In London, Lonsdale worked his way into interesting circles – civil servants and spies on his course but also American military personnel stationed in Britain. While studying, Lonsdale began to think about what cover he could use next. He knew from his time in America that jukeboxes were a huge part of the culture but they had not yet crossed the Atlantic. So, in October 1956 he bought two machines from the Automatic Vending Company which he sited in cafes. Soon he joined the company as a director and manager of the company. He moved into supplying other vending machines, especially for bubblegum. In February 1960 he became director of another company which made a prize-winning security lock. All of this helped justify his travel around the country and his frequent trips to Europe. He seemed to relish life as a Western businessman.

  His targets for espionage, he later claimed, included the Porton Down biological warfare establishment, where he built up dossiers on those working on secret weapons. He briefly worked with Melita Norwood – a long-time KGB agent supplying material related to the British atomic programme. She was mainly run out of the embassy, but Lonsdale – for reasons unclear and perhaps due to a personality clash – worked with her for only a short period of two months.vi The full details of Lonsdale’s spy work during his first few years in Britain remain obscure though – perhaps because they were so secret, perhaps because they were not as productive as what came after. The most important agent – and the one who would bring him down – was assigned to him a few years into his stay in Britain.

  HARRY AND BUNTY

  Almost everything that would be later said about how Harry Houghton ended up a spy – and how his treachery would be discovered – would, like the life of Gordon Lonsdale, be a lie. Sometimes they were his own lies to cover his tracks, sometimes those of KGB officers masking their own role and sometimes lies of British spies seeking to obscure their work. The true story of how it started is almost mundanely straightforward. There was no glamorous young Polish blonde who seduced him and then offered a sob story to get his financial help, as was later said.vii Houghton was just a middle-aged man with receding hair, a sharp nose and a mean face, who seemed to enjoy the seedier side of life. And he was disillusioned and after money. One thing almost everyone who met him agreed on was that Harry Houghton was not a pleasant chap.

  Houghton had joined the Navy at sixteen and following the Second World War took a position as a civil service clerk with the Admiralty. That led to a posting to Warsaw in 1951. By now he was in his mid-forties. He and his wife were out of place in the diplomatic community and their accommodation was grotty. Houghton’s excursions into the black market were lucrative, selling penicillin he had brought over from Britain, but he was not, as was later said, blackmailed because of them. Instead, he simply wrote a letter in a white envelope to the private secretary of the Polish Minister of Foreign Affairs.viii Inside was a letter offering secrets from the office of the naval attaché. There was no name but he gave his address, also expressing his view that Britain’s present rulers had sold the country to the Americans and turned it into an American colony. Polish intelligence put a watch on the address and found Houghton. When they met, he made it clear he wanted £550 to buy a car and for that could offer secret documents. Most importantly, he had access to the naval attaché’s codebooks. Polish intelligence quickly informed its masters at the KGB Centre in Moscow. Houghton went on to provide a regular stream of sensitive material – in August 1952 alone he was thought to have supplied over a thousand documents.

  But then he was told some bad news. Budget cuts meant he had to go back to Britain. The truth was that Houghton’s drink problem had been noticed – following a Canadian diplomatic reception he had pushed over his wife, who broke her leg, after they argued about the way home. His boss wanted him moved, although he had no suspicions of his espionage. Houghton hoped he could still be of some use to the Poles back in Britain but at this point, without him knowing, the case was handed over to the KGB. A spy in Britain was both more valuable and more challenging to run than one on Poland’s home turf. Houghton was told to go to Dulwich Picture Gallery on the first Sunday of February 1953 and exchange a coded phrase. The Russian who met him first in London was a ‘legal’ rather than an illegal – a member of the Soviet embassy in London. But he was meeting Houghton under what is known as a ‘false flag’, pretending to be a national of a different country, in this case Poland. Spies often use this to try and extract intelligence from an agent who they feel might be more likely to spy for another country rather than for their own. The good news for the KGB was that Houghton now had a job at the Underwater Weapons Establishment at Portland in Dorset.ix

  The material to which he potentially had access was red-hot. Submarines were designed to move undetected through the seas. Using the latest technology to hide your own submarines and find those of your adversary was the kind of intelligence that made all the difference in war. It was something in which vast sums of money and huge effort would be invested but where any hard-won advantage could quickly be countered if your secrets were passed on to the other side.

