Category Archives: Economics/Business

Dick White’s Devilish Plot

Dick White

The Time: March to June 1951

The Places: London and Washington

GCHQ Eastcote
Arlington Hall

The Organisations: In the UK, Government Communications Headquarters (GCHQ), operating out of Eastcote, in the London suburbs; the Foreign Office (FO), the Security Service (MI5), and the Secret Intelligence Service (SIS, or MI6) – all based in Central London. (GCHQ, which during the war, as the Government Code and Cypher School, had reported to SIS, broke free at the end of 1945, and was then responsible to the Foreign Office.) In or around Washington, D.C. in the USA, the Armed Forces Security Agency (AFSA, which in 1952 became the National Security Agency, working out of Arlington Hall), the State Department, the Federal Bureau of Investigation (FBI), and the newly formed Central Intelligence Agency (CIA). The organisations are paired, in function and in primary communications, as follows: GCHQ and AFSA; the FO and the State Department; MI5 and the FBI; and SIS and the CIA.

The Personnel:

Edward Travis is head of GCHQ. The leading cryptanalysts at GCHQ working on VENONA are Wilfred Bodsworth and Jeffrey Northbury.

The Secretary of State for Foreign Affairs, the ministerial head of the Foreign Office, Herbert Morrison, is new to his post, having succeeded the deceased Ernest Bevin in March 1951. At the FO, William Strang is Permanent Under-Secretary, Roger Makins is his Deputy Under-Secretary, while Patrick Reilly serves as Assistant Secretary, and acts as liaison with SIS. Reilly served as Secretary to the head of SIS, Stewart Menzies, during the war, and has also chaired the Joint Intelligence Committee since 1950. George Carey-Foster is Security Officer for the FO, while Robert Mackenzie fulfils an equivalent role in the Embassy in Washington, under the Ambassador, Oliver Franks. Christopher Steel is Franks’ deputy.

Stewart Menzies, the head of SIS, is a shadowy figure in the background. His deputy, Valentine Vivian, is responsible for security in SIS. (According to Nigel West, Vivian retired in March 1951, but his name appears in the archives as an SIS officer after that date.) At some stage in this spring, Vivian is replaced as Menzies’s deputy by Jack Easton. Kim Philby, who was recruited to SIS by Vivian in 1941, was transferred to Washington in 1949 as SIS’s representative, replacing Peter Dwyer, primarily to liaise with the CIA on special subversive operations, but with an additional mission to assist the FBI (but not the CIA) in identifying possible spies hinted at by the VENONA project. Maurice Oldfield headed the counter-intelligence section, R.5., for a while, but moved to South-East Asia in 1950.

Percy Sillitoe has been Director-General of MI5 since 1946, but gains little respect from his subordinates because of his police background. His deputy, Guy Liddell, previously headed B Division, responsible for counter-espionage, which is now led by Dick White, whom Liddell mentored. (Dick White worked in intelligence under General Walter Bedell Smith – see below – between 1943 and 1945.) Arthur Martin, who acts as liaison with GCHQ, and James Robertson are B Division officers knowledgeable about Soviet espionage. MI5’s Liaison Officer in Washington is Geoffrey Patterson, who replaced Dick Thistlethwaite in the summer of 1949.

J. Edgar Hoover is chief of the FBI, Mickey Ladd is his Director of Domestic Investigations, and Robert J. Lamphere is the agent working with AFSA on the VENONA project. John Cimperman is the FBI’s legal attaché in London.

Walter Bedell Smith has been Director of the CIA since 1950.  He is an ex-army general who has also served as Ambassador to the Soviet Union (1946-1948). He appointed Allen Dulles as Deputy Director for Plans in February 1951. His leading officer on Soviet counter-espionage is William Harvey. Harvey is unusual in that he joined the CIA from the FBI, and maintains a close relationship with Robert Lamphere. James Angleton (who built a close association with Kim Philby) works at this time in the Office of Special Relations.

Rear-Admiral Earl Stone is the head of AFSA. Meredith Gardner is his chief cryptanalyst working on VENONA. The senior British liaison officer at AFSA is Brigadier John Tiltman, at some stage replaced as SUKLO (Senior UK Liaison Officer) by Patrick Marr-Johnson. (Accessible records show them both present in Washington in 1951.) Philip Howse and Geoffrey Sudbury are cryptanalysts from GCHQ assigned to AFSA. William Weisband is a Soviet spy in AFSA who has worked in Signals Intelligence since 1942.

The Thesis:  That Dick White devised a plan to draw attention away from MI5’s own security failures towards Kim Philby, bringing the CIA in as an apparently imaginative source to cast aspersions on Philby’s loyalty without MI5 having to challenge Stewart Menzies and SIS directly.

VENONA – the Background

The Two Gentlemen of VENONA

John Tiltman
Meredith Gardner (on left)

Keith Jeffery concluded his authorised history of SIS on a celebratory note. In May of 1949, Menzies’s Principal Staff Officer (probably Jack Easton) and William Hayter, who was Foreign Office Liaison Officer, had visited Admiral Hillenkoetter, the head of the CIA, in Washington, and enjoyed the ‘very cordial’ tenor of the negotiations as they discussed Cold War initiatives. At the same time, Maurice Oldfield, who headed the R.5 counter-intelligence section, was gratified by the goodwill he encountered when visiting the CIA and the FBI. Hillenkoetter wrote to Menzies in June to speak glowingly of the organisations’ common purpose, and of the close working relationship they enjoyed. Jeffery pointed to this mutual enthusiasm as indicative of the special nature of the transatlantic intelligence relationship. Oldfield would in 1977 write to William Harvey’s widow that he had enjoyed knowing her husband since 1949, so the two must have met during this visit. Hillenkoetter was, however, a failure, and on the way out, unsuitable by temperament and experience to be a leading intelligence officer.

Maybe Sir John Scarlett, chief of SIS, who commissioned the history, was adroitly trying to define a positive legacy and avoid the more disturbing events. “Full details of our history after 1949 are still too sensitive to place in the public domain,” his successor, Sir John Sawers, wrote in his Forward to the 2011 publication. Indeed. But the lid of the seething cauldron could not be completely sealed. In late September 1949, Oldfield briefed the officer who had occupied the same post that he, Oldfield, currently held, before being posted to Ankara, Turkey at the end of 1946. The officer, Kim Philby, was about to be posted as Counsellor attached to the Embassy in Washington, with responsibility for liaising with the CIA, replacing Peter Dwyer, who, according to Anthony Cave-Brown, was being recalled at his own request. Yet memoirs indicate that Philby was brought in specifically to liaise with the Americans over the joint SIS-CIA operation to infiltrate exiles into Albania in an attempt to overthrow Enver Hoxha’s communist government. For instance, Queen Geraldine of Albania recalls that she and her husband, King Zog, met Philby in 1949, and both instantly ‘hated him’, the King refusing to have the SIS officer in the room with him again. [P.S. Neil ‘Billy’ Maclean, in a separate interview, claimed that Queen Geraldine was mistaken, and that the Englishmen they met was either Harold Perkins, or maybe Julian or Alan Hare, but not Philby.]

Alongside the briefings on Albania, Oldfield explained to Philby that a project that had been able to decrypt intercepted Soviet cables had identified a spy in the heart of the Foreign Office, working in the Washington Embassy in 1944 and 1945, who had passed on highly confidential communications to the Soviets. His cryptonym was HOMER, an identity that Dwyer had noted as early as March 1949 (but which had surfaced some time before, as I explain later). It would be an important part of Philby’s job to help his counterparts apply a name to the traitor who had betrayed these communications between the Foreign Office and the Moscow Embassy, and between Prime Minister Churchill and President Roosevelt, on negotiations with Stalin as the war was running down. But the mutual trust and confidence that characterised the relations between Washington and London were about to break down.

The project was known as VENONA (initially as BRIDE in the UK). Its success lent itself to a procedural mistake by the Soviet authorities, who carelessly reused a set of one-time-pads for diplomatic and intelligence transmissions during the period 1943-1948. (One-time-pads were regarded as an almost unbreakable technique for encrypting messages.) These messages were sent both by cable (in the USA, where commercial carriers provided a copy of all such traffic to the US Government), or by wireless – between London and Moscow and between Canberra and Moscow, and later between (primarily) Washington and Moscow. An intense decryption exercise was initiated by the AFSA, who then brought in the GC&CS (who may well have had a parallel operation in play already) as partners in the exercise. One important aspect of the project is that, while the Soviets changed their procedures in 1948 once they had learned via spies of the breakthroughs, the task of message decryption carried on until 1980, and the whole programme was not officially revealed until 1995.

Yet the process of decryption, namely the timing at which (portions of) certain messages were resolved has not been revealed – apart from the survival of the occasional exchange of messages between cryptanalysts, and the evidence of critical breakthroughs that forced intelligence organisations to take action. This lack of archival evidence has made it very difficult for historians to assess the reactions and intentions of the persons directing the investigation. What is also important to recognize is that the process of translation required a lot of help from political and diplomatic sources, to help identify the source messages stolen by the Soviets, since the original texts were invaluable as ‘cribs’, and the contexts were vital in helping identify the thieves. This was especially true in Australia, where the richness of the cribs meant that traffic was being digested almost in real-time by the beginning of 1948. The search for original texts did, however, run the risk of alerting a broader audience to the highly secret VENONA project itself.

That the group of intelligence officers and Foreign Office officials stalled in passing on to their own teams and their American partners their conclusions about VENONA ‘recoveries’ (as the evolving messages were called) is indisputable. But was such behaviour caused by institutional embarrassment, or was it guided by high politics? Some analysts have interpreted such dilatoriness as a pattern of the latter dimension – that it was a high-level strategy ordered by the British prime minister Attlee to protect a fragile Anglo-American agreement over the sharing of atomic weapons technology. Negotiations on resuming the wartime agreement had begun only in September 1949, and, as Aldrich and Cormac inform us in The Black Door, Secretary of State Dean Acheson had recently explained (maybe insincerely) to the British Ambassador that Congress would probably be able to roll back the embargo that the 1946 McMahon Act had imposed on any technology-sharing.

Some authors, such as Anthony Cave-Brown, in his biography of Menzies, “C”, even hint at a ‘double-agent’ game (actually a misnomer) arranged by Menzies and Hoover (FBI) to use Philby as a medium for disinformation to the Soviets (with Angleton, of the CIA) – an unlikely collaboration. Cave-Brown’s case, however, is woolly and muddled, with a haphazard chronology. The delusion of such endeavours, moreover, lay in thinking that an intelligence unit could control what an agent handed over to the target when the unit had not comprehensively ‘turned’ that agent, and did not manage exclusively his medium of communication. Even if such a dubious programme had been entertained, the selection of an agent for such deception when that agent had been indoctrinated into the secret VENONA programme, which demanded the highest security precautions, would have simply been absurd.

Despite that obvious paradox, the legend lives on. The prime promoter of such a theory is C. J. Hamrick, who, in his 2004 book Deceiving the Deceivers, makes a number of claims about the deception that the British intelligence agencies planted on the public during this exercise. His book contains many ingenious passages of analysis, offers a remarkably insightful account of the controversies surrounding the CIA in its initial years, reflects some painstaking research into the evolution of cables processed at Arlington and Eastcote, and contains a fascinating array of valuable insights and facts concerning the relationship of intelligence to politics. Unfortunately, however, Hamrick makes some huge leaps of imagination in putting his theory together. His book constitutes overall a poorly constructed and frequently dense narrative, full of circumlocutions, non sequiturs, vague hypotheses, unsupported assertions and simple errors that make it difficult to determine a verifiable thread.

If I can discern Hamrick’s argument correctly, I would say that it runs as follows: Under the authority of Lord Tedder, Air Marshall Robb, and General Hollis, Dick White masterminded, with his co-conspirator Roger Makins, a counter-intelligence scheme that none of his immediate colleagues or superiors knew about. What Hamrick suggests is that, after the discovery of purloined ‘Churchill’ telegrams, the VENONA decryption exercise became a predominantly British affair, that the authorities knew about the existence and identity of HOMER as early as 1947 (and that Oldfield was able to give this information to Philby in 1949), and that White contrived to conceal the results of the Eastcote decryption exercises from his peers. Moreover, Percy Sillitoe (who was White’s boss) reputedly kept Hoover up to date on the progress of the investigation using something called an ‘MI6 cipher’, to which Philby had access, and from which Philby thus gained his knowledge of VENONA decrypts, and the progress of the investigation. The proposed goal of all these machinations was for White to exploit Maclean, Philby and Burgess (even though they did not work for him) as unwitting tools to mislead the Soviet Union about the West’s nuclear capability, a project, incidentally, that should presumably have been carried out by SIS, not by MI5.

The germ of this idea came from a General Edwin L. Sibert, who communicated his beliefs in such a deception operation to the author on intelligence matters Anthony Cave-Brown. According to Hamrick, Cave-Brown misunderstood the message, and garbled it in his Treason in the Blood. (Cave-Brown reprised the idea in “C”, adding the testimony of William R. Corson, from the latter’s Armies of Ignorance, but then cited severe doubts emanating from Reilly and Easton that apparently quashed the story.) Sibert had in fact retired eighteen months before Philby arrived in Washington, but Hamrick was impressed enough by Sibert’s story to write: “A strategic deception operation using Anglo-American war plans and bombers as a deterrent to Soviet aggression in Western Europe required a suspected or known Soviet agent of proven credibility whose long loyalty to Moscow and unique access to official secrets [my italics] amounted to verification. Was one available? Evidently he was.” It was if Britain had dozens of such persons waiting in the wings, proven Soviet spies, of many years’ vintage, allowed to flourish and remain unpunished, and all the authorities had to do was to select one with the best profile, and plant information on him. And that it made sense to post the candidate to Washington to perform his duplicity, even though a project that had been initiated to help unmask such spies had been underway in the same capital for over a year.

It does not make sense. There are too many anomalies in this thesis for me to list them here. A full dismantling of Hamrick’s exposition, which ascribes some superhuman sleights to White, as if he were in total charge of GCHQ, and was able to hoodwink his colleagues, including Patrick Reilly (who was, after all, chairman of the Joint Intelligence Committee), will have to be undertaken on another occasion. I present just a few comments. While it is true that senior officials probably concluded that Maclean was HOMER well before they communicated this fact to their subordinates, it does not mean that Dick White (and he is incongruously given the credit for being able to manage the whole charivari from his position as B Division chief in MI5) was successfully controlling the output from GCHQ, and running the trio of Burgess, Maclean and Philby as disinformation agents to the Soviets. Hamrick’s repeated referral to a frequent series of messages from Sillitoe to Hoover on the progress of the investigation, using ‘Philby’s secret MI6 cipher’, by which Philby gained his information, is simply absurd. Philby gained his information from Patterson, and Admiral Stone, the head of AFSA, knew about Philby’s clearance, because on June 8, 1951, he sent a message to the FBI to ascertain whether Burgess had also had access.

So much of what Hamrick asserts is contradicted by the evidence of the archival records (the KV 6/140 to 6/145 series) released in October 2015 that one must conclude either that the archive itself has been handsomely faked, or that Mr Hamrick has written a work more of fiction than of history. As Hamrick himself wrote: “Ignoring the fact that not one shred of documentary evidence has been found nor is ever likely to be found to support it [General Sibert’s deception plan], its probability can be considered by asking how such an operation could have successfully escaped disclosure.” Ipse dixit.

According to some analysts, the Fuchs case (see below: he was found guilty of espionage in February 1950) killed cooperation on atomic technology sharing between the USA and the UK for good. M.S. Goodman wrote an article in The Journal of Cold War Studies in 2005, quoting a US diplomat who said: ‘We were getting very close to getting into bed with the British, with a new agreement. Then the Fuchs affair hit the fan, and that was the end of it’. Goodman then commented: “The case destroyed any British hopes for a resumption of the wartime nuclear partnership, and even Attlee’s artful performance before Parliament could not rescue it.” The reality is rather more complicated. A research colleague (and biographer of both Guy Burgess and Donald and Melinda Maclean) Michael Holzman has drawn my attention to the recently issued Documents on British Policy Overseas, which include records of negotiations in 1950 between Makins, Bevin and Attlee, accompanied by Canadian Secretary of State Lester Pearson, and Dean Acheson of the State Department. Makins attributed the lack of progress on overturning the McMahon Act to allow exchange of atomic power and weaponry technology between Canada, the USA and Britain on the dampener that Fuchs’s arrest gave to harmonious relations, and tried to appeal to Acheson, through Bevin, that the discovery of one spy (although he forgot about Nunn May) should not be considered cause enough to break off plans.

I have been able to inspect these documents, and to verify from Volume 2 of Margaret Gowing’s authorised history of Britain and Atomic Energy (1974) that the author used the same sources in researching her account. According to Gowing, Acheson temporized and prevaricated, as he knew that Congress would not move quickly on the issue. There was an election coming up in November, and thus prospects for new legislation were slim, especially with the Korean War underway. The flight of another Harwell scientist, Bruno Pontecorvo, to Moscow in September 1950 did not help matters. Britain would have to go it alone, and did so, with a story about its decision published in the New York Times in March 1951. Aldrich and Cormac strongly suggest that Attlee’s attention quickly moved elsewhere, to covert operations in Europe by SIS, and that he left the boffins to produce Britain’s weaponry independently. Thus, while Makins’ concerns may have put a temporary brake on the project to unmask HOMER in April-May 1950, such sensitivities quickly became irrelevant. That summer, the American spies Harry Gold and the Rosenbergs were arrested (Gold as a result of Lamphere’s interrogation of Fuchs in London), so the one-sidedness of Britain’s exposure to treachery was quickly removed. Gowing’s conclusion was that ‘the negotiations would have failed even if there had been no Fuchs, Pontecorvo, Burgess or Maclean’ (p 320).

Moreover, more recent releases to the National Archives, in 2007, indicate that Attlee, when he was informed, on June 11, 1951, of the disappearance of Burgess and Maclean, had been completely unaware of their errant behavior, let alone of any suspicions of espionage. Foreign Secretary Morrison stoutly came to the defence of Maclean and of the Foreign Office. At the time of the Fuchs case, Attlee had been briefed on the VENONA investigation, but it appears he was not given comprehensive updates on the project thereafter. Thus there appears to have been little scope for political interference into what the Embassy Spy investigations were uncovering.

Kim Philby and VENONA

Kim Philby

Why was Kim Philby being brought into this web? The story contains multiple anomalies, and a number of unlikely twists and turns.

First of all, from the UK side, the investigation into the Embassy leaks was supposed to be an MI5 responsibility, not one for SIS. Dick White pressed hard for this at the beginning of 1949, and believed he had the support of Menzies and Carey Foster. He soon found, however, that it was not the case with GCHQ, and then learned that he could not rely on the compliance of SIS and the Foreign Office, with the latter starting to playing a much more inquisitive role. White’s representative in Washington, Dick Thistlethwaite, felt he was being undermined by Travis’s and Carey Foster’s officers in Washington, Marr Johnson and Mackenzie, respectively. Thistlethwaite therefore complained to White, who was not only his boss but a close friend as well. The fact was that every department felt it had  a proprietary interest: GC&CS, because it was in charge of the intercepted material, the Foreign Office, because the leak had occurred on its own territory, and SIS, because the initial prime suspect was Alexander Halpern, of British Security Coordination (BSC, the wartime British intelligence service in the USA), which had reported to SIS. Peter Dwyer, Thistlethwaite’s counterpart from SIS, had worked for BSC during the war, so could contribute very usefully to the investigation.

What was especially poignant, moreover, was the fact that FBI maintained domestically a very jealous hold over the VENONA product: not only did Hoover intensely dislike the CIA, and regretted it had ever been created, he also believed that both it and the State Department were riddled with Soviet spies. (He had a point.) While a few CIA officers were introduced to VENONA earlier, the CIA would learn about the programme officially only in 1952, ironically after a controlled leak to Bedell Smith by the British forced Hoover’s hand. Thus bringing in a senior officer like Philby primarily as the SIS-CIA liaison officer (he had developed a great relationship with James Angleton during the war) would, given the sensitivity of the VENONA enterprise, on the surface appear to be a highly risky and unnecessary move that could only ruffle feathers more. White’s failure to maintain intellectual and practical leadership of the project points, however, to a developing malaise.

For some reason, MI5’s representative in Washington was replaced at about the same time. No official explanation has been offered for the change in the team. A large gap in the record for the summer of 1949 can be seen at KV 6/140, but the authorised history states that Geoffrey Patterson took over from Dick Thistlethwaite in June 1949. These moves would have unbalanced the arrangement, as Thistlethwaite was a senior campaigner, on first-name terms with Dick White. Patterson seems to have been a keen but inexperienced officer, while Philby was clearly a man on the move, identified by some as a future head of the service. It could have been coincidental, of course, but the fact that Philby was heavily briefed by Oldfield before he left could suggest that Menzies was keen that SIS take a stronger hold of the investigations. On the other hand, the author Ben Macintyre suggests, in A Spy Among Friends, that Philby’s appointment arose from the high-level discussions in the USA, and that Philby was a name preferred by some of the CIA officers whose opinion was sought. Macintyre offers no source for that statement, but it would make sense for the presence of Philby to be desired primarily in the light of the plans for joint CIA-SIS operations in Eastern Europe, where the help of an experienced heavyweight would be necessary.  Philby would however have been instructed to stay silent about VENONA before CIA officers, but no doubt became extremely curious once he learned of the dangerous project. Menzies – who viewed Philby as his blue-eyed boy – would not have thought twice about the appointment.

Yet how much did SIS and MI5 suspect about Philby’s possible career as a spy at that time, and should he have been excluded from any sensitive post in Washington? Maurice Oldfield later informed his biographers that, having inspected Philby’s profile, and the records concerning Volkov, the Soviet diplomat who tried to defect from Turkey in 1945, but who was betrayed and killed, he had suspected Philby of treachery, and he even confided his thoughts to his friend Alistair Horne at the time. Yet, even though he was only four years younger than Philby, Oldfield had been in SIS for only three years, and Philby, with his allies high up, was not a figure he could easily challenge. Moreover, Richard Deacon, in his biography of Oldfield, “C”, suggests that Philby’s contacts with the Soviets that he made in Turkey were approved by Menzies, as some kind of disinformation scheme.  “Whenever MI5, or anyone else, raised the issue of treachery, the SIS would come to Philby’s defence and indignantly reject such pleas, explaining that what he was doing in Istanbul, and elsewhere for that matter, was carried out with their full approval”, wrote Deacon. That would explain, if it were true, why Philby was regarded as untouchable.

That account of Philby’s inviolability might also help explain the Guy Liddell discomfort. The information recently distributed about Eric Roberts, as I described in the April coldspur, indicates that Liddell in MI5 also had nourished suspicions about a senior member of the SIS in 1947, but had obviously been told to suppress them by the time Roberts returned from Vienna in 1949. [The BBC has so far not responded to our request for the 14-page document that Christopher Andrew described as ‘the most extraordinary intelligence document I have ever seen’, so the historian must be charged with irresponsible grandstanding until he helps facilitate the release of this document to the public.] Dick White was lower on the totem-pole than Liddell, but was a more dominant character, yet between them, with their own skeletons in the cupboard, they must have concluded that speaking out against Philby at that juncture would not help their careers, or the reputation of MI5.

Soon after Philby’s arrival in Washington, however, an extraordinary event occurred: he completely changed the tone of the investigation by pointing the inquisitors towards Krivitsky and his 1940 testimony. (Krivitsky had warned of a spy on the ‘Imperial Council’, but his hints had not been strenuously followed up.) Throughout 1949 the project had taken a desultory course, involving the collection of staff lists and checking the background of, almost exclusively, secretaries and members of the Cypher Department. (Halpern and Cedric Belfrage were also suspected, but the latter, who later confessed to being a spy, was discounted early since he was not in Washington when the cables were stolen.) As early as November 19, 1949, however, Philby wrote a memorandum to Robert Mackenzie which crisply summarized the advice that Krivitsky had given about a spy in the Foreign Office, advice that Patterson enthusiastically picked up on. Somewhat surprisingly, Patterson received a rather lukewarm response when Martin and Carey Foster received the message in London, as if to say that of course they had considered a link between the two cases. Carey Foster did, however, produce a shortlist of six diplomats who could fit the Krivitsky/Washington profile, namely Balfour, Makins, Hadow, Wright, Gore-Booth and Maclean.

