January, and the atLcks con_ tinued spasmodically for several honthi.2r Despite the IRA's narrow appeal, the fact that Eire formed a common travel area *

These included

rhe Link, founded within rhc Anglt>C,crman

Friendship m'vement by

Admiral Sir Barry Dornvilc, a lirrrncr Direrr
l

lrreirkawty group lirrrrr

rlr !lil

lor,rrrerl tiy Willi,,rii.;,ry."

lrlrl ,lolrtt llclhett itr rggl'l; lrrrl tlre Riglrt (ilrrlr mlrlrlirherl hy (lngrtnirr Mrulc Rnrruuy Mt; r9t9,

irr

the

Wa,r

17

witlr the United Kingd'rn, with frontiers that were uncontrolled virtually uncontrollable, and the fact that she would almost certainly remain neutral in a war, made the IRA an obvious instrument for sabotage and espionage operations in the united Kingdom by an enemy power. Evidence obtained from some of the spies detected in rg37 and arr
rg38,showed that Germany was alive to tir. possibilities of ii.e as a b1s.e f9r operations, and_several reports alleging German .orrru.r, with the IRA were received in thi early mintTr, rfig. Apart from Dr carl Petersen, the Dublin representative "r of the German News Agency and a favourite r,.rp..t *ho was rumoured to have guaranteed that the government of Ireland would be handed over to the IRA if the IRA helped Germany to win the war, these le-ports implicated three Germans who were all to serve the Abwehr during the war - Franz Fromme, who was known to have made a recent visit to Eire, Helmuth clissmann, an .*.t urrg" lecturer at lrlniql College, Dublin since rg33 and Dr.|upp Hoven, a student of folklore who had arrived iri"dire i" ,g'3ti i"a puii several visits to Ulster. In July 1939 the SIS heard"ihat an IRA lepresentative had been promisedirms and funds at a meeting,in Berlin with Admiral cinaris of the German war office'; the repgl! was accurate as ro the central fact that the Abwehr had established contact with the IRA, though mistaken u, to th. plu.. the presence of Caiaris and the pr"-ij" of {lmmediate 1., me1ti1g, help, and it was understandably accepted by MI as confirming its belief that Germany had made definite plurrs5fo. -- r--' using^the.IRA against the United kingdom. April rg38 an agreement was sign"ed berween the British and -..In Eire.governments which provided f6r the withdrawaioi British garrisons from the Treaty ports. The Eire gou...t-.rri rtua ,ro, disgu-ised- its,intention to remain neutral if Briiain were involved in war, but had_also given assurances that it would not ailow Eire to be used as a base for hostile_operations. On August lqq,g, at a 3r Tg^.!i"g with an officer of Mi 5, the nire niiniste? ro.-i"*t.rrrut Affairs expressed his governm.it'r.orr.ern about German intelligen-ce activities in Eire and it was agreed that there strouta be an exchange of informadon on this sribject. In october liaison was -io--pr"u. established with the Eire aurhoritiis which was considerable importance. It was always strictly corifined "r to counter-espi
Itl

ll{in'e the Wul ()reat llritai'arrd tlrc rrirish Hr'p.ir,c (arrd rrrrri' i' ,*fri.n llarticurar) were. rhe prime larget ,l' thc ,,u,rrpiig,, irt ,utru.]r,ri,rn cominrern carried out until ttr. i'aJ.irt rhrear ..r-o.it.a ,fr. r, ,,, 3dop! a radical change of policy in the -iali.lr,r*!gg"r. rh. knowledge that this was so, which was based on rhe dJJrypts or Russian telegrams tt rg-rZ,* had almost prevented the conclusion of the Anglo-soviet Trade Agreement of'r 9*o, threat to cancel that agreemi"r r: ,9*3, .*i.t..it;;";kJ; British u _4o, i.rflr.rr.. on British politics in igz4 (the Zin&ilv letter) u"a, io,rpf"d with evidence of sovietcrpio.rug", led to tt.-ur.ir.J"g'Jilpio-uri.

j"

t.9zz.r,-The tommunisr ru.ty

oi.Cr.Ii"g.i,ui.

