184. The Secret Spy Network: Kim Philby Threatens the Alliance (Ep 2)

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0:24An intelligence alliance established to spy on the Soviets during the Cold War. But will it be able to hold up under crisis? Well, welcome to The Rest is Classified. I'm David McCloskey. And I'm Gordon Carrera. This is our second episode looking at the Five Eyes intelligence relationship. Last time, we looked at how US-UK intelligence cooperation during World War II, really predating World War II, sort of you get the little embryonic starts of cooperation between the two countries, how it solidifies or begins to solidify and really spreads to Canada, New Zealand, and Australia during and after the Second World War.

1:06We ended with really the beginning, the first kind of decade of the Cold War. And we are now going to pick up the story of this Five Eyes intelligence relationship as the Cold War gets going. We are once again very lucky to be joined by Richard Kerbaj, who's the author of The Secret History of the Five Eyes, a wonderful book about this relationship, most recently The Defector, and who is also, maybe most importantly, in Australia. Welcome back.

1:33David:It's great to be back. Thanks for having me back. So we started last time, Richard, explaining a little bit about what it is and what it isn't. It's not an organization, The Five Eyes. It is still mainly a signals intelligence alliance, isn't it? We should explain what signals intelligence are. That's the heart of it, isn't it? Which is collecting signals, in this case communications, intercepting traffic and communications in order to be able to decode it. That's what it grew out from, the Bletchley Park story, but also what it is at this point.

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4:59Before treatment, get checked for infections and tuberculosis. Tell your doctor if you have an infection, flu-like symptoms, or need a vaccine. Explore what's possible. Ask your doctor about Tremphia today. Call 1-800-526-7736 to learn more or visit TremphiaRadio.com. I think it is worth setting up because we talk a lot about SIGINT, signals intelligence on this program. But it's maybe worth setting up and kind of, Richard, in the early days of the Cold War, what are we talking about when we say signals intelligence? At this point in 1956, this again predates some of the developments, big developments that we'll hear about soon, for instance, Pine Gap in Australia, which we'll get to.

5:45But identifying Soviet missile launches, identifying Soviet comms, identifying developments in nuclear capabilities, identifying radar capabilities, all of that sort of works within the SIGINT. Yeah, it's more than just communications. It's more than that. Satellites. Of course, satellites in 1956 hadn't really become a big thing yet. That's the next decade. but all of that will come under SIGINT collection.

6:16David:So it's more the technical end of intelligence. Completely technical. It's the technical end of intelligence which is being shared which I guess is also very expensive as well which is where there's some benefit having geography and having the cost shared. But we left the story in 1956 as the alliance is kind of formed but at that point there is a crisis, isn't there? Which almost breaks it apart or risks breaking it apart And that's the Suez crisis. I mean, we should explain. I describe it as an alliance almost breaking up during the honeymoon period. It's a bit like Madonna and some other rock star getting married and sort of going to Vegas and falling apart.

6:52That's essentially what happened to the Five Eyes, right? So within a few days, almost two weeks of it coming together in October 1956 and officially being signed off, there are multiple things happening concurrently. currently. You've got the Hungarian Revolution, which the Americans were concerned about, so were the Brits. And you've got the crisis in the Middle East that was now emerging. This is a crisis in that they were essentially fighting over a narrow strip of water that was crucial for - The Suez Canal, yeah. That's the Suez Canal, right? And so you've got the British, the French, and the Israelis plotted to invade Egypt.

7:36David:Because NASA in Egypt has nationalized the Suez Canal. And they're unhappy with that. And I guess the crucial point is that the Brits are doing it without the Americans. Exactly. And they didn't inform the Americans. Americans weren't happy about this. The Americans are always happy to lock the Brits out. But when it's the other way around, David, just so we can say, mate, it's not cool, right? It's like, I want to lock your secrets. So they've locked out the Americans. But the Americans discover this and they're not very happy. So Eisenhower at the time, he's particularly unhappy because he's got a second term that he's trying to secure.