This bravado from Philby surely suggests that he realised that the evidence against Maclean was so substantial that his goose was essentially cooked, and that Philby’s best course of action was therefore to distance himself as sharply as possible from his comrade in espionage, and boost his counter-Soviet credentials. Yet his action raises further questions: did he have access to pointers that were available to other investigators, and, if so, why did the latter not come to similar conclusions? Otherwise, was it not a bit premature to risk changing the direction of the probe so dramatically, and risk additional attention on himself, and his associations with Maclean?

The Search Takes Time

On reflection, it might seem highly negligent for the multiple leads to Maclean as the source of the Foreign Office leakage not to have been assimilated and acted upon sooner. That was the sentiment that Robert Lamphere expressed in late 1948, a few months after he had been informed by his colleague Ladd of the first VENONA breakthroughs. As he waited for a more urgent response from his British counterparts, he recorded that the counter-intelligence machinery in the USA would surely have moved into top gear in such circumstances. After all, if, following the creation of the shortlist, a notice had been taken of Maclean’s leftist opinions at Cambridge, and his less than outright rejection of them at his diplomatic service interview, and his nervous breakdown after consorting with Philip Toynbee, a ‘known Communist’ (as MI5 considered him) in Cairo, one might have expected him to rise quickly on the list of suspects.  Yet MI5 appeared to be overwhelmed by the list of possible offenders, knowing also that it would be very difficult to elicit a confession from any of them on such circumstantial evidence, and that the best chance of gaining a conviction would be to catch him or her in the act of passing information to the Soviet contact. For the VENONA transcripts would be inadmissible in court: apart from the fact that all intelligence agencies did not want to reveal the extent of their decryption efforts, the nature of the translations and interpretations would mean that their veracity would be able to be picked apart by any capable defence lawyer. And MI5 was not certain, even when the information about the visits to the spy’s wife in New York were revealed in early March 1951, that Maclean was the only Foreign Office staff member who fitted that profile. (Or so it claimed, as long as was possible.)

Donald Maclean

Dick White then made, in February 1950, a shocking and irresponsible suggestion. He had been in Australia when Philby’s memorandum came through, but must have been made aware of the resulting exchange. He held a meeting on January 31, attended by Reilly, Carey Foster, Vivian, Oldfield, Marriott & Martin, at which he floated the idea that the whole investigation should be called off, at least until dramatic new evidence arrived, because of the overwhelming staff lists to be combed through. At this stage, it appeared that he had high-level agreement from the attendees. Carey Foster agreed the field was wide, but wanted MI5 to continue to pursue traces in some way. Vivian was still interested in Halpern. MI5 was charged with providing a formal report, which White duly provided on February 16, laying out the reasons for abandoning the quest, and suggesting that the project be handed over to the FBI.

This reckless initiative must be seen in the context of what else White and MI5 were occupied with at the time. On February 2, Klaus Fuchs (whose role as a spy had also been confirmed by VENONA transcripts) had been arrested, and was sentenced a month later to fourteen years’ imprisonment. White was heavily involved in the project to cover up MI5’s negligence and incompetence over Fuchs, during which Sillitoe vented his fury at White and Liddell for their lack of thoroughness. As Tom Bower, White’s biographer, put it: “There were good reasons to hold MI5 responsible. Not least was White’s failure, in the chain of responsibility, to adopt Suppell’s [Serpell’s] suggestion of investigating Fuchs.” The outcome was that Sillitoe and White had an uncomfortable meeting with Attlee where they lied to the Prime Minister in order to protect the institution. Moreover, Guy Burgess had come under suspicion at this time. On January 23, Liddell noted in his diary that Burgess had probably passed on secrets to Freddie Kuh, a Soviet spy, and three days later was discussing with his colleagues whether Burgess should be prosecuted for Official Secrets Act offences. The last thing White wanted was a fresh revelation that MI5 failures to follow up the Krivitsky testimony had allowed another spy – and a homegrown Briton, at that – to escape the net. White simply wanted the problem to go away: the remedy preferred by him and Liddell was for unmasked spies to fade quietly into the backwaters, and promise not to misbehave again, with no fuss and no publicity involved. Whether in this case he was acting on his own, or was being guided by political considerations, say by Attlee, or possibly Foreign Secretary Ernest Bevin, is not clear. The 2007 archival information referred to earlier strongly suggests that Attlee was not involved.

Perhaps White overlooked the fact that the Eastcote/Arlington decryption exercises were going to continue no matter how hard he tried to stifle the investigation. For a while, however, he appeared to have been successful. On February 22, Carey Foster (who like many emerges from this whole farrago as a weak character, far too defensive of the organisation he is supposed to be auditing) expressed support for White’s move, although he reserved the right to interview one Samuel Barron, one on the longlist of suspects. The archive is somewhat confused at this point, with memoranda and letters being split into separate files, but a couple of weeks later, it seems that Carey Foster had been spurred into reaction, probably at the behest of his boss, William Strang. On March 9, Carey Foster wrote a determined riposte to White’s suggestion, which was followed up by a similar outpouring from Strang himself, effectively pouring cold water on White’s plan, and suggesting that the Foreign Office would take over the investigation itself, if necessary. It is clear that White was not happy about Strang’s offensive, but he had to clamber down. Yet this rapid volte-face suggests that there was probably no higher-level political direction at work.

So the project continued all through 1950. In August, new material did turn up, primarily about references to the spy’s wife in Washington, and, more dramatically, showing that highly critical correspondence between Churchill and Roosevelt had been compromised. MI5’s desire for secrecy enveloped the officers even more deeply in a mire of subterfuge. Part of the new intelligence-sharing agreement between the USA and the UK commanded full disclosure of information, and, indeed, Eastcote and Arlington would continue to share findings irrespective of MI5’s fears. The responsibility for decrypting the exclusively British telegrams of 1944 was passed to GCHQ in the summer of 1950, which meant that Arlington officially had to rely on Eastcote for the latest decryptions. As the search narrowed, it touched tricky ground in dealing with the FBI. MI5 could not afford any premature disclosure of suspicions, or plans to interrogate, to be communicated to Hoover and his cohorts, lest leaks occur and jeopardise the inquiry. At the same time, Lamphere in the FBI was pursuing a similar line, and MI5 had to stay a step ahead of what his progress might be. If Hoover, who was not sympathetic to Great Britain and its intelligence apparatus (he had considered BSC a gross infringement of his territorial rights) learned of the fruits of the inquiry from another source, he would be apoplectic. Thus the mandarins gradually switched from a policy of measured indolence to one of nervous deceit, which resulted in a ‘real’ inquiry being accompanied by a ‘notional’ one, which had to lag a bit behind so that the FBI could be stalled.

A Breakthrough?

How quickly should MI5 have started the quest for HOMER? The records are bewilderingly opaque. There is much controversy about the first appearance of the cryptonym ‘HOMER’ (or ‘GOMER’, sometimes ‘GOMMER’: since the Cyrillic alphabet has no letter for ‘H’, ‘HOMER’ was represented as ‘GOMER’, and frequently abbreviated to ‘G’.)   The folder HW 15/38 at Kew includes a report by Meredith Gardner that shows that HOMER had been identified as a source as early as 26 September, 1947, providing information about the upcoming meeting between Roosevelt and Churchill in Quebec in September 1944. One might judge that the amount of information contained in this message should surely have prompted a well-focussed search on qualified individuals with access to such information. Yet an anonymous post-mortem report written in October 1951 appears to bury this fact, stating: “The resumé mentioned was transmitted 7 September 1944, but the opening (which contained the name ‘HOMER’) was not solved until much later (probably 1951). [handwritten note – ‘not until just before May 1951’: coldspur] The resumé concerned chiefly occupation policies, mentioning both American and British plans.” It is difficult to interpret what this could mean: is the ‘opening’ something different, but, if so, why does it matter, since HOMER was so clearly identified elsewhere in the text? Very oddly, Nigel West (in Cold War Spymaster) ignores the Gardner evidence, and echoes this conclusion that the ‘opening’ was not solved until May 1951.

The investigators were waiting for a stronger clue to the identity of HOMER, facts with which they could confront Maclean. If MI5 and the Foreign Office leaders still had any doubts that their prime suspect was Donald Maclean, they were apparently dispelled on March 31, 1951, when (according to the prime chronicler, Nigel West) the team of Wilfred Bodsworth and Jeffrey Northbury at Eastcote decrypted enough of a message from Stepan Apresyan in June 28, 1944 to identify Maclean by ‘HOMER’s visit to Tyre [New York] where his wife is living with her mother awaiting confinement’. (Nigel West states that this was the first cable, chronologically, that referred to HOMER [GOMER], rather than just ‘G’.) Yet even the exact process of transcription is not clear: in Venona, West provides the text of the above message, not released until 1973, but does not present this cable as the one that provided the breakthrough. In Cold War Spymaster, however, the same author specifically names this Apresyan cable as the one that succumbed to Bodsworth and Northbury at the end of March, and thus allowed Maclean to be confidently identified, presumably because of the ‘wife in New York’ reference. In any case, the news was sent to MI5, and also to Arlington, where Bodsworth’s counterparts congratulated him on the achievement. Thus we know that AFSA experts knew about its content, although what they did with the information has not been recorded by the historians.

Yet it is difficult to trust West’s updated account of what happened. The archives at KV 6/142 reveal a very startling alternative sequence of events, however. On March 31, that is the same day on which the above information was reputedly passed by GCHQ to MI5 in London, Geoffrey Patterson wrote a long letter to the Director-General (nominally to Sillitoe: Harrison’s cables are normally addressed that way, although it is more likely that Martin, Robertson, or sometimes White was first to read them), in which he declared that ‘PH’ (unidentified) ‘has sent to his Headquarters a letter  . . . and enclosures  . . . which are of considerable interest and may take us another step forward in our search  . . .’.  He added: “PH despatched these documents to London on March 30.” The primary suggestion in PH’s conclusions is that ‘HOMER may be identical with G’. (Patterson then added, rather alarmingly, that he and Kim Philby ‘have discussed these latest developments with Bob Lamphere’.)

‘PH’ was undoubtedly Philip Howse, a member of GCHQ, as the October 1951 report cited above explicitly recognises. In his Historical Dictionary of Signals Intelligence, under ‘BRIDE’, Nigel West writes: “Although Philip Howse had been assigned to Arlington in a general liaison capacity, the Canberra-Moscow channel revealed the need for a British input into BRIDE, and he was integrated into the JADE team to look after British interests, which were also focused on the leakage attributed to HOMER in the British Embassy.”(JADE was the name assigned to the technique by which VENONA messages identified which page of the one-time-pad to use.) S. J. Hamrick states that Howse was assigned to Arlington Hall from 1944 to 1946, pointing out that the National Archives records on VENONA do not name the 1951 contributor. Howse clearly returned, however, and Patterson’s weak effort at concealing his identity failed to confuse posterity.

For some reason it had taken a long time for the equation to be made that GOMER represented the same source as ‘G’, a shorthand that was frequently found in Soviet cables. Hamrick reports, without comment, that Meredith Gardner, who must have been one of the smartest cryptanalysts in the world, was not able to work out that ‘G’ and ‘GOMMER’ were the same as ‘HOMER’ before the Embassy telegrams were passed over to GCHQ for further decryption and analysis in 1949. The correspondence between ‘Source G’ and ‘G’ was confirmed, however, as having been made by Mrs. Gray of AFSA in August 1950, and the fact was immediately communicated to the British. It was given to Marr-Johnson, the GCHQ representative, and presumably passed on to Eastcote. The August 1950 memorandum continues “These recoveries were communicated to the British 11 August 1950, who thereupon set up work-sheets for further recovery work. The suspicion that ‘G’ was the source of material ‘G’ occurred to people at AFSA immediately upon seeing Mrs. Gray’s work, and this suspicion was suggested to the British at the same time.” HW 15/38 goes on to report: “On 30 March 1951, Mr Howse transmitted to England the suggestion that G. was Homer and GOMMER. . . . This identification, if true, allowed the placing of G. in New York in June 1944.”  

Yet what is not explained is why Howse’s insight, the correspondence of ‘G’ and ‘GOMER’, was necessary to make the breakthrough. As we can see, ‘HOMER’ – not just ‘G’ –  appears in the Apresyan cable of 28 June 1944, which referred to the agent’s wife in New York. (The cable can be seen at https://www.nsa.gov/Portals/70/documents/news-features/declassified-documents/venona/dated/1944/28jun_kgb_mtg_donald_maclean.pdf) Yes, ‘G’’s communications would have provided supportive evidence, but Bodsworth did not need Howse’s analysis to make his breakthrough reconstruction of the text, and, in any case, Howse’s message would not have arrived in time for Bodsworth to apply it, and then make his report. So what was going on here? If the ‘breakthrough’ did indeed occur at GCHQ, maybe Bodsworth informed his American colleagues well before he let MI5 know, and Howse then tried to claim the credit, presenting a different, but maybe equally important, conclusion to Philby and Patterson as if it had been his own. Howse’s action in sending a package to Eastcote probably negates that, however, and if Howse despatched the documents only on March 30, they would not have arrived at Eastcote in time for Bodsworth to make his report. Was this just a coincidental timing of independent threads? Or was Howse instructed to report the ‘non-breakthrough’ to indicate for posterity that London had had no inkling about HOMER’s identity until he provided the insight?

Given the intensity of this effort, and its being undertaken by cryptanalysts highly skilled at the task, the time it took for these correspondences to be made defies belief. The name HOMER was decrypted on September 26, 1947.  Messages also emanating from the British Embassy, ascribed to ‘Source G’, were known by some time in 1949. The equivalence of ‘Source G’ and ‘G’ was worked out in August 1950. On March 31, 1951, a suggestion was made that perhaps ‘G’ and HOMER were the same person, at which time Eastcote announced it had solved the puzzle.  It took three-and-half years for Maclean’s identity as HOMER to be recognized and admitted: a period longer than that between the USA’s entry into the war and VE-Day. (Anthony Cave-Brown very provocatively, and without comment, wrote, in “C”: “Homer’s identity and nationality remained unknown to the State Department and Foreign Office until 1949.”) So why was the ‘breakthrough’ announced at that juncture?  It should perhaps be noted that the America spies Julius and Ethel Rosenberg had been convicted on March 29: did that event perhaps prompt the investigators to conclude that it was now politically safe to step into the daylight?

The evidence bequeathed us superficially makes no sense at all. Yet the historians generally have stepped away from trying to analyse the conflicts in front of them. C. J. Hamrick, however, on pages 45-48 of Deceiving the Deceivers, offers a fascinating analysis of the conundrum, concluding that Arlington Hall had been out of the picture on the British Embassy cables since the summer of 1950, and that Eastcote had been sitting on the solved cable for some time. That is one of Hamrick’s conclusions that holds together well. In any case, the scribes creating what turned out to be the HW 15/38 archive then entered some disinformation to help breed confusion. The whole imbroglio demands some more detailed analysis.

We can, nevertheless, make some striking conclusions: i) both Patterson and his colleagues in London were in on the act, since they reciprocally referred to Howse as ‘PH’, and obviously recognized that concealment and subterfuge were necessary; ii) MI5 had an independent back-channel into the AFSA organisation, and might therefore have gained information on the progress of VENONA decryption even before the FBI learned of it; iii) GCHQ in Eastcote was probably not aware that Howse was leaking information to Patterson; and iv) an immense security exposure occurred, since Patterson did not just share the confidences with Lamphere (whom MI5 apparently accepted as a justifiable recipient) but also Philby, which meant that the information would surely be passed on to SIS – and the KGB.

Patterson certainly had not been briefed by London, since he makes some creative suggestions about the identity of HOMER. Indeed, he follows up with another letter (presumably also sent by diplomatic bag) in which, having also discussed the material with Mackenzie, he expands on his analysis, and, somewhat impatiently, but justifiably, looks for a response. On April 4, Robertson responds by cable, apparently quite unconcerned that Patterson has seen the material before the officers of MI5. His main advice runs as follows:

  1. Agree new material most important. Leakage enquiry now being pursued on presumption HOMER equals G.
  2. Collateral for G.C.H.Q. being collected here and, unless we ask specifically, consider it safer you do not repeat not draw subject files from Embassy.

His response does not make sense if Bodsworth’s solving of the Apresyan telegram had provided the ‘breakthrough’. Robertson then asks Patterson to work with Mackenzie in inspecting travel documents that might help clarify the New York visits made by HOMER.

Apart from the anomaly of the ‘HOMER=G’ equivalence, and what relevance it had to the Bodsworth exercise, at least four aspects of this exchange are breathtaking for the interpretation of the decisions for the handling of Maclean, confirming the conclusions outlined earlier. The first is the total lack of surprise shown by MI5 at the fact that its Washington outpost has worked out the HOMER=G breakthrough before London has. The second is that London intelligence (by which I mean MI5 and the Foreign Office, with fragmented attendance by SIS) should have realised that, once the information about ‘the latest recovery’ (as it came to be called) floated around Washington, anyone over there could have been privy to the supposed secret. The third is that Patterson’s and Philby’s access to cryptographic sources, and thus awareness of what was going on, meant that they could not be hoodwinked in any way about the progress of the inquiry. The fourth was the news that Lamphere was right in the thick of things, and could thus presumably come to the same conclusions as MI5’s detectives: moreover, much of the evidence required to seal the deal was to be found in the United States.

Yet MI5 proceeded as if they knew none of this. Indeed, Robertson followed up by trying to dampen Patterson’s enthusiasm: ‘ . . at this stage consider enquiries  . . . should not be confined to preconceived theories but cover all Chancery, cipher and registry staff. Feel sure you agree and will exercise moderating influence on premature speculations’. It was as if dozens of Embassy staff had pregnant wives in New York whom they visited in New York occasionally, and were thus under suspicion. Indeed, Mackenzie in Washington was keen to look for other culprits, and, partly on the grounds that Krivitsky had said that the Foreign Office source had attended Eton and Oxford, pointed the finger at Paul Gore-Booth, who had the disadvantage that his name more closely resembled the letters of ‘GOMER’. It was then, on April 2, that Philby made an even more persuasive case that HOMER was the Imperial Council spy. In a telegram to his boss, Menzies (in the archive at KV 6/142-2, unsigned, and with its first paragraph redacted) he refines the analysis discussed with Patterson and Mackenzie, and adds helpful information about Gromov (Gorsky) and Paul Hardt, who had also been mentioned by Krivitsky. The letter is a masterful exhibition of subterfuge, with Philby trying to protect his reputation and deflect possible criticism. And it apparently worked with Menzies.

What is also extraordinary is the lack of archival evidence of how MI5 received the critical information from GCHQ, and the lack of any initiative to let the Washington representatives know formally of the results. The final entry in the KV 6/141 folder is a note whereby Robertson, Martin and Carey Foster have a meeting at the Foreign Office on March 28, 1951, where they discuss a long report that lists several dozen Embassy employees, including junior staff, in order to whittle down the suspects. The report focuses on Messrs. Pares, Middleton, King and Payne. It is an exercise in self-delusion, probably written by Carey Foster, as if the writer thought the problem would go away if the authorities sat on it for long enough.

The Great Deception

As soon as the British authorities accepted internally that Maclean was indeed HOMER, on April 17, 1951, according to its formal chronology, they started to dither. Martin had told Patterson on April 12 that Maclean was the top suspect, but the MI5 and Foreign Office mandarins suddenly realised the implications of their conclusion. They would eventually have to interrogate Maclean. But if they informed the FBI of their suspicions and plans, the news might leak in a horribly prejudicial way. Lamphere might, however, also come to the same conclusion, which could make them look very foolish if they had not confided in the FBI as they were supposed to. Thus they concocted all sorts of strategies to pretend that they were less well advanced in creating the recent ‘recoveries’ than they actually were, that there were still six suspects they had to investigate. MI5 wanted to tell the FBI more, but the Foreign Office held back, as it did not want the Department of State to hear of it before the FO was ready. Patterson was squeezed: he was again encouraged to let Lamphere harbour his suspicions about ‘Fisher’ (actually Belfrage), even though Belfrage had been eliminated from the inquiry long before.  Mackenzie therefore pressed for continued deception of the FBI: Patterson and Philby disagreed.

By May 15, a tentative timetable had been arranged, whereby Maclean (who was now under surveillance, and had had secret papers withheld from him, so had a strong suspicion of what was going on) would be interrogated on June 8, and the FBI would be informed of that event the day before. On May 17, the KGB sent instructions to London for the escape of Burgess and Maclean, deeming that Maclean was in such a nervous state that he needed accompaniment. Martin prepared for the interrogation, and wrote up his detailed case against Maclean, which he sent to White (but not the Foreign office) on May 19. Sillitoe intervened to insist that no action on Maclean could be taken unless the FBI were informed. The interrogation date was then pushed back to June 18 (because of Mrs. Maclean’s imminent confinement), and Sillitoe planned to be in Washington at that time to explain things, and soothe Hoover. On May 25, Foreign Minister Morrison signed off on the interrogation warrant. That same evening, Burgess and Maclean absconded via Southampton.

The events following the disappearance have been described in multiple books, and I shall not go over them in full here. Instead, I shall concentrate on two aspects of the case: White’s ploy to unmask Philby, and the puzzling use of Anthony Blunt as some kind of witness/consultant in the investigation. Menzies realised immediately that Philby was compromised, because of his close association with Burgess in Washington. In fact, Verne Newton, in The Cambridge Spies, even wrote that Vivian had been sent out to Washington in March to warn Philby about the unsuitability of his boarding Burgess, an account that Cave-Brown also reports, having interviewed Easton. Philby had written another memorandum, on June 4, in which he tried to distance himself from Burgess by providing hints to his suspicious behaviour. Cave-Brown represents this message as a key trigger for Martin to confirm his suspicions about Philby. Martin then tells White, who conveniently presents a damning report on Philby written by Millicent Bagot, and then convinces Menzies that Philby must be recalled. Any complacency Philby had was shattered when John Drew, an experienced and trustworthy officer who had worked for the London Controlling Section in World War II, who happened to be on a visit to Washington, was on June 6 able to hand Philby a letter from Jack Easton, Menzies’s deputy, which alerted him to the fact that he would shortly be formally recalled. He duly arrived in London on June 10, and was immediately summoned by Dick White ‘to help with our inquiries’.

White had meanwhile been very busy, making sure Sillitoe was properly briefed for his meeting with Hoover, and also preparing Patterson for the line of deceit to take. In a letter of May 25, he introduced the concept of the ‘real and notional aspects of the case’, emphasizing how the wool had to be pulled over the eyes of Lamphere and Hoover so that they would not guess that the authorities had concluded that Maclean was their man well before the day he absconded. It would have been disastrous if the FBI learned that Maclean had been at large for several weeks since being identified, and been able to escape the nation’s security forces. (On June 2, Patterson was even instructed to tell Hoover that Sillitoe believed that Maclean’s disappearance was a coincidence.) White decided that Sillitoe should be accompanied by the impish and devious Martin, as Sillitoe needed someone who understood what was going on (which Sillitoe clearly did not) and could plausibly lie about the situation. Sillitoe would work at the high level, and Martin would brief Lamphere. But this is where the story diverges: in the account that he gave his potential biographer, Andrew Boyle (whose notes were inherited by Tom Bower after Boyle’s death) greatly distorted the sequence of events in order to disguise his plot.

Robert Lamphere divulged what happened next in The FBI-KGB War. While Sillitoe met with Hoover, on June 13, Martin engaged Lamphere, and handed over the famous seven-point memorandum (which I described in the April coldspur). This report sharply described several aspects of Philby’s ostensibly communist background, and Martin then passed it on to Lamphere’s old friend William Harvey in the CIA.  The Cleveland Cram archive shows that, on June 15, Harvey then presented his scathing report to Bedell Smith, actually derived from the Martin memorandum, but claimed by Harvey (with encouragement by Martin, no doubt) as resulting from his own inspiration. The next day, Sillitoe met with Allen Dulles of the CIA, who passed ‘Harvey’s’ memorandum to him, Sillitoe of course being completely unaware of what the source was. Sillitoe cabled back home on June 17 to say that he had also had a very satisfactory meeting with Bedell Smith (see Guy Liddell’s Diaries), Bedell Smith telling him he would rather deal with MI5 than SIS in the future. On June 18, Sillitoe and Martin flew back to London. The same day, Hoover told Admiral Sidney Souers, special consultant to the President, about Burgess’s habitation with Philby while in Washington, and that Philby’s first wife had been a Communist. Aldrich and Cormac show this as evidence that ‘Truman was getting better information on the British moles than Attlee’. If that were true, it was because MI5 was not providing the intelligence they gave to the FBI and CIA to their own Prime Minister, not because the US organisations were more efficient.

