I have interrupted the story of my own activities in order to give a picture of a typical Soviet spy network and also to explain our own. Such background "briefing" is essential for the clear understanding of what follows. Without some background knowledge of the workings of a Russian spy organisation and the cardinal principles involved, many of my actions and the precautions that we took would appear meaningless and stupid. Anyone who has read so far will now appreciate the essential and elementary security precautions that were taken and the way that our sources were contacted. Later on it will be seen how criminal disregard for these "simple little rules and few" led the organisation into disaster.
The period of my career as an active spy when I was in direct wireless communication with the Centre in Moscow falls quite naturally into two parts. The first comprises the first few months of the spring of 1941, between the time that I at last established communication with Moscow on March 12 and the invasion of Russia by Germany on June 22. The second period is from the entry of Russia into the war until my arrest on November 20, 1943. The first period was really a continuation of the halcyon days of peace, after the outbreak of war in September 1939 when Philips, Sonia, and I had little to do and did it on the whole very well. The flurry caused by the fall of France had subsided, and Rado's communications were secure, thanks to the activities of Sonia and myself. He had one set working in Geneva operated by the Hamels and I was also in touch with the Centre from Lausanne. Life was pleasant and easy in Switzerland that spring, and I enjoyed it and the leisure to the full- it was the last leisure I was to have for some time.
In those easy, carefree days I had contact with Moscow twice a week only. Twice a week at one o'clock in the morning I would settle down at my transmitter and send off what little I had and receive Moscow's replies. I was not at that time asked to do any espionage work myself nor to go out and attempt to recruit sources. I was the substitute resident director and as such had to remain in the background; the Centre was perfectly content to know that I was there; that communications were secured and that if anything happened they could call upon me if necessary.
On instructions from the Centre I concentrated upon establishing myself so firmly in Lausanne that there would be no possible danger of my presence arousing suspicion. This was not easy, for in the middle of the war there were not a great number of British subjects of military age resident in neutral Switzerland. In normal times the Centre will often put a resident director into his country for two years before they ask him to take over any work: he spends the entire two years in building himself an impressive cover. I had to do this as quickly as possible, and in time of war. My fellow Englishmen varied from retired army officers and civil servants, who had settled down in Switzerland on their pensions and been caught by the war, to the riffraff of the Riviera, who had been swept out of France by the German invasion and had taken refuge in Switzerland where they lived precariously on their wits, the black market, and such remittances as they could get from home. The latter were not an attractive crowd but they turned out in the end to be useful to me- though quite unconscious that they were indirectly assisting the Red Army. I understand that I ended up with the reputation of being a mildly eccentric English millionaire who had managed to salt away a portion of his fortune abroad and who on the whole shunned the company of his fellow men. The reputation of wealth was essential as otherwise I might have had awkward questions from the Swiss police as to the source of my funds; indeed at times my finances were precarious, while at others I had tens of thousands of Swiss francs concealed in my flat. My reputation as a recluse was not ill deserved. If anyone has ever tried to encipher messages for half the night and transmit them for the other half he will understand the reason why for the rest of the day I was inclined to keep to my flat - and my bed.
At this time Rado's transmitter was capable of taking all the traffic that had to be sent, so I was not used as an overflow channel. Indeed, the only espionage assignment that the Centre gave me that spring was the task of preparing an economic report on Switzerland. This I agreed to do, but in fact did nothing about it as I had no qualifications nor indeed any sources at that time to produce such a thing. Moscow used occasionally to enquire solicitously as to its progress and I used to reply equally encouragingly but did nothing but look round in a vague sort of way for someone suitable to "ghost" such a report for me. Luckily, before Moscow became too querulous the German invasion took place and such academic matters were shelved.
Sonia had left, and Bill Philips, too, had left the net, so at that time my only espionage contact was Rado himself. Having finished training Hamel, I avoided him scrupulously to prevent compromise, though later Maude, his wife, was used as a contact in times of emergency or stress.
The main preoccupation of the network at that time was finance. An espionage organisation without finance is almost as useless as one without communications. The fall of France had cut Rado's purse strings and since that time he had been living on such monies as he could obtain from the Swiss Communist Party - who were now pressing for payment. The majority of my communications with Moscow at this time were over this financial question, and in the end it turned out that I had to do all the organisation for the financing of the network. Moscow were prepared to assist, but were quite unwilling or unable to suggest anything themselves save for one foolish suggestion and one abortive attempt.
