Fighting to Lose (24 page)

The remaining two were recent acquisitions: James Marriott, a solicitor from the City (London’s financial centre), and J.C. Masterman, a fifty-year-old Oxford academic who had sat out the First World War in comfortable internment in Germany. Masterman had been White’s history tutor at Oxford, and within two months of being recruited he was named chairman of the XX Committee. He had no experience whatsoever.3

The seeds of destruction were sown in February with a plan to foist another double agent on DR. RANTZAU, by now known to be the Ast Hamburg spymaster to most of the agents landed in Britain. MI5’s air intelligence expert, Walter Dicketts, was selected for the mission and code-named CELERY. He was to pretend to be a veteran airman ready to betray his country because the RAF had refused him a commission. Owens was to introduce him to RANTZAU in Lisbon, Owens going by flying boat and Dicketts following by ship a few days later.4

The pair had been in Portugal about a month when the MI6(V) man at the embassy reported to London that Owens had come to see him to declare that the Germans had found him out, and that RANTZAU had accused him outright of working for the British. To salvage what he could, Owens said he had admitted it, but claimed that the British had only caught on to him a few months earlier. RANTZAU had responded by telling him to return to England and pretend nothing had happened.5 Apparently, the German hoped to turn the tables on MI5.

If it had only been a matter of one double agent blown, it would not have been so bad, but losing SNOW was a catastrophe. SNOW, the five at the table agreed, was disastrously linked to CHARLIE, BISCUIT, GW, SUMMER, TATE, and RAINBOW, as well as the most recent arrival, Dusko Popov, a.k.a. TRICYCLE, and his two fictional sub-agents, BALLOON and GELATINE.

Popov was an especially exquisite loss because the Germans had indicated they wanted to send him to Egypt by way of the United States. Altogether, Owens’s loss left MI5 with only one double agent of consequence, and he had only just made wireless contact with his German controllers.6 Robertson’s initial reaction was to insist that Owens must be lying. It was all too awful to contemplate.

The situation had been avoidable. MI5 had never seen anything wrong with having CHARLIE, GW, and BISCUIT send their reports through SNOW, but now that SNOW had crashed, it became clear that they must too. Through the
Midas
scheme, SNOW had already made a payment to TATE , so he was blown. TATE had notionally passed on some of the money to RAINBOW, so that finished him. TRICYCLE was compromised because he was just then in Lisbon arranging with the Germans to take the money to pay their agents with him to the United States, where it would be deposited for SNOW to draw on. Doubts about him would lead to doubts about BALLOON and GELATINE.

MI5 had made the most elementary mistake in agent-running: it had put its double agents in contact with one another.7

Again, it was a case of MI5 officers failing to inform themselves from the available pre-war espionage literature. Had they read Richard Rowan’s
The Story of Secret Service
(1937), they would have learned that during the First World War the Germans were so conscious of the need to isolate their secret agents that in spy school the students were given their own rooms, were identified only by numbers, and were required to wear masks when in sight of each other. The Germans would never have agreed to what was called for by Plan
Midas
unless they knew the spies involved were under British control.

Owens was given a wicked grilling on his return to England, but he stuck to his story. He accused Dicketts of having gone over to the Germans, and also stated that when Dicketts was debriefed he would undoubtedly claim that he, Owens, was working for the Germans and had been all along. This was an echo of Sam McCarthy’s accusation some nine months earlier, but the consequences this time were infinitely worse. It meant MI5’s entire double-agent operation was fatally compromised.

It was hard to accept. Was Owens telling the truth? Did the Germans really know he had been under British control? Why did they send him back, then? Would they really believe he would pretend he had not been discovered?8 Owens had flown back to England; when Dicketts followed by ship a week later, he evinced surprise when told of Owens’s accusations.

Dicketts had first come to MI5’s notice a year earlier, in April 1940, a month before Hitler’s invasion of France. He was a stranger out of nowhere who appeared to be shadowing Owens. At first it was thought that he was a German spy, but when detained, Dicketts explained that he had overheard Owens talking suspiciously in a pub, and, being a former air intelligence officer, resolved to investigate. He sidled up to Owens at the bar, and after a time extracted from him that he was a double agent for the British.9 It was a remarkable coincidence that a former intelligence officer and a present-day double agent should run into each other in one pub out of the thousands in England; MI5 nevertheless accepted it as so.