General Bedell Smith in Moscow

Many of the accounts of this period (including Andrew’s authorised history of MI5) have Bedell Smith banishing Philby from Washington at this time, but, as the archival chronology clearly shows, Philby was back in London by the time Sillitoe and Martin left for Washington. Meanwhile, David Martin, in Wilderness of Mirrors, incorrectly amplified the story about Harvey’s heroic insights into Philby’s background, a story that has been picked up by innumerable chroniclers. I described this in the April coldspur, and also showed that Guy Liddell was completely unaware of what was going on.

Bedell Smith may well have stated that he did not want to see Philby in Washington again, but the record shows that the chief of the CIA was much more annoyed at Hoover’s withholding information about VENONA from him than he was at either Sillitoe’s deception or even possible treachery by Philby. After acting Ambassador Steel visited Bedell Smith in October of 1951, Steel wrote to Reilly about Bedell Smith’s mood, quoting him as follows: “Of course Percy Sillitoe lied to me like a trooper but I appreciate he had to do it on account of your understandings with Hoover and it was not his fault.” Steel went on to write: “Bedell’s principal worry is concerned with how much Burgess may have learned casually from Philby and in his house about his, Bedell’s, organization. He was very anxious to be reassured that we had not had any previous cause for suspicion of Burgess as we had of Donald Maclean and that we had let him know about Burgess as soon as our suspicions were aroused. He is naturally not very happy about what Burgess may have picked up but appeared much more interested in a vindication of our own bona fides towards himself.” That did not sound like the voice of a man greatly offended by rumours about Kim Philby.

As for White, his version of the story, as related in The Perfect English Spy, was a gross distortion of the truth. First of all, he represented Martin’s conversations with the CIA as ‘focused on Burgess’, concealing the Philby memorandum. He then claimed that the long message from Philby that hinted at Burgess’s possible flirtation with espionage arrived on June 18, when that message had actually been seen two weeks earlier. Next White asserted that at only at that stage did Jack Easton send the letter to Philby warning him of the cable to call him home, when that had happened on June 6. He then told his biographer that it was only then that he and Martin started to compile a record of Philby’s work, as preparation for the interrogation of Philby to which John Sinclair had given his grudging approval. Lamphere’s report makes it abundantly clear that the research had been completed well before Sillitoe and Martin left on June 11. Cave-Brown reported that White immediately produced a dossier compiled by Milicent Bagot on Philby. David Martin then contributed to the White caprice, however, by adding that it was at this stage, on June 20, that MI5 compiled the dossier on Philby, listing the seven points so ingeniously provided by Harvey! White also made sure that his harsh opinion of Rees was articulated (‘why did he not come to us earlier’?), and he left a very clear impression that Liddell was irreparably tainted by his association with Blunt.

‘Old Men Forget’. Was this just a misremembrance by White in his declining years? That is very unlikely: his account is a tissue of lies. What he was trying to do is show that he and Martin had nothing to do with the plot to bring Philby down, and were simply following up doggedly on their investigation, since Burgess’s friend from Washington had been brought to them on a platter. Yet it was imperative for White to show that the creation of the dossier on Philby had been prompted by outside investigations, and that it had not occurred until after Burgess’s escape. That was a somewhat risky line to take, as it indicated a fair amount of naivety about Philby’s past, a track-record which, if William Harvey could work out from so far away (from the planted evidence), MI5 should have been able to conclude themselves, as any objective observer might suggest. Philby was in SIS, not MI5, of course, which ameliorated their responsibility. As seems much clearer now – especially if the Liddell-Roberts anecdote is shown to have substance – White had very probably already made that calculation, but he had enough problems on his hands without taking credit for identifying another skeleton in the closet whom he should have called out a long time before. And, if Philby’s guilt could swiftly be acknowledged, though perhaps not proven or admitted, it would help his cause. Yet his old ally Bedell Smith did not respond with the degree of specific outrage that he had hoped for. And, in a clumsy interrogation carried out by White himself immediately Philby returned to Britain, the master-spy resisted the attempts to make him confess, despite the damning evidence.

The ghastly secret that haunted White was as follows: if it could ever be shown that he had harboured serious doubts about Philby before he was sent to Washington, or while he was there, and done nothing about it, he (White) would have to be regarded as putting the whole VENONA project in jeopardy. White would therefore continue to dissemble over the years (see, for example, what he said to Nicholas Bethell over the Albanian incidents, as recorded in Bethell’s book The Albanian Operation of the CIA & MI6) – highlighting his own insights into Philby’s culpability, but not saying exactly when he came to any individual conclusion about a certain activity, or with whom he shared it. #  Meanwhile he concealed from his interviewers the plant that was placed with Harvey and Bedell Smith that listed the fuller indictment. In summary, he distorted the truth to indicate that he had no suspicions of Philby before Burgess absconded. When Burgess and Maclean disappeared, however, he could not hold back any longer. He needed to punish the old foe, SIS, without drawing attention on himself. The fact that he went behind Menzies’s back to attempt to unmask Philby proves that Menzies was not aware of the plan. And White could not have masterminded a deception project using Philby without Menzies’ and Easton’s participation. But was White working alone? Who else knew what was going on?

# For example, in his comments to Bethell, the historian manqué attempted to excuse MI5’s tolerance of communists in 1940, the year in which Philby was recruited by SIS, by telling his interlocutor that at that time ‘the Russians were our allies’, when of course they were then allies of the Nazis, providing matériel to the Germans for the prosecution of the Battle of Britain.

Philby as the Third Man?

What would have been convenient for White would be evidence that Philby had been the agent who had warned Maclean about the net closing in on him, and let him and Burgess know about the imminent arrest. Was Philby thus the Third Man? That question is one of many that surround the eighteen months that Philby spent in Washington, and it is probably educational to list the main conundrums about the man’s activity at this time, and attach some tentative answers to the riddles:

  1. Why did Menzies send Philby to Washington in 1949? (He seriously had no doubts about Philby’s loyalties.  In his Forward to The Philby Conspiracy, John le Carré points out that Menzies had appointed him head of Soviet counter-espionage in 1944 despite knowing his past, and was not apparently disturbed by the Volkov incident in 1945.  According to Cave-Brown, based on interviews with Easton, Reilly was similarly not aware of the questions surrounding Philby, as he was party to the discussions on Philby’s possible promotion in early 1951.  Whether Menzies entrusted a mission of deception and disinformation to Philby cannot be verified.)
  2. Why did Philby so quickly help point the finger at Maclean? (Philby immediately realised from what Oldfield told him that Maclean was probably doomed, and he had to save his own skin.)
  3. Why was Burgess sent to Washington in 1950, despite his malfeasance? (It was typical FO incompetence, as reinforced by its treatment of Maclean after his riotous behaviour in Cairo. The Foreign Office was absurdly indulgent to its senior employees: Attlee was shocked when he later learned of the continued employment of Burgess and Maclean, despite their transgressions.)
  4. Why did Philby take on Burgess as a boarder? (He genuinely thought Burgess’s reputation was safe, needed him as a convenient courier to New York, and believed he could control Burgess’s aberrant behaviour better by keeping a close eye on him.  It was, however, appalling tradecraft.)
  5. Why was White not concerned about Philby’s close collaboration with Patterson? (He probably was concerned, but could do nothing about it without incurring Menzies’s ire.  If White truly had concluded much earlier that Maclean was HOMER, he may have even believed the situation would resolve itself without MI5’s being tainted.)
  6. Why did SIS only warn Philby about his association with Burgess in March 1951? (Menzies and his lieutenants – apart, possibly, from Jack Easton – were so out of touch that they genuinely did not know Burgess was a threat until his outrageous behaviour that month.)
  7. Why did SIS immediately recall Philby in May 1951 if it regarded him as a loyal officer? (Given that Burgess had absconded with Maclean, it accepted that Philby would be contaminated in Hoover’s and Bedell Smith’s eyes.  Cave-Brown claims that Menzies acted only after White had informed him of Martin’s suspicions, provoked by his reading Philby’s awkward letter about Burgess)
  8. Why did Menzies agree to White’s interrogation of Philby immediately he returned? (The political pressure was intense, but Menzies was confident that Philby would be exonerated.  Thus he instructed Easton to agree to the trial, grudgingly. In July, Easton would travel to Washington to tell Winston Scott of the CIA that SIS believed Philby was innocent.)
  9. Why was Lamphere not more shocked when he was told about Philby’s probable culpability? (He had never liked Philby, but was overwhelmed by the implications of Maclean’s treachery. He wrote that he did not believe Philby was an active spy since he had spent so little time trying to woo him, Lamphere.)
  10. Why did Philby later promote himself as the Third Man, despite the obvious logistical difficulties? (It distracted attention from the real facilitator in the bowels of MI5 and magnified his reputation as a fixer extraordinaire.)
Guy Burgess

In his notoriously unreliable memoir, My Silent War, Philby wrote, of the plan to use Burgess to help Maclean escape: “In somebody’s mind – I do not know whose – the two ideas merged: Burgess’s return to London and the rescue of Maclean.” From this emerged an extraordinary series of events that involved Burgess’ s being booked for speeding three times in one day in the state of Virginia, and thus arrested, a project that Burgess ‘brought off  . . . in the simplest possible way’, according to Philby’s account. Burgess was accordingly reprimanded by the Ambassador and sent home, where he then successfully met his Soviet contact, and informed Maclean of the escape plan.

This flight of fancy does not stand up to serious analysis, on the following grounds:

  1. Risk: To require Burgess to engage in dangerous driving, an activity that might have resulted in death, was irresponsible. The desired outcome of having Burgess recalled to London was by no means certain.
  2. Speed: The process was extraordinarily laborious. Burgess’s driving escapade happened on March 1: Ambassador Franks received the letter of complaint from the Governor of Virginia on March 14, and told Burgess he was seeking FO approval for his recall. On April 14, he was ordered home, but did not leave on the boat from New York until May 2, arriving in the UK on May 7. If Burgess had been serious, he could voluntarily have returned home earlier without suspicion.
  3. Necessity: As the Mitrokhin archive informs us (probably reliably, in this case), Philby had a Soviet handler in New York named Makeyev, and Burgess was used as a courier to take messages to him. Makeyev could have had messages passed on to Moscow and London much more easily – and no doubt did so. (While in New York, Burgess stayed with Maclean’s younger brother Alan, who was working as Gladwyn Jebb’s private secretary at the time – a series of visits, including Alan’s unrecorded role as a prison visitor to another traitor, George Blake –  that the Macmillan publisher unaccountably omitted from his jocular memoir, No I Tell a Lie, It Was the Tuesday  . . .)
  4. Logistics: It would have been impossible and irregular for Philby and Makeyev (or Philby and a claimed contact in Washington) to make arrangements for Maclean’s escape from so far away, a claim made by both Modin and Philby. Moscow Centre would have had to approve and organize the whole project.
  5. Timing: While Philby did not make the claim, critics have pointed to the fact that Burgess and Maclean absconded on the very day that Foreign Secretary Morrison signed the order for interrogation, suggesting that the Third Man was able to tip off the traitors immediately that decision was known. That would have been impossible for Philby to accomplish: the timing was probably coincidental.
  6. Pragmatics: The Soviets did not have to wait until the date of interrogation was determined to initiate the escape, which must have been planned for weeks ahead. Once Maclean had been confidently identified, his extraction would have occurred as soon as all the pieces were in place.

The fact that Philby was not aware of the timetable, or what the plans were for Maclean’s escape, is shown by a message from Makeyev that even Hamrick quotes, one ‘verifiable’ (although that word should always be used carefully when dealing with Soviet archives) from the Mitrokhin papers. Makeyev met Philby on May 24, and Hamrick comments on it, without dating it, as follows: “In one or only two of Philby’s documented face-to-face meetings with his KGB illegal, Makayev found him distraught: STANLEY, he reported, ‘demanded HOMER’s immediate exfiltration to the USSR, so that he himself would not be compromised.” Thus, the deception was a tactic to draw attention away from a real source close to the centre of power: and that process helped MI5 as well. Despite its obvious flaws, the account of Philby as the Third Man who warned Burgess and Maclean became a political catchphrase, and has been picked up by numerous writers. It suited Philby to deny it when under fire in 1955, and it suited him to confirm it when writing his memoir.

The Strange Case of Anthony Blunt

Anthony Blunt

When Guy Burgess arrived at Southampton on May 7, he was picked up by Anthony Blunt at the Ocean Terminal. The descriptions of Blunt’s role in helping the Soviet cause in the next two-and-a-half weeks before the May 25 departure of Burgess and Maclean are notably unreliable. The account by Yuri Modin (who was the KGB handler of Blunt and Maclean at the time) in My 5 Cambridge Friends is notoriously wrong on many points, such as Philby’s access to VENONA information and the timing of his suspicions concerning HOMER, Philby’s passing hints to the investigation in London, his own failure to recognize Makeyev, and the details of Krivitsky’s interrogation. He adopts the fiction of the Burgess mission undertaken to alert Modin and company of the imminent threat to Maclean, and that Philby and Burgess planned the details of the escape (for Maclean only, of course) while others (such as John Costello) have reported, by access to the Petrov papers, that the decision to exfiltrate Maclean had been taken months before. Somewhat puzzlingly, Miranda Carter in her biography of Blunt, Anthony Blunt: His Lives, despite acknowledging Modin’s flaws, cites him repeatedly. What is certain, however, is that Blunt acted as a go-between, communicating with Modin and Burgess about what shape the plans would take.

In his 1987 book, The Secrets of the Service, Anthony Glees quoted the testimony that Blunt provided to the Times in an interview published on November 21, 1979. It is an awkward and deceitful explanation in which Blunt gave away his continuing relationship with the Soviets, while denying that he had had any involvement in warning Burgess and Maclean. Thus Blunt supported the story that it was Philby who provided the hints that were based on VENONA. “Philby warned them, as has been publicly stated and I could not have had any knowledge of this.” Glees points out the anomalies, reminds us that Hugh Cecil and Andrew Boyle echoed the same line of reasoning, and cites Robert Lamphere’s account of the obstructive MI5 inquiry. But Glees’s argument focuses on the notion that the escape was provoked by the decision to interrogate Maclean in the week beginning May 21 (actually made on May 24), thus absolving Philby of the ability to communicate a warning from Washington.  If Blunt had been the source, however, he would have had to rely on another insider in MI5, since he had left the service in 1945. That conclusion would point to the existence of another mole, as Chapman Pincher strongly asserted, naming Hollis. Glees, sceptical of the case against Hollis, then turned to the evidence of Patrick Reilly, which I shall analyse soon. Yet if the timing of the abscondence had been coincidental, it would not have required the constant refreshment of the investigation’s progress to Blunt, or to anyone else, in those heady days of May 1951.

In my February posting of coldspur, I laid out the bizarre chain of events which led to Goronwy Rees arriving to have an interview with Guy Liddell, on June 7, only to find Anthony Blunt in the room. The source for the timing of this event comes from Jennifer Rees and John Costello, yet there must be some doubt about it. Liddell’s Diaries (which contain many redactions over Burgess and Maclean) are interrupted for the period between June 2, when he met with Blunt to discuss Burgess’s travel patterns, and June 12, when he indicates that he had just returned from Wales – presumably on holiday. His first entry on his return is to deflect the discussion to Dick White: “Dick had had a talk with Anthony and Garonwy [sic] Rees, which seems to indicate that Burgess had in 1937 been fairly closely implicated in Communist activities.” Thus it seems likely that the Rees/Liddell/Blunt encounter probably occurred earlier. Jennifer Rees provides no source for the date: Costello cites Nigel West’s MI5 and Chapman Pincher’s Too Secret Too Long, but neither of those works gives a date for the meeting. Maybe Rees’s hazy memory imagined a delay that did not occur. In any case, Liddell either tried to minimise the event, and reduce his involvement.

In The Perfect English Spy, however, the timetable changes. White told his biographer that Liddell’s meeting occurred on June 1 – but did not mention Blunt’s presence – and that he, White, interviewed Rees on June 6, i.e. while Liddell was away, which would grant more sense to Liddell’s comment. Yet there is no mention of a previous meeting between Liddell and Rees, and certainly no reference to Blunt’s presence. Was that ‘second’ meeting part of Rees’s imagination? The evidence of White and Liddell might suggest that it was: perhaps it was part of Rees’s fevered campaign of denunciation of Liddell. While White’s recollections are frequently dubious, and he might have had good reason for suppressing Blunt’s involvement, Liddell’s diurnal records were less sensitive, and occasionally very ingenuous. As Liddell wrote in that same careful June 12 entry, after dining with a very perturbed Blunt: “No new facts emerged, except that I feel certain that Anthony was never a conscious collaborator with Burgess in any activities that he may have conducted on behalf of the Comintern.”

Guy Liddell

Liddell’s contribution to the investigation was certainly unusual. He had headed B Division before White, and was now Deputy Director-General, but his Diaries show that White introduced him to the leakage case only on April 11, 1951! He does not appear to be surprised or upset about this, but does become more involved after May 25. A note to file by Robertson on May 29 states tersely: “Mr Anthony Blunt is being contacted by DD [Deputy-Director, i.e. Liddell].”  At this stage the whereabouts of Burgess and Maclean were not known, and most of the investigators would claim that they had no inkling that Burgess might come under the same suspicions that surrounded Maclean, so Liddell must have volunteered the information that Blunt, as a friend of Burgess, might be able to shed more light on him. Again, the lead-up to this invitation is ambiguous: both White and Costello reported that Liddell had received a telephone call from Rees on May 26, but had not been able to make sense of it. Rees said that he had tried to contact Liddell unsuccessfully that day, and thus contacted Blunt. Yet Liddell’s diary entry for May 29 (after a large redacted segment for the previous day) indicates that Burgess’s absence came as a complete surprise. He (Liddell) knew about Maclean’s departure, but not that he had been accompanied. It was Blunt who informed him: it is either an enormous bluff, or he was for some reason being kept out of the picture.

In any case, the outcome was that Blunt turned out to be the main witness for the prosecution. The archive at KV 6/143 contains an entry (June 6) where Blunt’s testimony that Burgess worked for the Comintern is used as the primary background material in the briefing-book prepared for Sillitoe for his coming meeting with Hoover. (Reilly’s and White’s knowledge that Guy Burgess had eagerly shown he had contacts inside the Comintern in June 1940 was conveniently overlooked.) At the same time, it is clear that Rees tried to exonerate his friend somewhat: he told the investigators that in 1939 Blunt had echoed his (Rees’s) protestations at the signing of the Nazi-Soviet pact. That was not true, but Rees no doubt felt some obligation to a man he admired for dragging him into the controversy. And this whole exercise aroused the excitement of MI5’s B2 section. On June 11, Robertson was minded to declare: “Blunt has been named in Goronwy Rees’s statement as a person who was understood by Rees to have been one of Burgess’s source of information, at the time when Burgess was working for the Russians. Blunt has given every appearance of co-operating with M.I.5 in the present investigation but, by reason of his employment in this office during the war, must be regarded as under some suspicion.”

The irony was that the junior ranks in MI5 had just learned of Blunt’s possible treacherousness, while Liddell and White had known about it since 1944. After all, Blunt had made no secret of his Communist pretensions, he had written about them in the Spectator, he had been recalled from a Military Intelligence course in 1940 because of his dubious background (and somehow had been exonerated), and had then been recruited by MI5. As I also showed (conclusively, I would say: I have not received any rebuttal) in Misdefending the Realm, Blunt was caught red-handed accepting purloined secrets from his sidekick Leo Long, then working for MI14, which he then passed on to the Soviets. No doubt Blunt apologised, saying it was a one-off event, to which he was inspired by a deep sympathy for our struggling ally. He probably added that he believed Stalin was not receiving the richness of intelligence from Britain that he deserved, and felt entitled to show such initiative – an action, we should remember, with which Valentine Vivian expressed sympathy in another context. Long was suspended for a while, and Blunt was no doubt given a slap on the wrists, and continued with his perfidy.

Thus it might have come with a sudden and dreadful shock when White came to the realisation that, if apparently reformed Communist sympathisers like Maclean, and then Philby, and most recent of all, Burgess, could turn out to be red-blooded traitors and snakes in the grass, there was no reason why Blunt might not be in the same category, too. And here Blunt was, pretending to help the cause in nailing Burgess, just as Philby had gone out of his way to help incriminate Maclean. The final irony was that that, immediately White concluded that Philby’s guilt was proven – because of Burgess’s escape – he must have known that the fact of VENONA would have been leaked to the Russians, and thus there was no harm in confronting Maclean with the cables to cause him to confess. That would have been dangerous if Maclean had brazened out his interrogation (though that was unlikely, given his psychological condition), but it would no longer have mattered. By now, however, he had flown the coop.

Reilly and the Hollis Mystery

While Kim Philby had certainly acted as a ‘Second Man’ in warning Moscow of the net closing in on Maclean, many commentators and historians have picked up this unauthentic issue of a Third Man – an intelligence insider – warning Burgess and Maclean of the imminent plan to interrogate HOMER. Several have alighted on Liddell as the prime suspect, among them Costello, Lamphere, Oldfield, Deacon and Rees, as I listed in the April coldspur. An alternative theory has been strongly promoted by Chapman Pincher. Indeed, it was his life’s work to prove that the man behind all the counter-espionage disasters was Roger Hollis, who succeeded Dick White as Director-General of MI5 in 1956.

One of Anthony Glees’s objectives, in The Secrets of the Service, was to inspect Pincher’s claims, and I recommend the Professor’s book to anyone interested in the controversy. [I should declare that Professor Glees was my doctoral supervisor.] Glees analysed some of Pincher’s assertions about Hollis, and then reviewed them in the light of the Burgess-Maclean case. I have to say that I think Glees may have been influenced a little too much by some of the prominent politicians and officers whom he interviewed, among them Lord Sherfield (previously Roger Makins in our cast), Sir Patrick Reilly and Dick White. For instance, Lord Sherfield diminished the harm that Maclean had been able to cause, focusing on the matter of nuclear weaponry, when we now know that Maclean’s betrayal of Churchill’s and Roosevelt’s plans for negotiations at Yalta resulted in untold death and misery for much of eastern Europe, especially Poland. It is the post-mortem of the Burgess-Maclean affair, where Reilly contributed several comments in writing to Glees, that is even more provocative, I believe, and bears some close relationship to my inquiry.

Patrick Reilly

Glees introduces Reilly by citing Lamphere’s recently published FBI-KGB War, where its author complains about the way that the FBI were ‘misled and repeatedly lied to’ about the events that led up to the identification of Maclean. Lamphere stated that the Americans were told nothing about Maclean until after the escape, and he quoted Arthur Martin as ‘telling him that MI5 had insisted the FBI not be told about Maclean’. Glees then goes on to write: “As Chapman Pincher rightly observes, if this is true then Philby cannot have tipped off Maclean, since Philby would have known about Maclean and the date of interrogations only in his capacity as MI5’s postman to the FBI. But is this true? The answer must be ‘no’.” One might point out that, irrespective of Philby’s briefing by Oldfield in 1949, there is a solid difference between Maclean’s being identified as one of the suspects – a fact that was communicated to Lamphere, by Patterson – and the fact that he alone was about to be hauled in for questioning. In any case, Glees then called on one of the main participants in the investigation, Patrick Reilly, for his opinion.

To Glees, Reilly is a figure who instantly commands respect. “For against these allegations we must set the far more authoritative testimony of Sir Patrick Reilly . . .  His first concern now is that the full story of Maclean’s identification be told.” Reilly was generous enough to write letters to Glees on the topic, and I reproduce some of his statements here, adding my own commentary:

  1. “In the circumstances of the time, someone who was a member of the Communist Party might not have been acting dishonourably in not disclosing his political sympathies, provided, of course, he was not acting as a Soviet or a Communist agent.”

This is an extraordinarily ingenuous and weaselly policy to defend. First of all, it reflects the regrettable but all too real belief that there were ‘academic’ Communists who were harmless (probably British), and ‘practical’ Communists whose mission was to overthrow liberal democracy (probably foreigners), and that it was therefore quite acceptable to hire the former, even though they concealed their affiliations, while persecuting the latter. Did Sir Patrick not understand that the CPGB took its orders from Moscow, and that agents were known to engage in subterfuge, and thus conceal any illicit activity?

