Sidney Reilly, the self-styled ‘Ace of Spies’.
Al Cimino
James Bond is older than you think. In the reign of Henry VIII, he would have worn doublet and hose and been employed in the service of Sir Thomas Cromwell, who ran agents across Europe on behalf of the king. Elizabeth I’s spymaster Sir Francis Walsingham had a network of fifty agents gathering intelligence on the hostile intent of the Spanish in the run-up to the planned Armada invasion. His interception of secret messages from Catholic conspirators led to the arrest and execution of Mary Queen of Scots.
As the overseas territories claimed by England under Elizabeth blossomed into a global empire, the role of the secret services expanded. In India, for example, just 1,200 British civil servants ran a country of 280 million and a British garrison of only 60,000 men, plus 200,000 sepoys, was charged with keeping the peace from Egypt to Hong Kong. So it was vital to have up-to-date and accurate intelligence from a network of informants and agents. These agents played a vital role in the Great Game, the battle for influence over Central Asia played out beyond the northwest frontier of India. The struggle for the control of Afghanistan goes on to this day.
While British agents in the field disguised as butterfly collectors and ethnographers were easy enough to spot, the British had a secret weapon. In 1844, the Indian Army set up a bureau for decrypting encoded messages its agents had intercepted. During the British occupation of Egypt in 1880, agents were deployed to spy on competing interests and other agents were sent deeper into the continent during the scramble for Africa. These activities were formalized in 1887 with the establishment of the Directorate of Military Intelligence, which was further expanded during the Second Boer War, 1899–1902.
It took some time for the United States to catch up. While the US Secret Service had been set up in 1865, it had a narrow remit. As a specialized section of the Department of the Treasury, its job was to stop the circulation of forged banknotes and prevent other threats to the economy. However, after the assassination of President William McKinley in 1901, the agency was given responsibility for the protection of important federal officials and their families, as well as foreign dignitaries while they were on US soil. Although it still has this jurisdiction, when the Federal Bureau of Investigation was established in 1924 it took over much of the Secret Service’s broader role.
By 1909, the British began to perceive the burgeoning German Empire as a threat, so the Committee of Imperial Defence set up the Secret Service Bureau; in secret, of course. As a joint initiative by the Army and the Navy, it was divided into two sections. The Army section was the domestic branch that became MO5(g) and then MI5 and, in peacetime, the Security Service. It was responsible for counter-intelligence, counter-sabotage and counter-subversion. Under Army Captain Vernon Knell, formerly an intelligence analyst at the War Office, it had a lot to do. At the time, it was rumoured that there were thousands of German spies in Britain.
‘Refuse to be served by a German waiter,’ the Daily Mail advised its readers. ‘If your waiter says he is Swiss, ask to see his passport.’
The Navy section was the foreign branch. It became MI1(c), then Military Intelligence section 6 or MI6 and, in peacetime, the Secret Intelligence Service or SIS. Its job was to investigate Germany’s military and naval expansion. Initially, it was not the only organization in the game. In August 1910 two Royal Navy officers, no doubt inspired by Erskine Childers’ 1903 novel The Riddle of the Sands, which was about a planned German invasion of Britain, were arrested photographing naval installations on the German North Sea coast. They were put on trial and sentenced to four years for spying. After that the Naval Intelligence Division at the Admiralty sought to distance itself from such activities. From then on, spying on the Germans would be the exclusive role of the Secret Service Bureau.
Command of overseas operations was given to Commander Mansfield Smith-Cumming, a fifty-year-old naval officer forcibly retired from the active list due to chronic sea sickness. He then spent the next ten years as superintendent of the boom defence at Southampton. But he was a redoubtable character. Legend had it that after being involved in a serious car accident in which his son was killed he was forced to amputate his own leg with a penknife.
Smith-Cumming brought with him from the Navy the practice of writing in green ink and he used the codename ‘C’. These customs have been adopted by every chief of the department since. He ran the department from his own flat in Ashley Mansions, Vauxhall Bridge Road, always carried a swordstick, described espionage as ‘capital sport’ and met contacts wearing elaborate disguises designed at William Berry Clarkson’s theatrical shop in Soho’s Wardour Street. In keeping with his eccentric ways, Smith-Cumming ran a ring of often rather disreputable agents.
