The Defence of the Realm (135 page)

During the 1980s Line X (scientific and technological intelligence) in the KGB London residency had greater success than Line PR.
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The last major success of the residency in the Thatcher era, in the autumn of 1990, was to resume running the electronics engineer Michael John Smith, who had so far escaped detection by the Security Service.
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S&T was also a field in which the intelligence services of the Soviet Bloc were of particular importance to the Centre.
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In 1980, possibly an exceptional year, just over half the S&T obtained by the KGB came from the intelligence services of the Soviet Bloc, the East Germans and the Czechoslovaks chief among them.
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Only a decade later, however, with the collapse of the Soviet Bloc, the KGB lost all its main European intelligence allies. By 1990 some of the Soviet Union's closest Cold War intelligence allies had begun to co-operate with Western agencies. The illegal Václav Jelínek, alias ‘Erwin Van Haarlem', who had previously refused to talk to the Security Service,
was instructed to do so by the post-Communist Czech intelligence service.
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During the final years of the Cold War, Chinese espionage in Britain was probably more difficult to monitor than KGB operations. The Service reported in 1988:

At around 500 [the Chinese] are the largest official community in London. There are over 2,000 students at some 300 establishments and colleges; and delegations visiting the UK run into thousands. Both the Chinese Intelligence Services have substantial resources and both are represented here with their officers and co-optees working within the diplomatic community and outside it. We cannot therefore pretend to anything like satisfactory coverage.
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According to Chinese defectors, there was a dramatic increase in Beijing's scientific and technological intelligence-gathering in the later 1980s. In 1986 Beijing rated Britain as the fourth most important source of S&T. By 1988, the S&T unit at its London embassy was rated the ‘most productive in terms of reporting' anywhere in the world.
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An Interdepartmental Working Group convened by the Cabinet Office in 1987 concluded, after considering detailed evidence from K6 and K8, that List X firms showed insufficient awareness of ‘the weight and intensity of the Chinese Intelligence effort in the United Kingdom'. One cautionary example used by C Branch in 1988 concerned a leading hi-tech company with classified defence contracts which, to strengthen its commercial links with China, gave a ‘scholarship' to enable a young Chinese weapons engineer, whose father had an important job in Beijing, to train with it. A C Branch security adviser agreed with the List X company's security controller a training programme which would keep ‘Mr Zhang' (not his real name) away from sensitive areas. When the adviser visited the company in April 1988, however, he found that for the past four months ‘Mr Zhang' had been working in a secure area with engineers who were in the habit of discussing classified projects and in the vicinity of filing cabinets containing documents marked SECRET. ‘The assumption has to be made', the C Branch adviser concluded, ‘that [Zhang] will have been working to a detailed intelligence brief.'
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Chinese espionage never came close, however, to equalling the threat from Soviet Bloc espionage during the Cold War. A Cabinet Office assessment concluded in 1988:

The Chinese Government is not hostile to the British Government or NATO in the way the Soviet Government and the Warsaw Pact are. We should recognise the distinction between [Soviet] spying with the hostile intent of gaining an advantage
over an enemy, and [Chinese] spying with the purely selfish intent of gaining a national advantage.
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The Chinese military threat to British interests was rated so low that, as K8 (whose responsibilities included monitoring Chinese intelligence operations) reported to the DG: ‘The Chinese enjoy an access to the MoD and Armed Forces that is not afforded to any other Communist country. For example, the Chinese are now authorised to receive Confidential information from MoD. Also Chinese students are increasingly attending [military] courses in the UK . . .'
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At the end of the Cold War, the overall threat to national security from foreign espionage appeared to be low. Since Operation FOOT in 1971, the United Kingdom had been a hard target for the intelligence services of the Soviet Bloc. One of the most effective weapons in MI5's armoury had proved to be the policy of refusing a visa to any known hostile intelligence officer applying to work in or visit the UK. A counter-espionage officer, who became Director K in 1992, recalls:

Over the years this policy kept hundreds of experienced I[ntelligence] O[fficer]s from entering the country . . . The result of this policy was that the opposition was increasingly forced to post inexperienced intelligence officers to the UK – officers who had never served in the West before, or who had never drawn attention to themselves through operational activity, the espionage equivalent of ‘clean skins' – who were more likely to make mistakes or who would be reluctant to risk being caught and expelled ignominiously.
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The KGB's difficulty in appointing competent, experienced residents in London probably explains its choice of the inadequate Arkadi Guk in 1980. A more competent resident might well have accepted Bettaney's offer to work as a Soviet agent and have succeeded in bringing about the only major Cold War penetration of the Security Service. There were of course some able KGB officers who succeeded in slipping through the net. Possibly the ablest was Viktor Oshchenko of Line X, who was responsible for the recruitment of Michael John Smith, probably the most important espionage case in Britain still unresolved at the end of the Cold War.
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There were fewer restrictions on the GRU. In order to facilitate the posting of British military attachés in Moscow, there was a policy of giving visas to Soviet military attachés posted to London – all of them GRU officers – provided that they had not previously been identified acting operationally (including, but not limited to, running agents) against the UK or a close ally.

In tandem with the visa-refusal policy, the ceiling on the numbers of Soviet officials allowed in the UK prevented the unchecked expansion of the London residencies, forcing the KGB and the GRU to compete with other departments for slots in the embassy, Soviet Trade Delegation and other Soviet offices. A retrospective analysis of Service counter-espionage in the later Cold War concluded:

When a hostile IO arrived in this country, he faced an intimidating array of countermeasures, ranging from a sophisticated protective security programme to intensive surveillance and double-agent operations or ‘stings'. We watched, analysed, made deductions, followed up every lead, interviewed their contacts, even put officers alongside them under cover. This was the bread and butter of our work against the so-called ‘legal' Residencies – those IOs who operated under diplomatic or trade cover in the embassies, trade delegations, international organisations etc. At the outset, of course, we did not know whether a particular individual was an IO or not, so the first priority was to confirm his status. Once identified as an IO, he would become the focus of more intensive study to determine the nature of his duties and contacts. Finally we would decide whether and how to disrupt his espionage activity. The defensive system that we developed over the years put enormous pressure on hostile IOs, most of whom felt apprehensive and intimidated even before they arrived here, such was our reputation.

Perhaps the clearest evidence that the KGB found it hard to operate in Britain was the fact that in the latter years of the Cold War, it diverted a significant amount of its operations against UK targets to third countries, where British personnel were more exposed and vulnerable and where the local security service might not be as effective. The Security Service sought to counter this by briefing likely targets. Soviet Bloc intelligence agencies also moved many meetings with British agents to other countries, which made them more difficult to detect. To some extent, one Director K believes, ‘the Service may thus over time have become the victim of its own success.'
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The main Lines (departments) in KGB residencies during the later Cold War were: KR (counter-intelligence and security), N (illegals support), PR (political intelligence), SK (Soviet colony) and X (S&T). Line F (‘special actions') had been wound up in its existing form following the scandal which resulted from Lyalin's defection. For further details, see Andrew and Mitrokhin,
Mitrokhin Archive
, appendix E.

10

Counter-Terrorism and Protective Security in the Later 1980s

Stella Rimington later argued that the aftermath of the Brighton bombing would have been the moment for the Security Service to claim from the MPSB the lead intelligence role in combating Irish Republican terrorism in Britain. The opportunity, if it existed, was missed. Rimington blamed senior management, who, she claimed, ‘had not wanted to take on the responsibility, because they were afraid of criticism if they failed'.
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Though the claim that Sir John Jones and the Service leadership did not possess the courage to make the change may be unjust, they lacked the confidence to argue their case within Whitehall in a way which would have given it any real prospect of success. The ineffectiveness of PIRA mainland operations after the Brighton bombing also lessened what pressure there was for a radical reorganization of counter-terrorism. Neither the Security Service nor the MPSB could have foreseen that the attack on the Grand Hotel was to be the last major success by a mainland ASU for the next four years.