  • “One important stage in the investigation has, however, been overlooked. This is that at a fairly late stage a message became available that Homer was being consulted by the Russians  . . . The new message however showed that the spy was someone of some importance and we were then able to produce what was a relatively short list, about 9, I think. But we still had nothing special pointing to Maclean and indeed I remember clearly that we thought someone else was a more likely suspect.”

This is probably the only occasion in the history of intelligence where the treachery of leaking secret information has been described as a ‘consulting’ exercise. As KV 6/142 shows, Martin informed Patterson on April 12 that Maclean was then ‘the top suspect’. Reilly’s colleague in the Foreign Office, Carey-Foster, may have hoped otherwise, but the Washington Embassy was informed ‘at this fairly late stage’ of HOMER’s probable identity.

  • “The other part of the story quoted by Pincher is pure fabrication; it is totally untrue that the Foreign Office told MI5 not to inform the FBI that Maclean had been identified. On the contrary, Sir Percy Sillitoe [head of MI5] was absolutely determined not to put a foot wrong with Hoover since he had had such a lot of trouble with the latter over the Fuchs and Nunn May cases. He kept Hoover informed with messages which were sent over for special security through MI6 and therefore, of course, through Philby. And there is not the slightest doubt that it was Philby who was thus able to set Maclean’s escape in train. Indeed, I remember that when we in the FO were getting impatient about the delay in interrogating Maclean we were told that Sillitoe wanted to be quite sure we were in step with the FBI before the interrogation took place.”

There is no evidence that Sillitoe, who was out of touch with the details of the investigation, maintained regular communications with Hoover on the subject. (Hamrick makes much of the ‘special MI6 link’ accessed by Philby). K 6/142 shows that Reilly reported at a meeting on April 17 that ‘Strang wants no information passed to the Americans’. Martin passed that message on to Patterson on April 18. On May 10 Mackenzie suggested: ‘If Maclean breaks under interrogation, we should tell the FBI we intend to question him and very shortly afterwards give them the results’.  K 6/142 offers, from a meeting on May 15, that the Foreign Office ‘was anxious that nothing be disclosed to the State Department’, and thus nothing should be sent to Hoover (for fear of leaks). On the same date, Makins and Mackenize pressed for Hoover not to be informed until after Maclean’s interrogation had taken place.

  • “The allegation that Maclean was not going to be prosecuted is also totally untrue. The long delay in interrogating him was due to the fact that it was considered that the evidence from the deciphered telegrams could not be used in court.”

This is partly true. Unless Maclean could be encouraged to confess, or had been caught red-handed passing over information (which was then unlikely, given the obvious surveillance imposed on him), he could not be tried in court based on VENONA evidence. Thus there was no certainty that he was going to be prosecuted, but also no decision made in advance not to prosecute.

  • “MI5 therefore considered that a conviction could only be obtained by a confession and in order to obtain a conviction their star interrogator, Skardon, needed much more information about Maclean. Hence the long delay which proved disastrous, especially as MI5 did not have enough men to keep Maclean under continuous observation.”

On May 15, a meeting between Reilly, Carey Foster, Mackenzie, White, Robertson and Martin agreed to go ahead with the interrogation, but keep silent about it to Washington for up to 3-4 weeks. Reilly did have a point, however. MI5’s report of May 18 stated that the service needed three months to prepare for the interrogation: that was partly because they wanted the FBI to make further investigations about Maclean’s wife, but Lamphere was very nervous about leakages to the State Department.

  • “Morrison would certainly have had before him a written submission, certainly already signed and approved by Strang, drafted by me or Carey Foster.  That submission would have certainly have been the result of prior discussion and the Home Secretary’s concurrence would have been obtained.”

The use of the conditional tense shows evasiveness. Could Reilly, so anxious to set the historical record straight, not recall what papers he signed?

  • “All Sillitoe’s messages to Hoover went through Philby who was thus able to arrange for Burgess to get himself sent home to alert Maclean without the latter’s contact in the UK having to contact him. Philby would of course have been on the alert for information about the date of the interrogation. He could have telephoned to Burgess who was not then suspected or under observation. But it is surely much more likely that he would have used the safe channel of his Soviet contacts in Washington who would have informed their colleagues in London who must have told Burgess by the morning of the 25th since the latter spent the day preparing for the escape.”

Communications on the progress of the BRIDE/VENONA investigation were sent variously by Robertson, Martin or White to Patterson, who then shared the results, as guided, with Philby and Lamphere. There is no evidence of secret traffic between Sillitoe and Hoover. The existence of safe contacts in Washington is highly dubious: Philby used Burgess to contact Makeyev in New York, but does claim he made contact once or twice with handlers in Washington. In any case, Philby would not have had time to act. The decision to go ahead with interrogation (for June 18-25) was taken on May 24, the day before the abscondence.

  • “At last, towards the end of May, MI5 declared themselves ready to interrogate. Full details of the plan were telegraphed to Washington (via Philby). I seem to remember that some hitch with the FBI caused a last-minute delay.”

On May 25, White informed Patterson of the recent meetings, and the schedule. He claimed that the discovery of Maclean’s wife in New York was ‘very recent’, and introduced ‘the real and notional aspects of the case’. The same day, Sillitoe sent copies of the instructions to Menzies, adding that they would be available to Philby, too (via Patterson). The FBI was not party to the decision.

  • “In the FO we had no conceivable motive for further delay. We were longing for the end of three months of intense suspense.”

On the contrary, the Foreign Office was trying to stretch the process out.  For example, reluctant to admit that Maclean could actually be a traitor, Mackenzie continually sought to investigate Gore-Booth.

  1.  “Our service had the tradition of a closely knit family. That one of us, the son of a Cabinet Minister, should be a Soviet spy was something quite horrible and we had been living with this knowledge for months.”

Apart from the fact that the Foreign Office, like any normal family, had its black sheep, rivalries, jealousies, misfits and idlers (as is clear from memoirs and archives), if Reilly had known this fact ‘for months’ (and the description pointed solely to Maclean), how could he pretend that, ‘at a fairly late stage’, the shortlist of suspects had been reduced to nine? And had he already forgotten about the conviction of John King, and Krivitsky’s warnings about the ‘Imperial Council’ spy?  On the issue of ‘family’, Richard Deacon informs us that George Wigg, who had been the intermediary between Prime Minister Harold Wilson and the intelligence services, told him that esprit de corps was the bane of the Foreign Office.  Deacon wrote: “Wigg himself said that Morrison, when he left office, ‘still persisted in the view that Foreign Office esprit de corps was in part responsible for the affair [the failure to apprehend Burgess and Maclean before they defected]. Esprit de corps, apparently, had kept Morrison ignorant of information implicating Maclean which had been given to the Foreign Office by Stalin’s former agent, Walter Krivitsky, in 1940; it had also kept him ignorant of the Volkov revelations, made through the British Embassy in Turkey.”

  1.  “What is of course impossible to understand is that Arthur Martin should have told Lamphere (if he really did) that the FO told MI5 not to keep the FBI informed. . . If he is concerned to incriminate Hollis and therefore wants to minimize Philby’s part, he is being deliberately untruthful. I am absolutely astonished that it is possible for any doubt to be cast on the fact that it was Philby who warned the Russians of the investigation of Maclean and thus enabled them to plan his escape. The statement that the FO had told MI5 not to inform the FBI is false. I say that with complete certainty.”

As I have shown above, Reilly’s statement is simply untrue. There is not necessarily a logical link between the desire of the Foreign Office to keep information from the FBI (because of the risk of leakage, and the discomfort of having an announcement of Maclean’s interrogation pre-empted by the Americans) and the casting of doubt on the assertion that Philby could not have been responsible for all that Reilly (and others) claimed he did. Philby no doubt did warn the Soviets of the investigation into Maclean, but he would not have been able to alert them to the imminent interrogation. Indeed, no one may have done so.

Professor Glees’s conclusion from Reilly’s contribution was that ‘the full truth about the defection of Burgess and Maclean serves to incriminate Philby and to exonerate Roger Hollis in particular”. Apart from the fact that Philby was incriminated anyway (if not by the last-minute disclosure), if Reilly’s testimony can now be shown to be untruthful, would that incriminate Hollis? Not necessarily, but that is the topic of a completely different discussion. (Hollis hardly features in all the archival reports about the Embassy Spy investigation, but that was because he was intensely involved with the Australians in investigating their VENONA leaks, travelling to the Dominion frequently in 1948 and 1949, and helping to establish the ASIO organisation.) The major point here is: what was Reilly trying to hide?

The first declaration to be made is that, like White, he wanted to divert all attention away from any potential mole in MI5 (or a further one in the Foreign Office). This would likewise minimise the highly irregular relationship with Anthony Blunt, which must have also embarrassed Reilly enormously when the truth came out in 1963. If one maintained the stance that Burgess and Maclean had really been alerted at the last minute, but then Philby was eliminated from the line-up, fingers would have to point at another source close to the discussions. Blunt was later shown to be an intermediary for the Soviets, but he was not close enough to the action – unless Liddell had been keeping him constantly updated. But Liddell was largely out of the picture, too. The subsidiary point was that he wanted to clarify that MI5, not the Foreign Office, had been the main stumbling-block in the move to interrogation. That was perhaps petty (and White was still alive when he wrote to Glees), but it presumably meant a lot to Reilly.

Reilly thus remains something of a paradox. Why, after all that time, did he not simply admit that Philby had known about Maclean for a long time, and that the timing of the escape was probably coincidental? He would not have constructed such a web of deception around himself. Moreover, his professional contribution to intelligence matters appears very flimsy. His period as Chairman of the Joint Intelligence Committee, a position he held from November 1950 to April 1953, is treated with complete lack of interest by Michael S. Goodman in his official history of the Committee (2014). Goodman grants Reilly and his specific tenure only two uninformative paragraphs. (The sole fact that Michael Goodman vouchsafes us, about Reilly’s term as Chairman of that body, is that he destroyed a chair when he heard the news about Burgess and Maclean – a highly symbolic gesture of Chekhovian, or even Dostoyevskian, proportions.) Goodman does comment, however, on the JIC’s general abrogation of responsibility over VENONA and Soviet espionage, whether out of ignorance or indifference: “The JIC’s failure to probe the strategic implications of the damage caused by Soviet espionage is even harder to understand, despite the fact that administrative responsibility for security and counter-intelligence lay with MI5”, he writes. Goodman might have added that Reilly was in close cahoots with White at the time, but clearly concealed everything from the JIC itself. The real mystery is why such an unimpressive character as Reilly was not only appointed Chairman of the JIC, but lasted there three years.

Summary and Conclusions

Jorge Luis Borges likened the Falklands War to two bald men fighting over a comb. Here were two old-age pensioners claiming that neither of them, when schoolboys, broke the window. In 1951, Dick White, when he realised that Philby was blown, executed a crafty move to plant the responsibility for MI5 lapses on his rival organisation, SIS. Thirty-five years later, he distorted the real sequence of events when he described the happenings of that spring to his biographer, not wanting to reveal that he had suspected Philby long before. Back then, Patrick Reilly, embarrassed and enraged by the leakiness of the Foreign Office, had tried to stave off the inevitable. Thirty-five years later, under no pressure at all, he volunteered to document for Anthony Glees ‘the full story of what occurred’, and tried to turn the reading public’s attention away from the rottenness of MI5 and towards the comprehensive culpability of Philby. He could quite plausibly have simply debunked the ‘Third Man’ concept without practising to deceive.

Why did they do it? Because they could get away with it, and they knew that, even if the archive were opened, they would not be around to see it. This was the 1980s, however. The decade had kicked off with Andrew Boyle’s Climate of Treason, and the unmasking of Blunt. Chapman Pincher had followed in 1982 with his searing Too Secret Too Long. The secret of VENONA was starting to leak out, from David Harvey and Nigel West, and then Robert Lamphere’s FBI-KGB War in 1986. It does not appear that either White or Reilly read Lamphere’s account, but Glees’s reading of it prompted his approach to Reilly. Peter Wright’s controversial and revealing Spycatcher came out in the same year (1987) that Glees’s book was published, at the same time when Tom Bower started interviewing White. The mandarins needed to move on to the offensive, and try to protect the reputations of themselves and their institutions. Dick White’s deep plotting shows a hitherto undocumented side of his character as he elbowed and intrigued his way to the Director-Generalship of MI5.

The last point to be made is on the rather romantic notion of ‘intelligence sharing’, with which this piece started. The practice has a humorous aspect, in that Britain was invited by the Americans to join an exercise that would turn out to embarrass its intelligence circles. MI5 (for a while) shared the fruits of the Embassy Spy investigation with the FBI, but the FBI did not share them with the CIA, who did not even know about VENONA. And it has its darker side, too. It appears that Dick White, to meet his own political objectives, shared his inner suspicions with the CIA in order to spite his real rival, SIS, while concealing what he was doing from his boss, Sillitoe (a policeman) and his political master, Attlee (a Socialist). All the time, the real enemy, Stalin, learned more about VENONA (from Philby, and the American spy, William Weisband, uncovered in 1950) than either Truman or Attlee.

The research is never over. While I am relatively happy that my explanation in this piece is as solid as possible, given the sources available, further questions remain to be answered: For example:

When did White seriously begin to suspect Philby? In 1945? In 1947? In 1949?

Was there anything devious in Philby’s posting to Washington in 1949?

Did Menzies apply pressure on White to remain silent between 1945 and 1951?

Was there any outside political pressure on White & Reilly?

Was the Embassy leakage investigation extenuated for reasons other than embarrassment?

How much did Liddell tell Blunt?

Why was Menzies so tacit in the whole project?

Why did Reilly feel he had to lie so poorly?

Did Eastcote truly delay or conceal some of the VENONA decipherments?

Readers may think of others. Please let me know.

And lastly, what historiographical lessons can be learned from this? They are familiar.

  1. Luminaries will say anything to protect their legacy if they believe the archival record will not be released. Do not trust interviews of ‘The Great and the Good’ for historical exactitude.
  2. You cannot rely on authorised histories. Their sweep is to great, their sources too random, and they are works of public relations.
  3. Too many accounts pluck indiscriminately from semi-reliable sources, and lack a research methodology, as if an accurate story can be enticed from a volume of facts both reliable and unreliable, or from a succession of interviews with persons loosely connected with the drama.
  4. A methodology is thus essential, containing a rigorous chronology, knowledge of the roles, ambitions and objectives of the participants, and the background in which they worked. The historian has continually to ask: Why should we trust certain sources? What does redacted information in the archive tell us? How can conflicts in the record be resolved? Why would a participant in the drama want to make such falsifiable claims?

Sources Used

I list the following, in a hierarchy of those most reliable downwards.

Level One comprises mostly official archives. The series KV 6/140-145 at the National Archives at Kew is the primary source, even though it is selective and has been redacted. Publicly available CIA & FBI records have been used, although they are likewise often heavily redacted. I am grateful to an anonymous colleague for showing me excerpts from the Cleveland Cram archive. KGB records should always be viewed with some suspicion, but the Mitrokhin Archive contains some items that most critics have judged reliable. The VENONA transcripts are trustworthy (despite what some leftist apologists have claimed in recent years). Guy Liddell’s Diaries have also been a useful source, as they mostly bear the aroma of immediacy, but they have also been heavily redacted in places, and Liddell was not above inserting the occasional deceptive entry.

Level Two consists mostly of serious, primarily academic, histories. It must be remembered that all of these were published before much of the relevant archival material was released. They are thus highly reliant on what little ‘authorised’ history had been published, on other secondary sources, on the press, sometimes on controlled access to archives, on testimonies from participants through interviews, even on leaked documents. They are characterised (mostly) by a seriousness and objectivity of approach, with some governing methodology apparent, but not always a sound approach to the resolution of conflicts in evidence. (If you challenge interviewees too closely, they will cut off the oxygen from you.) Andrew Boyle’s Climate of Treason (1979) clearly broke new ground. Robert J. Lamphere’s FBI-KGB War (1986) adds some well-supported facts, although the author is very loose on dates. Anthony Glees’s Secrets of the Service (1987) offers a painstaking analysis of the affair, but unfortunately is too trusting of the evidence of Reilly, Makins and White. John Costello’s Mask of Treachery (1988) is a compendious but more journalistic volume, suffering from the author’s apparent desire to cram every ‘fact’ he could find about the case in the hope that a consistent story would emerge from the exercise. Verne Newton’s Cambridge Spies (1991) provides a thorough US-centric view of the spies’ activity, although it uses some dubious sources a little too indiscriminately.  The accounts of VENONA are generally solid: the official publication VENONA: Soviet Espionage and the American Response 1939-1957 (1996), edited by Robert Louis Benson and Michael Warner, Nigel West’s VENONA: The Greatest Secret of the Cold War (1999), John Earl Haynes’ & Harvey Klehr’s VENONA: Decoding Soviet Espionage in America (1999), and Herbert Romerstein’s and Eric Breindel’s VENONA Secrets (2001), but they are all weak on the exact process of message collection and decryption, and contain errors.

Level Three displays a broad range of more specialised works, biographies mainly, by such as (but not restricted to) Miranda Carter, Jennifer Rees, Andrew Lownie, Michael Holzman, Ben Macintyre, Stewart Purvis and Jeff Hulbert, Barrie Penrose and Simon Freeman, and Roland Phillips. They all bring something to the table, but are for the sake of this exercise a little too narrowly focussed, or are acts of homage, or rely too much on oral evidence and memoir. I would place in this category the very readable works of Chapman Pincher, who rewards his readers with some tireless excavation of ‘facts’, but provides no sources, is too easily impressed by insiders who may be stringing him a line, and whose methodology is flawed by his objective of having all evidence point to Roger Hollis as a traitor. Nigel West’s Molehunt is also useful, but has been carelessly put together, and requires caution. Anthony Cave-Brown’s Treason in the Blood (1984) has some valuable material, but is undisciplined, as is his biography of Stewart Menzies, “C” (1987), which throws out some will-o’-the-wisp stories about Philby in the course of reporting interviews the author arranged with contemporaries.

Level Four includes a number of unreliable works that need to be listed, since they are so frequently cited by books in Categories 2, 3 and 5. The comparison of misleading stories appearing in memoirs with new archival sources does however often result in new syntheses. David Martin’s Wilderness of Mirrors (1980) is perhaps the most dangerous because it has been so widely quoted, a journalistic creation lacking sources. I have covered S. J. Hamrick’s fascinating but irresponsible Deceiving the Deceivers (2004) in my text. Kim Philby’s My Silent War (1968) needs to be approached with great scepticism, as do most books about Philby, including Patrick Seale’s and Maureen McConville’s Philby: The Long Road to Moscow (1973), a work completely devoid of sources but apparently reflecting a belief that a plausible story could be woven from interviews with about one hundred-and-fifty persons, and The Philby Conspiracy (1968) by Bruce Page, David Leitch and Phillip Knightley. The biography of Dick White, The Perfect English Spy (1995), by Tom Bower, is a classic example of how a prominent intelligence officer manipulated the media and distorted the truth. Goronwy Rees’s memoir, A Chapter of Accidents (1972) is highly unreliable. Dozens of works, by authors from such as Richard Deacon to Yuri Modin, could be included in this category.

Level Five includes the official or authorised histories. In normal circumstances such would at least appear in Category 2, but for this subject, they add nothing, and, moreover, frequently cite items from Level Four for their authority. Keith Jeffery’s Secret History of MI6 (2010) stops in 1949. Christopher Andrew’s Defend the Realm (2009), the authorised history of MI5, has solid coverage of VENONA in general, but is weak on the Burgess and Maclean case, and uses Wilderness of Mirrors as a source. No authorised history of the FBI exists, but John Ranelagh’s The Agency (1986), which comes closest, shows the same defects as Andrew.

Lastly, as part of my background reading for this project, I read Robert Littell’s The Company (2002), a semi-fictional account of the life of the CIA. It is an epic work in many ways (900 pages), a complement perhaps to Vasily Grossman’s Life and Fate, and a real page-turner. It has the disquieting feature, however, of mixing in historical figures (e.g. Kim Philby, James Angleton, Richard Helms, J. F. Kennedy) with invented characters, which may give the work some measure of authenticity, but is bound to lead to disillusion among the cognoscenti. The figure of William Harvey of the CIA, who fulfils a minor, but very important, role in the story of Dick White’s deception, is thinly masked by Littell’s giving him the name of Harvey Torriti. The reason for this is, I think, simple. The author needed his hero to be alive when Communism collapsed (the real Harvey died in 1976), and he also wanted to describe Torriti’s experience in dealing with a botched defection in Germany – which he ascribed to Philby’s mischief – by the time he wrote his report to Bedell Smith condemning the British traitor. In real life, however, Harvey was not sent to Germany until after the 1951 incident. The facts would have impaired a good story.

This month’s Commonplace entries can be found here.

2 Comments

Filed under Economics/Business, Espionage/Intelligence, General History, Politics

Guy Liddell: A Re-Assessment

Guy Liddell

Guy Liddell’s ‘Guardian’ – Nigel West

I have met Nigel West, the pen name adopted by Rupert Allason, the undisputed doyen of British writers on intelligence matters, on three occasions, as I have recorded in previous blogs. I met him first at a conference on wartime Governments-in-Exile at Lancaster House several years back, and he kindly agreed to come and listen to the seminar on Isaiah Berlin that I was giving at the University of Buckingham the following week. We exchanged emails occasionally: he has always been an informative and encouraging advisor to researchers into the world of espionage and counter-espionage, like me. A couple of years ago, I visited him at his house outside Canterbury, where I enjoyed a very congenial lunch.

Nigel West

Shortly before Misdefending the Realm appeared, my publisher and I decided to send Mr. West a review copy, in the hope that he might provide a blurb to help promote the book. Unfortunately, Mr. West was so perturbed by the errors in the text that he recommended that we withdraw it in order to correct them. This was not a tactic that either of us was in favour of, and I resorted to quoting Robin Winks to cloak my embarrassment: “If intelligence officers dislike a book, for its tone, revelations, or simply because the find that one or two facts in it may prove compromising (for which, also read embarrassing), they may let it be known that the book is ‘riddled with errors,’ customarily pointing out a few. Any book on intelligence will contain errors, given the nature and origin of the documentation, and these errors may then be used to discredit quite valid judgments and conclusions which do not turn on the facts in question.”  (Robin W. Winks, in Cloak & Gown: Scholars in the Secret War, 1939-1961, p 479) Since then, therefore, I have not dared to approach Mr. West on questions of intelligence where I might otherwise have sought his opinion.

I would still describe myself as being on friendly terms with Mr. West, though would not describe us as ‘friends’.  (No collector like Denis Healey or Michael Caine am I.  I count my friends in this world as a few dozen: most of them live in England, however, which makes maintenance of the relationship somewhat difficult. On my infrequent returns to the UK, however, I pick up with them as if I had last seen them only the previous week. What they say about the matter is probably better left unrecorded.) And I remain an enthusiastic reader of Mr. West’s books. I have about twenty-five of his publication on my shelves, which I frequently consult. I have to say that they are not uniformly reliable, but I suspect that Mr. West might say the same thing himself.

His latest work, Cold War Spymaster, subtitled The Legacy of Guy Liddell, Deputy Director of MI5, is a puzzling creation, as I shall soon explain. Two of Mr. West’s works on my bookshelf are his editions of Guy Liddell’s Diaries – Volume 1, 1939-1942, and Volume 2, 1942-1945. In a way, these items are superfluous to my research needs, as I have the full set of Liddell’s Diaries on my desktop, downloaded from the National Archives website. Mr. West told me that he would have dearly liked to publish more of Liddell’s chronicle, but it was not considered economically viable. Yet I still find it useful to consult his editions since he frequently provides valuable guides to identities of redacted names, or cryptonyms used: it is also important for me to know what appears in print (which is the record that most historians exploit), as opposed to the largely untapped resource that the original diaries represent. Cold War Spymaster seems to reflect a desire to fill in the overlooked years in the Liddell chronicle.

Guy Liddell, the Diaries and MI5

As West [I shall, with no lack of respect, drop the ‘Mr.’ hereon] points out, Liddell’s Diaries consist an extraordinary record of MI5’s activities during the war, and afterwards, and I do not believe they have been adequately exploited by historians. It is true that a certain amount of caution is always required when treating such testimony: I have been amazed, for example, at the attention that Andrew Roberts’s recent biography of Churchill has received owing to the claim that the recent publication of the Maisky Diaries has required some revisionist assessment. The Soviet ambassador was a mendacious and manipulative individual, and I do not believe that half the things that Maisky ascribed to Churchill and Anthony Eden were ever said by those two politicians. Thus (for example), Churchill’s opinions on the Soviet Union’s ‘rights’ to control the Baltic States have become distorted. Similarly, though to a lesser degree, Stephen Kotkin takes the claims of Maisky far too seriously in Volume 2 of his biography of Stalin.