The fledgling intelligence services of the UK and the US were happy to spy on each other. Indeed, it was Britain’s tapping of the transatlantic telegraph cables and its interception of a telegram sent from the US embassy in Berlin that brought the United States into the First World War. On the first day of the war, the British cable ship Telconia tore up the German transatlantic cable, forcing Germany to use cables owned by neutral nations, including those belonging to a still non-belligerent America.
Then on 16 January 1917, the German foreign minister Arthur Zimmermann delivered a coded message to the US embassy for transmission to the German embassy in Washington, DC. The American cable ran through a relay station at Porthcurno on the tip of Cornwall, where the signal was boosted before it was transmitted across the Atlantic. The British simply tapped the cables there and intercepts were sent to the codebreakers in Room 40 at the Admiralty. The Zimmermann telegram informed the ambassador that Germany planned to resume unrestricted submarine warfare to starve the British and French into submission. This risked bringing America into the war. The telegram was to be forwarded to the German consul general in Mexico City, who was to offer the Mexican government generous support if it would attack the US in an attempt to retake its lost territories of Texas, Arizona and New Mexico. American troops would then be tied down defending their country’s southern flank, rather than being sent to the Western Front in Europe, and supplies being sent to the Western Allies would be diverted.
The British could not admit that they had tapped US diplomatic traffic and made out that the cable had been stolen in Mexico City. The text was handed to the US government, an English translation was published in American newspapers and on 6 April 1917 the United States declared war on Germany. With Britain and America now allies, the two countries’ codebreakers began to co-operate in breaking German signals. It was the beginning of a special relationship in intelligence sharing that continues to this day.
In the interwar years, though, the relationship went on ice. When President Herbert Hoover appointed Henry L. Stimson secretary of state in 1929, he closed the US Cipher Bureau, which had been successfully reading Japanese diplomatic traffic, on the grounds that ‘gentlemen do not read each other’s mail’. America’s top codebreaker, Herbert O. Yardley, found himself out of a job when the Wall Street Crash heralded the Great Depression. To save his family from penury he wrote The American Black Chamber, which was about the Bureau’s codebreaking activities.
‘The Black Chamber,’ he wrote, ‘bolted, hidden, guarded, sees all, hears all. Though the blinds are drawn and the windows heavily curtained, its far seeking eyes penetrate the secret conference chambers at Washington, Tokyo, London, Paris, Geneva, Rome. Its sensitive ears catch the faintest whisperings in the foreign capitals of the world.’
The book was an international bestseller. As Yardley had travelled to Europe towards the end of the war to liaise with the British, they were not best pleased that he was giving their secrets away. The US government’s reaction was to amend the Espionage Act, prohibiting the disclosure of foreign codes or anything sent in code. Consequently, Yardley’s second book, Japanese Diplomatic Codes
1921–22, was impounded. Like others in his profession, he went on to write spy novels.
The First World War spawned a new enemy – Bolshevik Russia. Although the Bolshevik leader Vladimir Ilyich Lenin lived in London on and off from 1902 to 1911, even editing a revolutionary newspaper in Clerkenwell, it was only when he returned to Petrograd in April 1917, crossing Germany in a closed train, that the British government realized that he was a dangerous man. Seizing power in the October Revolution six months later, the Bolsheviks began making peace overtures to the Germans, resulting in the Brest-Litovsk Treaty of March 1918. With the war on the Western Front still under way, clearly this was not in Britain’s interest and the British decided to do something about it.
The British Secret Intelligence Service had an impressive array of agents in Russia at the time. For instance, there was Sidney Reilly, the self-styled ‘Ace of Spies’. In an effort to keep Russia in the war, his lieutenant George Hill had become an adviser to Trotsky and had set up a counter-intelligence service to thwart German agents in Russia, while running his own ring of spies for the British. Paul Dukes – ‘the Man of a Hundred Faces’ – managed to infiltrate the Cheka, the secret police and forerunner of the KGB. When Dukes returned to Britain, Winston Churchill tried to introduce him to the prime minister, but Lloyd George thought that it would be inappropriate for him to be seen in the company of a spy. At the time, the SIS did not officially exist. However, Mansfield Smith-Cumming – the original ‘C’ – arranged an audience for Dukes with George V, who called him ‘the greatest of all soldiers’.
