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NAZI NEMESIS: INTELLIGENCE FAILURE – INTELLIGENCE SUCCESS

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The unprecedented successes of British intelligence during the Second World War are all the more remarkable when it is considered how weak the collective position of MI5, SIS and GC&CS was in 1939. The British secret state began the war with pitiful intelligence on its enemies, the Axis Powers. GC&CS had failed to make any significant headway in reading German communications, which relied on the famous Enigma code. The situation was similarly bleak for MI5 and SIS: they had such a dearth of intelligence that in 1939 they barely knew the name of the German military intelligence service (the Abwehr) or of its head (Admiral Wilhelm Canaris). MI5’s official in-house wartime historian, John ‘Jack’ Curry, who had worked as a counter-espionage officer before the war, and was therefore well placed to comment on what Britain knew at the time about Nazi intelligence, described MI5 as entering the war in a state of ‘confusion’ that often amounted to ‘chaos’:

In 1939 we had no adequate knowledge of the German organisations which it was the function of the Security Service [MI5] to guard against either in this wider field of the ‘Fifth Column’ or in the narrower one of military espionage and purely material sabotage. We had in fact no definite knowledge whether there was any organised connection between the German Secret Service and Nazi sympathisers in this country, whether of British or alien nationality.3

A similarly bleak picture was given by one of MI5’s principal wartime counter-espionage desk officers, Dick White, who went on to become the only ever head of both MI5 and SIS. He later recalled that MI5 started the war ‘without any real documentation on the subject we were supposed to tackle. We had a very vague idea of how the German system worked, and what its objectives were in time of war.’4

Much of the reason why the British secret state had so little information on Nazi Germany at the beginning of the war was that, for most of the 1930s, its intelligence services had been starved of resources. In 1934 Whitehall’s Defence Requirements Committee had predicted that Nazi Germany would be the ‘ultimate enemy’ for Britain and its empire, but in the years that followed, MI5 and SIS failed to obtain any significant increase in funding or staff. Some minority voices, such as John Curry in MI5, warned from an early stage that Britain’s intelligence machinery needed to gear up to face the threat of Nazi Germany. From 1934 onwards Curry was advising that it would be dangerous simply to dismiss Mein Kampf, in which Hitler essentially outlined his vision for world domination, as the writings of a crazed lunatic – which of course it was, but it was also much more. As Curry argued, the problem for Britain (and the rest of the world) was that this crazed lunatic was now in power, so his diatribe in Mein Kampf had to be taken seriously. However, Curry was a voice in the wilderness within Whitehall, and neither MI5 nor SIS managed to secure any major expansion of resources in the pre-war years. While both agencies failed to make their warnings about Hitler sufficiently loud to be heard, Whitehall bureaucrats and bean-counters were only too willing to disregard the warnings they did hear as merely the perennial cry for more resources from intelligence services – after all, armies always ask for more tanks. As late as 1939, SIS was so underfunded that it could not even afford wireless sets for its agents.5

MI5’s lack of reliable intelligence on Nazi German intelligence was made worse by the frenzied ‘spy scares’ that broke out in Britain in the early stages of the war, just as they had in 1914. During the so-called ‘phoney war’, the period after September 1939 when war had been declared but proper fighting had not yet commenced, hysterical reports from the British public bombarded MI5’s London headquarters about German ‘agents’ – and even ‘suspicious’-looking pigeons, which led MI5 to establish a falconry unit, appropriately led by a retired RAF wing-commander, to track down and ‘neutralise’ enemy pigeons. Its efforts were unsuccessful: all of the pigeons killed by MI5’s falcons turned out to be innocent British birds – a new twist on the term friendly fire.6

