MI6 chiefs used secret slush fund to finance operations, document shows

Sir Stewart MenziesSuccessive directors of the Secret Intelligence Service used a secret slush fund to finance spy operations without British government oversight after World War II, according to a top-secret document unearthed in London. The document was found in a collection belonging to the personal archive of the secretary of the British cabinet, which was released by the United Kingdom’s National Archives. It was discovered earlier this year by Dr Rory Cormac, Associate Professor of International Relations in the Faculty of Social Sciences of the University of Nottingham in England. It forms the basis of an episode of BBC Radio 4’s investigative history program, Document, which was aired last weekend. In the program, the BBC’s security correspondent Gordon Corera explains that the discovery of the secret slush fund reveals new information about the activities of the Secret Intelligence Service. It also raises questions about the underground activities of British spies in the Middle East following the British Empire’s postwar retreat.

Historically, the activities of the Secret Intelligence Service —known commonly as MI6— have been indirectly supervised by the British Parliament and its committees, which fund the agency through a secret vote. The use of the agency’s funds to carry out operations is also monitored by the Secretary of State for Foreign Affairs, the head of the Foreign and Commonwealth Office, who exercises political control over MI6. However, the document uncovered by Dr Cormac shows that, for many years, successive directors of the secretive spy agency financed operations using a sizeable personal fund, the existence of which was not disclosed to the government. The document describes a meeting held in 1952 between Sir Stewart Menzies, who was then the outgoing director of MI, and the permanent secretaries —essentially the top-ranking civil servants— to the Foreign Office and the Treasury. The meeting was held to prepare the ground for Sir Stewart’s retirement and to facilitate the smooth handover of power to his successor, Major-General Sir John Sinclair, who became director of MI6 in 1953. Read more of this post

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Extraordinary lecture by Soviet spy Kim Philby surfaces on videotape

Kim PhilbyA videotaped lecture by Kim Philby, one of the Cold War’s most recognizable espionage figures, has been unearthed in the archives of the Stasi, the Ministry of State Security of the former East Germany. During the one-hour lecture, filmed in 1981, Philby addresses a select audience of Stasi operations officers and offers them advice on espionage, drawn from his own career. While working as a senior member of British intelligence, Harold Adrian Russell Philby, known as ‘Kim’ to his friends, spied on behalf of the Soviet NKVD and KGB from the early 1930s until 1963, when he secretly defected to the USSR from his home in Beirut, Lebanon. Philby’s defection sent ripples of shock across Western intelligence and is often seen as one of the most dramatic moments of the Cold War.

The videotaped lecture, which was never intended for public consumption, was found recently by the BBC in the archives of the BStU, the Federal Commissioner for Stasi Records in Berlin, Germany. Excerpts can now be viewed publicly for the first time.

The recording begins with an introduction by Markus Wolf, one of the most high-profile intelligence operatives of the Cold War, who was head of East Germany’s Main Directorate for Reconnaissance, the foreign intelligence division of the Stasi. Then Philby takes the stand and for about 15 minutes recounts his recruitment by the Soviet NKVD, the forerunner of the KGB. He tells his audience that the Soviets recruited him despite his extremely young age and joblessness, seeing him as “a long range project”. They did so, he says, because they knew he was part of “the ruling class of the British Empire” and was thus bound to end up in a position of power. His NKVD handler was clear as to his agent’s task, says Philby: his mission was to join the Secret Intelligence Service, known as MI6, Britain’s external intelligence agency. The young Philby then spent years trying to work his way into the intelligence agency, and did so successfully.

With extreme candidness, Philby proceeds to tell his East German audience about his mission, given to him by his NKVD handler in the late 1940s. It was to unseat Felix Cowgill, his boss in MI6’s Soviet counterespionage division, and take his place. He achieved that, he says, even though Cowgill was a man he “rather liked and admired. It was a very dirty story”, admits Philby, “but after all our work does imply getting dirty hands form time to time, but we do it for a cause that is not dirty in a way”.

