The Defence of the Realm (65 page)

The President felt very strongly that there should be an agreement on the matter . . . Every effort should be made to secure further information in the US and also Britain before action was precipitated. [It was] also most important to have complete understanding between the countries immediately concerned first.
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Mackenzie King told Hollis that he agreed with Truman. In the event, of course, neither May nor his Soviet controller turned up for the meeting outside the British Museum. Unaware of Philby's treachery, MI5 was left agonizing over the reasons why the prearranged rendezvous did not take place.

During Mackenzie King's stay in London, the Canadian permanent secretary for external affairs, Norman Robertson, agreed at a meeting with the DG, Sir David Petrie, that no action should be taken on Gouzenko's revelations until after Attlee and Mackenzie King had conferred with Truman in Washington.
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Meanwhile, the role of the Security Service in the Gouzenko case, as in most other cases, remained entirely secret. When the case was publicly discussed again five years later after the conviction of the atom spy Klaus Fuchs, the Commonwealth Secretary, Patrick Gordon Walker, still believed it ‘particularly important to avoid saying that we have or did have security officers in Canada'.
³²

May was first questioned at Harwell, Britain's first atomic energy research centre, by Commander Leonard Burt of Scotland Yard on 15 February 1946, the day after the Gouzenko case became public knowledge. Burt informed Guy Liddell that, when told by the Harwell security officer that someone wanted to see him, May ‘turned as white as a sheet, and was very near collapse'. During questioning by Burt:

He failed to answer any questions except in a plain negative. He made one rather curious remark when asked whether he would be prepared to assist the authorities:
‘Not if it's counter-espionage.' Asked what he meant he was unable to explain. His usual answer was ‘The answer is no,' after several minutes of silence.

Liddell noted, ‘There is no doubt from his demeanour that he is guilty.'
³³
On 20 February skilful interrogation by Burt convinced May that the case against him was very much stronger than it actually was. Liddell observed in his diary: ‘The point I think that shook May more than anything was Burt's reference to the proposed meeting [with a GRU officer] in London.' May signed a statement admitting he had been approached by a ‘Soviet agent', whom he refused to identify, and had given him a report on atomic research together with two samples of uranium:

He had done this because he thought it was in the general interest that the Russians should be kept in the picture, and should share in the experimental work. He knew about the appointment in London but had not kept it as he felt that since so much information had been public on atomic research there was no need to communicate any more.
³⁴

May's explanation for missing the rendezvous with his London controller was a lie. Over half a century later, shortly before his death, he finally admitted that he had received a warning from Soviet intelligence (no doubt prompted by Philby's warning to Moscow) ‘and so did not turn up to this meeting'.
³⁵

Mackenzie King was surprised as well as delighted by May's confession on 20 February 1946. It was, he wrote, ‘the best piece of news we have had yet'. It would demonstrate that there were British as well as Canadian lapses of security and enable a trial which, the Canadian Prime Minister was confident, would lead to similar trials in the United States. May pleaded guilty at the Central Criminal Court on 1 May to charges of breaking the Official Secrets Act by handing to a person unknown ‘information which was calculated to be or might be useful to an enemy'. After a trial lasting only a day, he was sentenced to ten years' penal servitude. When news reached Los Alamos of May's arrest, the wife of one of the British scientists commented, ‘I knew him fairly well. But I don't know how you would describe him. He was like – why he was rather like Klaus [Fuchs] here.' Fuchs, who was later revealed as the most important of the British atom spies, is said to have smiled politely and commented that he did not think May could have told the Russians anything of real importance.
³⁶
Though Fuchs did not say so, he probably concluded correctly that Gouzenko had no intelligence which incriminated him. When the net began to close around Fuchs in 1949, Philby was able once again to warn the Centre.
³⁷