More seriously than rogue pigeons, the paucity of intelligence on the Axis Powers essentially led to MI5’s near total collapse. In July 1940, amid the Battle of Britain and the so-called ‘fifth column’ crisis, MI5’s internal bureaucracy completely broke down under the strain of checking reports on supposed enemy agents and other ‘suspicious’ activities, ranging from the plausible to the preposterous. So many reports of ‘enemy spies’ bombarded MI5 that its central Registry, the nerve centre of its operations, which in 1940 contained two million cards and 170,000 ‘personal files’ or dossiers, ground to a halt and then collapsed. The chaos that these reports caused – those on ‘enemy light signalling’ alone reached a stack five feet high in MI5’s office – was made worse by the spectre of events on the Continent. Between May and June 1940 Hitler launched an unprecedented ‘lightning war’ (Blitzkrieg) in Europe, which led to the surrender of European countries from the Netherlands to Norway in quick succession. Hitler’s Blitzkrieg was facilitated by ‘fifth column’ saboteurs and agents planted and parachuted into the invaded countries. With their conventional armies obliterated, the Dutch gave up after just five days of fighting; the Belgians after seventeen. At the end of May the entire British Expeditionary Force (BEF) was evacuated from the Continent at Dunkirk, and by mid-June Britain’s greatest ally in Europe, France, had ignominiously surrendered. Britain was standing alone in Europe, fighting for its survival, with only its empire and Commonwealth to support it. The Joint Intelligence Committee, Britain’s highest overall intelligence assessment body, sombrely planned for its own evacuation from London, and speculated on how it could survive (by hiding in bunkers) after the Nazi invasion of Britain that appeared imminent. The JIC was not fantasising: the German leadership had drawn up detailed plans for an invasion of Britain (codenamed Operation Sealion), which included the arrest and likely execution of a number of senior MI5 and SIS officers, whose names the Gestapo had probably found in London telephone directories and entries in Who’s Who, which in many cases, as we have seen with Sir Eric Holt-Wilson, gave their home addresses.7

The situation for Britain was actually even worse than this suggested. Due to the Nazi–Soviet Pact of August 1939, the Soviet Union and Nazi Germany entered the war as allies. It is often forgotten that the invasion of Poland in September 1939, which brought Britain into the war, was carried out by German and Soviet forces together. For a nightmare period between the outbreak of war in September 1939 and Nazi Germany’s invasion of Russia in June 1941, it appeared that Germany, Italy, Japan and the Soviet Union would act in uneasy concert and divide the spoils of the world between themselves. Britain nearly went to war with the Soviet Union when the Red Army invaded Finland in November 1939, and as papers of the British Chiefs of Staff reveal, in April 1940 the RAF was planning a devastating bombing attack on the Soviet Union, codenamed Operation Pike.8

In these circumstances, with Britain standing alone against Nazi and Soviet forces, in the summer of 1940 MI5 concluded – inaccurately, as it turned out – that large-scale German sabotage and espionage networks were operating in Britain, as they had done in Europe. The truth would only be revealed later: unbeknownst to MI5 at the time, code-breakers at Bletchley Park had in fact identified virtually all German agents operating in Britain. Unaware of this, in June 1940 MI5 took one of the most controversial decisions it would ever take, recommending the mass internment of all ‘enemy aliens’ in Britain. In total over 27,000 foreign nationals were interned in Britain during the war on MI5’s orders. In Britain, as with the wartime internment of Japanese Americans in the United States, this was a lamentable low point in the history of civil liberties.9

Due to its lack of reliable information on Nazi Germany, British intelligence started the Second World War effectively fighting in the dark. To make matters worse, it was chronically under-resourced: in 1939 MI5 had a total staff of only thirty-six officers. The bungling efforts of British intelligence in the early days of the war were symbolised by a catastrophic incident that befell SIS in October 1939, soon after the outbreak of hostilities. Two SIS officers stationed in the Netherlands, Richard Stevens and Sigismund Payne Best, were lured to the town of Venlo on the Dutch–German border on the pretext of meeting a group of anti-Hitler German officers. In reality, the ‘resistance’ group was controlled by the Gestapo. The two SIS officers were immediately arrested, dragged from neutral Dutch territory across the German border, and imprisoned for the rest of the war. Inexplicably, they had come to the rendezvous with a complete list of their agents in Germany, all of whom were promptly arrested and neutralised (with many executed) by the Nazi authorities. In one fatal swoop, Britain’s network of agents in the Third Reich was dismantled.10

The ‘Venlo incident’ seems to have cast a long shadow. Although little information is currently available in British records, it does not seem that after Venlo SIS assisted or sponsored any significant anti-Hitler resistance groups within Germany. This may have been caused by anxiety after Venlo, or it may have been due to fears within Whitehall that killing Hitler would simply create a martyr and unleash further demons. None of the various wartime attempts made on Hitler’s life by German officers, the most famous of which was the ‘July Bomb Plot’ of 1944, appears to have been sponsored by SIS or any other part of British intelligence. Armchair assassins and ‘critical historians’ today rarely comprehend the genuine bravery shown by these plotters, but even with that concession, contrary to what has been suggested in a recent Hollywood film, Operation Valkyrie in July 1944 was not intended to oust Hitler and establish democratic government in Germany. Instead, it was an attempt by a group of German officers to replace the Third Reich with a non-democratic military dictatorship.11