8:08This is 1956. He's got the election campaign. The election campaign he's got to worry about. He's got to worry about the Hungarian revolution. The issue with the Hungarian revolution is that the CIA had very little coverage there because it only had one officer on the ground who was stationed at the embassy there. And I go into that in the book. But more importantly, Eisenhower is trying to figure out, well, now the Soviet Union's been quite threatening towards Britain. He didn't like that either. So he wanted to get some sense of how much of that was genuine or how much of that was sort of just bluster and talk.

8:46And so he tasks the CIA to figure out what the situation is with the Soviet Union and whether or not Moscow is likely to conduct a military attack against Britain. Meanwhile, the UK is collecting intelligence on diplomatic and military communications from the Soviet Union, so they feel that they've got some sense of coverage of what Moscow's thinking at that point. In addition to all of that, GCHQ and MI5 had created this operation in London where they bugged the Egyptian embassy in London. So they were listening to communications there. And this is a crucial thing because in early November 1956, the British managed to intercept communications between the Egyptian ambassador in the UK and the Egyptian ambassador in Moscow.

9:44and the ambassador in Moscow told his counterpart in the UK that the Soviets were really considering military action. Now, we will never know to what extent that helped shape Britain's decision to walk away because there were a number of reasons why that ceasefire was then put in place. But what we do know is that that played a fairly crucial role in getting a sense of what the Soviets were thinking. But what the Brits didn't know at the time is that the Russians knew that the place was bugged as they were feeding misinformation through there, giving the whole kind of indication, especially through the Cold War, that the Russians kind of seemed to be several steps ahead when it came to espionage.

10:29David:How big were the tensions, though, between the US and the UK over Suis when it comes to the intelligence relationship? I mean, was it at risk of breaking down? I think declassified material that we've seen later suggested that it got close to, but I don't think it was ever going to break down. I think it was more of a political issue. And so Eden, Anthony Eden, the prime minister of the UK, couldn't get the military backing from Eisenhower. And I think that diminished him on the global stage. So there's one argument that this is the beginning of the collapse of the empire. I don't think that was the moment.

11:08I think what it did is it really diminished the empire's strength and projection on the world stage. So it's more about the kind of relative power becoming clearer between the US and UK. Well, the US became the donor. At that point, the US is like, you do what we say, essentially. And that will become a common theme, a pattern, because the US is very much the lead singer and everyone else is a vocalist, a backup vocalist. And a lot of people didn't like that when I described it that way, particularly the Aussies. They were like, why are we saying this? But it's true because it becomes the dominant force in resources, in capabilities, and just its ability to reach.

11:44It is worth saying, I think, that the hard logic of the relationship, which I think is one of the, I mean, it's a theme, and it's something we'll continue to talk about throughout the series, is that when you talk about signals intelligence in particular, it's really, really expensive in this era. It's very capital intensive. And geography matters. It still matters today. But back then, it really mattered. Because if you're trying to intercept satellite downlinks, or you're trying to intercept even kind of regional or local communications, the way it's done with, you know, microwaves or high frequency radar, whatever it might be, being closer is a huge advantage, right?

12:34And so even if you have a political dispute with another member of the Five Eyes, the underlying business logic of sharing, of pooling resources, and of having access to bases in Wellington or in Cyprus or in Oman, that really matters. That's what it's about. That's what it's about. And also, it's a burden sharing thing. So they essentially split the world into five pieces. there was some overlap. So with the UK in 1956, the UK's responsibilities were east of the Ural Mountains. So, you know, cutting through Russia to Kazakhstan, east of, so anything that's, you know, Poland, Ukraine, Germany, that was kind of the UK's responsibility, but they also had parts of Africa as well to monitor.

13:23Then the US had Russia, China, Middle East, also bits of Latin America. The Canadians looked at Eastern Russia as opposed to West that the UK was looking at, and also did some of Latin America. And then when the Aussies joined and the New Zealanders, they looked at sort of East Asia, Southeast Asia. And that's where China becomes a very important factor here in the 1950s, because, of course, China becomes the PRC, People's Republic of China in 1949, and very quickly begins developing capabilities that are quite worrying to the Five Eyes, from the nuclear developments to the eventual Sino-Soviet split.