Philby's repeated attempts to dominate the British handling of the Gouzenko case eventually led to complaints from the Security Service. On 19 February 1946, Philby prepared a draft memorandum on Gouzenko's defection which he claimed that Sir Stewart Menzies, ‘C', wished to circulate to the directors of intelligence in the armed services.
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Hollis was quick to protest:

I feel that the question of circulating this document from your office to the Directors of Intelligence is a matter of some embarrassment. The case took place in Canada and has ramifications in this country and in both Canada and here the security responsibility rests on our office and not on yours. The close cooperation which we have had over this case has, of course, given you just as much information as we have about it and as you know, we have welcomed this. But when it comes to putting out such a paper to the Directors of Intelligence, it may, I am afraid, give the impression that the responsible department is yours and not M.I. 5.

Hollis suggested sending a covering letter to the service directors making it clear that MI5, not SIS, was ‘the department responsible for dealing with counter-espionage in the Empire' and had approved the circular. He also noted a number of misleading statements in Philby's draft which he politely termed ‘small inaccuracies'. Philby had failed to give the service directors a clear indication of the kind of intelligence which the GRU was collecting in Canada. Hollis generously, but mistakenly, assumed that Philby had been motivated by a desire to protect the security of the Gouzenko case. ‘Perhaps you hedged on this', he told Philby, ‘so as to avoid giving the Directors of Intelligence too much detailed information.' Other inaccuracies in Philby's draft included his failure to mention that the Canadian Communist Party had acted as talent spotters for Soviet intelligence – a revelation which might have caused the service directors to investigate the wartime role of British Communists in the armed forces.
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Philby's reputation in the Security Service, none the less, remained high. Liddell was ‘profoundly sorry' to be told in September 1946 that Philby was leaving to become head of station in Istanbul and doubtful whether his successor would be nearly as good.
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Liddell also had great respect for Gouzenko, whom he found ‘extremely alert and intelligent' during a visit to Canada in March 1946:

I asked him how it was that Russia had been going on in its present state for 28 years and how it was that the Russian people fought so well. He said that if I had been brought up on Marxian dialectics from the age of 6, if I had heard nothing but Soviet press and radio telling me that conditions abroad were far worse than any
conditions in Russia, in fact that the rest of the world was living in squalor and revolution, if I had known what it was to walk down a street with my best friend and feel I could not talk freely, and if I had had no opportunity of comparing my standards with those of anybody else, I should have been thinking as he did before he came to Canada. The impact of Canadian conditions was so ter[r]ific that he had been completely converted and had realised that from his youth up he had been deceived. He said that although he was under guard day and night by 3 officers of the RCMP he had never felt freer.

Gouzenko added that Liddell could have no idea what it meant to him just to be able to go out and buy a bag of oranges and a pound of hamburger. Liddell noted in his diary that, with rationing in force in Britain, it actually meant ‘quite a lot' to him too.
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Gouzenko's evidence contained one puzzle which continued to confuse, and at times torment, MI5 for over thirty years. He revealed that there had been two Soviet agents codenamed ELLI. One was quickly identified as Kay Willsher, deputy registrar in the British high commission in Ottawa, who was sentenced to three years' imprisonment in March 1946 for breaches of the Official Secrets Act. The identity of the second and more important ELLI remained a mystery until the 1980s.
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A series of conspiracy theorists, chief among them the maverick MI5 officer Peter Wright, succeeded in convincing themselves and many of their readers that ELLI was none other than Roger Hollis, who had been working as a Soviet agent throughout the Gouzenko investigation.
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In reality, probably no other senior MI5 officer during the Second World War had placed more emphasis on the continuing threat from Soviet espionage and the need to maintain comprehensive surveillance of the British Communist Party. The KGB found the Hollis conspiracy theory so bizarre that some of its foreign intelligence officers suspected that it derived from ‘some mysterious, internal British intrigue'.
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The second ELLI was finally uncovered only after the high-flying SIS penetration agent Oleg Gordievsky was posted to the KGB London residency in 1982. Gordievsky identified ELLI as Leo Long, whom Anthony Blunt had run as a sub-agent in military intelligence during the war. Long, like Blunt, had been an NKGB (later KGB) agent – thus accounting for the fact that Gouzenko (who had worked for the GRU, not the NKGB) could provide only fragmentary information about him. Long had probably come briefly to Gouzenko's attention because the GRU had made an approach to him in 1943, only to be warned off by the NKGB from making further contact with its agent.
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It is now clear that an important clue which could have identified Long much earlier was overlooked by
British intelligence for almost forty years. A substantial minority of Second World War KGB codenames contained important clues to the identities of the agents. The first codename of the Fifth Man in the Cambridge Magnificent Five, John Cairncross, MOLIÈRE, was derived from the subject of his academic research, on which he published two books. Anthony Blunt's remarkably unimaginative first codename was TONY. The youngest major KGB agent of the Second World War, Ted Hall, one of the leading atom spies, was codenamed MLAD, ‘Youngster'. The Hollywood producer Boris Morros was codenamed FROST – the English translation of the Russian word
moroz
. The codename ELLI can be translated from Russian as ‘Ls', the plural of the roman letter ‘L'. LL were the initials of Leo Long. Had this clue been spotted during the original investigation, Peter Wright's conspiracy theories might well have grown to less preposterous proportions.

