General Articles

Boom in Spying

The cold war has loosed new legions of spies over the face of Europe. There’s big money in it — and sudden death

L S. B. SHAPIRO September 1 1948
General Articles

Boom in Spying

The cold war has loosed new legions of spies over the face of Europe. There’s big money in it — and sudden death

L S. B. SHAPIRO September 1 1948

Boom in Spying

The cold war has loosed new legions of spies over the face of Europe. There’s big money in it — and sudden death


Maclean s European Correspondent

GENEVA—Early in 1946 an English-speaking foreigner, a doctor, visited Prague where he had done postgraduate work between the wars. He found himself welcomed by his old colleagues and he seemed to like the city so much that he sent for his wife and settled down to practice his profession among the Czechs. Being an extremely personable fellow, and possessing a charming wife, he soon built up a fashionable clientele among prominent businessmen and high government officials. Within a few months he became a well-known and popular person in the community.

One day, late in May of this year, he went out in his car on a routine call—and never returned. His friends were mystified. His wife, although distracted, was curiously uncomplaining. There was no police enquiry, no representations by the embassy of the doctor’s native country. The man had disappeared, quietly, completely. His wife, who returned home, began to receive a pension from her government.

The doctor, of course, was a secret agent who had been caught and liquidated.

This sort of incident is not uncommon in today’s Europe, although it rarely reaches the newspapers. Not long ago the body of a middle-aged man was washed against the docks of Messina, at the tip of Sicily. There being evidence of foul play, an appropriate item appeared in the local papers. But nothing else happened. Enquiry revealed that the man was a refugee national of a south European country, who had last been seen trying to peddle some of his country’s military secrets to foreign embassies. This ended the enquiry. Police in Europe know better than to delve too deeply into such matters.

An Uncounted Army

TO INSIDERS, the most ominous development of the last six months has been the fabulous increase in espionage activity on both sides of the Iron Curtain. While the world glues its eyes on such incidents as the bloodless conquest of Czechoslovakia and the bare test of nerves in Berlin, other ominous evidence of the tension between recent allies lies in the quiet, unobtrusive but earnest efforts of a legion of spies suddenly let loose over the face of Europe. No man knows— or ever will—how many spies are operating between the Volga and the Irish Sea. The only estimate I have been able to get comes from an adroitly placed intelligence officer who numbers Russian and satellite spies in Western Europe in the thousands and those of other countries operating east of the Curtain in the hundreds. Their numbers, he believes, have multiplied tenfold since the turn of the year.

Espionage is the only branch of warfare that has largely defied modernization. Only in the field of communication has there been a change; radio transmission has speeded and simplified the delivery of information. But the methods of ferreting out information remain generally unchanged since before the first World War. Spies still pose as workers or students dr shopkeepers or manufacturers’ agents. The orfice of a manufacturers’ agent is still the favorite and most effective façade for a spy organization.

In the last war RAF Bomber Command learned from British Intelligence the exact locations of German war factories which had been moved for security purposes. This information reached London within a few days of the actual removal —through one of those freaks of carelessness which

so often beset the methodical German mind. It happened this way: In the late 30’s a British secret-service team ojjened a manufacturers’ agency in Geneva behind the façade of a Swiss firm. It subscribed to a Berlin commercial news service which published a catalogue of German factories, their products and locations. Each month the service sent to its subscribers loose-leaf additions to its catalogue showing the most recent additions and changes in the German manufacturing field. After the outbreak of war, German factories dispersed for safety. Yet, through an extraordinary oversight which at first mystified and then delighted British Intelligence, the Berlin service continued to send to its Swiss subscribers the exact changes and locations of all German factories on its list. With typical German thoroughness this service continued until the end of the war—while Reich air-defense officials were beside themselves wondering how the RAF learned the details of their factory dispersal.

If the method of the spy hasn’t changed in 50 years, neither has his status. If he is caught, he dies. The government which employs him disowns

him the moment anything goes wrong. The only help he can count on in times of difficulty is his luck and his quick-wittedness. But the spy’s chances of survival and retirement are on the whole quite good. In times of peace, spies caught and liquidated number less than two per cent of t he total operating. During war the game is more dangerous. I have heard a good authority estimate that less than 20% of German spies o|>erating in Britain and the United States during the last war were apprehended. The Anglo-American record in Germany is even better.