14:07And so from a collection perspective, the Americans then set up a base in Australia in the 1960s called Pine Gap. Pine Gap is quite crucial at this stage. It's crucial for a number of reasons. One is Pine Gap was set up under the auspices of being a military base rather than an intelligence base. The chief of Pine Gap was supposed to be a military officer rather than a CIA officer. But, of course, it was a CIA officer. His name is Richard Stoling. And it's a U.S. base in Australia. Very much. Well, it's U.S. run. It's called a – it's a cooperation. But come on. It's – yeah, the Americans are very much –

14:48David:Well, we have the same thing in the U.K. You have Menwith Hill and Finingdale. You have these Americans just trying to take over everything. Let's just face it. And they're loosely RAF faces, but staffed by Americans. It's joint, but yeah, it's US. And that becomes a point of contention for a number of reasons. Before I move on to them, I'd just like to set up a picture of who this guy is, Richard Stallings from the CIA. He was a SIGINT specialist who had been based in Germany. He joined the Navy during wartime, developed a set of skills, obviously went through the ranks and got promoted and was sent to Australia.

15:29And so in the late 1960s, when Pine Gap was created, he was overseeing it. And he will become a quite controversial figure in the early 1970s when Gough Whitlam comes into power, Gough Whitlam being the Labour Australian Prime Minister, he comes into power. And this is after more than 20 years of Labour being out of power as a result of the Petrov stuff, to a great degree, that we've spoken about earlier. Of course, there are other reasons that Labour stayed out of power, but this is one of the key things. And so when Whitlam comes in, eventually he wants to distance Australia from the US. He thinks we're too reliant on the Americans.

16:11He feels that ASIO, so the Australian Security Intelligence Organization, that is the domestic intelligence agency, is slightly captured by the US and too reliant on the US. And he wants to create some separation. Of course, ASIO is starting to feel separation anxiety here ahead of time. So they don't like this. The Americans don't like this. And eventually his government authorizes a raid of the ASIO headquarters. Imagine that. A raid of their own intelligence headquarters. Imagine someone organizing a raid. The Prime Minister raiding MI5. MI5 or the CIA or the FBI. So they raid. I can actually imagine it these days in America.

16:48That's another story. That's to come. So they raid the place for a number of reasons. The reasons they were given at the time, beyond their closeness to the US, is that they felt that ASIO was too focused on communists and not enough focus was given to nationalists, terrorists, etc. That was the reasoning. And then there's a counter-explanation that he had it with ASIO and so as a result the Whitlam government raided them. That caused a huge problem for anyone sharing with ASIO, particularly the Canadians and the US. They were getting in touch. We know this now through declassified material. that they were trying to get some assurances that how is this going to impact our intelligence?

17:35This is our product that we've shared. Are you going to share it on? Eventually, that slightly settled down, but Gough Whitlam couldn't get it out of his head that those Americans are up to something. And then he discovers that at Pine Gap, there was this guy, Richard Stallings, who had been running Pine Gap, and he discovers that this guy may have been a CIA officer. He wasn't really a military officer. So he gets his people to look into that, and they discover that his name was never shared as part of the CIA list because there is this agreement, you know, spy on each other, but also identify each other's officers.

18:13There was this agreement that we will give you all the information about our declared officers and vice versa. Well, he wasn't declared, and that really infuriated Gough Whitlam. There were a number of issues that led up to his departure, eventual departure, but that was among them. There continues to be a debate about the extent to which the CIA and U.S. played a role in his ousting. Because on the day that he was ousted by the Governor General, he was essentially sacked. Imagine being fired. Imagine the Prime Minister here being fired. Not just being fired, but he was fired. And the opposition leader was appointed as caretaker prime minister.