Dicketts said he was anxious to serve his country in the present war, but an appeal to the director of Air Intelligence, Commodore Boyle, had failed to land him a job. This was easily checked, and when found to be true, MI5 decided to put him to work itself, although not without distaste. There were police files on Dicketts at Scotland Yard and in the United States. He had been something of a con artist, and the Americans wanted him for having fleeced members of the social services bureau in Chattanooga, Tennessee. When it was decided to try to have Owens land another double agent on the Germans through Lisbon, Dicketts was given the mission.10

It was the practice then for a double agent returning from abroad to dictate a “chronology” of his experiences to a secretary. This Dicketts did when he got back to London, before he was told of Owens’s accusations. It had gone smoothly, he said. His initial meeting with DR. RANTZAU had led to the proposal that he go on to Germany for a more thorough assessment. He was taken to Hamburg, where he was closely questioned by a “German air force type.” He passed the test, and after being officially accepted as a spy for the Abwehr, he was taken around the city and also to Berlin to show him how slightly these cities had been damaged by British bombing. He returned to Lisbon after being away three weeks.

Dicketts also described how in setting out for Germany he was driven to the airport near Barcelona by a German embassy employee named Hans Ruser, the nephew of the former Reich minister of economics, Dr. Hjalmar Schacht. Ruser declared himself to be an absolute opponent of the Nazi regime and, as he guided the black Ford V-8 along Spain’s narrow roads, sounded Dicketts out as to his willingness while in Germany to meet Dr. Schacht, and a certain “Baron X,” who wanted to open covert peace negotiations with Britain. He would do it, Dicketts replied, only if DR. RANTZAU was informed and approved. Ruser agreed.11

The meeting with Dr. Schacht and “the Baron” went ahead, and it was proposed that when he returned to England as the Abwehr’s newest spy, Dicketts would search British intelligence, and other government circles, for officials who might be amenable to secret peace talks. During subsequent questioning by MI5, he was asked how he was to get the results of these efforts back to Germany. Dicketts appears to have stumbled in answering. He failed to reply convincingly.

Dicketts was pressed more aggressively. It was not Ruser who put him on to the peace party in Germany, Dicketts admitted, but DR. RANTZAU, and it was Dicketts who prompted him to do it.12

DR. RANTZAU was not the man he was led to expect, Dicketts explained. At their first meeting, instead of the foul-mouthed type that McCarthy had described, RANTZAU turned out to be like a “very shrewd American business man,” who spoke English fluently with a strong American accent and to whom his subordinates accorded considerable deference. Dicketts had had to think fast. This was not a man to be taken in by a flimsy yarn about being an unhappy former airman. Dicketts had a sudden inspiration. He was with British intelligence, he said. He had been sent to Lisbon to sound out German intelligence on the possibility of secret peace talks.

DR. RANTZAU was immediately interested, he said. He questioned him closely, but Dicketts was an experienced liar. RANTZAU said he would send him to Berlin to speak with a higher authority. Ruser only made the suggestion that he also meet Dr. Schacht after he learned about his mission during their drive across Spain.13

MI5 accepted this story, and in the ensuing months there was much earnest debate about it. Did the Abwehr’s Major Ritter — by now DR. RANTZAU’s real name was known — really believe Dicketts was a British intelligence agent? The debate went on and on with the chairman of the XX Committee, J.C. Masterman acting as referee.

It was while Dicketts was in Germany that Owens reported to the MI6 officer at the British embassy that the Germans were on to him. As he absolutely insisted this was so on his return to England, the two MI5 officers who separately questioned him had to take him seriously. It was reluctantly agreed that SNOW, CHARLIE, and BISCUIT had to be shut down. TATE, GW, TRICYCLE, and RAINBOW would be retained for the time being. Owens was taken into close custody. The SNOW wireless operator tapped out A-3504’s last message. He was having a nervous breakdown, it said, and could not continue.14 The leaders of MI5’s double-cross program anguished over what to do next.