From the mid-1980s onwards, the decline in the Cold War and in the perceived threat from domestic subversion was matched by increasing awareness of the terrorist menace. FX Branch's work was evenly divided between Irish and international terrorism. Director FX, Patrick Walker, told the Home Secretary and his PUS in July 1985: ‘The threat posed by international terrorism was less intense and sustained, but it was, on the other hand, more diffuse and, in intelligence terms, tougher to crack. The threat posed by Irish terrorism was more sustained, but in this area the Security Service shared responsibility with MPSB . . .'
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The Service found it particularly difficult to assess the threat from the most active and brutal international terrorist group of the time, the Abu Nidal Organization (ANO), then based in Libya,
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which was committed to the destruction of the State of Israel and to an international Arab revolution. In an unsuccessful attempt to secure the release of the jailed hitmen responsible for the attempted assassination in 1982 of the Israeli ambassador in London, Shlomo Argov, the ANO threatened a series of attacks on British interests.
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The Service, however, had no means of knowing whether the increasingly mentally unstable and unpredictable Abu Nidal was planning operations in Britain as horrendous as his murderous attacks in the mid-1980s on Rome and Vienna airports, and on Istanbul's largest synagogue. F3/8 told an intelligence conference in September 1984:

It has always been extremely difficult to achieve a sound estimate of the size of AN[O] either as a whole or in a particular country such as the UK. The group has been very effective in securing the anonymity of its members in European countries and it has been exceptionally difficult to penetrate. Although we are constantly in receipt of lists which purport to name Abu Nidhalists, they are usually worthless. We have received over twelve such lists in 1984 alone, some of them being repeated from one security service to another, the names being increasingly garbled in transmission. Few of the names ever prove to be of men who can be positively identified.
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‘I am the evil spirit of the secret services,' boasted Abu Nidal in an interview with
Der Spiegel
in 1985. ‘I am the evil spirit which moves at night causing nightmares.' The greatest nightmare for the Security Service was his threat to the Prime Minister: ‘We are working with all our forces against Thatcher, for example with the IRA. She escaped with her life from the last assassination attempt in Brighton, but I can assure you that she will not be able to avoid the next attacks.'
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Improbable though the threat to Mrs Thatcher might appear, Abu Nidal's terrorist track-record was such that it could not be ignored. In the event, instead of mounting further attacks in Britain, he chose softer British targets abroad. In 1984 ANO assassins killed Kenneth Whitty, the British cultural attaché in Athens, and Percy Norris, the British deputy high commissioner to India in Bombay. Abu Nidal's most ambitious operation against a British target, probably prompted by his Libyan hosts, seems to have been the attack on Sunday 3 August 1986 by three small groups identified by the Security Service as ANO terrorists on the living quarters and recreational area of RAF Akrotiri in the British Sovereign Base Area of Cyprus. The attackers claimed to be retaliating against the US air-raid on Libya a few months earlier, which Qaddafi wrongly believed had been launched from Akrotiri. Though the terrorists used a rocket launcher and mortars, damage to the RAF base was slight. The only injuries were minor shrapnel wounds suffered by two wives of service personnel.
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The Security Service continued to investigate the possibility that ANO had established a network in Britain capable of mounting a major terrorist attack.
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Though the Service found no evidence of any, it could not be certain that – as now seems highly probable – none existed. During the later 1980s, Abu Nidal increasingly dissipated his
homicidal energies in a feud with the leader of the PLO, Yasir Arafat, whom he bizarrely called ‘the Jewess's son', and in a paranoid hunt for mostly imaginary Arab traitors. He subjected his mostly innocent victims to sadistic torture and execution.
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