Somerset Maugham had been recruited by Sir William Wiseman, British intelligence’s liaison officer in the US, to go to Russia in 1917 and report back to both SIS and the State Department. Fellow author Arthur Ransome was there too, ostensibly as a journalist. He got close to Lenin and Trotsky, eventually marrying Trotsky’s secretary.
Although Britain had broken off relations with Russia in the aftermath of the October Revolution, Bruce Lockhart was sent as an envoy in January 1918. He had £648-worth of diamonds to pay for the agents there. That month, an assassination attempt was made on Lenin. His car was shot up, but Fritz Platten, the Swiss Communist who had arranged his return to Russia, shielded him and was grazed by a bullet.
Sidney Reilly, the self-styled ‘Ace of Spies’.
Sidney Reilly then came up with the Lettish Plot, which the Russians called the Lockhart Plot. Two disillusioned Lettish (Latvian) officers had approached Lockhart, saying that they wanted to get a message to General Poole, commander of the British intervention force in Archangel, to arrange the surrender of their men. Latvian troops formed the bodyguard for Lenin and Trotsky in the Kremlin, as the government had moved to Moscow by then. The Latvians were mercenaries and Reilly – a fanatical anti-Communist – bribed them to arrest the two Bolshevik leaders, which was planned to take place in early September.
At the same time, Reilly arranged for 60,000 White Russians to stage an uprising in Petrograd and arrest the head of the Cheka, Moisei Uritsky. The White Russians, under General Judenitch, would then form a provisional government. But things got out of hand. On 30 August 1918, Uritsky was shot dead in his office. The next day, a young Jewish woman named Fanya Kaplan shot Lenin twice at point-blank range as he was leaving a factory meeting in Moscow. This was thought to have been ordered by Reilly’s associate, Jacob Peters, another SIS plant in the Cheka, once suspected of being ‘Peter the Painter’ in the Siege of Sidney Street. One bullet lodged in Lenin’s lung and the other hit him in the neck, narrowly missing a main artery. He was not expected to survive.
The Cheka knew who to blame. They burst into the British embassy in Petrograd and shot the naval attaché Captain Cromie, who had first introduced the Latvian officers to Reilly. The rest of the staff were seized.
There was no uprising by the White Russians, and Reilly and Hill fled the country pursued by the Cheka. They were sentenced to death in absentia. Lockhart was arrested, but refused to answer any questions. In prison, he saw Fanya Kaplan, who insisted she had acted alone and refused to name her accomplices. She was executed with a bullet in the back of the head.
The Bolsheviks then decreed the Red Terror and the Cheka were given summary powers of arrest and execution. Tens of thousands were tortured and shot, while Lockhart was exchanged for a Russian diplomat seized in reprisal. He went on to write the bestselling Memoirs of a British Agent. Hill continued working for the SIS in the Middle East, before writing two volumes of memoirs and a couple of plays, while managing the Globe Theatre.
Although Lenin recovered from the shooting, his health was permanently impaired. Stalin took advantage of this to consolidate his power in the Party and ease out Trotsky. Contrary to Lenin’s wishes, Stalin seized power in the Soviet Union when Lenin died in January 1924 after years of ill-health.
After Reilly was lured back into Russia in 1925 he then disappeared. In an attempt to find out what had happened to him, his wife contacted Winston Churchill, who maintained that her husband had returned to Russia on private business. He could not have been working for the Secret Intelligence Service as its very existence was not acknowledged until 1994.
In 1945, Ian Fleming, then with Naval Intelligence, instigated an operation to try to discover what had happened to Reilly. A witness said that he was executed soon after capture.
In 1919, the Admiralty’s codebreaking operation, Room 40, was merged with British Army intelligence unit MI1b to form the Government Code and Cypher School, under former Admiralty codebreaker Alastair Denniston. By 1925, it had come under the overall control of Hugh ‘Quex’ Sinclair, a former director of Naval Intelligence, who took over as ‘C’ when Cumming died in 1923. GC&CS and the SIS occupied two floors of Broadway Buildings opposite St James’s Park.