The big problem was that the Wireless Board and the XX Committee had been specifically set up to oversee the information being sent over to the Germans by Captain Robertson’s wireless double agents, principally SNOW, after Caroli’s spectacular escape attempt at the beginning of the year. Through January and February, notionally drawing on information supplied by CHARLIE and BISCUIT, SNOW delivered a feast of reports on bomb damage following the big raids on Manchester, Bristol, and Southampton.

TATE also seemed to have retained the Germans’ confidence. With the closing down of SNOW, the burden of weather observations and bomb damage reports fell to him. The Germans continued to respond normally to his messages. As this seemed a little too good to be true, it had been decided to put his good standing to the test: he was to urgently ask for money, and to threaten to stop transmitting if he did not get it. The Germans took him seriously, proposing to drop a bundle of pound notes by airplane. When that proved impractical, and he continued to complain, they tried to mollify him by telling him he had been awarded the coveted German military decoration, the Iron Cross.

Next, in a repeat of the tactic that forewarned of the arrivals of Caroli and Schmidt the September before, the Germans wirelessed Schmidt to expect an agent shortly who would be bringing him money and a spare crystal for his transmitter. Another spy then landed by parachute, a twenty-nine-year-old Sudeten German named Karl Richter. The usual errors on his identification papers caused him to be picked up almost immediately, and on being searched he was found to be carrying two wads of money in pounds and dollars. His identity card and ration book were forgeries based on the serial numbers supplied to the Germans by SNOW. A little later, after seventeen hours of interrogation at Camp 020, Richter led his inquisitors to where he had hidden his equipment; it was found to include two radio crystals. Richter was the spy the Germans had advertised.

Richter was one of the millions of small tragedies of the war. He was German, but not by choice or preference — he had acquired citizenship automatically when Hitler annexed western Czechoslovakia. This meant compulsory military service, so he joined the German merchant marine, deserting shortly after the war started only to be nabbed by the Gestapo and put in a concentration camp. After some grim months, he was approached and offered a pardon if he did service as a spy. Yet, despite his lack of real ties to Germany, he responded to his interrogators at Camp 020 bravely, gave details of his mission only grudgingly, and refused offers to switch sides to work under British control. It would cost him his life.

Meanwhile, other attempts to pay Schmidt followed. The Germans finally arranged for him to meet a staff member of the Japanese embassy on a bus, where he would receive the money in a copy of the
Times
the embassy worker was carrying. Despite a glitch in which the pair missed their proper bus and were lost to sight for a while, the rendezvous was successful and Schmidt came back with £200 in “brand new English notes in series.”15 Obviously, as usual, they were counterfeit.

All this tended to reassure XX Committee members and MI5 case officers that the Owens-Dicketts contretemps had not blown MI5’s precious double agents after all. But still there was uneasiness.

It was decided to send Dicketts back to Lisbon. The suggestion came from the Wireless Board, apparently at the instigation of Stewart Menzies, the MI6 chief. He would have read the debriefings of Dicketts, and the mention of Dr. Schacht would have caught his eye. Dicketts had returned from Germany via Lisbon with an Abwehr offer to negotiate; the name of Dr. Schacht, famous for having put Germany’s finances in order and an outspoken critic of the Nazis, gave weight to the overture. It seems Menzies was now covertly sending him back a response.16

Dicketts took the flying boat to Portugal, and when Kramer, the Lisbon KO counter-intelligence officer, heard he was in town he grimly welcomed the news. The report on Hans Ruser’s interrogation at Camp 020 after he defected to the Allies in 1943 disclosed the following:

About May or June, 1941, Dicketts came back again and called on Ruser. At the time Ruser had Mayer-Döhne [the German naval attaché] staying with him. Dicketts and Mayer-Döhne therefore met.

Dicketts told Ruser that he was going to Germany again on a peace mission, and had got a specially arranged escort from the Germans. Ruser told Kramer about this who said: “Yes, and this time he won’t get out of Germany.” When Ruser went back to Dicketts he rather pointedly advised him not to go to Germany, saying that peace negotiations were rather hopeless just then. Dicketts had secret information from Mayer-Döhne that Germany was about to declare war on Russia. Dicketts immediately took this up and asked Ruser if he meant [because of] Russia but Ruser did not tell him any more.17