In order to understand (he meaning of espionage in the great confusion that is today’s Europe, it is necessary to clarify the different kinds of secretintelligence activity. They are three in number.

The first category embraces the unromantic gent who is nobody’s enemy and everybody’s friend — the intelligence broker. This man has no loyalties, works for no government, is in the business strictly for the money he can make out of it. There is usually one of his kind living sumptuously in the Grand Hotel of every capital city in Europe except Russia. In Geneva,

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Boom in Spying

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which is not a capital city but is nevertheless Europe’s primary centre for espionage activity of every variety, there are several of such intelligence brokers.

A composite picture of him would be that of an elderly, stoutish man, exceedingly well-dressed, a gourmet, addicted to gambling in the nearest casino, hearty, popular and making no particular secret of his mode of livelihood. He does no espionage work himself. He buys and sells from and to everybody who wants to do business. He is well-known to the military attachés of the embassies in the country in which he operates. The local police have a pretty good idea of what he does, but they can’t put a finger on him and, truth to tell, they don’t try very hard.

His field of brokerage is very wide, including industrial as well as military intelligence and a sideline of blackmarket arms. This is how he operates:

A chemist, let us say, working on a research project for a European government, finds himself in financial difficulties and decides to sell the information at his disposal. He contacts the broker. The latter evaluates the information, then decides which government would be most interested in buying it. He approaches the military attaché of this government (whom he has made it his business to know very well) and concludes the deal, thereby making for himself a very substantial brokerage fee. Sometimes a government will contact him with a request that he try to obtain certain information. He will then get in touch with another broker in the capital concerned and, if the deal goes through, he earns himself a middleman’s profit. He runs no risks, usually lives to a ripe old age and dies of natural causes arising out of lavish living.

It works the same way in the industrial field. A Romanian oil firm, for instance, may want to know the details of a refining process developed by an American oil firm. The intelligence broker is in a position to undertake such a commission.

Brokers and Spies

A specialty of this kind of broker, particularly since the war, has been black marketing in arms. With revolutions brewing in South America, the Middle and Far East, the business of armament has been a big one. How does the Israeli army manage to possess heavy tanks? I don’t know the specific answer, but I do know how such tanks might have been obtained. A year ago in Milan I met an intelligence broker who, among other things, happened to mention that he had three brand-new Sherman tanks on his hands and would like to get rid of them at a good price. They were apparently cumbersome pieces of merchandise to conceal.

This type of broker flourishes in peacetime, at least in the period we foolishly call peacetime. During war the broker vanishes from belligerent capitals (because the business becomes risky) and establishes himself in a neutral country. During the last war Lisbon was the headquarters of Europe’s intelligence brokers and Geneva only a secondary choice. Lisbon was favored because communications with the principal belligerents was easier, besides which Lisbon was the central point for the paid secret agents of both sides.

A year ago the bulk of secret

intelligence which exchanged hands was handled by these brokers. There was comparatively little espionage activity by paid agents of governments. But in recent months the latter have vastly increased in number; which brings us to the second category of intelligence activity—the spy.

There is very litt le that is interesting, professionally or financially, in the life of a career spy in today’s Europe. He usually takes the job because he can’t find anything better to do. In almost every case he is a native of the country in which he operates. He is a shopkeeper or a student or a worker in a munitions factory and he works at his dull job month in and month out. He doesn’t find out very much and what he does find out he writes in a gossipy letter to a relative in a foreign country. Individually his contribution to intelligence is almost nil, but when it is collated with scores of other such letters, it may produce something significant. He is like the tuba player in a symphony orchestra, never hearing the full effect and being rather bored with his own occasional note.

British Are Veterans

There are exceptions, of course. British intelligence records contain some amazing stories, as that of the Scotsman who became a high official in the German General Staff during the last war. But, by and large, the spy of romantic proportions is not common in the profession; the process has become big and highly scientific.

The recruiting of professional spies increases with the imminence of war and this is one of the periods when the spy corps is being multiplied all over Europe. Only the British, who have the best intelligence service in the world, maintain a sizeable complement of spies year in and year out, in times of tension and of clear peace. A healthy appropriation is voted by the Commons for this service.