In addition to leaving behind one major puzzle which took British intelligence nearly forty years to solve, the Gouzenko case also helped to generate one serious misunderstanding. An early report on the case, circulated by Philby, considerably exaggerated the quality of Soviet intelligence which it appeared to reveal: ‘The general impression of the GRU obtained from Corby [Gouzenko] is that it is an extremely efficient intelligence system, demanding the highest standards of work and security, and suffering partly from over-centralisation.'
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Throughout the Cold War, as in the aftermath of the Gouzenko case, the British and American intelligence communities regularly failed to grasp the huge gulf which separated Soviet intelligence collection, which enjoyed some remarkable successes, from Soviet intelligence assessment, which (save in the sphere of scientific and technological intelligence) was frequently dismal. As in all one-party states, Soviet political intelligence assessment was constrained by the need to tell the political leadership what it wanted to hear. ‘Telling truth to power' was not a serious option.

As well as uncovering a major Soviet espionage network in Canada with British connections, the Gouzenko case made the more far-sighted in the Security Service realize how much they still did not know about Soviet intelligence operations. In October 1946 John Curry sent a forceful memorandum to the DDG, Guy Liddell, arguing that the Service must make a strong and convincing case for extra counter-espionage resources: ‘We are now in a position vis-à-vis Russia similar to that we had vis-à-vis Germany in 1939/1940 in the sense that we have little positive knowledge of the basic structure of the organisation which we have to counter.'
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Not until SIGINT began providing important clues in 1948 did the Service's hunt for Soviet agents start to make real progress.
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2

Zionist Extremists and Counter-Terrorism

The Security Service's main concern at the beginning of Sir Percy Sillitoe's term as director general was not, as is usually supposed, the looming Cold War with the Soviet Union but the threat from Middle Eastern terrorism during the final years of the Palestine mandate (given to Britain by the League of Nations in 1922). The terrorists came not, as later in the twentieth century, from Palestinian or Islamist groups but from the Zionist extremists of the Irgun Zvai Leumi and the Stern Gang (also known as Lehi after its Hebrew acronym), who believed that the creation of an independent Jewish state required and legitimated the use of terror against the British administration. Both, the Security Service believed, were increasing in size. The Stern Gang was thought to have an active membership of about 500, the Irgun several times as many.
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The Stern Gang was among the last groups in the world to describe itself publicly as a ‘terrorist' organization.
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Both it and the Irgun, the Service believed, were planning to extend their operations to Britain. For the only time before the closing years of the Cold War, counter-terrorism thus became a higher Service priority than counter-espionage.