Diaries, it is true, have the advantage of immediacy over memoirs, but one still has to bear in mind for whose benefit they are written. Liddell locked his away each night, and probably never expected them to be published, believing (as West states) that only the senior management in MI5 would have the privilege of reading them. Yet a careful reading of the text shows some embarrassments, contradictions, and attempts to cover up unpleasantries. Even in 2002, fifty years later, when they were declassified, multiple passages were redacted because some events were still considered too sensitive. Overall, however, Liddell’s record provides unmatched insights into the mission of MI5 and indeed the prosecution of the war. I used them extensively when researching my thesis, and made copious notes, but now, each time I go back to them on some new intelligence topic, I discover new gems, the significance of which I had overlooked on earlier passes.

Describing Liddell’s roles during the time of his Diaries (1939-1952) is important in assessing his record. When war broke out, he was Assistant-Director, under Jasper Harker, of B Division, responsible for counter-intelligence and counter-espionage. B Division included the somewhat maverick section led by Maxwell Knight, B1F, which was responsible for planting agents within subversive organisations such as the Communist Party and Oswald Mosley’s British Union of Fascists. When Churchill sacked the Director-General, Vernon Kell, in May 1940, and introduced the layer of the Security Executive under Lord Swinton to manage domestic intelligence, Liddell was promoted to Director of B Division, although he had to share the office with an inappropriate political insertion, William Crocker, for some months. As chaos mounted during 1940, and Harker was judged to be ill-equipped for leadership, David Petrie was brought in to head the organisation, and in July 1941 he instituted a new structure in which counter-intelligence against communist subversion was hived off into a new F Division, initially under John Curry. Thus Liddell, while maintaining an interest, was not nominally responsible for handling Soviet espionage during most of the war.

David Petrie

Petrie, an effective administrator appointed to produce order, and a clear definition of roles, was considered a success, and respected by those who worked for him. He retired (in somewhat mysterious circumstances) in 1946, and was replaced by another outsider whose credentials were superficially less impressive, the ex-policeman, Percy Sillitoe – an appointment that Liddell resented on two counts. Petrie was a solid administrator and planner: he had been in his position about a year-and-a-half when he produced, in November 1942, a paper that outlined his ideas about the future of MI5, how it should report, and what the ideal characteristics of officers and the Director-General should be. His recommendations were a little eccentric, stressing that an ideal D-G should come from the Services or Police, and have much experience overseas. Thus Liddell, who probably did not see the report, would have been chagrined at the way that career intelligence officers would have been overlooked. In the same file at Kew (KV 4/448) can be seen Liddell’s pleas for improving career-paths for officers, including the establishment of a permanent civilian intelligence corps in the services.

Petrie was reported to have kept a diary during his years in office, but destroyed it. The authorised historian, Christopher Andrew, glides over his retirement. In a very provocative sentence in his ODNB entry for Petrie, Jason Tomes writes: “In retrospect, this triumph [the double cross system] had to be set alongside a serious failure: inadequate surveillance of Soviet spies. Petrie sensed that the Russian espionage which MI5 uncovered was the tip of an iceberg, but the Foreign Office urged restraint and MI5 had itself been penetrated (by Anthony Blunt).” What Soviet espionage had MI5 uncovered by 1945? Green, Uren and Springhall were convicted in 1942, 1943 and 1944, respectively, but it is not clear why Petrie suspected an ‘iceberg’ of Communist penetration, or what sources Tomes is relying on when he claims that Petrie had evidence of it, and that he and the Foreign Office had a major disagreement over policy, and how the Director-General was overruled. Did he resign over it? That would be a major addition to the history of MI5. The defector Gouzenko led the British authorities to Nunn May, but he was not arrested until March 1946. Could Petrie have been disgusted by the discovery of Leo Long and his accomplice Blunt in 1944? See Misdefending the Realm for more details. I have attempted to contact Tomes through his publisher, the History Press, but he has not responded.

Like several other officers, including Dick White, who considered resigning over the intrusion, Liddell did not think the Labour Party’s appointing of a policeman showed good judgment. Sillitoe had worked in East Africa as a young man, but since 1923 as a domestic police officer, so he hardly met Petrie’s criteria, either.  Astonishingly, Petrie’s entry in the Oxford Dictionary of National Biography asserts that Petrie had recommended Liddell for the post, but had been overruled by Attlee – an item of advice that would have been a complete volte-face in light of his memorandum three years earlier. On the other hand, it might be said that Sillitoe could have well riposted to his critics, after the Fuchs affair, that the established officers in MI5 did not understand counter-intelligence either. And in another of those enigmatic twists that bedevil attempts to work out what really happened here, Richard Deacon (whose role I shall inspect later in this piece), wrote about Sillitoe in The Greatest Treason: “The picture which has most unfortunately been portrayed since Sillitoe’s departure from MI5 has been that of a policeman totally out of place in a service which called for highly intellectual talents. This is total balderdash: someone like Sillitoe was desperately needed to put MI5 on the right track and to get rid of the devious amateurs who held power.” One might ask: was that not what Petrie had been doing for the past five years?

Percy Sillitoe

In any case, Liddell also thought that he deserved the job himself. Yet he did receive some recognition, and moved nearer to the seat of leadership. In October 1946 he replaced Harker as Deputy Director-General, and frequently stood in for his new boss, who had a rough time trying to deal with ‘subversive’ MI5 officers, and reportedly liked to travel to get away from the frustrations of the office climate.  What is puzzling, however, about the post-war period is that, despite the fact that the Nazi threat was over, and that a Labour government was (initially) far more sympathetic to the Soviet cause, B Division did not immediately take back control of communist subversion. A strong leader would have made this case immediately.

The histories of MI5 (by Christopher Andrew, and West himself) are deplorably vague about responsibilities in the post-war years. We can rely on John Curry’s internal history, written in 1945, for the clear evidence that, after Petrie’s reorganization in the summer of 1941, F Division was responsible for ‘Communism and Left-Wing Movements’ (F2, under Hollis), which was in turn split into F2A (Policy Activities of CPGB in UK), under Mr Clarke, F2B (Comintern Activities generally, including Communist Refugees), and F2C (Russian Intelligence), under Mr. Pilkington. Petrie had followed Lord Swinton’s advice in splitting up B Division, which was evidently now focused on Nazi Espionage (B1A through B1H). Dick White has been placed in charge of a small section simply named ‘Espionage’, with the mission of B4A described as ‘Suspected cases of Espionage by Individuals domiciled in United Kingdom’, and ‘Review of Espionage cases’. Presumably that allowed Liddell and White to keep their hand in with communist subversion and the machinations of the Comintern.

Yet that agreement (if indeed it was one) is undermined by the organisation chart for August 1943, where White has been promoted to Deputy Director to Liddell, and B4A has been set a new mission of ‘Escaped Prisoners of War and Evaders’. F Division, now under the promoted Roger Hollis, since Curry has been moved into a ‘Research’ position under Petrie, still maintains F2, with the same structure, although Mr Shillito is now responsible for F2B and F2C. With the Soviet Union now an ally, the intensity of concerns about Communist espionage appears to have diminished even more. (In 1943, Stalin announced the dissolution of the Comintern, although that gesture was a fraudulent one.) One might have expected that the conclusion of hostilities, and the awareness within MI5, and even the Foreign Office, that the Soviet Union was now the major threat (again), would provoke a reallocation of forces and a new mission. And, indeed, this appears to be what happened – but in a quiet, unannounced fashion, perhaps because it took a while for Attlee to be able to stand up to the Bevanite and Crippsian influences in his Party. A close inspection of certain archives (in this case, the Pieck files) shows that in September 1946, Michael Serpell identified himself as F2C, but by the following January was known as B1C. This is an important indicator that White’s B Division was taking back some responsibility for Soviet espionage in the light of the new threat, and especially the Gouzenko revelations of 1945. Yet who made the decision, and exactly what happened, seems to be unrecorded.

According to Andrew, after the war, B Division was highly focused on Zionist revolts in Palestine, for which the United Kingdom still held the mandate. Yet he (like West) has nothing to say about F Division between Petrie’s resignation in 1946 and Dick White’s reorganisation in 1953. The whole of the Sillitoe era is a blank. Thus we have to conclude that, from 1947 onwards, Hollis’s F Division was restricted to covering overt subversive organisations (such as the Communist Party), while B Division assumed its traditional role in counter-espionage activities, such as the tracking of Klaus Fuchs and Nunn May, the case of Alexander Foote, and the interpretation of the VENONA transcripts. The artificial split again betrayed the traditional weaknesses in MI5 policies, namely its age-old belief that communist subversion could come only through the agencies of the CPGB, and that domestically-educated ‘intellectual’ communists would still have loyalty to Great Britain. White held on to this thesis for far too long. Gouzenko’s warnings – and the resumption of the Pieck inquiry – had aroused a recognition that an ‘illegal’ network of subversion needed to be investigated. Yet it was not until the Communist takeover in Czechoslovakia, with the subsequent executions, and the Soviet blockade of Berlin in 1948, that Attlee’s policy toward the Soviets hardened, and B Division’s new charter was accepted.

I return to West and Liddell. On the inside cover of each volume of the published Diaries appear the following words: “Although reclusive, and dependent on a small circle of trusted friends, he (Liddell) was unquestionably one of the most remarkable and accomplished professionals of his generation, and a legend within his own organisation.” Even making allowances for the rhetorical flourish of granting Liddell a ‘mythical’ status, I have always been a little sceptical of this judgment. Was this not the same Liddell who recruited Anthony Blunt and Victor Rothschild into his organisation, and then wanted to bring in Guy Burgess, only being talked out of it by John Curry? Was this the same officer who had allowed Fuchs to be accepted into atomic weapons research, despite his known track-record as a CP member, and who allowed SONIA to carry on untouched in her Oxfordshire hideaway? Was this the same officer whom John Costello, David Mure, Goronwy Rees, Richard Deacon and SIS chief Maurice Oldfield all * thought so poorly of that they named him as a probable Soviet mole? Moreover, in his 1987 book, Molehunt, even West had described Liddell as ‘unquestionably a very odd character’. Can these two assessments comfortably co-exist?

* John Costello in Mask of Treachery (1988); David Mure in Master of Deception (1980); Goronwy Rees in the Observer (1980); Richard Deacon in The Greatest Treason (1989); Maurice Oldfield in The Age, and to US intelligence, quoted by Costello.

To balance this catalogue of errors, Liddell surely had some achievements to his credit. He was overall responsible for conceiving the Double-Cross Operation (despite White’s claims to his biographer of his taking the leading role himself, and ‘Tar’ Robertson receiving acclaim from some as being the mastermind of the operation), and basked in the glory that this strategic deception was said to have played in ensuring the success of OVERLORD, the invasion of France. He supervised Maxwell Knight’s infiltration of the Right Club, which led to the arrest and incarceration of Anna Wolkoff and Tyler Kent. He somehow kept B Division together during the turmoil of 1940 and the ‘Fifth Column’ scare. His Diaries reveal a sharp and inquiring mind that was capable of keeping track of myriads of projects across the whole of the British Empire. Thus I opened Cold War Spymaster in the hope that I might find a detailed re-assessment of this somewhat sad figure.

‘Cold War Spymaster’

First, the title. Why West chose this, I have no idea, as he normally claims to be so precise about functions and organisation. (He upbraided me for getting ‘Branches’ and ‘Divisions’ mixed up in Misdefending the Realm, although Christopher Andrew informs us that the terms were used practically interchangeably: it was a mess.) When Geoffrey Elliott wrote about Tommy (‘Tar’) Robertson in Gentleman Spymaster, he was somewhat justified, because Robertson’s main claim to fame was the handling of the German double-agents in World War II. When Martin Pearce chose Spymaster for his biography of Maurice Oldfield, he had right on his side because Oldfield headed SIS, which is primarily an espionage organisation. Helen Fry used it for her profile of the SIS officer, Charles Kendrick, and Charles Whiting wrote a book titled Spymasters for his account of GCHQ’s manipulation of the Germans. But Liddell headed a counter-espionage and counter-intelligence unit: he was not a master of spies.

Second, the subject. Subtitled The Legacy of Guy Liddell, Deputy Director of MI5, the book ‘is intended to examine Liddell’s involvement in some important counter-espionage cases’. Thus some enticing-looking chapters appear on The Duke of Windsor, CORBY (Gouzenko), Klaus Fuchs, Konstantin Volkov (the would-be defector from Turkey who almost unveiled Philby), BARCLAY and CURZON (in fact, Burgess and Maclean, but why not name them so? : BARCLAY does not appear until the final page of a ninety-page chapter), PEACH (the codename given to the investigation of Philby from 1951), and Exposure. One might therefore look forward to a fresh analysis of some of the most intriguing cases of the post-war period.

Third, the sources. Like any decent self-respecting author of average vanity, the first thing I did on opening the book was to search for my name in the Acknowledgments or Sources. But no mention. I might have thought that my analysis, in Misdefending the Realm, of Liddell’s flaws in not taking the warnings of Krivitsky seriously enough, in not insisting on a follow-up to the hint of the ‘Imperial Council’ source, worthy of inclusion. I saw such characters as Tommy Robertson, Dick White, Anthony Blunt, John Cairncross, Yuri Modin and even Jürgen Kuczynski listed there, which did not fill my bosom with excitement, as I thought their contributions would have been exhausted and stale by now. The Bibliography is largely a familiar list of books of various repute, going back to the 1950s, with an occasional entry of something newer, such as the unavoidable and inevitable Ben Macintyre, from more recent years. It also, not very usefully, includes Richard Deacon’s British Connection, a volume that was withdrawn and pulped for legal reasons, and is thus not generally available  So what was this all about?

It turns out that the content of the book is about 80% reproduction of public documents, either excerpts from Liddell’s Diaries from the time 1945 to his resignation in 1953, or from files available at the National Archives. (It is very difficult to distinguish quickly what is commentary and what is quoted sources, as all appear in the same typeface, with many excerpts continuing on for several pages, even though such citations are indented.  And not all his authoritative statements are sourced.) The story West tells is not new, and can be largely gleaned from other places. Moreover, he offers very little fresh or penetrating analysis. Thus it appears that West, his project on publishing excerpts from the Diaries forced to a premature halt, decided to resuscitate the endeavour under a new cover.

So what is Liddell’s ‘legacy’? The author comes to the less than startling conclusion that ‘with the benefit of hindsight, access to recently declassified documents and a more relaxed attitude to the publication of memoirs [what does this mean? Ed.], we can now see how Liddell was betrayed by Burgess, Blunt and Philby.’ Is that news? And does West intend to imply that it was not Liddell’s fault? He offers no analysis of exactly how this happened, and it is a strain to pretend that Liddell, whose object in life was to guard against the threats from such lowlifes, somehow maintained his professional reputation while at the same time failing calamitously to protect himself or the Realm. What caused the fall from grace of ‘unquestionably one of the most remarkable and accomplished professionals of his generation’? Moreover, the exploration of such a betrayal could constitute a poignant counterpoint to the sometime fashionable notion – espoused by Lord Annan and others –  that Goronwy Rees had been the greater sinner by betraying, through his criticisms of Burgess and Maclean in his People articles, the higher cause of friendship. Cold War Spymaster thus represents a massive opportunity missed, avoided, or perhaps deferred.

Expert, Administrator or Leader?

In Misdefending the Realm, my analysis of Liddell concluded that he was an essentially decent man who was not tough enough for the climate and position he was in. Maybe someone will soon attempt a proper biography of him, as he deserves. His earlier years with Special Branch and the formative years in the 1930s are not really significant, I think. West starts his Chronology with January 1940, when Krivitsky was interrogated, and I agree that that period (which coincides closely with the start of the period studied in Misdefending the Realm) is the appropriate place to begin.

I have always been puzzled by the treatment of Jane Archer, whom Liddell essentially started to move out at the end of 1939. Why he would want to banish his sharpest counter-espionage officer, and replace her with the second-rate Roger Hollis – not the move of a ‘remarkable and accomplished professional’ – is something that defies logic. Yet the circumstances of Archer’s demise are puzzling. We have it solely on Liddell’s word that Archer was fired, in November 1940, at Jasper Harker’s behest, because she had reputedly mocked the rather pompous Deputy Director-General once too much. (She did not leave the intelligence world, but moved to SIS, so her behaviour cannot have been that subversive.  Incidentally, a scan of various memoranda and reports written by Harker, scattered around MI5 files, shows a rather shrewd and pragmatic intelligence officer: I suspect that he may have received a poor press.) I should not be surprised to discover that there was more going on: I am so disappointed that no one appears to have tried to interview this gallant woman before her death in 1982.

Kathleen (aka ‘Jane’) Archer, nee Sissmore, MI5’s most capable counter-espionage officer

It would be naïve to imagine that MI5 would be different from any other organisation and be immune from the complications of office politics – and office romance. If I were writing a fictionalized account of this period, I would have Guy Liddell showing an interest in the highly personable, intelligent, humorous and attractive Jane Sissmore (as she was until September 1939). Liddell’s marriage had fallen on rocky ground: in Molehunt, Nigel West stated that his wife Calypso née Baring (the daughter of the third Baron Revelstoke) had left him before the start of the war.  John Costello, in Mask of Treachery, related, having interviewed Liddell himself, that Calypso had absconded as early as 1938, and that Liddell had travelled to Miami in December of that year, and surprisingly won a successful custody battle. Yet contemporary newspapers prove that Calypso had left her husband, taking their children to Florida as early as July 1935, in the company of her half-brother, an association that raised some eyebrows as well as questions in court. Liddell followed them there, and was able, by the peculiarities of British Chancery Law, to make the children wards of court in August. In December, Calypso publicly called her husband ‘an unmitigated snob’ (something the Revelstokes would have known about, I imagine), but agreed to return to England with the offspring, at least temporarily. At the outbreak of war, however, Calypso had managed to overturn the decision because of the dangers of the Blitz, and eventually spirited their children away again. West informs us that, ‘for the first year of the war Liddell’s daughters lived with his widowed cousin Mary Wollaston in Winchester, and Peter at his prep school in Surrey, and then they moved to live with their mother in California’. (Advice to ambitious intelligence officers: do not marry a girl named ‘Calypso’ or ‘Clothilde’.)

The day before war broke out, Jane Sissmore married another MI5 officer, Joe Archer. In those days, it would have been civil service policy for a female employee getting married to have to resign for the sake of childbearing and home, but maybe the exigences of war encouraged a more tolerant approach. Perhaps the Archers even delayed their wedding for that reason. In any case, relationships in the office must have changed. There is not a shred of evidence behind my hypothesis that Liddell might have wooed Sissmore in the first part of 1939, but then there is not a shred of evidence that he maintained a contact in Soviet intelligence to whom he passed secrets, as has been the implication by such as Costello. Yet it would have been very strange if, his marriage irretrievably broken, he had been unappreciative of Sissmore’s qualities, and not perhaps sought a closer relationship with her. It might also explain why Liddell felt uncomfortable having Jane continue to work directly for him. Despite her solid performance on the Krivitsky case, she was appointed supremo of the Regional Security Liaison Officers organisation in April 1940. In this role she quickly gained respect from the hard-boiled intelligence officers, solicitors, stockbrokers and former King’s Messengers who worked for her, until she and Liddell in late October 1940 had another clash (as I reported in the Mystery of the Undetected Radios: Part 3). She was fired shortly after.

Liddell’s life was complicated by the insertion, in August 1940, of William Crocker as his co-director of B Division, at Lord Swinton’s insistence, and no doubt with the advice of Sir Joseph Ball. It is not clear what the exact sequence of events was, but Crocker, who was a solicitor, and Ball’s personal one to boot, had acted for Liddell in trying to maintain custody of the three children he had with Calypso. While the initial attempt had been successful, it was evidently overturned in 1939, and Liddell and his wife were legally separated in 1943. Crocker did not last long in MI5, and he resigned in September of 1940. While David Petrie brought some structure and discipline to the whole service by mid-1941, Liddell had buried himself in his work (and in the task of writing up his Diaries each night), and had found social company in circles that were not quite appropriate for his position. The personal stress in his life, alone and separated from his four children, must have been enormous.

Such contacts would come back to haunt Liddell. When Petrie retired from the Director-Generalship of MI5 in 1946, Liddell was overlooked as replacement, some accounts suggesting that a word in Attlee’s ear by the leftwing firebrand, ‘Red’ Ellen Wilkinson, had doomed his chances. The most recent description of this initiative appears in Michael Jago’s 2014 work, Clement Attlee: The Inevitable Prime Minister, where he describes Liddell’s rejection despite the support for him from within MI5. Wilkinson had apparently told her lover, Herbert Morrison, who was Home Secretary in the postwar Labour administration, that Liddell had in 1940 betrayed the communist propagandist Willi Münzenberg, who had entered Stalin’s hitlist and been assassinated in France.

Several aspects of such an assertion are extremely illogical, however. It is true that the suspicions that Attlee and his ministers had about the anti-socialist tendencies of MI5 coloured the Prime Minister’s perspectives on security matters, but this narrative does not bear up to examination. First, for a leftist agitator like Wilkinson (who had also been the lover of Münzenberg’s henchman, Otto Katz) to confirm her close association with Münzenberg, and take up Münzenberg’s cause against Stalin, was quixotic, to say the least, even if her convictions about the communist cause had softened. Second, for her to believe that the democratically-minded Attlee would look upon Münzenberg’s demise as a cause for outrage reflected a serious misjudgment. He would not have been surprised that MI5, and Liddell in particular, would have taken such a stance against Communist subversion, especially when he (Attlee) learned about the activities of the Comintern a decade before. Third, for Wilkinson to think that Attlee could be persuaded that Liddell had abetted the NKVD in eliminating Münzenberg, showed some remarkable imagination. Fourth, if Attlee had really listened carefully to her, and found her arguments persuasive, he would hardly have allowed Liddell to continue on in MI5 without even an investigation, and to be promoted to Deputy Director-General as some kind of designate. (Churchill was back in power when Sillitoe resigned.) Thus Wilkinson’s personification of Liddell as an agent of Stalinism has the ring of black comedy.

Donald McCormick (aka Richard Deacon)

I have discussed this with the very congenial Mr. Jago, who, it turns out, was at Oxford University at exactly the same time as I, and like me, relocated to the USA in 1980. (We worked out that we must have played cricket against each other in opposing school teams in 1958.) He identifies his source for the Wilkinson anecdote as that figure with whom readers of this column are now very familiar, the rather problematical Richard Deacon. Indeed, in The Greatest Treason, Deacon outlined Wilkinson’s machinations behind the scenes, attributing her reservations about Liddell to what Münzenberg had personally told her about his ‘enemy in British counter-espionage’ before he was killed. Deacon had first introduced this theory in his 1982 memoir With My Little Eye, attributing the source of the story to the suffragette Lady Rhondda, who had apparently written to Deacon about the matter before she died in 1958, also suggesting that Liddell ‘was trying to trap Arthur Koestler’. Yet Deacon qualified his report in The Greatest Treason: “Whether Ellen Wilkinson linked the Münzenberg comments with Guy Liddell is not clear, but she certainly remembered Münzenberg’s warning and as a result expressed her doubts about him. Morrison concurred and it was then that Attlee decided to bring an outsider in as chief of MI5.” I rest my case: in 1940, with Nazi Germany an ally of Soviet Russia, Liddell should have done all he could to stifle such menaces as Münzenberg. Of course Münzenberg would have ‘an enemy in MI5’. I cannot see Attlee falling for it, and this particular urban legend should be buried until stronger independent evidence emerges.

The rumour probably first appeared in David Mure’s extraordinary Last Temptation, a faux memoir in which he uses the Guy/Alice Liddell connection to concoct a veiled dramatization of Liddell’s life and career. This work, published in 1980, which I have analysed in depth in Misdefending the Realm, exploits a parade of characters from Alice in Wonderland to depict the intrigues of MI5 and MI6, and specifically the transgressions of Guy Liddell. If anyone comes to write a proper biography of Liddell, that person will have to unravel the clues that Mure left behind in this ‘novel of treason’ in order to determine what Mure’s sources were, and how reliable they were. Mure describes his informant for the Ellen Wilkinson story as an old friend of Liddell’s mother’s, ‘the widow of a food controller in the First World War’, which does not quite fit the profile of Sir Humphrey Mackworth, whom Viscountess Rhondda had divorced in 1922. A task for some researcher: to discover whether Mure and Deacon shared the same source, and what that person’s relationship with Ellen Wilkinson was.