18:56I mean, it's unprecedented and it's never going to happen again, maybe. I don't know. But it was just so shocking. And I go into that in great detail in the book. So the suggestion is that actually the... He was going to reveal details about Pine Gap and he was going to reveal details about the Pine Gap chief, former chief. And that may be why he's made a theory. Well, it's a very strong theory. And also there was just a fear within the CIA and US intelligence that by coming out to discuss all of these, this could compromise intelligence. So it was a buildup to that. What does, in this period of the Cold War, what value is Pine Gap providing to the signals intelligence agencies inside the five-bys?

19:41A huge value, because this is the 1960s, sort of the satellites era. So it's communicating with US satellites to intercept communications, say, from Russia and China, as I said. So China at this point has now developed a nuclear weapon. So they're able to track radar communications. They're able to track missile tests. They're, you know, from re-entry of high ballistic missiles to ballistic missiles being launched. They're trying to identify, in some cases, troop movements, thinking, you know, trying to get ahead of time.

20:13David:That's essentially what it is doing. So there with a sense of maybe some of the tensions between the US and Australia. Let's take a break. And afterwards, we'll look at some of the tensions between the UK and the US and also how the New Zealanders get into all kinds of trouble. See you after the break.

20:33David:Hello, it's Gordon here. And I'm with Tabby from Goldhanger's new show, The Book Club. We're not here, are we, Tabby, to announce the new James Bond. But we are here to discuss a book that you've just covered, which may have inspired the character. That is correct, Gordon. So this week, Dominic Sandbrook and I have been discussing John Bucken's The 39 Steps. And now this is undoubtedly one of the greatest British spy thrillers of the 20th century. And it's a real trailblazer for that genre. So the birth of Bond. Absolutely. Secret squirrels will know that here on Classified, we're a big fan of historical intrigue.

21:09David:And in the 39 Steps, we meet the dashing Richard Hannay, based on David McCloskey, as he races to prove his innocence whilst inadvertently foiling a German plot to spark the First World War. Yeah, and it's a plot that bears an uncanny resemblance to the assassination of the figure that sparked the First World War in real life. So that's intriguing. And Hane's journey takes us from the hustle and bustle of London to the Scottish Highlands in this game of cat and mouse and espionage that starts to unfold around our main character. So to listen to the 39 Steps, search for The Book Club wherever you get your podcasts and follow along so you don't miss out on more of their upcoming thrillers.

21:53Yeah, including Goldfinger and Tinker Tailor Soldier Spy. So lots to look forward to. Thank you so much for listening. Thank you for having me, Gordon. Goodbye.

22:01David:No problem, Dabby. Bye.

22:11David:Welcome back. So we talked a bit about Australia there, but actually there's going to be some tension between the two, I guess, core partners, the US and the UK. The special relationship. The special relationship is going to come under some strains in the 60s and 70s. And it's particularly thanks to our dear friend Kim Philby, isn't it? And that issue of whether the Brits can be trusted. And we've done some of our series on Philby, the early Philby, but we're going to come to the later Philby towards the end of this year. But it does play a big role, doesn't it, in creating suspicion within the five eyes and between the US and UK.

22:44Not just creating suspicion, but also I think it impacts Britain's confidence, self-confidence, because in the late 1951, you had Burgess and McLean defect. and then you had Blake defect in early 1960s and then you had Philby defect I think in 63, 64. So there have been these defections to the other side of the Iron Curtain. It's not looking good for MI5 as a domestic agency and so it's becoming increasingly deferential to the CIA. At the CIA you've got this very strong character, strong-willed character who suffers from a great deal of paranoia as well, a man called James Jesus Angleton, who was the head of counterintelligence at the CIA, so essentially the chief mole hunter.

23:29And he is convinced that the CIA has got moles and the KGB has penetrated the CIA, but also convinced that they've penetrated MI5 and potentially MI6. And the reason he's convinced is twofold. One, he was really broken by Philby's defection because Philby was one of his mentors in the lead-up to the defection. And two, is because a man who defected to the West in 1961, Anatoly Galitsyn, can reinforce that belief that the KGB had penetrated the CIA. And he said to him, you've got spies all over. So they ran more hunts within the CIA. And even the British Prime Minister,