  The bad news was that Houghton’s access to classified material initially seemed relatively limited. But soon after, Houghton told the Russian he had found a way to get round the lax security and access the safe room where documents were kept. The flood of documents resumed. In October of 1957, Houghton was informed he was actually working for the KGB. He was silent for a few moments and then said it was no surprise and that he had long suspected that his handlers had been Russian rather than Polish based on the way they spoke. He had been worried by the fact that this had been hidden and said he was grateful for the honesty.x

  It was obvious to everyone who knew him that Houghton was a man living beyond his means. He did not even bother hiding it. He had four new cars in as many years and had rebuilt his home. In January 1957 he was transferred to an administrative job and lost much of his access. But he was desperate to keep the cash coming. So he came up with a way of ensuring the exchange of secrets for money continued. His wife, Peggy, left him in 1955. Before she left, he had already met Ethel Gee, who worked in the records office at Portland. Ethel was known as ‘Bunty’ and lived with her mother, an aunt who had been bedridden for twenty-two years and the aunt’s husband in a small, grey terraced house (Bunty sharing a bedroom with her mother). She was dark-haired and vivacious rather than beautiful. In her mid-forties, she had never married. ‘Plain in appearance and speaking with a fairly strong Dorset accent, it would be hard to find someone further removed from the conception of the female spy than Miss “Bunty” Gee,’ an MI5 report would note, adding ‘regular teeth, probably false’. There was little money and not much excitement until the fast-living Harry had turned up with his dangerous charm. He knew how to treat her. The landlord of one nearby pub remembered Houghton as he would sometimes spend the enormous sum of four pounds in a single evening with Bunty in tow (being able to spend less than that in a British pub these days is more likely to get you noticed). She was keen on marriage. He kept on putting it off as he took her to fancy London hotels.xi

  He tested Bunty once. She had shown him a document and he joked that the Russians would love to see it. She replied she would show it to anyone who paid. Moscow thought it risky to recruit her formally but Houghton was insistent. In the end, they said he could approach her if he did not say for which country she would be spying. When Houghton revealed his secret, she first expressed relief he was not seeing another woman, then disbelief at what he was up to and finally she cried. After a few months, he presented his KGB handler with a bundle of documents and explained that Bunty had decided to co-operate. Moscow was nervous about the security surrounding their valuable spies. They were especially worried about the possibility that the heavy surveillance on the Soviet embassy and its staff by MI5 could lead to their exposure if their handler was followed to a meeting. And so the decision was taken to hand them over to their illegal – Gordon Lonsdale.

  On 11 July 1959 Houghton was introduced to Lonsdale. Houghton was nervous at first. It was the accent that threw him. Why did he sound like an American? Lonsdale had to explain that he had worked for a long time in North America. To test him, Houghton questioned him about the Soviet Union.

  Lonsdale’s relationship with Houghton shows why he was so highly rated by the KGB. The job of a handler is to entice someone to betray secrets while always remaining in control. What is clear from both Lonsdale and Houghton’s accounts is the disparity between the way each man saw the other and their relationship.

  Houghton looked up to Lonsdale and thought of the two men somehow as friends and equals. ‘A deep bond of friendship existed between us,’ Houghton later said. ‘We were a team.’ But the reality was that Lonsdale had nothing but contempt for the Briton. This is the reality that sometimes lies behind the handler–agent relationship but which is rarely acknowledged, particularly when the agent is betraying their country for cold, hard cash (the relationship is more respectful when the motivation is ideological). ‘He was vain as well as shifty,’ Lonsdale said contemptuously of Houghton, adding that when it came to an officer trapping their target, ‘once he has claws into the agent, there’s no getting away.’