:*111. founded in, (CPGB), rgzo as a fully committed member of the Comintern, was all the more ,rrrp.lt because, unlike the Fascist movements, it had influence in the Trades Unions and attached

to revolutignaf/ work in the armed forces. The of 19z6 had'shown that Britain was revolution. The ineffectiveness of the CPGB - nor ,ipe tor u" ug.rrt of lmportance

General strike

subversion had been demonstrated in rg3r; ". it exerted no in_ !,ue3ce.during the grave economic ..iriJ *ni.rr'-iro",igr,t trr. to power, and even the Invergordorimutiny )",11"^Tl^g_"."=ment rn rne Navy took it comple,tely by surprise- But rg35, when the Cominrern remporirily subordii-ated the frolm ultimate eoal of world revolurion to ihe immediare Frr.irand defending the soviet Union as theLastion "ui..ti"" "fof rJvorutlon, MI 5 believed that the rhrear fr"- ,n. Cpi tha n before u".",, r. j. acqu iri n g .'.u" , rtT:jH ryu, its Popular Fronr policies " u'i it, ;;;i".";;^i"".i;;,.,ii'_iur.ir, crusade. In rg35i\il argued ,t"rirr. 5 tacrics ,show a distinct ,..".d:"qy b-y ".w Comintein ro face realities $e ua-"ptH,hoa, which., had.they beeri exploitea consistently ";J;; rirr." itr.irr..ptiorr, would certainly have prod^uced far greater results,. There *u, ro lack tf ,".rppo., this anxiety. ln the "uialrr."'to" summer of following early setbacl, i" tn. Fof"i'ur'rror,, 1997, campaign_, the CpGB was se-verely criticised by the Co,iri-.ri"r' u'a instrucred ro be more whole_heJrt.al" ,,rUJ.airruii"g ir, ;".fr_ tionary aims ro the search for collaboration with the Labour movement' It was to decrare its acceptance of the .o.r.iit.rtio' or supporr Labour iandidates, ll^".^*P::_li1t, electoral agreements with the Labour party _ in, an utt._pt to teaders _ and t."r,rrorrn th- D"ib w;;h", fro_ a_ uommunrst paper one that^appealed to the eirtire working into class' The membership 'f the cfcg, which had failen from r o,o(x) to under 6,(x)o tiy r 93 r , grew t,, i li,,uu, r g3g

;iliil;

i

ff; *i|:Iilfi

i./i."."i.. i".

:r*i:::gll*hs

lrrs+il;;r

r

Ser tlirrrlry et ul,

ll,t*l

lnlolligctttt rtt lhe Sotonil Wuhl Wt,,

V'l

r (rtt7lt), lr llt,

llrlin'r the War

il'(l

r9

'r'lre expansi'n of its influence r 7't(x) in Marr:h beyond .r-g3{). the rncr'lrcr'slrip was iliuslraterr noi.nly by the ,ir; il;h; sales of Ihc Daily Wuher - to about loo,ooo on'weekdays and r5o,ooo on saturdays - but alqo by the striking success of the teft giok ctub; established in. r.-9g6: its membershlp was by the end of the 3o,ooo rising, ahd its ,iircles,"were freq.rentty l.a Uy I:i:.d.r.rpid]I Uommunis.ts.. MI 5 noted in December tggT that the Communist Party's_policies were identifying it with tfiJ ;p.ogr.rriu. .I"-..rtr' in the Labour Party and, inseltemb., rg3g, th"at its moderarion had strengthened its position in the Trad?i Unions. while the communists were unrivalred in the consistency with which they.opposed the Fascist srares, they displayed no less consistency^ in their hostility to the chamberiain gtverrrment. At the time of the Munich crisis MI 5 received u ,.p6rt to the effect that the CPGB had been told by the comint.rn thut chamberlain must be turned out of office at all costs in the event of war, an alliance between his government and the soviet union being logically untenable. The policy which the cpGB would adopt if the chamberlain government led Great Britain into war *ith th. Fascist porye-rs remained in doubt. The correct party line was that would not fight an alliance of Great Britain, France and the Ilrl.l USSR but that, whatever he said, Chamberlain would not fight Hitler. Accordingl/, rhe sheet anchors of party policy in ihe run-up to the war were the need for an alliance with Russia and the repla-cement of Mr chamberlain by a popular Front government. MI 5's assessment of April rg3g was that, leaving iria. itt long-term dedication to the d-"strnit'.i6.t of ail capitalisi regimes, 'the outbreak of war would not of itself ralry the clmrnunist"party against a totalitarian enemy. The support oi the party could never be given to a government which contained Mr Chamberlain . . . and this ruling appears to hold good even if the USSR should be fighting on th_e side of this couniry. Not only would the Commu_ nist Party withhold support . . . but it would take active sreps ro embarrass the Government by hindering the prosecution o'f the 1gI the hop-e that it mightforce its resifnatiorr'. Irr;rrly rg3g the CPGB was still denouncing chamberraiils governmJnt as iiiil..'. Fifth Column. There was never 1ny doubt that the soviet intelligence authorities would exploit communist loyalties for espionige purposes, but few cases of soviet espionage came to lighi in th"e rgz* u"a A network, probably run by the OGpU, which wis under -rggos. MI.5 surveillance f
l()

llr.lin'e

lhr Wul'

firrnratiolt alxrttt arltts sltilrtttcnls to r:orurtrics lxlrrlcr.irrg llre Sovict Union from a Lkryrls rrn