Between the wars SIS’s main efforts were directed against the Soviet Union and while GC&CS could crack the codes of the Japanese and the Americans, they made no progress with those used by the Russians or the Germans. Already SIS had started mass surveillance. All of the telegraph companies were obliged to submit their traffic to the codebreakers on the grounds that the world was in a state of unrest.
By 1938, there was growing criticism of the SIS’s inability to supply accurate information on the German military build-up or Adolf Hitler’s intentions. In response, it began recruiting journalists. Even though it was supposed to confine itself to domestic operations, MI5 had more success. The head of its counter-espionage section, Dick White, toured Germany in the late 1930s and found numerous willing recruits among those who opposed Fascism, particularly officers who feared that Hitler would lead them into an unwinnable war.
Using open sources, the Industrial Intelligence Centre, established in 1931, spotted that the Germans were building an air force in direct contravention of the Versailles Treaty before the SIS did. Nor did the SIS report Germany’s naval build-up, or give advance warning of the German occupation of the Rhineland in 1938, the Anschluss with Austria or Hitler’s hostile intentions towards Poland. What information it did have came via France’s Deuxième Bureau, who had an agent inside Germany’s Air Ministry.
The US did not have to resort to such subterfuge. They simply sent aviation pioneer and dedicated isolationist Charles A. Lindbergh. The Germans welcomed him with open arms and vastly exaggerated their air power. Lindbergh’s bogus figures intimidated British prime minister Neville Chamberlain when he flew to the Munich Conference in 1938, but the SIS could not produce any figures of their own to counter them. To the SIS, the enemy was still the Soviet Union, not Nazi Germany. After Munich, the Germans gave Lindbergh a medal.
The German military intelligence service, the Abwehr, fared little better than the SIS. Its agents reported back little that was not available in open sources and many were captured and given heavy prison sentences to discourage others.
Its chief, Admiral Wilhelm Canaris, boasted an active network of spies in the US, with the crews of German shipping lines acting as couriers. But this was hardly necessary as large US companies had cartel agreements with German firms and passed on any information they needed. Dupont supplied details of new explosives to its German counterparts, while Standard Oil built a refinery in Germany to supply a new 100-octane fuel, under an agreement with IG Farben. As the US had set its face against getting involved in another European war, American salesmen were happy to supply the Germans with anything they wanted.
Although the Abwehr managed to bug the US embassy in Berlin, they completely misread the political situation, believing that there would be no adverse reaction in the US to the persecution of the Jews and that the sizeable and vocal German population would keep America out of any war in Europe.
In the Soviet Union, the Cheka had become the GPU, then the OGPU, which was absorbed into the NKVD – the People’s Commissariat for Internal Affairs – in 1934. While it was principally concerned with repression at home, it successfully recruited a number of disaffected upper-middle-class British students – Kim Philby, Guy Burgess, Donald Maclean, Anthony Blunt, John Cairncross and others. The so-called Cambridge spy ring successfully penetrated the British secret services during and after the war, passing a treasure trove of sensitive information to Moscow.
Meanwhile Charles Howard ‘Dick’ Ellis, an Australian recruited by the SIS in Paris in 1923, handed copious amounts of information about the British secret services to the Germans and helped the Gestapo compile their Black Book of those to be arrested and executed when Germany invaded Britain. It was also thought that he had been blackmailed into working for the Soviets.
Soon after the Second World War broke out, Sinclair died and his deputy Stewart Menzies took over. Five days later, the head of the SIS in the Hague and another intelligence officer were lured to the village of Venlo on the border with Germany. A car carrying men armed with machine guns then raced over the border and kidnapped them. Interrogated by the Gestapo, they added to the information provided by Ellis for the Nazis’ Black Book.
Despite its poor record, Churchill lent his support to the SIS, but the German blitzkrieg against Western Europe in 1940 closed down its operations there. When the SIS agents fled back to London or into neutral countries there was no contingency plan to leave a covert network in place. Again the SIS had failed to predict this, although at one time plans for the attack on Belgium and Holland had fallen into its hands, only to be dismissed as a trick.