  In early January 1960 Lonsdale paid his first visit to Houghton’s home. Over twenty-four hours, he taught Houghton how to photograph. But he also had the chance to assess Gee. He would later say he was taken aback by her accent, which he thought came from New England in America. He then found out it was actually how they spoke in the West Country. ‘She’s very friendly and talkative, but an awful cook,’ Lonsdale reported back to Moscow. Food was less of a worry once he confirmed she had access to documents and blueprints at Portland. The intelligence was gold dust. In June of that year Houghton and Gee handed over documents on underwater detection devices including the sonar for Dreadnought, Britain’s first atomic submarine, then nearing completion. A pattern of regular monthly meetings with Lonsdale had begun in which Britain’s precious naval secrets were being transferred to Moscow.

  THE SPYCATCHER

  The CIA officer addressed the assembled British spies in a fourth-floor conference room at Broadway – the old-fashioned headquarters of MI6 just by St James’s Park. It was late April 1960 and the CIA had a new source. They could not yet be sure about their reliability but someone had begun sending anonymous letters to the CIA written in German with details about Soviet bloc intelligence operations, particularly related to Poland. His code name was SNIPER. The CIA had something important to pass on to their British cousins. ‘SNIPER says the Russians have two very important spies in Britain; one in British intelligence, the other somewhere in the Navy.’ The two unknowns were codenamed LAMBADA 1 and 2.

  This was catastrophic. British intelligence was already reeling from the fact that Kim Philby, once a top MI6 officer, was suspected of being a Soviet agent. That and other cases left the Americans worried about their leaky cousins. A quick investigation led to the all too convenient response to the CIA that there was no traitor within British intelligence and the documents SNIPER had heard about must have been compromised by a burglary. The real truth would have to wait.

  But what of the spy in the Navy? SNIPER provided a list of ninety-nine documents that had been handed over, most from the office of the naval attaché in Warsaw in the early fifties. The only clue that SNIPER could offer to the spy’s identity was that he had been ‘persuaded’ to betray secrets by Polish intelligence after he had been discovered playing around in the black market and had a name that sounded something like Huppkner. He was now in Britain and doing something with naval intelligence. Finding him was a job for the Security Service MI5.xii

  The man who would ultimately lead the investigation was forty-year-old Charles Elwell, one of around 140 officers based at headquarters at Leconfield House.xiii He was a tough, sometimes difficult character who, he readily admitted himself, could be pig-headed and something of a nuisance, but who had the tenacity to never let go of a challenge. He did not come from a wealthy background but had been educated at Haileybury School and then St John’s College, Oxford, where war had overshadowed his studies. He joined the Navy and was recruited to work with the Special Operations Executive. In March 1942 he was dropping two agents by boat in the Netherlands. But when he tried to scramble back into his dinghy, it overturned and became stuck in the sand. Exhausted by trying to move it, he was soon captured. After escaping his first prisoner-of-war camp in the back of a lorry, he was sent to Colditz Castle. The rest of his war was spent not knowing when or if he would ever make it out. There were amusements like the homemade hooch and acting in theatre productions. But there was a darker side. He knew what the inside of a prison cell could do to a man. One day he saw a British officer run right past him, a wild look in his eyes. The man had become obsessed with getting out. The man scrambled over the barbed wire but shots rang out. Elwell cried at the memorial service held three days later in the camp.xiv Colleagues who worked with Elwell at MI5 recall an intensity to him and also a distance that may have dated from his wartime experience.

  Following the war, he wanted to join the Foreign Office and become a diplomat but only managed a few temporary appointments. He never quite made it into the inner sanctum – perhaps he was just not quite the right type of chap. The Foreign Office was the kind of place where going to the right public school and knowing the right people was the entrance ticket. It would have no doubt pained him to realise in the 1950s that some of those who were the right kind of chap – men like Donald Maclean – were actually communist spies. Instead, Elwell found himself in MI5 hunting those spies. In those days, the Security Service was looked down on by the Foreign Office and also MI6, its officers seen as little more than glorified policemen.

  The year after joining MI5 in 1949, Elwell had found himself in a lift with a beautiful and intelligent woman. Six months later he married Ann Glass. In 1940, aged eighteen, she had joined MI5 as a secretary after meeting the Deputy Director General at a party. As well as being well connected and strikingly good-looking, with her fashionable brunette hair and deep-brown eyes, she was a skilled linguist, witty and well travelled.xv A friend and colleague remembered that as she aged, ‘her memorably sexy, deep bass voice grew even huskier, making Marlene Dietrich sound like a near-soprano.’ She had been trusted with undercover intelligence tasks during the War. One of her most enjoyable had been posing as a secretary for an Italian director who had been released from internment to work on a film with Noël Coward.