Soon after establishing contact in March, after a long discussion with Rado I put the whole financial position to Moscow and asked for help and advice. The Centre replied by suggesting, helpfully, that I go to Vichy and collect money from the courier at a prearranged rendezvous; they added that if this was not possible I could no doubt arrange for a trusted go-between to go there in my place. I replied somewhat acidly that as things were in Europe at that time it was a little difficult for a British subject to go into Vichy France from Switzerland and in any case this would hardly be advisable as it would probably "blow" me completely or at least expose me and the network to a grave risk of compromise. As regarded Ending a reliable homme de confiance I had, as the Centre knew, no sources of my own at that time, having been told not to cultivate any, and by the time I had found someone reliable and had had him vetted by the Centre in all likelihood the whole network would, at best, be in the Swiss equivalent of Carey Street and, at the worst, in jail. The Centre tactfully dropped this suggestion and I heard no more about it; but in April or May they produced a further scheme.
I was informed that a courier was coming from Belgium and that he would meet Rado at a rendezvous in Switzerland and would hand over Rado's allocation of cash and also my own. The courier duly arrived- but empty-handed. He told the infuriated Rado that this was merely a trial trip to see what the frontier controls were like between Germany and Switzerland, and, having passed through them, he, the courier, was certain that this route was not practicable as the search was too stringent. To add insult to injury he attempted to borrow money from the almost penniless Rado in order to finance his return trip. After our experience of these two bright financial ideas by the Centre, it was obvious to Rado and me that unless we ourselves could think up some scheme for getting money and put it in words of one syllable to Moscow the whole organisation would crumble quietly into ruins.
I first of all suggested to the Centre that they should pay money into an account in my name in a foreign bank and that this sum could then be transferred in a normal way to me in Switzerland. This was at once turned down as it would be necessary for the courier who paid the money to know my name, and this was strictly against the rules. They did state, however, that they could make cash payments into banks in Great Britain, the United States, China, and Sweden on receipt of instructions from me. They added, however, that on no account was the person receiving the money to know my name and the courier paying the money in would in turn give a false name. On those conditions and those conditions only could they help financially.
On the face of it, this did not look too promising. On the other hand the war had been going on some time and the various black bourses were in full blast. I made some discreet enquiries among my more monied Swiss friends and the shadier of my English acquaintances, and soon evolved a scheme which I thought would work. Through the agency of a Swiss friend I was able to get in touch with some firms which in the course of their normal business remitted money between Switzerland and the U.S.A. The usual procedure for such transactions was for the whole affair to be handled by the National Bank, which would change Swiss francs into dollars and vice versa at the rate of four francs thirty centimes per U.S. dollar. I proposed that, instead of doing their transactions through the normal and indeed only legal way, namely a Swiss bank, they should allow me to do them- at a cheaper rate.
The scheme was put up to Moscow and they agreed and played their part. The procedure was quite simple and almost foolproof. Moscow would pay into a bank in New York a sum of money in dollars for the credit of the Geneva account of an American firm. The firm's branch in Switzerland would be notified by telegram that this sum had been credited to their account and they would at once pay me the agreed rate in Swiss francs - at the black market rate.
This may sound complicated but in fact it was quite simple- and indeed profitable to all concerned. For ease and simplicity let it be assumed that the official rate for Swiss francs to dollars was four to the dollar and that the black market rate was two to the dollar (the real rates were 4.30 and at lowest 2.75 respectively) and that the sum in question was one hundred U.S. dollars. The Centre, through their courier, would pay into the firm's account at the New York bank the sum of one hundred dollars. The New York office of the firm would notify their Geneva branch that this sum had been credited to them in New York and that as a result they had a credit of four hundred Swiss francs or its equivalent available to them. The Geneva representative of the firm paid out to me two hundred francs (the equivalent of one hundred dollars at the black market rate). At the official rate of exchange, four Swiss francs to the dollar, he had thus paid out only fifty dollars and as a result he or his firm had fifty dollars' clear profit on the deal. The only loser was of course the Centre, which had to buy francs at a bad rate of exchange; but it enabled them (and it was the only way) to pay their network in Switzerland- and I suspect that the same system worked elsewhere. Thus everyone was happy. The firm in New York could not care less; their manager in Switzerland was making a handsome profit (the figures given above are of course arbitrary and put in for the sake of simplicity, but the mathematically inclined can work out the percentage of profit between rates of 4.30 and 2.75) and the Centre was able to finance its sorely embarrassed Swiss network.
This system was one which I worked satisfactorily all the time I was with the network, and as a result some hundreds of thousands of dollars were transferred to our use through the intermediary of innocent firms. The only limitation on the sums involved was laid down by Moscow. They stated that they were not prepared to do deals of more than ten thousand dollars at a time. Their reason for this was simple and practical. Any such transaction meant that a courier had to be given the money in question in cash to take to the bank and deposit. The Centre was not prepared to trust couriers with more than ten thousand dollars, as the temptation might prove too great and they might "go private" and settle down at large and at ease in a foreign democracy. Indeed one such case occurred and caused me considerable embarrassment.