One of the reasons the British secret state had such poor intelligence on Nazi Germany at the start of the war was the extreme difficulty of gaining reliable information on a closed police state like the Third Reich. To this day, understanding its power structures is still one of the most controversial, and voluminous, subjects in modern history. Historians today, equipped with German records, which British intelligence at the time was not, are unable to agree on such basic questions as who was ultimately in charge of Nazi Germany and whether Hitler was a ‘strong dictator’ or a ‘weak dictator’. That said, in the pre-war years British intelligence as a whole failed catastrophically to understand the mindset of the Nazi leadership. There were a few pre-war officers, in particular MI5’s John Curry and Dick White, who grasped the true nature of the strategic threat posed by the Third Reich, but their attempts to convince the rest of Whitehall of this came to little. The Oxford historian and wartime recruit to SIS Hugh Trevor-Roper was shocked to find that none of his colleagues had bothered to read the ‘sacred texts’ of those they were fighting, such as Mein Kampf. To make matters worse, MI5 and SIS had given an overwhelming priority in the pre-war years to Soviet and Comintern activities, and had largely neglected the growing threat of Nazi Germany. This also meant that they viewed the Nazi threat through the paradigm of the Comintern, and erroneously concluded that fascist organisations such as Oswald Mosley’s British Union of Fascists (BUF) were run along similar lines to the British Communist Party, which was controlled by Moscow. In fact the black-shirted members of the BUF were above all British, and contrary to what MI5 believed, were not willing to bow to instructions from Berlin or Rome in the way that the ‘internationalised’ British Communist Party followed instructions from ‘the centre’, Moscow. That said, it is impossible to know exactly how the BUF would have reacted if there had been a Nazi invasion of Britain.12

The remarkable failures of Britain’s intelligence services before the war led them in some astonishing directions during it. By 1942 the intelligence chiefs in Whitehall had become so desperate in their bid to understand the mindset of the Nazi leadership that they employed a water-diviner, nicknamed ‘Smokey Joe’, and a Dutch astrologer, Louis de Wohl, who both claimed that they could predict Adolf Hitler’s behaviour from his star sign (Libra rising). It was only after de Wohl had been employed for several months that MI5 and SIS realised he was nothing more than a con artist.13

One of the main reasons why, despite the meagre intelligence Britain had at the start of hostilities, its intelligence machinery achieved such phenomenal wartime successes was because of Winston Churchill, who, as the world’s leading intelligence historian Christopher Andrew has pointed out, more than any British political leader before or since was an enthusiastic believer in intelligence matters. Churchill had probably first become interested in ‘cloak and dagger’ activities while serving as a reporter in the Boer War from 1899 to 1900, but his interest blossomed after he became Home Secretary in 1910. As Home Secretary he helped the fledgling Secret Service Bureau in its early days – he was a contemporary of Sir Vernon Kell’s at Sandhurst – providing it with increased powers to intercept letters (HOWs) and steering a revised Official Secrets Act through Parliament in 1911, which made it easier to bring prosecutions for espionage. Churchill’s fascination with intelligence continued after he became Prime Minister in May 1940, Britain’s ‘darkest hour’, which under Churchill became its finest. As Prime Minister he was an avid consumer of intelligence reports, and allowed for vastly more resources to be given to the intelligence services. Under Churchill, the Joint Intelligence Committee (JIC), which had been established in 1936, came into its own, operating as a streamlined assessment body for all of Britain’s intelligence services, and producing concise weekly reports for Churchill and his cabinet on threats to British national security – a legacy that lasts down to the present day. Britain’s separate intelligence services began to collaborate in ways they previously had not, thus effectively becoming the British intelligence community.14