‘The Greatest Treason’

Regardless of these intrigues, Nigel West suggested, in A Matter of Trust, his history of MI5 between 1945 and 1972, quite reasonably that an ‘insider’ appointment would have been impossible in the political climate of 1945-1946, what with a rampant Labour Party in power, harbouring resentment about the role that MI5 had played in anti-socialist endeavours going back to the Zinoviev Letter incident of 1924. Yet West, while choosing to list some of Liddell’s drawbacks (see below) at this stage of the narrative, still judged that Liddell could well have been selected for the post had Churchill won the election. The fact was that Churchill returned, and Liddell again lost.

Another Chance

When Sillitoe’s time was over in 1953, Liddell still considered himself a candidate for Director-General, and faced the Appointments Board in the Cabinet Office on April 14. (West reproduces his Diary entry from that evening.) It appears that our hero had not prepared himself well for the ordeal. Perhaps he should have been alarmed that a selection process was under way, rather than a simple appointment, and that one of his subordinates was also being encouraged to present himself. When the Chairman, Sir Edward Bridges, asked him what qualifications he thought were appropriate for the directorship, Liddell recorded: “I said while this was a little difficult to answer, I felt strongly somebody was need who had a fairly intimate knowledge of the workings of the machine.” That was the tentative response of an Administrator, not a Leader. Later: “Bridges asked me at the end whether I had any other points which had not been covered, and on reflection I rather regret that I did not say something about the morale of the staff and the importance of making people feel that it was possible for them to rise to the top.” He regretted not saying other things, but his half hour was up. He had blown his opportunity to impress.

Even his latest sally probably misread how his officers thought. Few of them nursed such ambitions, I imagine, but no doubt wanted some better reward for doing a job they loved well. For example, Michael Jago (the same) in his biography of John Bingham, The Spy Who Was George Smiley, relates how Maxwell Knight tried to convince Bingham to replace him as head of the agent-runners. Jago writes: “He strenuously resisted promotion, pointing out that his skills lay as an agent runner, not as a manager of agent runners. The administrative nature of such a job did not appeal to him; his agents were loyal to him and he reciprocated that loyalty.” This is the dilemma of the Expert that can be found in any business, and is one I encountered myself: should he or she take on managerial duties in order to gain promotion and higher pay, or can the mature expert, with his specialist skills more usefully employed, enjoy the same status as those elevated to management roles?

Dick White

Liddell was devastated when he did not get the job, especially since his underling, Dick White, whom he had trained, was indeed appointed, thus contradicting the fact of White’s ‘despondent’ mood after his interview, which he had communicated to Liddell. The authorised historian of MI5, Christopher Andrew, reported the judgment of the selection committee, which acknowledged that Liddell had ‘unrivalled experience of the type of intelligence dealt with in MI5, knowledge of contemporary Communist mentality and tactics and an intuitive capacity to handle the difficult problems involved’. But ‘It has been said [‘by whom?’: coldspur] that he is not a good organiser and lacks forcefulness. And doubts have been expressed as to whether he would be successful in dealing with Ministers, with heads of department and with delegates of other countries.’ This was a rather damning – though bureaucratically anonymous – indictment, which classified Liddell as not only an unsuitable Leader, but as a poor Administrator/Manager as well, which would tend to belie the claim that he had much support from within MI5’s ranks.

(Incidentally, Andrew’s chronology is at fault: he bizarrely has Liddell retiring in 1952, White replacing him as Deputy Director-General and then jousting with Sillitoe, before the above-described interviews in May 1953. The introduction to the Diaries on the National Archives repeats the error of Liddell’s ‘finally retiring’ in 1952. West repeats this mistake on p 185 of A Matter of Trust, as well as in Molehunt, on pp 35-36, but corrects it in the latter on p 123. Tom Bower presents exactly the same self-contradiction in his 1995 The Perfect English Spy. West’s ODNB entry for Liddell states that “  . . . , in 1953, embarrassed by the defection of his friend Guy Burgess, he took early retirement to become security officer to the Atomic Energy Authority”, thus completely ignoring the competition for promotion. It is a puzzling and alarming pattern, as if all authors had been reading off the same faulty press release, one that attempted to conceal Liddell’s embarrassing finale. In his 2005 Introduction to the published Diaries, West likewise presents the date of Liddell’s retirement correctly, but does not discuss his failed interview with the Appointments Board. The Introduction otherwise serves as an excellent survey of the counter-intelligence dynamics of the Liddell period, and their aftermath.)

Liddell’s being overlooked in 1946 cannot have helped his cause, either. West wrote, of the competition for D-G that year, that Liddell’s intelligence and war record had been ‘exceptional’, and continued: “He was without question a brilliant intelligence officer, and he had recruited a number of outstanding brains into the office during his first twelve months of the war. But he had a regrettable choice in friends and was known to prefer the company of homosexuals, although he himself was not one. [This was written in 1982!] Long after the war he invariably spent Friday evenings at the Chelsea Palace, a well-known haunt of homosexuals.” West updated his account for 1953, stating that Liddell ‘might have at first glance have seemed the most likely candidate for the post, but he had already been passed over by Attlee and was known to have counted Anthony Blunt and Guy Burgess amongst his friends.’ In the light of Burgess’s recent decampment with Maclean, that observation strikes an inappropriate chord, as if Burgess’s homosexuality rather than his involvement in Soviet espionage had been the aspect that tarnished Liddell’s judgment, and that Liddell’s now recognized professional failings were somehow not relevant. After all, Burgess’s homosexuality was known to every government officer who ever recruited him.

Moreover, if associating with the Bentinck Street crowd that assembled at Victor Rothschild’s place cast a cloud over Liddell’s reputation, Dick White may have been as much at fault as was Liddell. It is somewhat difficult to find hard evidence of how close the associations at the Rothschild flat were, and exactly what went on. Certainly, Rothschild rented it to Guy Burgess and Anthony Blunt. Goronwy Rees’ posthumous evidence, as retold by Andrew Boyle, was melodramatic. The Observer article of Sunday, January 20, 1980 was titled ‘The Brotherhood of Bentinck Street’, with Rees explaining how ‘Burgess and Blunt entangled top MI5 man Guy Liddell in their treachery’. Rees went on to say that Liddell was one of Burgess’s ‘predatory conquests’, and that Burgess’s ‘main source’ must have been Liddell. Rees certainly overstated the degree of sordidness that could be discovered there. White, meanwhile, still a bachelor, was reported, according to his biographer, Tom Bower, to attend wartime parties in Chesterfield Street, Mayfair, hosted by Tomas ‘Tommy’ Harris, where he mixed with such as Blunt, Philby, Burgess, Rothschild, Rees and Liddell himself. White, however, was not a ‘confirmed bachelor’ and married the communist novelist Kate Bellamy in November 1945.

Yet none of this would have been known about in 1953, or, if it had, would have been considered quite harmless. After all, the top brass in Whitehall was unaware at this time of Blunt’s treachery (although I contend that White and Liddell, and maybe Petrie, knew about it), and Burgess had mixed and worked with all manner of prominent persons – all of whom rapidly tried to distance themselves from any possible contamination by the renegade and rake. Moreover, Liddell had not recruited Burgess to MI5, even though he had wanted to, but been talked out of it by John Curry. John Costello, in his multipage assault on Liddell in Mask of Treachery, lists a number of ‘errors’ in Liddell’s behavior that raise ‘serious questions about Liddell’s competency, bad luck, or treachery’, but most of these would not have been known by the members of the Appointments Board, and the obvious mistakes (such as oversights in vetting for Klaus Fuchs) were not the responsibility of Liddell alone. He simply was not strong enough to have acted independently in protecting such persons.

Thus it is safe to assume that Liddell was rightly overlooked in 1953 because he was not leadership material, not because of his questionable associations. White was, on the other hand, a smoother operator. He had enjoyed a more enterprising career, having been posted to SHAEF at the end of 1944, and spent the best part of eighteen months in counter-intelligence in Germany, under General Eisenhower and Major-General Kenneth Strong, before touring the Commonwealth. (Strong was in fact another candidate for the MI5 leadership: White told his biographer that he noted Strong’s lack of interest in non-military intelligence.) He knew how to handle the mandarins, and sold himself well. As Bower wrote, in his biography of White, The Perfect English Spy: “The qualities required of an intelligence chief were evident: balance, clarity, judgment, credibility, honesty, cool management in the face of crisis, and the ability to convey to his political superiors in a relaxed manner the facts which demonstrated the importance of intelligence.” Malcolm Muggeridge was less impressed: “Dear old Dick White”, he said to Andrew Boyle, “‘the schoolmaster’. I just can’t believe it.”

White was thus able to bury the embarrassments of two years before, when he and Liddell had convinced Sillitoe to lie to Premier Attlee over the Fuchs fiasco, and he had also somehow persuaded the Appointments Committee that he was not to blame for the Burgess/Maclean disaster. This was an astounding performance, as only eighteen months earlier, in a very detailed memorandum, White had called for the Philby inquiry to be called off, only to face a strong criticism from Sir William Strang, the permanent under-secretary at the Foreign Office since 1949, who was also on the Selection Committee. Yet White had previously clashed with Strang when the latter held back secret personal files. They shared similar convictions of misplaced institutional loyalty: Strang could not believe that there could be spies in the Diplomatic Service, while White refused to accept that there could be such among the officers of the intelligence corps.

White had also benefitted from Liddell’s promotion. He had returned from abroad in early 1946, and had been appointed head of B Division, since Liddell had been promoted to Deputy Director-General under Sillitoe, with Harker pushed into early retirement. Thus White took over centre-stage as the Cold War intensified, and was in obvious control of the meetings about Fuchs (1949-50), and then Burgess and Maclean (1951), with Liddell left somewhat out of the main picture. White was then able to manipulate the mandarins to suggest that the obvious mistakes had either not occurred on his watch, or had else been unavoidable, while Liddell was left in a relatively powerless no-man’s-land. It would appear that White out-manoeuvred his boss: how genuine was his display of ‘despondency’ to Liddell after the interview, one wonders?

White was probably also a better Leader than a Manager. He was somewhat bland, and smoothness was well-received in Whitehall: he had the annoying habit of agreeing with the last person who made a case to him – a feature that I came across frequently in business. There can be nothing more annoying than going in to see a senior manager, and making a well-prepared argument, and see a head nodding vigorously the other side of the desk, with its owner not challenging any of your conclusions or recommendations. Yet nothing happens, because the next person who has won an audience may put forward a completely different set of ideas, and still gain the nodding head. That is a sign of lack of backbone. R. A. (later Lord) Butler ascribed the same deficiency to his boss, Lord Halifax, and Franklin Roosevelt was said to exhibit the same tendency, preferring to manipulate people through his personal agencies and contacts, and commit little in writing. But White dealt well with the politicians, who considered him a ‘safe pair of hands’, and his career thrived after that.

Re-Assessing Liddell

When Kim Philby was being investigated as the possible ‘Third Man’ in the latter part of 1951, George Carey-Foster, the Security Officer in the Foreign Office, wrote to Dick White about their suspect’s possible escape: “Are you at any stage proposing to warn the ports, because even that may leak and bring in the Foreign Office? For these reasons as well as for those referred to in my previous letter I think we ought to know how we are to act before we are overtaken by events.” That was one of the main failings of Liddell’s that I identified in Misdefending the Realm: “Liddell was very reactive: he did not appear to prepare his team for any eventuality that came along” (p 284). How should MI5 respond if its recommendations over vetting were overruled? What policies were in place should a defector like Gouzenko or Volkov turn up? How should MI5 proceed if it came about that one of its officers was indeed a Soviet spy, yet the evidence came through secret channels? Who should conduct interrogations? Under what circumstances could a prosecution take place? There was no procedure in place. Events were allowed to overtake MI5.

The task of a regular counter-espionage officer was quite straightforward. It required some native intelligence, patience and attention to detail, stubbornness, curiosity, empathy, a knowledge of law and psychology, unflappability (the attributes of George Smiley, in fact). As it happens, I compiled this list before reading how Vernon Kell, the first Director of MI5 had described the ideal characteristics of a Defence Security Officer: ‘Freedom from strong personal or political prejudices or interest; an accurate and sympathetic judgment of human character, motives and psychology, and of the relative significance, importance and urgency of current events and duties in their bearing on major British interests’. They still make sense. Yet, if an officer performed his job of surveillance industriously, and identified a subversive, not much more could be recommended than ‘keeping an eye on him (or her)’. MI5 had no powers of arrest, so it just had to wait until the suspect was caught red-handed planting the bomb in the factory or handing over the papers before Special Branch could be called in. That process would sometimes require handling ‘agents’ who would penetrate such institutions as the Communist Party HQ, for example Olga Gray and her work leading to the capture and prosecution of Percy Glading. That was a function that Maxwell Knight was excellent at handling.

With the various ‘illegals’ and other aliens floating around, however, officers were often left powerless. They had to deal with busybody politicians interfering in immigration bans and detention orders, civil servant poohbahs overriding recommendations on non-employment, cautious ministers worried about the unions, inefficient security processes at sea- and air-ports, leaders cowed by their political masters, Foreign Office diplomats nervous about upsetting Uncle Joe Stalin in the cause of ‘cooperation’, or simple laziness and inattention in other departments – even absurd personnel policies. Thus Brandes and Maly and Pieck were allowed to escape the country, Krivitsky’s hints were allowed to fade away, Fuchs was recruited by Tube Alloys, and Burgess and Maclean were not fired from their positions in the Foreign Office but instead moved around or given sick leave, and then allowed to escape as the interrogation process ground into motion. These were problems of management and of leadership.

If a new manager asks his or her boss: “What do I have to do to perform a good job?”, and the boss responds: “Keep out of trouble, don’t rock the boat, and send your status reports in on time”, the manager will wisely not ruffle feathers, but concentrate on good recruitment, training, and skills development, following the procedures, and getting the job done. The problem will however arise that, after a while when the ship is running smoothly, the manager may be seen as superfluous to requirements, while his or her technical skills may have fallen by the wayside. That may lead to a loss of job (in the competitive commercial world anyway: probably not in government institutions.) If, however, the boss says: “I want you to reshape this unit, and set a few things on fire”, the candidate may have to develop some sharp elbows, lead some perhaps reluctant underlings into an uncertain future, and probably upset other departments along the way. That implies taking risks, putting one’s head above the parapet, and maybe getting metaphorically shot at. In a very political organisation – especially where one’s mentor/boss may not be very secure – that rough-and-tumble could be equally disastrous for a career. I am familiar with both of these situations from experience.

So where does that leave ‘probably the single most influential British intelligence officer of his era’ (West)? We have to evaluate him in terms of the various roles expected of him. He was indubitably a smart and intelligent man, imaginative and insightful. But what were his achievements, again following what West lists? ‘His knowledge of Communist influence dated back to the Sidney Street siege of January 1911’ – but that did not stop him recruiting Anthony Blunt, and allowing Communists to be inserted into important positions during his watch. ‘He had been on the scene when the Arcos headquarters in Moorgate had been raided’, but that operation was something of a shambles. ‘He had personally debriefed the GRU illegal rezident Walter Krivitsky in January 1940’, but that had been only an occasional involvement, he stifled Jane Archer’s enterprise, and he did not put in place a methodological follow-up. ‘He was the genius behind the introduction of the now famous wartime Double Cross system which effectively took control of the enemy’s networks in Great Britain’, but that was a claim that White also made, the effort was managed by ‘Tar’ Robertson, and the skill of its execution is now seriously in question. As indicated above, West alludes to Liddell’s rapid recruitment of ‘brains’ in 1940, but Liddell failed to provide the structure or training to make the most of them. These ‘achievements’ are more ‘experiences’: Liddell’s Diaries contain many instances of decisions being made, but it is not clear that they had his personal stamp on them.

Regrettably, the cause of accuracy is not furthered by West’s entry for Liddell in the Oxford Dictionary of National Biography. Again, vaguely referring to his subject’s ‘supervision’ of projects, and ‘key role’ in recruiting such as White and Blunt, West goes on to make the following extraordinary claim: “Thus Liddell was closely associated with two of MI5’s most spectacular accomplishments, the interception and decryption of German intelligence signals by the Radio Security Service, and the famed ‘double cross system’. The Radio Security Service had grown, under Liddell’s supervision, from an inter-service liaison committee known as the Wireless Board into a sophisticated cryptographic organisation that operated in tandem with Bletchley Park, concentrating on Abwehr communications, and enabling MI5 case officers to monitor the progress made by their double agents through the reports submitted by their enemy controllers to Berlin.” Yet this is a travesty of what occurred. As I showed in an earlier posting, the Radio Security Service (RSS) was a separate unit, part of MI8. MI5 rejected taking it over, with the result that it found its home within SIS. It had nothing organisationally to do with the Wireless Board, which was a cross-departmental group, set up in January 1941, that supervised the work of the XX Committee. RSS was an interception service, not a cryptological one. It was the lack of any MI5 control that partly contributed to what historian John Curry called the eventual ‘tragedy’. Thus West founds a large part of what he characterizes as a ‘remarkable’ career on a misunderstanding: Liddell’s lifework was one dominated by missed opportunities.

Moreover, West cites one of his sources for his bibliographic entry on Liddell as Richard Deacon’s Greatest Treason. This seems to me an error of judgment on at least three counts, and raises some serious questions of scholarship. While Deacon’s work contains the most complete account of Liddell’s earlier life, it is largely a potboiler, having as its central thesis the claim that Liddell was an agent of Soviet espionage, and may even have been the elusive ELLI over whose identity many commentators have puzzled. (The lesser-known subtitle of Deacon’s book is The Bizarre Story of Hollis, Liddell and Mountbatten.) Yet this is a position with which West is clearly not in sympathy, as is shown by his repeated encomia to Liddell’s performance. The Editors at the ODNB should have shown much more caution in allowing such a book to be listed as an authoritative source without qualification. Lastly, a fact that Deacon did not acknowledge when his book was published in 1989, West had himself been a researcher for Richard Deacon, as West explains in a short chapter in Hayek: A Collaborative Biography, edited by Robert Leeson, and published in 2018. Here he declares that Deacon was ‘exceptionally well-informed’, but he finesses the controversy over Liddell completely. Somewhere, he should have explained in more detail what lay behind his research role, and surely should have done more to clarify how his source contributed to his summarization of Liddell’s life, and why and where he, West, diverged from Deacon’s conclusions.

Something else with which West does not deal is Liddell’s supposed relationship with one of the first women members of the Communist Party of Great Britain. Joyce Whyte. David Mure, in The Last Temptation, had hinted at this lady’s identity, but not named her, giving her the codename ‘Alice’. In With My Little Eye, however, Richard Deacon went much further, providing us with the following insight (which can be found in a pagenote on p 194 of Misdefending the Realm): “In the early 1920s, when Liddell was working at Scotland Yard, supposed to be keeping a watch on communists, his mistress was Miss Joyce Wallace Whyte of Trinity College, Cambridge, and at that time one of the first women members of the Cambridge Communist Party. In 1927 she married Sir Cuthbert Ackroyd, who later became Lord Mayor of London.” For what it is worth, Deacon has Whyte’s family living in Chislehurst, Kent: Mure indicates that the influential lady lived nearby, in Sidcup.

It is not as if Liddell were outshone by his colleagues, however. To an extent, he was unlucky: unfortunate that there was another ‘able’ candidate available in White when a preference for an insider existed, and perhaps unfairly done by, from a historical standpoint, when the even less impressive Hollis succeeded White later. A survey of other candidates and successes does not depict a parade of standouts. Jasper Harker was regarded by all (maybe unjustly) as ineffectual, but was allowed to languish as Deputy Director-General for years. Dick White was not intellectually sharper than Liddell, but was likewise impressionable, and equally bamboozled. He managed the politics better, however, had broader experience, and was more decisive. Hollis was certainly less distinguished than Liddell in every way. Petrie was an excellent administrator, and occasionally showed signs of imaginative leadership, sharpening up MI5’s mission, but he was not a career intelligence officer. Sillitoe did not earn the respect of his subordinates, and had a hazy idea of what counter-intelligence was. Liddell’s equivalent in SIS, Valentine Vivian, comes across as something of a buffoon, clueless about the tasks that were confronting him, and how he should go about them, and Vivian’s arch-enemy within SIS, Claude Dansey (whose highly unusual behavior may perhaps be partially explained by his being involved, in 1893, in a scandalous affair with Oscar Wilde, Lord Alfred Douglas, and Robbie Ross), was regarded as poisonous by most who encountered him. Kim Philby outwitted them all. (If his head had been screwed on the right way, he would have made an excellent Director-General.) So, with a track-record of being only a mediocre man-manager, it should come as no surprise that the very decent and intellectually curious Liddell should have been rejected for the task of leading Britain’s Security Service. The tragedy was that MI5 had no process for identifying and developing interior talent.

When Liddell resigned, he was appointed security adviser to the Atomic Energy Commission, an irony in that AERE Harwell was the place where Fuchs had worked until his investigation by Henry Arnold, the adviser at the time. The introduction to Liddell’s Diaries at the National Archives suggests that he was in fact quite fortunate to gain this post, considering his links to Burgess, Rothschild and Philby. (The inclusion of Rothschild in these dubious links is quite impish on the behalf of the authorities.) Liddell died five years later. The verdict on him should be that he was an honest, intelligent and imaginative officer who did not have the guts or insight to come to grips with the real challenges of ‘Defending the Realm’, or to promote a vision of his own. He was betrayed – by Calypso, by Blunt, Burgess and Philby, by White, and maybe by Petrie. In a way, he was betrayed by his bosses, who did not give him the guidance or tutoring for him to execute a stronger mandate. But he was also soft – and thus open to manipulation. Not a real leader of men, nor an effective manager. By no means a ‘Spymaster’, but certainly not a Soviet supermole either.

What it boils down to is that, as with so many of these intelligence matters, you cannot trust the authorised histories. You cannot trust the memoirists. You cannot trust the experts. You cannot always trust the archives. And you cannot even trust the Oxford Dictionary of National Biography, which is sometimes less reliable than Wikipedia. All you can trust is coldspur, whose ‘relentless curiosity and Smileyesque doggedness blow away the clouds of obfuscation that bedevil the world of intelligence’ [Clive James, attrib.].

In summary, we are left with the following paradoxical chain of events:

  • During the 1970s and 1980s, Nigel West performs research for Richard Deacon.
  • In 1987, West publishes Molehunt, where he describes Liddell as ‘a brilliantly intuitive intelligence officer’.
  • In 1989, Deacon publishes The Greatest Treason, which claims Guy Liddell was a Soviet mole.
  • In 2004, West writes a biographical entry for Liddell in the ODNB, which praises him, but carelessly misrepresents his achievements, and lists The Greatest Treason as one of the few sources.
  • In 2005, West edits the Liddell Diaries, and provides a glowing Introduction for his subject.
  • In 2015, West provides a chapter to a book on Hayek, praises Deacon for his knowledge, but debunks him for relying on two dubious sources. He does not mention Liddell.
  • In 2018, West writes a new book on Liddell, which generally endorses the writer’s previous positive opinion of him, but rejects the opportunity to provide a re-assessment of Liddell’s career, merely concluding that Liddell, despite being’ the consummate professional’, had been ‘betrayed’ by Burgess, Blunt and Philby. West lists in his bibliography two other books by Deacon (including the pulped British Connection), but ignores The Greatest Treason.

So, Nigel, my friend, where do you stand? Why would you claim, on the one hand, that Liddell was a brilliant counter-espionage officer while on the other pointing your readers towards Richard Deacon, who thought he was a communist mole?  What do you say next?

This month’s Commonplace entries can be found here.

1 Comment

Filed under Economics/Business, Espionage/Intelligence, General History, Management/Leadership, Personal, Politics

Homo Sovieticus

Aeroflot Advertisement, New York Times, 2017

A few months ago, I noticed an advertisement that Aeroflot, the Russian carrier, had placed in the New York Times. The appearance reminded me of an approach I had made to the airline over forty-five years ago, in England, when, obviously with not enough serious things to do at the time, and maybe overtaken by some temporary lovelorn Weltschmerz, I had written a letter to its Publicity Manager, suggesting a slogan that it might profitably use to help promote its brand.