My Swiss friend managed to get in touch with an American firm which was prepared to do business on these terms and he negotiated the first deal. The firm in question was an American one which had a flourishing business in Switzerland. I arranged over my transmitter that the Centre should send a courier from time to time to the bank in New York and pay ten thousand dollars into the firm's account for the credit of their Geneva branch. In due course Moscow informed me that the transfer had taken place, and also of course the firm's representative in Geneva was equally informed that this transfer to the credit of his account had taken place. When both sides were satisfied that the money was there, then my Swiss friend received the money in Swiss francs and handed it over to me. I need hardly emphasise that neither the Swiss friend nor the American firm knew that these transactions were being undertaken on behalf of the Red Army Intelligence, and I have no doubt that they would have been horrified if they had known that the Centre was in fact behind these transactions. The whole thing was regarded by these innocent intermediaries as part and parcel of the usual black bourse activities which flourished all over Europe and with a particularly virile luxuriance in Switzerland.
If I may jump ahead of my narrative a trifle and continue with financial matters, this system suited us admirably for a year or so, and a number of innocent American firms were unwitting paymasters for the network. In 1942, however, things became a trifle more difficult. By this time we had been told by the Centre that America was the only place through which we could be financed and that it was not the slightest good thinking in terms of Great Britain, Sweden, or China. (I had never seriously contemplated the proposal to use the last country. It was complicated enough trying to deal with America- the imagination boggles at the proposition of trying from Switzerland to cope adequately with the black market in Chungking.)
In 1942 the American security authorities decided that the financial arrangements for the transfer of currency abroad must be tightened up, as at that time they gave admirable loopholes through which it would be possible to finance an enemy espionage network in the United States. As a result, as a first and simple measure, it was enacted that in future banks were to inform the United States Treasury of all details regarding large cash deposits. This, not unnaturally, rather disrupted our system of financing the network as it prevented the current procedure. The Centre informed me of the new regulations and asked me to devise a new scheme. As usual they were singularly uninspired. I then delved into the dim twilight world of the local black bourse and discovered that there were a large number of individuals who had friends in America who were prepared to take the place of my well-established firms and quite certain that their relatives would not question a sudden windfall of a few thousand dollars to the credit of their relative in Switzerland. As a result I substituted individuals for firms and the whole procedure went on as merrily as before; the only difference being that instead of benefiting firms of repute, the profits of these transactions went into the pockets of the shadier members of the black-currency underworld.
The whole procedure, though simple in essence, was made immensely more complicated as I had to provide explanations to all and sundry for my desire to transfer these large sums and also the reason why I had them. It would be as tedious as it would be difficult for me to remember the variety of lies that I told to cover up these deals. I think that, on the whole, they did good, for they enhanced my reputation as an eccentric millionaire- as only a millionaire would do deals at such a ruinous rate of exchange. The rate I got was based not on the rate for a check on New York but on the rate of a dollar bill- and as any traveller abroad knows who goes to a "free market," there is the world of difference between the two. A short and cursory study today of the exchange boards of the money-changers in, for example, Tangier will show the difference.
I also had to explain how I knew that the transaction had gone through. In fact, I was of course always told by the Centre that they had paid the money into the bank in New York and I could, and did, then so inform the company or individual concerned through my Swiss friend. I naturally could not tell them I had heard over my secret transmitter that the deal was completed. As a result I used to inform them that, before the war broke out, I had envisaged such a possibility and had arranged a plain language code with my agents by whom they would inform me when a deal was through. All cables were scrutinised by the Swiss and British censorships, and after Pearl Harbour by the Americans as well, so that it was out of the question to say that I had heard through normal channels. Quite often I heard from Moscow before the intermediary in Switzerland had been informed. This did not matter usually; I could laugh it off on the cover story of my plain language code. On several occasions, however, Moscow told me that the money had been paid and it proved that this statement was merely a pious hope. The Centre had told their resident director in America to do the necessary but it had not been done. In most cases this was due to pressure of work at the American end intermingled with sheer incompetence. On at least one occasion- as I learnt when I was in Moscow- the money had been embezzled by the courier, who had "gone private" with the ten thousand dollars; to my intense embarrassment as I had assured my Swiss contact - as the Centre had assured me- that the money had been paid over.