Of particular interest to intelligence observers is Philby’s justification of his role in Operation VALUABLE/FIEND, in which the Central Intelligence Agency, in association with MI6 and other Western European intelligence agencies, secretly sent Western-trained Albanian agents into communist-controlled Albania. The agents were tasked with organizing an armed popular revolt against Albania’s communist rulers. But Philby, who had been given the job of overseeing the operation on behalf of MI6, betrayed the entire program to the Soviets, thus ensuring its complete failure. In his lecture, he justifies his betrayal by arguing that it helped prevent World War III. Had VALUABLE/FIEND succeeded, claims Philby, it would have been expanded to Bulgaria, at which point the USSR would have intervened, causing World War III.

Following the end of his prepared remarks, Philby takes a series of questions from his audience, including one about how he managed to “stay ideologically pure” while living in a capitalist society. In responding, the British defector praises his Soviet handler, who looked after his “political as well as physical health”, and advised his audience, which presumably included dozens of Stasi case officers, to do the same. A summary report of the recently unearthed videotape can be read on the BBC’s website, here. There is also an audio podcast on Philby’s lecture, which includes commentary from Professor Christopher Andrew, of Cambridge University, and Hayden B. Peake, most recently curator of the CIA’s Historical Intelligence Collection.

Author: Ian Allen and Joseph Fitsanakis | Date: 05 April 2016 | Permalink

Memos confirm secret NSA deal with leading cryptography vendor

William FriedmanIn 2007 I wrote in my “National Security Agency: The Historiography of Concealment” that America’s leading signals intelligence agency had made a secret deal with Crypto AG, a Swiss-based manufacturer of cryptographical equipment. The agreement, which lasted for much of the Cold War, allowed the NSA to read the classified messages of dozens of nations that purchased encoding equipment from Crypto AG. As I expected, the claim drew criticism from individuals connected with Crypto AG, including company scientists, who argued that the Swiss manufacturer would never have agreed to a deal that undermined its professional reputation as a trusted and neutral vendor of cryptological devices. Now, however, the BBC has revealed two recently declassified NSA memos that provide concrete proof of the deal.

My 2007 claim was based on a string of well documented allegations that surfaced in the early 1980s. While conducting research for his seminal book The Puzzle Palace, historian James Bamford came across references to Project BORIS, which involved a pact between the NSA and the Swiss company. To be precise, the deal appeared to have been struck between the Swiss inventor and Crypto AG founder Boris Hagelin and William F. Friedman, an American cryptologist who led the Armed Forces Security Agency, a forerunner of the NSA. The two men were united by a deep personal friendship, which was forged during World War II by their mutual hatred of Nazism.

Bamford’s claim was echoed in 1996 by Scott Shane and Tom Bowman, reporters for The Baltimore Sun. In a six-part investigative series about the NSA, the two journalists wrote that Friedman visited Hagelin during a trip to Switzerland in 1955 and asked for his help so that American could dominate its Cold War rivals. According to Shane and Bowman, Hagelin agreed and built a type of cryptological backdoor in Crypto AG’s devices, which allowed the NSA to read millions of messages for many decades. The company, of course, reacted furiously, saying that claims of a secret deal were “pure invention”.

On Thursday, however, BBC security correspondent Gordon Corera confirmed that a BBC investigation of 55,000 pages of documents, which were declassified by the NSA in April, found proof of the secret agreement. The declassified material, said Corera, contains two versions of the same NSA memorandum, as well as an earlier draft, which refer to a “gentleman’s agreement” between Friedman and Hagelin. Under the agreement, Crypto AG would inform the NSA about periodical changes to the technical specifications of its encoding machines. The company would also provide the American spy agency with detailed lists showing the precise models purchased by various national governments around the world. Furthermore, Crypto AG agreed not to sell the more advanced, customizable models of its equipment to countries viewed by Washington as directly adversarial. This, says the BBC, amounted to Crypto AG deceiving some of its customers, by offering them “watered-down versions” of its encoding devices.

Corera notes that there is no evidence in the memos that Crypto AG built any kind of back door in its devices for use by the NSA. Instead, by providing the American agency with detailed operational knowledge of the devices, it enabled American codebreakers to reduce the time and effort needed to break encoded messages intercepted by the NSA.