The Americans are comparatively new at the game, although they learned much from the British during the last war. Congress, which likes to debatí appropriations in detail, is stymied by custom from knowing too much about the American spy organizations it foreign countries. The money which pays for secret information abroad ii voted to the President personally. Il is his special fund and is the only appropriation which allows of no accounting or cross-checking. The President pays out the money on the advice of his intelligence chiefs.

The third category of secret intelligence is an official one—the diplomatic mission generally and the military attaché specifically. The latter is allowed by custom to explore to a certain degree the military potential o! the country to which he is accredited and in the years before the war he rarely attempted to go beyond his official duties. But the Russian performance in Canada during 1944 and 1945 broke down the conventions. Nowadays, military attachés are specialists in intelligence rather that in general staff duties and they find out a great deal more than their letters of accreditation entitle them to explore In European capitals Russian military attachés are under surveillance hours a day and there can be no doubl that western attachés in Soviet and satellite countries are similarly watched Espionage is big business. The cos! of modern war has become so greai that even a minor piece of secrel intelligence attains a large cash value Recently a design for a new artillery shell developed by a western Europeat country—not a particularly startling

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invention—sold in the Geneva spy market for $25,000.

As every horse player dreams of making a financial killing on a big race, the intelligence brokers of Europe dream of making a huge fortune on the two most valuable secrets in the world today—the final assembly plan of the American atomic bomb and the exact degree of Russian progress in the development of atomic energy. The latter is the more valuable secret because the American Government would pay literally anything to know the date when the Russians can expect to produce a working bomb. It is common knowledge in Geneva that the American Government would pay 10 million dollars, perhaps more, to any broker who could deliver in Washington a scientist high enough in the Soviet hierarchy to provide an exact picture of Soviet atomic research.

The Russians are reliably reported to be more chary with their money and European brokers do not like to work with them. There was the recent case of a broker who carried on negotiations with a Russian official for certain aviation blueprints which were stolen from the secret files of a western power. The broker was merely the agent in the matter and was naturally seeking the highest bidder. In this case a central European power outbid the Russians and before the broker could close the deal the Russian representative brandished a gun and threatened him with violence. This was naturally against all the rules by which the brokers ply their trade. They abhor violence. The Russian was therefore struck from the lists of the more reputable brokers.

Only the brokers are in a position to make big money out of espionage. The professional agent works for a modest salary and is rarely in a position to discover a valuable secret. His function is the accumulation of small facts—the bottleneck in a steel plant’s production which may mean the lack of a modern machine tool available in America and nowhere else, or the fact that a department foreman has expensive tastes and may be vulnerable to a bribe, or the particular wing of a factory which, if put out of action, would halt production entirely. These

small, unromantic facts are the onegj which prove in the long run the rnosü valuable in the event of war.

Yet the cost of compiling these factJ runs high. One intelligence official estimated that the money spent oi] espionage in Europe during 1948 would pay for the establishment in busined or on a farm of every displaced persod now languishing in camps between thJ Black Sea and the Channel. Th3 amount runs into hundreds of million^ of dollars.

It is a large and dull business and it hasn’t even the saving grace of d beautiful woman spy. No intelligence or counterintelligence agent of mv acquaintance has ever run across the traditionally ravishing spy. The one woman who was recently pointed oui to me as a suspected agent was a dowdy middle-aged woman who would not be able to get a job in the washroom of a Hollywood studio. A corres pondent just returned from Moscow described the woman agent whe allegedly seduced Sergeant McMillin an American Embassy code clerk, aí “a hard-faced party member whe couldn’t get a job in a burlesque line.’

Recently a Soviet spy was appre hended in the Ruhr. He had beet under surveillance for a period o months, his communications inter cepted and his incoming instructioni carefully microfilmed before bein¡ passed on to him. He had been posini as an itinerant peddler in communitie adjacent to the Ruhr’s railway switch ing yards. When he was finally picket up, he confessed all—and his confessioi tallied exactly with what counter intelligence agents already had learnet from his incoming and outgoing mes sages. His job was to ascertaii exactly how much coal was beim allocated to France from the Ruh mines. When it was pointed out fc him that this information was publisher monthly in the reports of the COJ commission, he replied that he kne' it—but his job was to check o whether the published figures wer correct.

This is how wasteful, how suspicion how belligerent the world has becomi It also shows how unromantic is th business of spying to which thousand of people are now devoting their livi and their talents. ★