The speed of the transactions varied. Moscow told me that they could guarantee to do the whole thing from start to finish in ten days- given the requisite names. Sometimes it took a great deal less, often a great deal longer, and the longer it took the more my grey hairs grew. The financing of a Russian espionage network in wartime in the face of currency and exchange regulations was no joke, and I take a great deal of credit to myself that despite my original, pardonable ignorance of international finance and the black bourse and the lack of ideas from Moscow, I was able to keep the whole organisation solvent until my arrest.
As I have said, at this time I was seeing Rado only about twice a month in the normal course of events. It had been the original intention of the Centre to keep Rado's and my networks entirely separate once his communications were established. The idea had been that we should gradually draw apart during those spring months of 1941 and become two entirely independent organisations, as had been the position with his and Sonia's networks before the fall of France. Despite this desire on the part of the Centre to keep us apart, they had instructed Rado to arrange a place of conspiracy for me and for his principal cut-outs so that if ever anything happened to him I could step into his shoes. In point of fact the invasion of Russia put an end once and for all to any idea of separating our two organisations. The volume of traffic and the complexity of the work made it more and more imperative that we work closely in contact- and we continued to do so until the end.
In the early part of June 1942 I received instructions from the Centre to meet Rado at least twice a week and take the burden of some of the transmission work of his organisation. Rado was not a trained operator and even if he had been he had not a transmitter under his hand. From the time of receipt of information by him to its despatch over the air some twenty-four hours was liable to elapse. I, on the other hand, could encipher and send off my information in the course of one evening, as I had the set on the premises. As a result, for urgent information the Centre began to rely on me as the vehicle- though of course Rado still was the focal point for its collection.
The messages I sent to Moscow early in June had an ominous sound, and it appeared to me that if they were true the era of perpetual peace between Russia and Germany, which had been so loudly announced by Ribbentrop and Molotov less than two years ago, was rapidly coming to an end. Most of the information on this subject came from Lucy and from his source Werther in the German high command. Werther reported wholesale troop movements to the East, and unless the whole thing was an elaborate strategic bluff the information could mean only one thing- that Germany was about to unleash an attack in the East - if the information was true. At that time the Centre was deeply suspicious of Lucy. His information was regarded as too factual and too exact and Moscow suspected that the original source of it was the Abwehr, who were building up a source for use for deception purposes later. The Centre could not understand why the cut-out Taylor could not reveal the identity of his source and were constantly telling Rado to warn Taylor that the source was tainted.
Despite the Werther information and other news coming in from other sources on German troop movements, Rado himself remained firmly optimistic and refused to believe that Germany had any intention of invading Russia. He thought the whole thing was part of the German "war of nerves" to obtain further political and economic advantages from the Soviet Union, and once these were obtained the whole scare would die down.
One morning toward the middle of June my telephone rang and a voice which I recognised as Rado's bade me, in the usual veiled phraseology, come to a rendezvous. When I saw Rado he was obviously worried and upset. He handed me a message which he had received from Taylor through Cissie that morning. It was from Lucy and from his source Werther. Curtly and baldly it stated that a general German attack on Russia would take place at dawn on June 22 and it gave details of the army groupings and the primary objectives. Rado could not make up his mind what to do. If the information was correct it was obviously of paramount importance that it be got off as quickly as possible. He himself inclined to the Centre's belief and thought that the whole thing was an Abwehr plant. I remember that he argued that we had not only sent the Centre intelligence of German troop movements but that Lucy had also reported what the Germans believed were Russian countermoves. These the Centre must have been in a position to evaluate and appreciate and if after so doing they continued to warn us against Lucy, then Moscow must have had cogent reasons for thinking that it was a German double-cross. I argued that it was not for us to speculate on the workings of the Centre's mind. If the information was false and we sent it, it could not do much harm- if Moscow knew it was false they would throw it into the wastepaper basket. If on the other hand it was true, it was obviously vital that the Centre should have it as soon as possible and it would be criminal for us to suppress it; far the best thing was to send it off and let the Centre do the worrying. In the end Rado agreed and handed me the message and I sent it off that night.
I learnt afterwards in Moscow that this was the first piece of Lucy's information that they did take seriously. It fitted in with information that the Russians had got from other sources and they took it into account in making their troop dispositions. For the first but not the last time Lucy had proved his worth.
The information I was sending grew increasingly ominous over the next few days, and I myself became more and more convinced that it was wishful thinking to imagine that the Germans could have put all that machinery in motion merely to frighten. I did not sleep well that Saturday night and on the Sunday morning turned my radio on early. I shall never forget hearing the hoarse voice of the Fuehrer announce the invasion of Russia. "Operation Barbarossa" was on and our real work about to start.