Lisbon, Geneva and Stockholm were its only theatres of operation on the Continent. Even its activities in Madrid were hampered by the British ambassador there, who was still trying to organize a negotiated peace with Hitler through the Spanish dictator General Francisco Franco.
Even MI6’s sabotage role – nominally undertaken by Section D operative Kim Philby – was taken over by the newly created Special Operations Executive in July 1940. Churchill famously told the SOE to ‘set Europe ablaze’. It largely failed to do this because the head of Bomber Command, Sir Arthur Harris, was unwilling to spare aircraft from bombing missions to drop SOE agents by parachute into occupied territories. It did have its successes though, such as the raid on the heavy water plant at Telemark in Norway in February 1943, which prevented the Nazis from developing an atomic bomb. It also organized the assassination of Reinhard Heydrich, who was chairman of the Wannsee Conference which discussed the logistics of the ‘final solution’ and was also the brutally repressive governor of Bohemia and Moravia. Hundreds of Czech civilians were murdered in reprisal.
There were other disasters. In the Netherlands, a Dutch radio operator was captured and forced to transmit to London. Although he did his utmost to alert his handlers, fresh agents were killed or captured. As a result, the SOE’s entire operation in the Netherlands fell under German control.
As the war progressed, MI6 fared little better. Much of the information it gathered came from the Abwehr, where the anti-Nazi Admiral Canaris protected others who opposed the regime. This included reports of the development of the VI and V2 weapons at Peenemünde, but the information was treated with scepticism. Canaris was executed after the failed assassination attempt on Hitler on 20 July 1944.
One Abwehr agent who provided MI6 with information was the Yugoslav playboy Dusko Popov. When he reported that the Japanese planned to attack Pearl Harbor, he was sent to the US to talk to the FBI, but the Bureau’s chief, J. Edgar Hoover, dismissed his report out of hand.
Moves were made to disband MI6, but Menzies kept the ear of Churchill, who loved secret information and kept hold of GV&CS, which was moved out to Bletchley Park in Buckinghamshire in May 1938. Some fifty miles northwest of London, the Victorian manor house was the home of the legendary Station X. Its extensive grounds provided the codebreakers with both quiet and secrecy. As it was out of the way, knowledge of its activities did not filter back to the moles in the secret services, so it was denied to the Nazis and the Soviets.
Before the Second World War, both the British and the French had little success in breaking the German Enigma code. After the First World War, memoirs – including those of Winston Churchill – had revealed that the Western Allies had broken the existing German codes, so when the German armed forces began to build up their strength again they adopted a mechanical method of encoding messages developed by electrical engineer Arthur Scherbius, which was thought to be unbreakable.
His Enigma machine had a typewriter keyboard and electric signals from the keys passed through a series of wired rotors to a display where letters would light up. The resulting letters would be noted down and transmitted by wireless in Morse code. Using the same initial settings, the recipient would then type in the coded message they had received and the original text would appear.
As the rotors advanced with each keystroke, a letter in the original text would not appear as the same letter in the coded message. The original machine adopted by the German Army had three rotors but more were added, along with a plugboard that swapped six pairs of letters, making the odds of cracking the code astronomical.
As the Versailles Treaty ending the First World War had limited the size of the German armed forces, it did not bother the British much that they could not crack the German codes. They were more intent on finding out what the Japanese were up to. This was a priority for the US too.
For the Poles, however, sandwiched between Nazi Germany and the Soviet Union, breaking the Enigma code was vital. Before 1918, Poland had been partitioned between Russia, Prussia and Austria for over a century. But when Poland re-emerged as an independent state after the defeat of Germany and Austria in 1918, it was immediately threatened by the Soviet Union, created out of the remains of the Russian empire to the east. However, information from the fledgling Polish Cipher Bureau allowed the newly-formed Polish Army to halt the Red Army at the gates of Warsaw and drive it back.
The Versailles Treaty of 1919 recognized the autonomy of Poland and gave it access to the Baltic through the so-called Polish Corridor and the free port of Danzig – or, in Polish, Gdańsk. This corridor separated East Prussia from the rest of Germany and caused great resentment among the Germans, which Hitler exploited in his efforts to seize power. Eventually it was Poland’s refusal to hand over Gdańsk that became Hitler’s excuse for invading in 1939.