Bombshell in the briefcase: MI5 seized a locked case in a London bank vault packed with espionage kit – and found a spy ring feeding our nuclear secrets to Moscow, as a new book retells one of the greatest Cold War thrillers of all
During the early afternoon of September 12, 1960, an unmarked car drove along Great Portland Street in central London and drew up outside No 159, a branch of the Midland Bank.
The two men inside were from MI5, Britain’s counter-espionage service. They glanced up and down the street before they entered the five-storey building and asked for the manager.
He and a bank inspector, sent specially from head office, treated the visitors with intrigued deference: someone at the pinnacle of the bank had ordered full cooperation.
Peter and Helen Kroger are pictured in 1969. Peter Kroger posed as an antiquarian bookseller, always sending and receiving parcels. His wife was a flamboyant and free-spirited woman with a penchant for wearing trousers
They unlocked the strongroom and extracted a large paper parcel and two cases belonging to one of their clients, Gordon Lonsdale. Canadian businessman Lonsdale was under observation by the Security Service because he was suspected of being a Russian spy.
Just over a fortnight before, he had been seen by MI5’s ‘watchers’ to enter the bank and deposit an attaché case, a briefcase and a deed box.
He told staff that he was leaving shortly for Canada and would return in a couple of weeks. Afterwards, the Security Service could find no trace of Lonsdale departing from Britain by land, sea or air. He had quite simply vanished.
But who was he? And what was he doing? The discovery of the attaché case marked the beginning of the unravelling of the Portland Spy Ring, one of the most significant anti-espionage operations ever carried out in this country.
The full story of this top-secret investigation has now been told in a thrilling new book by Trevor Barnes, drawing on hitherto secret MI5 and FBI files as well as original research in the United States and Moscow.
Gordon Lonsdale is pictured in East Berlin. Canadian businessman Lonsdale was under observation by the Security Service because he was suspected of being a Russian spy. Just over a fortnight before, he had been seen by MI5’s ‘watchers’ to enter the bank and deposit an attaché case, a briefcase and a deed box
Quite how important Lonsdale was can perhaps be judged by the fact that nearly 60 years after the visit to Great Portland Street, Russian President Vladimir Putin paid special tribute to him in a speech to mark the anniversary of overseas Russian intelligence.
Lonsdale was, said Putin, a ‘legend. One of those people of special qualities ready to give up their life, their nearest and dearest, and leave the country to dedicate their life to the fatherland’.
But on that autumn afternoon in 1960, the MI5 men needed to know what was in the attaché case. It was taken to the secret MI5 lab near St Paul’s where an expert picked the lock. What he found was a treasure trove of espionage: a camera, photographic equipment, film, letters, two books that when a light was shone on them were revealed to have indentations (probably code) and a cigarette lighter on a wooden base.
This was carefully picked apart and found to contain three miniature single-use cipher code books of a type used by Soviet intelligence. The MI5 agents had uncovered a complete set of Russian Cold War spying paraphernalia — and proof that Lonsdale was a deep-cover KGB officer.
The agents put it all back exactly as they had found it and returned the case to the bank so that Lonsdale wouldn’t suspect MI5 were on to him.
This was at a time when the Cold War was at its chilliest (George Blake was unmasked at the same time). In an era before computers, CCTV and mobile phones, operatives on both sides had to rely on cunning and patience. Most people didn’t even have telephones in their houses and had to use pay phones. Letters were steamed open with kettles and read while using rubber gloves.
Secret documents were written in invisible ink or documents photographed via a microscope to reduce them to the size of a typewriter’s full stop and sent as ‘microdots’. The security services were still locked into traditional public school attitudes: MI5 wouldn’t use women as operatives, but since they were much less conspicuous as ‘watchers’, officers’ wives were drafted in to help with surveillance. Neighbours’ houses were used to watch suspects, with their owners being recruited as extra eyes and ears.
The investigation into one of the most serious examples of post-war deep-cover Soviet spying had begun in February 1960 when a man working at the Underwater Detection Establishment at Portland near Weymouth complained to Admiralty police about one of his colleagues, Harry Houghton.
He suspected Houghton was the author of a letter he received with a single word — ‘JEW’ — and a swastika. Anti-semitism wasn’t a reason to alert the Security Service, but it provoked the man into also revealing that Houghton had taken secret files from the strongroom at the UDE a few years earlier. In fact, MI5 had already been alerted to Houghton in 1956 by his wife Amy.
He was a drunken brute who beat and cheated on Amy: when reporting his violence to the Admiralty welfare officer, she also mentioned that her husband ‘was divulging secret information to people who ought not to get it’. This claim was passed up the chain to the head of the UDE who dismissed the allegations as ‘nothing more than outpourings of a jealous and disgruntled wife’. This was 1956, after all.
Similarly, the desk officer at MI5 who saw the latest report on Houghton dismissed Amy’s claims with casual misogyny as the spiteful accusations of a bitter woman.
Four years later, the Admiralty passed the latest claim from Houghton’s UDE colleague on to MI5, with the extra information that when Houghton had been working in Poland for the British Embassy in the early Fifties he was often drunk and had to be sent home to Britain.