It was in the realm of signals intelligence (SIGINT) that Churchill’s support of the intelligence services paid the biggest dividends. The unprecedented successes gained by British intelligence during the war were caused largely by the herculean efforts of the code-breakers at GC&CS, based at Bletchley Park. In the course of the war, Bletchley Park would come to preside over mass-espionage on an industrial scale. In May 1941 Churchill received a top-secret request from Bletchley Park begging for more resources. He was so perturbed that he demanded ‘Action this Day’, and instructed his military assistant, General Hastings ‘Pug’ Ismay, to give GC&CS all the resources it needed and to report that this had been done. In December 1940 Bletchley Park had managed, with the assistance of Polish code-breakers, to crack the first of the famous German Enigma codes. With the resources that Churchill now threw behind it, GC&CS expanded rapidly: by 1943 its code-breakers were reading on average 3,000 German communications per day. These decrypts were codenamed Ultra, but were also known as ISOS, standing for ‘Intelligence Services Oliver Strachey’ (ISOS), named after a high-ranking official at GC&CS, and more generally were termed ‘Most Secret Sources’ (or MSS for short). The Ultra decrypts were passed by SIS, which had formal control over GC&CS during the war, directly to Churchill himself on an almost daily basis. Ultra provided such accurate and rapid ‘live’ intelligence that some German communications from the Eastern Front or the deserts of North Africa actually arrived on Churchill’s desk in London before they reached Hitler in Berlin. Bletchley Park code-breakers also acquired chilling ‘real time’ messages about the Holocaust. As early as 1941, intercepts of low-grade German traffic from the Eastern Front were revealing to Bletchley Park what, with hindsight, we can see was the evolution of the Nazi ‘Final Solution’ – the mass murder of European Jews and other supposed racial subhumans (Untermenschen). There is some existing but disputed evidence that the British and US governments refused to release what Bletchley Park had discovered about the Holocaust because to do so would have jeopardised the Ultra secret. On present evidence, it is impossible to state whether this was the case or not.15

Over 12,000 people are thought to have worked at Bletchley Park, and their voluminous Ultra decrypts contributed to Allied military successes in a number of areas. The leader of British forces in North Africa in 1942, General Sir Bernard Montgomery, was provided with a stream of high-grade Ultra decrypts that revealed the location of his opponent Erwin Rommel’s Afrika Korps. The decrypts flowing to Montgomery were so accurate that after the war the JIC worried that when the history of the North African campaigns came to be written, historians would realise that he had some kind of foreknowledge of Rommel’s movements, and would be able to piece the puzzle together. As it turned out, the JIC gave historians far too much credit – the Ultra secret remained hidden for years after the war. We now know that the decrypts assisted Montgomery’s Eighth Army in its famous victory in the summer of 1942 at El Alamein, once an obscure port on the edge of the Egyptian desert, which was a major turning point in the Allied campaign in North Africa. By May 1943 Montgomery’s ‘desert rats’ had effectively driven Rommel’s Afrika Korps into the sea in Tunisia. Bletchley Park’s Ultra decrypts also produced direct benefits for the Allies in the Battle of the North Atlantic: they revealed the locations of German U-boats, allowing the Admiralty to manoeuvre supply convoys away from danger, bring shipping losses down to bearable levels, and contributed to Allied victories in the Battle of Cape Matapan (March 1941) and the Battle of the North Cape (December 1943).16

Ultra decrypts likewise made possible MI5’s now-legendary ‘Double Cross System’, the process by which every German agent in Britain was identified, and many of them turned into double agents. It was only after Ultra came on-line in December 1940 that MI5 could establish conclusively whether any unidentified German agents were operating in Britain, and also, crucially, whether the disinformation that MI5’s double agents were passing back to Germany was being believed by the German High Command. The MI5 officer T.A. ‘Tar’ Robertson, who was in charge of Section B1a within MI5, responsible for running double agents, would later describe how Ultra decrypts allowed MI5 to see whether the files of its enemies were being stocked with the exact information that MI5 desired. In several cases, MI5 watched with pride as its disinformation was passed by the Nazi intelligence services across Europe and beyond. The magnitude of these successes was later summarised by Sir John Masterman, the head of MI5’s wartime deception committee, who noted that during the war Britain ‘actively ran and controlled the German espionage system in this country’.17

Churchill later reflected on the value of the intelligence produced by Bletchley Park and the secrecy of its operations, describing its code-breakers as ‘the geese that laid the golden eggs but never cackled’. Some historians, including F.H. ‘Harry’ Hinsley, who worked as a junior official at Bletchley Park and who later became the editor of the magisterial official history of British intelligence in the Second World War, have suggested that the intelligence produced by Bletchley Park was so valuable that it shortened the war by up to two years, saving countless lives on both sides. More recently, doubt has been cast on this claim, with historians arguing that the Second World War was really a war of matériel production, and that once the Soviet Union and the United States entered the war, in June 1941 and December 1941 respectively, victory for the Allies was assured. Although counter-factual ‘what if’ postulations can produce endless debates, the reality was that, if the war in Europe had not ended in May 1945, the Allies would have dropped an atomic bomb on Germany – which was the original target for the bombs dropped on Japan in August 1945.

Empire of Secrets: British Intelligence, the Cold War and the Twilight of Empire

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