Miraculously, this letter recently came to light as I was sorting out some old files. I keep telling my wife, Sylvia, that she need not worry about the clutter that I have accumulated and taken with me over the years – from England to Connecticut, to New Jersey and to Pennsylvania, and then back to Connecticut before our retirement transplantation to North Carolina in 2001. The University of Eastern Montana has generously committed to purchasing the whole Percy archive, so that it will eventually be boxed up and sent to the Ethel Hays Memorial Library in Billings for careful and patient inspection by students of mid-twentieth century social life in suburban Surrey, England.

I reproduce the letter here:

Letter to Aeroflot, March 1972

It reads:

“Dear Sir,

I notice that you have started advertising on London buses. I have for some time thought that a good slogan for Aeroflot would be: ‘Happiness is just an Ilyushin’, which is a pretty awful pun, but a fairly Russian sentiment. E.G.

. . .В себя ли заглянешь, там прошлого нет и следа;

И радость, и муки, и всё там ничтожно . . .  (Lermontov)

Yours faithfully, R. A. Percy”

[Dimitri Obolensky, in the Penguin Book of Russian Verse, translates this fragment of an untitled poem as follows: “If you look within yourself, there is not a trace of the past there; the joys and the torments – everything there is worthless  . . .”]

I am not sure why Aeroflot was advertising on London Transport vehicles at the time, since the Man on the Clapham Omnibus was probably not considering then a holiday in Sochi or Stalingrad, and anyone who did not have to use the airline would surely choose the western equivalent. Nevertheless, I thought my sally quite witty at the time, though I did not receive the favour of a reply. Did homo sovieticus, with his known frail sense of humour, not deem my proposal worthy of merit? After all, humour was a dangerous commodity in Soviet times: repeating a joke about Stalin might get you denounced by a work colleague or neighbour and sent to the Gulag, while Stalin himself derived his variety of laughs from ordering Khrushchev to dance the gopak late at night, and forcing his drinking-pals on the Politburo to watch him.

I think it unlikely that the state-controlled entity would have hired a Briton as its publicity manager, but of course it may not have had a publicity manager at all. Maybe my letter did not reach the right person, or maybe it did, but he or she could not be bothered to reply to some eccentric Briton. Or maybe the letter was taken seriously, but then the manager thought about Jimmy Ruffin’s massive 1966 hit What Becomes of the Broken-Hearted? (see https://www.youtube.com/watch?v=cQywZYoGB1g) , and considered that its vibrant phrase ‘Happiness is just an illusion/filled with darkness and confusion’ might not communicate the appropriate atmosphere as Aeroflot’s passengers prepared to board the 11:40 flight from Heathrow to Minsk. We shall never know.

The Stalin-Class S. S. Baltika

My first real encounter with homo sovieticus had occurred when I was a member of a school party to the Soviet Union in the summer of 1965. As we went through customs after disembarking from the good ship Baltika, I recall the officer asking me, in all seriousness, whether I was bringing in ‘veppons’ with me. After verifying what he had asked, I was able to deny such an attempt at contrabandage. I had conceived of no plans to abet an armed uprising in the Land of the Proletariat, as I thought it might deleteriously affect my prospects of taking up the place offered me at Christ Church, Oxford, the following October. Moreover, it seemed a rather pointless question to pose, as I am sure the commissars would have inspected all baggage anyway, but perhaps they would have doubled my sentence if they had caught me lying to them, as well as smuggling in arms. Yet it showed the absurd protocol-oriented thinking of the security organs: ‘Be sure to ask members of English school groups whether they are smuggling in weapons to assist a Troyskyist insurrection against the glorious motherland’.

At least it was not as naïve as the question that the US customs officer asked me, when I visited that country for the first time about eleven years later: ‘Do you have any intentions to overthrow the government of the United States?’. Did he really expect a straight answer? When H. G. Wells asked his mistress, Moura Budberg, whether she was a spy, she told him very precisely that, whether she was a spy or not, the answer would have to be ‘No’. That’s what spies do: lies and subterfuge. If I really did have plans for subversion in the United States, the first thing I would have done when I eventually immigrated here would be to plant a large Stars and Stripes on my front lawn, and wear one of those little pins that US politicians choose to place in their lapels, in the manner that Guy Burgess always sported his Old Etonian tie, to prove their patriotism. So the answer in Washington, as in Leningrad, was ‘No’. That was, incidentally, what Isaiah Berlin meant when he wrote to his parents in July 1940 that Americans were ‘open, vigorous, 2 x 2 = 4 sort of people, who want yes or no for an answer. No nuances’. These same people who nailed Al Capone for tax evasion, and Alger Hiss for perjury, would have to work to convict Tony Percy for the lesser charge of deceiving a customs official.

H.G. Wells, Maxim Gorky & Moura Budberg

I did not manage to speak to many homines sovietici during my time in the Soviet Union, but I did have one or two furtive meetings with a young man who was obviously dead scared of the KGB, but even keener to acquire nylon shirts and ballpoint pens from me, which I handed over at a night-time assignation in some park in Leningrad. That was clearly very foolish on my part, but it gave me an early indication that, despite the several decades of Leninist, Stalinist, Khruschevian and Brezhnevian indoctrination and oppression, the Communist Experiment had not succeeded in eliminating the free human spirit completely. Moreover, despite the ‘command economy’, the Soviets could not provide its citizens with even basic goods. When the Soviet troops invaded eastern Europe in 1944, among other violations, they cleared the shelves, grabbed watches, and marvelled at flush toilets that worked. As Clive James wrote in his essay on Coco Chanel: “It was the most sordid trick that communism played. Killing people by the millions at least had the merit of a tragic dimension. But making the common people queue endlessly for goods barely worth having was a bad joke.”

Piata-Victoriei Square, Bucharest

My only other direct experience with life behind the Iron Curtain was in Bucharest, in 1980. In an assignment on which I now look back on with some shame, I was chartered with flying to Romania to install a software package that turned out to be for the benefit of the Ministry of Home Affairs, probably for the Securitate. I changed planes in Zürich, and took a TAROM flight (not in an Ilyushin, I think, but in a BAC-111) to reach Ceausescu’s version of a workers’ paradise. The flight crew was surly, for they had surely glimpsed the delights of Zürich once more, but knew that they were trapped in Romania, and had probably been spied upon as they walked round one of the most glittering of the foreign cities. And yet: I had been briefed beforehand to bring in some good whisky and a stack of ‘male magazines’ to please my contacts among the party loyalists. This time, I was able to bypass customs as a VIP: my host escorted me past the lines directly to the car waiting for us, where I was driven to my hotel, and handed over my copies of The Cricketer and Church Times for the enjoyment of the Romanian nomenklatura. I spent the Sunday walking around the city. The population was mostly cowed and nervous: there was a crude attempt to entrap me in the main square. During my project, I was able to watch at close hand the dynamics of the work environment in the Ministry, where the leader (obviously a carefully selected Party apparatchik) was quick to quash any independence of thought, or attempts at humour, in the cadre that he managed. A true homo sovieticus daciensis.

The fantasy that occupied Lenin’s mind was that a new breed of mankind could be created, based on solid proletariat lineage, and communist instruction. The New Man would be obedient, loyal, malleable, unimaginative, unselfish, unthinking. Universal literacy meant universal indoctrination. The assumption was accompanied by the belief that, while such characteristics could be inculcated in captive youth, inherited traits of the ‘bourgeoisie’ would have to be eradicated. The easiest way of achieving that was to kill them off, if they did not escape first. There were almost as many executions in the Red Terror of 1918 as there had been death sentences in Russian courts between 1815 and 1917, as Stephen Kotkin reminds us in Volume 1 of his epic new biography of Joseph Stalin. Kotkin also recounts the following: “Still, Lenin personally also forced through the deportation in fall 1922 of theologians, linguists, historians, mathematicians, and other intellectuals on two chartered German ships, dubbed the Philosophers’ Steamers. GPU notes on them recorded ‘knows a foreign language,’ ‘uses irony’.” Irony was not an attribute that homo sovieticus could easily deploy. What was going on had nevertheless been clear to some right from the start. In its issue of June 2, 2018, the Spectator magazine reprinted an item from ‘News of the Week’ a century ago, where Lenin and Trotsky were called out as charlatans and despots, and the revolution a cruel sham.

The trouble was that, once all the persons with education or talent had been eliminated or exiled, there were left only hooligans, psychopaths, or clodpolls to run the country. Kotkin again: “A regime created by confiscation had begun to confiscate itself, and never stopped. The authors of Red Moscow, an urban handbook published at the conclusion of the civil war, observed that ‘each revolution has its one unsightly, although transient, trait: the appearance on the stage of all kinds of rogues, deceivers, adventurists, and simple criminals, attaching themselves to power with one kind of criminal goal or another. Their danger to the revolution is colossal.’” This hatred of any intellectual pretensions – and thus presumptions about independent thinking – would lead straight to Pol Pot and the Khmer Rouge, with their execution of persons wearing eyeglasses, as they latter could obviously read, and thus might harbour ideas subversive to agrarian levelling.

Oleg Gordievsky

Oleg Gordievsky, the KGB officer who defected to Britain in 1985, crystallized the issue in his memoir Next Stop Execution. “Until the early 1970s I clung to the hope that the Soviet Union might still reject the Communist yoke and progress to freedom and democracy. Until then I had continued to meet people who had grown up before the revolution or during the 1920s, when the Soviet system was still not omnipotent. They were nice, normal Russians – like some distant relatives of my father who were engineers: not intellectuals or ideologues, but practical, decent people, embodying many of the old Russian engineer characteristics so well described by Solzhenitsyn. But then the last of these types died out, and the nation that emerged was composed purely of Homo sovieticuses: a new type had been created, of inadequate people, lacking initiative or the will to work, formed by Soviet society.” [The author acknowledged the ungrammatical plural form he used.] Thus Gordievsky classified both the common citizenry intimidated into submission and the apparatchiks themselves as homines sovietici. He also pointed out that what he found refreshing in English people generally was their capability for spontaneity, their discretion, their politeness, all qualities that had been practically eliminated in Russia under Communism. He may have been moving in sequestered circles, but the message is clear.

I sometimes reflect on what the life of a Soviet citizen, living perhaps from around 1922 to 1985, must have been like, if he or she survived that long. Growing up among famine and terror, informing against family members, with relatives perhaps disappearing into the Gulag because of the whisperings of a jealous neighbor, or the repeating of a dubious joke against Stalin, witnessing the show-trials and their ghastly verdicts, surviving the Nazi invasion and the horrors of serving in the Soviet armed forces, and then dealing with the long post-war deprivation and propaganda, dying before the curtain was pulled back, and the whole horrible mess was shown to be rotten. Yet some citizens had been taken in: they believed that all the suffering was worthwhile in the cause of Communism. In Secondhand Time, the nobelist Svetlana Alexievich offers searing portraits of such persons, as well as of those few who kept their independence of thought alive. Some beaten down by the oppression, some claiming that those who challenged Stalin were guilty, some merely accepting that it was a society based upon murder, some who willingly made all the sacrifices called for. Perhaps it was a close-run thing: the Communist Experiment, which cast its shadow over all of Eastern Europe after the battle against Fascism was won, almost succeeded in snuffing out the light.

(Incidentally, in connection with this, I recommend Omer Bartov’s searing Anatomy of a Genocide: The Life and Death of a Town Called Buczacz, published this year. Its title is unfortunate, as it is not about genocide. It tells of the citizens of a town in Galicia in the twentieth century, eventually caught between the monsters of Nazism and Communism. It shows how individuals of any background, whether they were Poles, Ruthenians, Ukrainians, or Jews, when provoked by pernicious demagogues or poisonous dogmas, could all behave cruelly to betray or murder people – neighbours – who had formerly been harmless to them. All it took was being taken in by the rants of perceived victimhood and revenge, or believing that they might thus be able to save their own skins for a little longer by denouncing or eliminating someone else.)

I was prompted to write this piece, and dredge out some old memories, by my reading of Odd Arne Westad’s The Cold War a few months ago. In many ways, this is an extraordinary book, broad in its compass, and reflecting some deep and insightful research. But I think it is also a very immoral work. It starts off by suggesting, in hoary Leninist terminology, that the battle was between ‘communism’ and ‘capitalism’ – a false contrast, as it was essentially between totalitarianism and liberal, pluralist democracy. (For a fuller discussion of this issue, please read Chapter 10 of Misdefending the Realm.) Westad goes on to suggest that the Cold War’s intensity could have been averted if the West had cooperated with the Soviet Union more – a position that ranks of sheer appeasement, and neglects the lessons of ‘cooperation’ that dramatically failed in World War II. (see  http://www.coldspur.com/krivitsky-churchill-and-the-cold-war/)  But what really inflamed me was the following sentence: “There were of course dissidents to this ameliorated view of the Cold War. In the Soviet Union and eastern Europe some people opposed the authoritarian rule of Communist bosses.” On reading that, I felt like hurling the volume from a high window upon the place beneath, being stopped solely by the fact that it was a library book, and that it might also have fallen on one of the peasants tending to the estate, or even damaged the azaleas.

Some people opposed the . . .  rule’? Is that what the Gulag and the Great Terror and the Ukrainian Famine were about, and the samizdat literature of the refuseniks, and the memoirs of Nadezhda Mandelstam and Yevgenia Ginzburg, and the novels of Alexander Solzhenitsyn, and many many more? Did these people protest noisily in the streets, and then go home to their private dwellings, resume their work, perhaps writing letters to the editors of progressive magazines about the ‘wicked Tories’ (sorry, I mean ‘Communists’)? How on earth could a respectable academic be so tone-deaf to the sufferings and struggles of the twentieth century? Only if he himself had been indoctrinated and propagandized by the left-wing cant that declares that Stalin was misunderstood, that he had to eliminate real enemies of his revolution, that the problem with Communism was not its goals but its execution, that capitalism is essentially bad, and must be dismantled in the name of Equality, and all that has been gradually built with liberal democracy should be abandoned. Roland Philipps, who recently published a biography of Donald Maclean (‘A Spy Named Orphan’), and who boasts both the diplomat Roger Makins (the last mandarin to see Maclean before he absconded to Moscow) and Wogan (‘Rockfist’) Phillips (who served as an ambulance-driver with the Republicans in Spain) as his grandfathers, asked Wogan, shortly before he died in 1993, where he stood on the durability of Communism. “He said that Stalin had been a disaster for the cause but that the system was still inherently right, would come round again, and next time be successful.” Ah, me. Wogan Phillips, like Donald Maclean, was a classic homo sovieticus to the end.

Wogan (‘Rockfist’) Phillips

As we consider the popularity of such as Jeremy Corbyn and Bernie Sanders, it is as if all the horrors of socialism have been forgotten. A few months ago, the New York Times ran a full-page report on the disaster of Venezuela without mentioning the word ‘socialism’ once: it was apparently Chávez’s and Maduro’s ‘populism’ that put them in power. A generation is growing up in China that will not remember Tiananmen Square, and the Great Leap Forward and the Cultural Revolution will not be found in the history books. Maybe there is an analogy to the fashion that, as a schoolboy, I was given a rosy view of the British Empire, and was not told of the 1943 famine in India, or the post-war atrocities in Kenya. But I soon concluded that imperialism was an expensive, immoral and pointless anachronism, and had no interlocking relationship with liberal democracy, or even capitalism, despite what the Marxists said. This endemic blindness to history is ten times worse.

So why did my generation of teachers not point out the horrors of communism? Was it because they had participated in WWII, and still saw the Soviet Union as a gallant ally against Hitler?  Were they really taken in by the marxisant nonsense that emerged from the Left Bank and the London School of Economics? Or were they simply trying to ratchet down the hostility of the Cold War, out of sympathy for the long-suffering Soviet citizenry? I cannot recall a single mentor of mine who called out the giant prison-camp for what it really was. Not the historians, not the Russian teachers. The latter may have been a bit too enamoured with the culture to make the necessary distinction. Even Ronald Hingley, one of my dons at Oxford, who was banned from ever revisiting the Soviet Union after his criticisms of it, did not encourage debate. I had to sort it out myself, and from reading works like Robert Conquest’s The Great Terror, Koestler’s Darkness at Noon, Marchenko’s My Testimony, Mandelstam’s Hope Against Hope and Hope Abandoned, and Ginzburg’s Into the Whirlwind. On the other hand, under the snooker-table in my library rests a complete set of the Purnell History of the Twentieth Century, issued in 96 weekly parts in the 1960s. (Yes, you Billings librarians: soon they too shall be yours.) In part 37, that glittering historian, TV showman, hypocrite and Soviet stooge A. J. P. Taylor wrote: “Lenin was a very great man and even, despite his faults, a very good man.” For a whole generation, perhaps, the rot started here. That’s what we mostly heard in the 1960s. But Lenin was vicious, and terror was his avowed method of domination.

President Putin is now trying to restore Stalin’s reputation, as a generation that witnessed the horrors of his dictatorship is now disappearing. So is Putin then a homo sovieticus? Well, I’d say ‘No’. Maybe he was once, but he is more a secret policeman who enjoys power. The appellation should be used more to describe those cowed and indoctrinated by the regime rather than those who command it. Putin’s restoration of Stalin is more a call to national pride than a desire to re-implement the totalitarian state. Communism is over in Russia: mostly they accept that the Great Experiment failed, and they don’t want to try it again. More like state capitalism on Chinese lines, with similar tight media and information control, but with less entrepreneurialism. As several observers have noted, Putin is more of a fascist now than a communist, and fascism is not an international movement. Maybe there was a chance for the West to reach out (‘cooperate’!) after the fall of communism, but the extension of NATO to the Baltic States was what probably pushed Putin over the edge. The Crimea and Ukraine have different histories from those in Latvia, Lithuania and Estonia, and I would doubt whether Putin has designs on re-invading what Kotkin calls Russia’s ‘limitrophe’ again. He is happier selectively cosying up to individual nations of Europe, especially to those countries (e.g. Poland, Hungary, and now maybe Italy and Austria, and even Turkey) whose current leaders express sympathy for his type of nationalism, while trying to undermine the structure of the European Union itself, and the NATO alliance.

So whom to fear now – outside Islamoterrorism? Maybe homo europaensis? I suspect that the affection that many Remainers have for the European Union is the fact that it is a softer version of the Socialist State, taking care of us all, trying to achieve ‘stability’ by paying lip-service to global capitalism while trying to rein it in at the same time, and handing out other people’s money to good causes. And it is that same unresponsive and self-regarding bureaucracy that antagonizes the Brexiteers, infuriated at losing democratic control to a body that really does not allow any contrariness in its hallways. (Where is the Opposition Party in Brussels?) I did not vote in the Referendum, but, if I had known then of all the legal complexities, I might have voted ‘Remain’, and fought for reform from inside. But my instincts were for ‘Leave’. If the European Project means tighter integration, political and economic, then the UK would do best to get out as soon as possible, a conclusion other countries may come to. The more oppressive and inflexible the European Union’s demands are (to discourage any other defectors), the more vigorously should the UK push against its increasing stranglehold. That does not mean goodbye to Goethe and Verdi, or those comforting ’cultural exchanges’, but it does require a bold stance on trade agreements, and limitations on migration of labour. We should beware of all high-faluting political projects that are experimental, and which remove the responsibility of politicians to their local constituents, as real human beings will be used (and maybe destroyed) in the process. A journalist in the New York Times wrote a few weeks ago that he was ‘passionate’ about the European Union. That is a dangerous sign: never become passionate over mega-political institutions. No Communist Experiment. No New Deal. No Great Society. No European Project. (And, of course, no Third Reich or Cultural Revolution.) Better simply to embrace the glorious muddle that is liberal democracy, and continue to try to make it work. Clive James again: “It is now part of the definition of a modern liberal democracy that it is under constant satirical attack from within. Unless this fact is seen as a virtue, however, liberal democracy is bound to be left looking weak vis-à-vis any totalitarian impulse.”  (I wish I had been aware of that quotation earlier: I would have used it as one of the headliners to Chapter 10 of Misdefending the Realm.)

I close with a riposte to A. J. P. Taylor, extracted from one of the great books of the twentieth century, The Stretchford Chronicles, a selection of the best pieces from Michael Wharton’s Peter Simple columns in the Daily Telegraph, from 1955 to 1980. These pieces are magnificent, daft, absurd, hilarious, and even prescient, where Life can be seen to imitate Art, as Wharton dismantles all the clichéd cant of the times, and anticipates many of the self-appointed spokespersons of loony causes and champions of exaggerated entitlement and victimisation who followed in the decades to come. Occasionally he is simply serious, in an old-fashioned way, as (for example) where he takes down the unflinching leftist Professor G. D. H. Cole, who in 1956 was trying to rally the comrades by reminding them that ‘while much has been done badly in the Soviet Union, the Soviet worker enjoys in most matters an immensely enlarged freedom’, adding that ‘to throw away Socialism because it can be “perverted” to serve totalitarian ends is to throw out the baby with the dirty bath-water’. Writes Wharton:

“This is familiar and most manifest nonsense. What has gone ‘amiss’ in Socialist countries is no mere chance disfigurement, like a false moustache scrawled by a madman on a masterpiece. It is Socialism itself, taken to its logical conclusion.

The death of freedom, the enslavement of the masses, the withering of art and culture, the restless, ruthless hunt for scapegoats, the aggressive folie de grandeur of Socialist dictators – these are no mere ‘perversions’ of Socialism. They are Socialism unperverted, an integral and predictable part of any truly Socialist system.

We are not faced here with so much dirty bath-water surrounding a perfectly healthy, wholesome Socialist baby. The dirty bathwater is Socialism, and the baby was drowned in it at birth.”

New Commonplace entries can be found here.

1 Comment

Filed under Economics/Business, Espionage/Intelligence, General History, Literature/Academia, Personal, Politics, Travel

Economists’ Follies

img_0437

At Ashley’s school in San Jose, CA. October 2016

(James, Alyssa, Ashley, Coldspur, Julia, Alexis & Sylvia)

In my Commonplace Book of 2008, I recorded the following nugget: “There is no greater nonsense than that uttered by a Nobel prize-winning economist in a mood of moral indignation”, attributing the apothegm to ‘Anon.’. But that was pure invention: I had actually come up with the saying myself, and indulged in a bit of subterfuge to give it a bit more authority. If the World watched, however, it said nothing.

I can’t recall what particular speech or article had prompted my expostulation, but the trend goes back a long way, with Karl Marx the obvious prototype, even though not all economists’ absurdities are expressed in a mood of moral indignation. John Maynard Keynes died before the Nobel Prize for Economics was instituted, but his contribution: “In the long run, we are all dead” is a good place to start. It was either an unimaginative truism, or else a colossal lie, in that, while he and all his Bloomsburyites would indeed be dead within a decade or two, the heritage that he and his acolytes would leave behind would dog future generations, and there is nothing easier for politicians to do than leave a legacy of debt to posterity. One notorious example who did catch my attention was the 1992 Nobelist, Gary Becker. He once wrote a piece for Business Week (I have it somewhere in my clippings files), which recommended that housewives  ̶  he may have called them ‘homemakers’  ̶  should be paid for the work they did. It must have been utterances like this that caused the New York Times to dub Becker ‘the most important social scientist of the past fifty years’, as it reflects a tragic confusion in the economist’s brain between Effort and Value. Moreover, who would check whether the housework was done properly? If the government were to pay housewives for their contributions, it would need a Bureau of Domestic Affairs to be set up, with supervisory rights, inspection capabilities, a system of fines, as well as all the trappings of equal opportunity hiring, overtime pay, health care benefits, proper vacations and pensions for all its employees. Who would be paying for all this? One might as well suggest that I should be paid to do the gardening or the yardwork.

And then there’s Paul Krugman, whose ‘progressive’ rants (yes, that’s how he classifies himself, as if everyone who disagrees with him is some regressive Neanderthal – not that I have any bias against the Neanderthal community, I hasten to add, as most of them were upstanding characters, with reliable opinions on such matters as free childcare and climate change, and actually passed on some of their genes to me), appear regularly in the New York Times. Krugman  ̶  the 2008 laureate  ̶  once famously said that the US National Debt (now standing at about $19 trillion), is not a major problem, ‘as we owe it to ourselves’. In which case, one might suggest: ‘why don’t we just write it off’? I am sure we wouldn’t mind. Krugman lives in a Keynesian haze of 1930, and is continually arguing against austerity, and recommending that now is the time to increase the debt even further by ‘investing’ (note the leftist economist’s language: government spending is always ‘investing’, not ‘spending’) in infrastructure and education in the belief that this will get the economy ‘moving’ again, and foster wealth-creation, not just consumption. Keynes in fact recommended increasing government spending during times of recession, and putting it away when times were good, when the rules of national and global economics were very different from what they are today. The policy of today’s leftist economists seems to be to encourage governments to spend a lot when times are good, and even more when times are bad, criticizing any restraints on spending as ‘the deficit fetish’ (see Labour MP Chris Mullin in the Spectator this month).