Amazingly, he had then been given a job at the UDE where top secret submarine technology was being invented and tested, not least for HMS Dreadnought, Britain’s first nuclear sub. So Houghton found himself close to highly sensitive material about that technology, the very purpose of which was to protect Britain from the Russians.
His luck finally ran out in April 1960 when a Soviet double agent working for the CIA, codenamed Sniper, revealed there were two Soviet agents operating in Britain, one in MI6 (George Blake) and one in the Navy. The second spy, thought Sniper, had worked in Warsaw, as had Houghton. So MI5 looked more closely at him.
They discovered that on his return from Poland he had bought a house near Weymouth for £500 and a flashy car. Around the same time a stash of money had also been found in the cistern of a public toilet in Weymouth: a favourite technique of Russians leaving a dead drop.
The agents started to intercept Houghton’s calls, and a neighbour was co-opted to keep an eye on the house.
By now, Amy had left Houghton and remarried. She was belatedly interviewed by agents and confirmed not only that Houghton had beaten her viciously, breaking a leg at one point, but also that when in Poland he was always going out and returning with large sums of money. He claimed to be selling medicine on the black market.
Meanwhile, the neighbour in Portland reported that Houghton, an unlikely lothario, in his 50s with wispy hair, had several girlfriends on the go. One was Ethel Gee, a colleague at the UDE who had higher security clearance and might be stealing secret papers for him.
The MI5 watchers discovered that Houghton and Gee would travel up to London on the train together as husband and wife, often taking in a show, and meet their KGB contact to hand over naval plans and any other material they had stolen. This contact was Gordon Lonsdale, a senior KGB operative under deep cover.
In turn, close surveillance of Lonsdale led MI5 to a couple he used to visit in a bungalow in Ruislip: Helen and Peter Kroger, who claimed to be Canadian like Lonsdale.
They were codenamed the Killjoys. Peter Kroger posed as an antiquarian bookseller, always sending and receiving parcels. His wife was a flamboyant and free-spirited woman with a penchant for wearing trousers.
MI5 operatives stationed themselves with a family in a nearby house, always ready to take cover if Helen Kroger called round, which she often did.
Veteran spies, the Krogers were implacable Communists and highly skilled radio operatives. It was from their basement, the network’s communications hub, that the secret documents were sent on to Moscow.
With Houghton, Gee, Lonsdale and the Krogers all being watched, MI5 wanted to let the operation run on to see who else was pulled in.
But Sniper suddenly defected to the West and it was time to move fast: the Security Service was anxious the KGB would pull Lonsdale out in case Sniper compromised him.
The decision was made to strike on Saturday, January 7, 1961. The watchers followed as Houghton and Gee — codenamed Trellis by MI5 — arrived at Waterloo for another of their regular meetings with handler Lonsdale.
The watching police and agents saw Lonsdale near the Old Vic, studying posters for that night’s performance of A Midsummer Night’s Dream. Houghton and Gee ambled past and Lonsdale fell in a few paces behind.
The watching police fanned out unseen around them. After a short distance Lonsdale caught up with the couple, threw his arms around them as they exchanged greetings and took Gee’s shopping bag from her.
At that moment, Superintendent George Smith of Special Branch, an immensely tall and imposing officer who for the purposes of disguise was sporting a natty French beret, jumped in front of them shouting, ‘You’re under arrest. I’m a police officer.’ (MI5 officers are not allowed to make arrests themselves.)
Three MI5 cars swerved to a halt beside them, Smith snatched the bag from Lonsdale’s grip and bundled him into the nearest car.
As soon as they were speeding to Scotland Yard, Smith pulled the radio microphone to his lips and — with a barely suppressed smile of satisfaction — announced ‘lock, stock and barrel’. It was the code sign to MI5 and Special Branch that all three KGB agents had been arrested.
Inside Gee’s shopping bag he found four pamphlets from Portland giving confidential details of research tests and a sealed tin of undeveloped film.
A couple of hours later Smith and a group of police and MI5 officers sped out to Ruislip to arrest the Krogers.
The final pillars of the spy ring were about to fall. The Krogers would have been expecting Lonsdale that Saturday evening with his latest batch of secrets handed over by Houghton and Gee. Smith knocked on the door and introduced himself, then asked the Krogers to get ready to leave for the police station.
Helen Kroger said she needed to stoke the boiler and picked up her handbag. Smith, suspecting something was up, tried to grab her bag but she held on and the catch sprang open. Inside was a letter in Russian, a typed sheet of cipher code, two glass slides with microdots sandwiched in them and other links to the contents of Lonsdale’s briefcase.
Even at the last minute, she was resourceful enough to try to destroy the evidence. Down at the station they refused to give fingerprints, but when the prints were finally taken by court order two days later they turned out to match those of a pair of suspected Soviet spies called Morris and Lona Cohen, whom the FBI had been hunting all over the world for years.
American citizens but dedicated communists, the Cohens had been crucial parts of Ethel and Julius Rosenberg’s spy ring that had divulged nuclear secrets from The Manhattan Project to the Russians, enabling them to develop their own nuclear bomb.