There are a couple of minor errors in Corera’s article. For instance, the “father of American code-breaking” is not Friedman, as he claims, but Herbert Yardley, who led the so-called Black Chamber (also known as the Cipher Bureau) in 1919, long before Friedman was in the picture. Additionally, he fails to mention Bowman’s contribution to Shane’s Baltimore Sun article, which was published in 1996, not 1995, as he writes. These minor errors aside, however, the BBC discovery is absolutely crucial for our understanding of cryptological history in the Cold War.

Author: Joseph Fitsanakis | Date: 31 July 2015 | Permalink

Did South African spy services kill Swedish prime minister in 1986?

Olof PalmeBy JOSEPH FITSANAKIS | intelNews.org
The usually tranquil waters of Swedish national politics were stirred violently on February 28, 1986, when the country’s Prime Minister, Olof Palme, was shot dead. He was walking home from the cinema with his wife when he was gunned down by a single assassin who shot him from behind in Stockholm’s central street of Sveavägen. Following the 1988 acquittal of Christer Pettersson, who had been initially convicted of the assassination, several theories have been floating around, but the crime remains unsolved to this day. Now the BBC has aired an investigation into the incident, which revisits what some say is the most credible theory behind the killing: that Palme was targeted by the government of apartheid-era South Africa because of his strong support for the African National Congress (ANC). Palme was among the leading figures of the left wing in Sweden’s Social Democratic Party. He had served as Prime Minister from 1969 to 1976, and was reelected in 1982 on a left-wing program of “revolutionary reform” that included expanding the role of the trade unions and increasing progressive taxation rates. He was also a strong international opponent of South Africa’s apartheid system and under his leadership Sweden became the most ardent supporter of the ANC. By the mid-1980s, the country was providing nearly half of the ANC’s political funding. Swedish authorities viewed South African intelligence, especially the apartheid system’s State Security Bureau (BOSS), as the primary suspect in Palme’s assassination. In 2010, Tommy Lindström, former Director of the Swedish Police Service (Rikskriminalpolisen), said he was certain of the South African government’s complicity in Palme’s murder. After the end of apartheid, several South African former security officials said elements within the country’s intelligence services had authorized the assassination of the Swedish leader. But investigations by Swedish authorities remain inconclusive. Now the BBC’s security correspondent, Gordon Corera, has produced an investigation into the claims of South African complicity behind Palme’s murder. The investigation was aired on Monday by Document, an investigative program on BBC’s Radio 4 station. It is based on nearly 30 boxes of documents on the Palme assassination, found in the personal archive of the late Swedish author Stieg Larsson. Though known today primarily for his Millennium series, Larsson worked for most of his professional life as an investigative journalist specializing on the activities of the Swedish far-right. One of the documents in Larsson’s archive mentions Bertil Wedin, an anti-communist Swedish journalist, as “the middle man in the assassination” of Palme. Correra talks to several sources, including British investigative journalist Duncan Campbell, who in 1988 alleged that the British security services had been aware of plots by Pretoria to kill Palme. Read more of this post

Analysis: How vital was spying during the Cold War?

Gordon Corera

Gordon Corera

By IAN ALLEN | intelNews.org |
The BBC’s security correspondent, Gordon Corera, asks a very basic yet very intriguing question about the history of the Cold War: did espionage actually make a difference in ts outcome? This question stems out of BBC Radio 4’s three-part documentary series examining the 100-year history and operations of MI6, Britain’s foremost external intelligence agency. Corera’s article on the BBC website provides conflicting answers by intelligence defenders and intelligence skeptics, including Rodric Braithwaite, former British ambassador to the USSR, and David Owen, Britain’s former Foreign Secretary, who says that, barring a few important exceptions, UK policy makers “didn’t really […]  know exactly what was going on” in the Communist Bloc. Other commentators include former MI6 deputy director Sir Gerry Warner, and Sir David Omand, who argues that most of the intelligence collected during the Cold War was of a military or tactical nature and would therefore have proven effective only “if the Cold War had gone hot”.

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