So next comes along Joseph E. Stiglitz, the 2001 Prize recipient.  Earlier this year he published “The Euro: How A Common Currency Threatens the Future of Europe”, which I think is an absolutely muddle-headed and irresponsible project. Not that he doesn’t bring an honest concern to bear on the perils of the euro, but a) sensible persons (including me) have been pointing out for ages that financial integration is impossible without political integration, so the overall message is nothing new; and b) it is not clear whether he is talking about the future of the European Union or Europe itself, or why the health of ‘Europe’ is tied to a shared currency. Worry not: the flyleaf informs us that the guru ‘dismantles the prevailing consensus around what ails Europe, demolishing the champions of austerity while offering a series of plans that can rescue the continent – and the world – from further devastation.’ Apart from the fact that, if there is a ‘consensus’ about what ails Europe, his would be a lone voice in the wilderness, one can only marvel at his hubris.

Stiglitz shows he does not understand what he calls ‘neoliberalism’, the belief in the efficacy of free markets, at all. He characterizes neoliberalism as ‘ideas about the efficiency and stability of free and unfettered markets’, and wants to bring the power of the regulator – him who knows best – to address the instability of markets. ‘With advances in economic science [sic], aren’t we supposed to understand better how to manage the economy?’, he inquires in his Preface, without specifying what he regards as ‘the economy’ – the total output of all the countries of Europe?   ̶  or why he claims economics is a ‘science’. And, if he is a Nobelist, shouldn’t he be answering such questions, not posing them rhetorically?  (This month, Janet Yellen, the chairwoman of the US Federal Reserve, expressed the following alarming concern: “The events of the past few years have revealed limits in economists’ understanding of the economy and suggest several important questions I hope the profession will try to answer.” From his recent see-sawing, Mark Carney, the governor of the Bank of England, appears to be similarly bewildered. Over to you, Joseph.)  But markets are inherently unstable: that is why they are markets. Joseph Schumpeter was the economist who introduced the notion of ‘creative destruction’ to explain how previously dominant players can be swept away by innovation and organizational sclerosis. Such ideas disturb econometric regulators like Stiglitz: they would prefer to have a clearly defined number of players in a market, allow them to make enough profit to keep their investors happy, but ensure that there should be enough competition for each to keep on its toes, but not so much that any individual company should actually fail. Yet such a set-up quickly drifts into crony capitalism, like the US health insurance ‘market’, where supporters of President Obama’s disastrous Affordable Care Act admit that the role of the regulators is to keep insurance companies solvent. Or politicians meet with ‘business leaders’ in the belief that they are discovering what ‘business’ wants; today’s ‘business leaders’ know very well that they do not represent the interests of a competitive market, but gladly go along with the pretence, and look for favours to protect them from the upstarts. Be very wary when journalists (or politicians) start talking about ‘the business community’: it proves they don’t get it.

What is more, Stiglitz demonises his intellectual foes. Even though their ideas have been ‘discredited’, ‘they are held with such conviction and power, immune to new contrary evidence, that these beliefs are rightly described as an ideology’. (p 10) Unlike his own ideas, of course, which are naturally ‘scientific’. “Modern scientific [sic!] economics has refuted the Hooverite economics I discussed in the last chapter.” (p 54)  “Doctrines and policies that were fashionable a quarter century ago are ill suited for the 21st century”, he continues (p 269), but he quickly adopts the Keynesian doctrines of eighty-five years ago, without distinguishing what is fashion and what is durable. (Keynes made some notoriously wrong predictions, especially about automation and leisure.) People who disagree with Stiglitz are madmen: “Today, except among a lunatic fringe, the question is not whether there should be government intervention but how and where the government should act, taking account of market imperfections.” (p 86: his italics) Yet it is clear that, while he denigrates the designers of the Euro for applying free-market economics to the reconstruction of Europe’s economies, categorising them as ‘market fundamentalists’ is utterly wrong. Those architects may have believed, as Stiglitz claims, that ‘if only the government would ensure that inflation was low and stable, markets would ensure growth and prosperity for all’, but such an opinion merely expresses a different variation on the corporatist notion that governments can actually control what entrepreneurialism occurs within its own borders. After all, as Stiglitz admits, the chief architect of the European Union and the euro was Jacques Delors, a French socialist.

The paradoxes and contradictions in Stiglitz’s account are many: I group the dominant examples as follows:

1) Globalisation: For someone who wrote “Globalization and its Discontents”, Stiglitz is remarkably coy about the phenomenon in this book. The topic merits only three entries in the index, much of which is dedicated to some waffle about ‘the global community’. For, if globalization is an unstoppable trend, it must require, in Stiglitz’s eyes, political integration to make it work, on the basis of the advice he gives to the European Union. “The experiences of the eurozone have one further important lesson for the rest of the world: be careful not to let economic integration outpace political integration.” (p 322) Are you listening, ‘the rest of the world’, whoever you are? Yet the idea of ‘World Government’ is as absurd as it was when H. G. Wells suggested it a century ago. By the same token, however, if Europe believes it can seclude itself from globalization effects by building a tight Customs Union, it must be whistling in the dark. Stiglitz never addresses this paradox. Nor does he recommend the alternative – a return to aurtarkic economies, which would be an unpalatable solution for someone who has to admit the benefits of trade. No: he resorts, as in his proffered ‘solution’ for the Euro crisis, to tinkering and regulation.

2) Austerity: On the other hand, Stiglitz has much to say about ‘austerity’. Unsurprisingly, he is against it, defined as ‘cutbacks in expenditure designed to lower the deficit.’ But he then goes on to make some astounding claims about it: “Austerity has always and everywhere had the contractionary effects observed in Europe: the greater the austerity, the greater the economic contraction.”  (p 18) “Almost as surprising as the Troika’s not learning from history – that such private and public austerity virtually always brings recession and depression – is that Europe’s leaders have not even learned from the experiences within Europe.” (p 312)  No evidence is brought forward to support such assertions. Is he not familiar with the austerity of the Labour Chancellor Stafford Cripps between 1947-1950, which was necessary in order to foster an export effort, and was seen as successful? Or Reynaud’s austerity policies in France in the 1930s, which led to economic recovery? Unfortunately, ‘austerity’ has come to imply meanness of politicians unwilling to hand out entitlements with funds they don’t have (the belief of those who concur with that definition being  that such spending will inexorably lead to wealth creation), rather than signifying a well-designed good-housekeeping move to protect the currency. Yes, austerity will not work as a policy for Greece: debts will have to be forgiven in some measure, since (as Keynes told us in The Economic Consequences of the Peace), people reduced to slavery will never create enough wealth to hand a portion over to others. But a large part of the problem there was government overspending and poor tax collection – a lack of ‘austerity’.

3: Confidence: Stiglitz is dismissive of any softer aspects of economic decision-making that may get in the way of his ‘scientific’ thinking. ‘Confidence theory’ is another of his bugbears. “The confidence theory dates back to Herbert Hoover and his secretary of the Treasury, Andrew Mellon, and it has become a staple among financiers. How this happens has never been explained. Out in the real world, the confidence theory has been repeatedly tested and failed. Paul Krugman has coined the term confidence fairy in response.” (p 95) Stiglitz never explains how anybody was able to conduct ‘scientific’ experiments on something as vague as ‘confidence’ in the real world. Moreover, Paul Krugman is a good mate of Stiglitz, and they clearly belong to a Mutual Admiration Society. “Joseph Stiglitz is an insanely great economist”, puffs Klugman on the back-cover. But then, there must be different types of confidence, since Stiglitz later states: “Indeed, Mario Draghi, head of the European Central Bank since 2011, may have saved the eurozone, with his famous speech that the ECB would do whatever it takes to preserve the euro – and in saying that, restoring confidence in the bonds of the countries under attack.”  (p 145) But ‘confidence theory’ never works! Shome mishtake shurely? Absent-mindeness? Or sophistry?

4: Productivity: Stiglitz seems as muddled by productivity as do most economic journalists. He appears to share the popular opinion that increased productivity is important, as it leads to greater prosperity. That was one of the goals of the Eurozone, after all, with its free flow of labour and capital. (p 70) But common-sense tells us normal people that productivity can be applied only to a certain task. If it takes fewer employees, and less capital, to make 1000 widgets, than it did before, the benefits will accrue to the owners of capital (and in turn the pension funds) rather than to the general working populace (as Piketty has pointed out). Only if the displaced employees can find alternative similarly well-paid employment will overall prosperity increase. Stiglitz, somewhat reluctantly, seems to accept this viewpoint, but gets there in a devious way: “In the eurozone, across-the-board average hours worked per worker have declined – implying an even worse performance.” (Would fewer hours worked not suggest better productivity? Britain is reported to have lower productivity – and lower wages – than most European rivals, but less unemployment. Is that good or bad?) And then: “But most of the advanced countries will have to restructure themselves away from manufacturing towards new sectors, like the more dynamic [= ‘unstable’?] service sectors.” (p 224) But what is required to make this happen? Yes, government intervention. The market does not perform this task very well, so what is needed is ‘concerted government effort’. By individual nations? By the EU? Stiglitz is not sure, as he knows such policies are largely precluded within the eurozone. And it is not clear whether everyone will fall over themselves trying to provide services to a declining manufacturing sector – especially when those services are moving overseas as well. What is to be done? What will people do to earn a decent living? That is the perennial problem.

5: Markets: Stiglitz does not understand how markets work. In reality, they are not ‘designed’, as he claims. They do not pretend to lend themselves to stability. Their members compete, and sometimes fail. Yet he severely criticises those who he claims do not understand his view of them, for example as in the following observation about distortions: “But, of course, in the ideology of market fundamentalism, markets do not create bubbles.” (p 25) What market fundamentalists would say is that markets will make corrections to bubbles in due course, so that overpriced (or underpriced) assets will return to their ‘correct’ value once information is made available, or emotions are constrained. Moreover, failure is an inevitable outcome of the dynamism of markets, and, in order to keep trust in those entities who behave properly, mismanagement and misdemeanours of those who break such trust must be seen to fail. (An enormous slush of capital – primarily Oriental – is currently looking for safe havens in Western countries, and is almost certain to create another bubble.) In addition, there is no ‘banking system’: banks are no different from any other corporation. A loose and dynamic range of institutions provides various financial services: they will lend as they see fit, and, if they miss an opportunity, a competitor should pick it up. The answer to the recent errors of Wells Fargo on the US, for instance, is not more regulation, but a massive exodus of its customers to other banks, and visible punishment for the executives who let it happen. Bailouts lead to moral hazard: investment is always a risk. Yet the Stiglitzes of this world close their eyes to reality, seeing a business environment where established companies should be entitled to survive, making enough profit to satisfy the pension funds and their investors, but not so much that they would appear greedy and exploitative, and should try to maintain ‘stability’ to contribute to ‘full employment’. ‘Stability’ is the watchword of Stiglitz and his kind (like the Chinese government trying to maintain the ‘stability’ of the stock-market), but it is impossible to achieve.

Enough already. There are some other oddball things, such as his dabbling with referenda when the going gets tough: “There could be a requirement, too, that, except when the economy is in recession, any increase in debt over a certain level be subject to a referendum within the country.” (p 243) Surely not! And I don’t claim to understand his remedy for fixing the euro without dismantling the eurozone itself, something that apparently involves carving it up into different sectors. But Stiglitz has really written a political pamphlet: the eurozone is for some reason important to him, as it is to those who think that only political integration will prevent a reoccurrence of the dreadful world wars that originated there. “A common currency is threatening the future of Europe. Muddling through will not work. And the European project is too important to be sacrificed on the cross of the euro. Europe – the world – deserves better.” (p 326) That belief in ‘the European project’, and the disdain for those who would question it, is what divided Britain in its recent referendum.

Yet I can’t help concluding that Stiglitz and his colleagues are much closer to the architects of the euro, and thus part of the problem, than he would ever admit. The belief that expert economists, with their mathematical models and their Nobel prizes, can somehow understand how an ‘economy’ works, and possess the expertise to fine-tune it for the benefit of everybody, and somehow regulate out of the way all the unpredictable missteps that will happen, is one of the famous modern illusions. When separate decisions are made by millions of individuals, and companies and firms devise any number of strategies for new technologies, new markets, some whimsical, some wise, to suppose that all such activity can be modeled and projected, in order to supply enough taxable revenue to fund any number of favourite programmes, is simply nonsense. It is as if such experts had never worked in the real world, managed a start-up, struggled to make a payroll, had to lay off good people, dealt with a sudden competitive threat, faced an embarrassing product recall or an employee rebellion, or wrestled to bring a new product successfully to market. Yes, of course, capitalism is flawed, some executives are absurdly overpaid, compensation committees are largely a joke, and corporate boards are frequently useless, risktakers should not be generously rewarded for playing recklessly with other peoples’ money (and being rewarded for failure as well as success), and the notion that ‘aligning executive goals with those of shareholders’ does not magically solve anything if the former get away like bandits just once because of cheap stock options, while the latter who wanted to be there for the long haul simply watch from afar . . .  When all is said and done, common prosperity still relies on private enterprise and profit.

Those who believe in expert management of ‘the economy’ simply have it all wrong. Except under war conditions, governments of liberal democracies cannot control the wealth-creation processes of their populace. They can spend money cautiously, knowing how unpredictable private wealth-creation is, and simply try to foster the conditions that encourage entrepreneurialism. Alternatively, they can put the currency at risk by running massive deficits, and they can plunge the place into the depths through socialism (see Venezuela), or abet a death spiral like that of Greece or Puerto Rico. But the one thing they should not do is carelessly engage Nobel Prize-winning economists to give them advice. As a postscript to the self-indulgent advice from Keynes that I quoted earlier, two prominent economists, Paul A. Volcker, former chairman of the Federal Reserve, and Peter G. Peterson, former secretary of commerce, jointly offered the following observation concerning the National Debt in the New York Times this month: “Take some advice from two observers who have been around for a while: The long term gets here before you know it.”  But neither of them has won the Nobel Prize.

P.S. A few hours after I completed this piece, I read a feature encompassing an interview with Stiglitz by the editor of Prospect, Tom Clark, in the October issue of the magazine. The article quoted Keynes’s biographer, Robert Skidelsky, as saying: ‘the likes of Stiglitz and Krugman have got their Nobel prizes, then given up developing the economic ideas, and drifted into radical political commentary instead.’ Too true. If Stiglitz is not a charlatan, he is hopelessly confused. I would not change a word of what I wrote.

P.P.S. After the publication of last month’s installment of ‘Sonia’s Radio’, three items have come to light. A reader sent me some provocative statements concerning Sonia from Soviet archives, a 2014 book I read about WWII counter-espionage has inspired some fresh observations about Trevor-Roper and the Double-Cross System, and my attention has been drawn to an archive freshly published (by the NSA) on German wartime intelligence. I shall report more, and make some textual amendments, next month – probably in the omnibus version only, to keep the integrity of the monthly posts whole.

This month’s Commonplace entries appear here.

tony3girls

With Alyssa, Alexis and Ashley

Leave a Comment

Filed under Economics/Business, General History, Politics

The Myth of Buying Market Share

A few years after I became an analyst/consultant at the Gartner Group, I was introduced by one of the DBMS vendors to the thoughts of Geoffrey Moore, who had some original ideas about the challenges of high-tech companies in introducing their disruptive products to mainstream buyers. His book, ‘Crossing the Chasm’ (1991) quickly became a classic in technology circles (see https://en.wikipedia.org/wiki/Crossing_the_Chasm), and I adopted his ideas in evaluating and guiding the strategies of companies in my bailiwick. Some CEOs claimed to be familiar with the theories, and even to putting them into practice, but since the distinct message in the early years of the Technology Adoption Life Cycle was ‘focus’, they understandably struggled to keep their companies in line. ‘Chasm’ thinking requires a proper marketing perspective, but independent VPs of Marketing in technological start-ups are a bit of a luxury, and VPs of Sales always think of Marketing as something that supports their Sales Plan, rather than of their Sales Plan as something which realizes the Marketing Plan. Trying to close a deal to unqualified and unsuitable prospects is frequently an exciting challenge for such types.

As my career at Gartner wound down, and I considered retirement, I chose to move to a small software company in Connecticut. I was quickly brought down to earth: as a Gartner consultant, I had earlier been engaged by the company for a day’s work, at quite high fees, during which the managers attending dutifully wrote down all I said, and nodded appreciatively. When I became an employee, however, and started suggesting (as VP of Strategic Planning) to the CEO how she might want to change some of the processes (such as not having the R & D plan changed each month after the latest visit by a customer or prospect to the development facility in Florida), I was swiftly told: ‘You don’t understand how we do things around here, Tony’. That was not a good sign. So I picked up my thinking about Chasm Crossing, tried to talk my CEO out of an acquisition strategy (devised to show muscle to the Wall Street analysts, but in fact disastrous), and reflected on how financial analysts misled investors about markets. I had learned a lot from the first software CEO I worked for, back in the early 1980s, but he was another who didn’t understand the growth challenge. ‘Entrepreneurial Critical Mass’ was the term he had used to persuade his owners to invest in an acquisition strategy that was equally misguided: I had had to pick up the pieces and try to make it work.  (This gentleman was also responsible for bringing to the world the expression ‘active and passive integrity in and of itself’ to describe the first release of a new feature, which presumably meant that it worked perfectly so long as you didn’t try to use it.)   My renewed deliberations now resulted in an article, titled ‘The Myth of Buying Market Share’, which explained how completely bogus estimates of ‘market size’ misled CEOs and investors into thinking that all they had to do to be successful was to pick up a portion of a fast-growing ‘market’. I believe it was published somewhere, but I cannot recall where.

I reproduce the article here. I have not changed a word: it could benefit from some tightening up in a few places, and some fresher examples, but otherwise I would not change a thing, even though it is now sixteen years old. At the time I wrote it, I contacted Geoffrey Moore, and sent him the piece. We spoke on the phone: he was very complimentary about my ideas, and we arranged to meet for dinner in San Francisco, where I was shortly to be attending a conference. I vaguely thought that I might spend my last few years actually putting into practice some of the notions that had been most useful to me in my analyst role, and wanted to ask Moore about opportunities at the Chasm Group. So, after the day’s sessions were over, I approached him, introduced myself, and said how much I was looking forward to dinner. He was brusque – dinner was off. Obviously something better, somebody more useful, had come along. I was for a few minutes crestfallen, but then realized that I would never want to work for someone who behaved that rudely. I resigned from the software company a month later and began my retirement a bit earlier than planned. Since then I have never touched the industry again, apart from one day’s work for another small software company in New Jersey that desperately needed help, and wanted to hire me as VP of Marketing after I did a day’s consulting for them. North Carolina beckoned, and I have never regretted getting out when I did.

After receiving a fascinating observation from a reader (via Nigel Rees), I have posted an update to my piece on ‘The Enchantment’. The normal set of Commonplace items can be found here.                                                                                                                   (January 31, 2016)

2 Comments

Filed under Economics/Business, Personal, Technology

Turing and Cripps (and later update)

In our first visit to the movies for several years, Sylvia and I went to see The Imitation Game a few days ago. (What was the last film we went to see: Lawrence of Arabia? Brief Encounter?? I forget.) We enjoyed it very much: I could forgive most of the liberties taken with history, although the decision to introduce the spy John Cairncross in a case of double-blackmail, with the claim that MI6 had installed him deliberately so that he could leak secrets to the Russians, was palpably absurd and unnecessary. I have a special enthusiasm for Alan Turing, as readers of this site will recall from my posting here at the end of last November, and Sylvia was better able to understand the links between crosswords, cryptography and espionage that occupy the dark side of my character.

Yet you may not have noticed a brief annotation I made in July 2012, when I commented that the Times had published, on the exact centenary of Turing’s birth (June 26, 2012) a Listener Crossword Puzzle (’SUM’ – geddit?) that celebrated his achievements in imagining a universal computing machine. I was a little muted about this event, because the puzzle contained a blatant error, about which I am still sorely embarrassed. Both the Puzzle Editor and I had overlooked a tiny calculation error in the encoding of one of the answers.

Now, in my more thoughtful moments, I reflect on the phenomenon of ‘deliberate’ errors introduced as a means of communicating to the receiver that something is wrong. When the Nazis turned round captured SOE agents, dropped by parachute into the Netherlands in WWII, the radio operators ignored the lack of messages that would have confirmed they were safe, because SOE staff in London did not want to believe that their efforts had been sabotaged. Thus the famous Englandspiel, in which several agents died. A similar mistake happened when the CIA tried to infiltrate agents into Albania in the late 1940s and early 1950s. (See Operation Valuable Fiend, by Albert Lulushi.) And I have always wondered whether Kim Philby’s identification of the Secret Intelligence Service as MI5 (instead of the correct MI6) in My Secret War (p 32) represented a plaintive cry to his old mates that they should recognize that the whole memoir was being ghosted – or, at least, controlled  – by the KGB. Lastly, when I noticed in the National Archive at Kew that a Report on the Communist Party written by the MI5 officer Jane Sissmore in 1935 was titled ‘Investigation by SS into Activities of the CPGB and Indentification [sic] of its Members 1935’, it occurred to me that this very capable and literate person may have inserted that error to indicate that she was very unhappy about compiling such a report. So maybe the error I made could be interpreted as saying ‘I am a Prisoner in a Listener Crossword Construction Factory and Cannot Get Out’. No, it was just a really clumsy boner.

*          *          *          *          *          *          *          *          *          *          *

One of the books I read in January was Tony Judt’s Ill Fares The Land. It was rather sad. Sad, because Tony Judt, who must have been a delightful man, died of amyotrophic lateral sclerosis, at the age of 52, in 2010. But also sad, because the book is an elegy to the decline of The Left and all its aspirations, at the same time betraying all the hopeless impracticality of the so-called social-democrat Left. (I have never been a member of The Left.) It is as if Judt and his kin think that we can all have secure jobs, and nice houses, and travel to work in environmentally-friendly transport, and enjoy free childcare and expert healthcare until we retire and enjoy safe inflation-proof pensions – all without having to worry about the sordid business of actually creating any wealth. The book is scattered with a number of unexplained clichéd terms: ‘social democracy’, ‘market failure’, ‘financial stability’, ‘social market’, ‘rational market management’, ‘endemic inequality’, ‘social justice’, and is liberally strewn with a host of semi-rhetorical questions suggesting that ‘we’ have to do something. It appears to emphasise the role of the nation-state, but says hardly anything about the European Community. Etc. etc.

I think I shall have to return to this subject next month. I am no economist, but I don’t think that matters, as economists disagree about all this stuff anyway. All I know is that I hope my financial portfolio does not hold any Greek debt. When I ponder over the question of how those poor Hellenes are going to pay back their 240 billion Euro debt, I think of Keynes and The Economic Consequences of the Peace, and what he said about economic slavery. (Is there a deliberate mistake here?) So, as an educational antidote to the maunderings of The Left, I borrowed David Stockman’s The Great Deformation; The Corruption of Capitalism in America from the Public Library, but, after reading one chapter, I decided life was too short for me to read 700 pages on economics, and took it back. And maybe we need Sir Stafford Cripps to remind us what Austerity really means. He was the authentic ‘Left’.

The normal set of Commonplace items appears for the month here.  (January 31, 2015)

I don’t normally add late notes to my monthly post, but an odd thing happened today. I was reading in the New York Times about Podemos, the left-wing Spanish Political party, and a march it was holding in Madrid. Podemos’s leader, Pablo Iglesias, was accusing Prime Minster Rajoy of ‘wanting to humiliate our country with this scam they call austerity’. (Heigh-ho . . .) Furthermore, Rubén Aguilar, a Spanish telecom technician, was described as waving a Greek flag ‘out of solidarity’, and was quoted as saying: ‘We’re better off economically than our Greek friends, but we share their determinatiom to put the interests of people back ahead of economic goals like debt repayment.’ Yet this hardly inflammatory paragraph does not appear in the on-line version of the piece! What is going on? Is it now not allowed to suggest that debts to the EU and central banks may not be repaid?

I have sent a message to the Public Editor at the NYT to find out what is going on. (February 1, 2015)

Leave a Comment

Filed under Economics/Business, Espionage/Intelligence, General History, Personal