  It took only six days from opening the case for MI5 to zero in on Harry Houghton. He had been in Warsaw in 1952. Disastrously, he was now working at Portland – site of the most sensitive secrets about submarine warfare. When an MI5 team visited in late May, officials at Portland were dismissive of the dangers posed by Houghton, one saying that ‘for a person of limited education it would be difficult if not impossible to extract information of any value.’xvi

  But as they began their initial checks, MI5 found something deeply embarrassing, the full details of which have only just emerged in declassified files. All the way back in 1955, Houghton’s then wife, Peggy, had told a local probation officer, a former Navy man, that her husband was in touch with communist agents and supplying material during secret trips to London. But she had not been believed. ‘The whole story sounds really fantastic. It is either a case for the MI5 or Herrison Hospital’, was the verdict – Herrison was the local mental asylum. ‘Mrs Houghton seems totally unbalanced,’ the official wrote after a 17 July 1955 meeting.xvii He talked to Peggy’s solicitor, who agreed her stories were the result of ‘a woman’s scorn’ because her husband seemed to have taken up with a woman at the base and it was all an attempt to smear him. Peggy even went to the house of Houghton’s direct superior at the base but he did not want to listen. In May 1956 Mrs Houghton went to see a female welfare officer. She was the only person who actually took Peggy Houghton seriously – viewing her as frightened but not neurotic. Peggy explained she had seen strange paper with dots on it among other things. But the welfare officer in turn was not taken seriously when she said Houghton might be a risk. On 11 June, a captain at Portland finally made a report to the Director of Naval Intelligence including a statement from Mrs Houghton claiming her husband was ‘divulging secret material to people who ought not to get it’. The security officer expressed his view that her allegations ‘were nothing more than the outpourings of a jealous and disgruntled wife.’ This had been reported to MI5 on 30 June. On 9 July, MI5 wrote back saying they had ‘no adverse trace of Houghton and agree that prima facie the allegations seem to be mainly spiteful.’ MI5 had not actually bothered to investigate the allegation. They did not talk to Houghton’s then wife nor conduct any inquiries. If they had, they might have spotted his lavish lifestyle. They might have even learnt that in May 1956 some sensitive files about joint work with the Americans had gone missing from a strong room and someone had spotted them on Houghton’s desk before they were found, one of many signs of sloppy security at the base. If they had done any of these things, MI5 might have broken the spy ring years earlier and long before bundles of top-secret documents had found their way to Moscow. MI5 would later do their best to downplay this embarrassing failure.xviii

  In 1958 Houghton had been divorced by his wife on grounds of cruelty. Now, Elwell and MI5 got the full story from Peggy after she was interviewed in Malaysia (where her new husband was serving with the RAF). She had a ‘great mop of dyed hair, a long nose and rolling eyes’ it was reported back. ‘She gives the impression of being highly strung . . . the description of her as a drab and ineffectual woman is not unfair and I have no doubt that any spirit or character she ever had was long ago beaten out of her by Houghton.’ The judgement of her may have been unpleasantly harsh (and led to a desire to avoid her ever being called as a witness), but her story was dynamite. ‘My suspicions were aroused in Warsaw on account of the behaviour of my husband who used to have telephone calls late at night secretly which I was not allowed to hear,’ she recalled. He went out regularly on Wednesday evenings and would return with English money which he said was from selling drugs he had smuggled in diplomatic bags. He once said to her he would work for whichever side paid him the most money. Back in Britain, from February 1953 she said he had started making trips to London on Saturdays once a month. He claimed he was going to the Admiralty but he showed her a bundle of banknotes in the car’s glove compartment when he returned, and he claimed he was back working the black market with some Polish contacts. After one Saturday trip, he had pulled out a bundle of pound notes and thrown them up in the air shouting, ‘Whoopee!’

 

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