Their bungalow was searched revealing the hidden basement where they kept their secret transmitter and other equipment.
They had been Lonsdale’s conduit to and from Moscow, relaying to him instructions from the KGB as well as letters from his wife and children, via dead drops. Gee and Houghton’s homes were searched too, and documents and drawings containing secret research into anti-submarine sonars were found.
A search of Lonsdale’s London flat revealed stashes of cash in ingenious hiding places, such as secret zipped pockets and a Chinese scroll.
MI5 surveillance operatives had already bugged the flat and heard him singing in Russian.
So who was Gordon Lonsdale? It turned out that he was a Russian spy, Konon Molody, who had been to high school in the U.S. while a teenager in the 1930s, hence his perfect English, before returning to the USSR.
During World War II he was an intelligence officer in an artillery regiment, making dangerous forays behind German lines.
After the war he was recruited by the ‘illegal’ (deep cover) branch of the KGB, rising to the rank of colonel. The subsequent trial of the five defendants in Court Number One at the Old Bailey was a sensation.
The judge was Lord Chief Justice Hubert Parker, a sign of the importance of the trial.
To preserve the anonymity of witnesses from the Security Services, they were smuggled in by way of the judge’s bench to give evidence, then discreetly vanished.
So the Portland Spy Ring was broken, and the first deep-cover Soviet spies brought to justice. But the aftershocks would be felt for years. Gordon Lonsdale is pictured with Carla
Gee and the Krogers protested their innocence; Houghton tried to turn Queen’s Evidence, but the offer was refused. Lonsdale claimed the Krogers were innocent and tried to convince the jury he had simply used their home to hide his spying equipment.
Shortly after the jury returned the inevitable guilty verdicts, the defendants stood up to be sentenced. Lord Parker declared that ‘for peacetime this must be one of the most disgraceful cases to come before the court’. He described Lonsdale as the ‘directing mind’ and, to gasps in the court, jailed him for 25 years.
The Krogers, said the Lord Chief Justice, were professional spies and ‘in this up to the hilt’.
They were jailed for 20 years each. Houghton and Gee were in some ways ‘the most culpable’, betraying their own country purely for the money. They were each sent down for 15 years.
So the Portland Spy Ring was broken, and the first deep-cover Soviet spies brought to justice. But the aftershocks would be felt for years.
In the post-trial inquiry, the Admiralty came in for most of the blame and the UDE was called out for its grotesque failure to follow up Mrs Houghton’s accusations: had she been listened to in the first place then years’ worth of secrets would not have been handed over.
The Admiralty sought to downplay the value of the intelligence the spy ring passed on, but in fact it was incredibly helpful to the Russians, enabling them to get years ahead on their own nuclear submarine programme and aiding the manufacture of a more silent generation of Soviet submarines.
In March 1964, ringleader Konon Molody (Lonsdale) was flown back to Moscow in a spy swap, exchanged with Greville Wynne, a Briton held by the Russians.
Molody was installed in a comfortable flat and hailed as a hero. He helped to train future agents and his work with the Cohens was taught to new KGB officers as an exemplary case in creating and running a network of agents.
He was friends with other spies and they would drink together and play chess, but he eventually grew disenchanted with the lumbering nature of the Russian state.
In October 1970, while out collecting mushrooms for a picnic with his family, he drank a second glass of vodka and suffered a severe stroke and died. He was 48.
His body lay in state at the KGB officers’ club, and there is an elaborate tombstone commemorating him in Moscow. Like the Cohens, he was even honoured on a Russian stamp.
Morris and Lona Cohen (the Krogers) were flown back to Moscow in 1969 in another spy swap. Like Molody, they are revered as heroes of the Cold War and were regarded as KGB royalty. At a welcome party in their honour at a secluded dacha, all the KGB top brass were present.
The Cohens were given a luxurious apartment in an upscale district of Moscow and made Soviet citizens. They were described as ‘true soldiers of the revolution’.
Lona died in 1992 aged 79, leaving Morris devastated and in failing health.
He died in 1995, aged 85, and at his burial in a KGB cemetery a guard of honour fired a salute over his grave. On the orders of President Boris Yeltsin, he was made a posthumous ‘Hero of the Russian Federation’.
Even today, for Russian intelligence, and especially for Putin’s Russia, these three agents have resonance as illustrious examples of sacrifice and spycraft.
The only Britons in the spy ring, Harry Houghton and Ethel Gee, were released from prison in 1970 and married the following year.
Houghton’s memoir, published in 1972, was a long whine of complaint about the incompetence of the Security Service, the unfairness of his trial and his harsh treatment in prison.
After publication, the couple dropped out of public sight. They ran their home as a guesthouse for a period then retired to a three-bedroom house on a nondescript 1970s housing estate in Dorset.
In 1984 Gee died aged 70. Houghton followed her the next year, just before his 80th birthday.
Dead Doubles by Trevor Barnes is published by Weidenfeld & Nicolson on September 3 at £20. © Trevor Barnes 2020.
To order a copy for £16 (offer valid until August 29; P&P free), visit mailshop.co.uk/books or call 020 3308 9193.
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