22 March 1987
The Sunday Times
How deeply involved was MI5 in attempts to destabilise the Wilson government in the mid-1970s? The Peter Wright spy book trial indicates it was highly active. Last week Merlyn Rees, Wilson's former home secretary, demanded a full inquiry, and alleged there were even attempts to denigrate Edward Heath, the then Tory leader. The Sunday Times INSIGHT team has amassed considerable evidence of a concerted campaign of 'burgling and smears'
ON Monday in the House of Commons an angry Merlyn Rees, a former Labour home secretary, made a surprise intervention. The attorney general, Sir Michael Havers, had just announced the government's decision to appeal against the Australian court ruling over the publication of the memoirs of Peter Wright, the former MI5 officer.
Rees announced that he intended to 'get to the root' of renewed claims alleging an MI5 'dirty tricks' plot to destabilise Harold Wilson's government, of which he was a senior member.
His outburst might have been dismissed as yet another attempt to rake over old ashes except for one added factor: Rees startled the House by revealing that, contrary to what government ministers were now saying, the last Labour administration had not fully investigated the allegations of an MI5 conspiracy.
According to Rees, all that had been probed was a specific claim that 10 Downing Street had been bugged during the final Wilson administration. The battle over the Wright memoirs, he went on, had re-aroused his suspicions. He had come to believe that attempts by the intelligence services to destabilise democratically elected government in Britain went further than had been realised before. There might even have been an attempt to 'denigrate Ted Heath', he said.
Rees' call for the government to institute an inquiry has now been taken up by others. On Wednesday Roy Jenkins, who like Rees, is a former Labour home secretary, said Mrs Thatcher had a 'clear duty' to investigate elements of the security services in the mid-1970s. On the same day, the Labour MP, Dale Campbell Savours, attempted to table a series of related parliamentary questions probing the truth about rumours of a mysterious incident called 'the Cunard affair'.
But what is behind this clamour for a judicial inquiry? Did MI5 'dirty tricks' really happen or are they just a fantasy more worthy of a spy thriller?
The Sunday Times Insight team has investigated allegations against MI5 for more than 10 years. Some of the incidents chronicled are comparatively minor, and often bizarre. Individually they mean little; taken together they present a picture of an organised campaign, running over five years between 1971 and 1976, covering both the Heath and the second Wilson administrations. Rees and others are now convinced that senior MI5 operatives, operating either on their own or with sanction from superiors, indulged in activities well outside their official role - and the law.
ONE night in the summer of 1974, Marcia Falkender, a close advisor of Wilson's, heard running footsteps outside her London mews home. Later, shortly before 10pm, her sister, Peggy Field, who shared the house, discovered that her handbag was missing from the hall table. It contained an expensive brooch, keys, a cheque book and about pounds 4 in cash.
It could have been just another unfortunate burglary but events were to cast sinister shadows on the incident. As Peggy went to call Scotland Yard's Special Branch, the telephone rang and a man announced he had discovered a lady's handbag. He added that if its owner wanted it back she would have to collect it in person from a nearby apartment in Bickenhall Mansions in London's West End. Despite this odd request the sisters handed the task of collection over to the police. When the bag was returned all that was missing was the tiny amount of cash.
The robbery was not an isolated event for the Wilson entourage. The Labour leader and some of his close associates suffered a series of burglaries around the same time. The list of victims included Wilson's lawyer, Lord Goodman, his press officer, Jean Denham, and a senior policy advisor, Bernard Donoughue (now Lord Donoughue).
Nor was it the first time that Wilson had heared of Bickenhall Mansions. Not long before he had learned of an alleged attempt to lure Tony Benn, then one of his cabinet ministers, into a situation there which, if successful, would have been sexually compromising.
Wilson had first fallen prey in the early 1970s to Peter Wright, who had risen up the MI5 hierarchy to become personal assistant to Sir Michael Hanley, the service's director general between 1972 and 1979.
In the mid-1970s MI5 operated against a backdrop of gloomy stories predicting economic disaster. The three-day week and the miners' strike toppled Heath's government and under Wilson inflation rose to alarming levels, the stock market was in a bigger crash than 1929, and the City was in the midst of its worst banking crisis in 40 years. In the words of Hanley, 'a disaffected faction with extreme right wing views' had grown up within MI5.
When MI5 heard claims from a Russian, who had defected to the US, that the Labour party's leadership had been penetrated by the KGB, it took it seriously.
Wright was asked to investigate, and as he himself admits his team 'bugged and burgled our way round London'. Wright, the molehunter who had de-briefed Sir Anthony Blunt, believed only covert operations would prove whether or not Wilson and his colleagues were agents of the Kremlin. However, the activities that Wright and others were involved in were not confined to burglaries. There were also organised smear campaigns.
Several retired MI5 officers now accept that Wright masterminded some of these crimes. But because MI5 operates on a strict 'need to know' basis, some claim they had no idea that Wilson had been a target. Wright now admits to 23 criminal acts and 12 acts of treason.
The techniques used had been developed over a number of years and used against a variety of victims. Wright has told friends that eavesdropping devices were planted at the French embassy in London as long ago as the 1960s to discover de Gaulle's attitude towards Britain's Common Market application. Wright also says MI5 took part in discussions at the government's Porton Down research centre to produce a poison which would be untraceable in 'assassination operations' overseas. Other 'dirty tricks' included bugging the hotel rooms of foreign businessmen who were negotiating commercial deals with Britain.
Some of these activities involved burgling premises, including homes and offices belong to Wilson and his circle. As far as Whitehall's intelligence establishment was concerned, these break-in operations were 'deniable'. One precaution was taken in case any operative was caught by the police. Each 'burglar' carried his own special pass, known as a 'get out of jail free' card. If ever caught he could show the pass and claim he was on 'national security' business.
Both Wilson's former London home, in Lord North Street, and his country house, Grange Farm at Great Missenden in Buckinghamshire, were broken into more than once. There was also a break-in at offices Wilson used for storage in Buckingham Palace Road. Among the items taken were tax documents, personal correspondence, photographs and tape-recordings relating to his exchanges with the then US president, Richard Nixon, and the Rhodesian premier, Ian Smith. Lady Falkender's cottage, near Great Missenden was also burgled twice.
Wilson's suspicions were aroused and he became convinced he was being bugged. In 1976 he told two BBC journalists, Barrie Penrose and Roger Courtiour (authors of the Pencourt File): 'There were far too many burglaries. The coincidence is far too great. You'd think if they were looking for anything valuable they'd rummage through drawers and through cabinets. ' The incidents were made even more bizarre when some of the stolen papers were returned to Wilson. At an Old Bailey trial in 1976, when two men were convicted of stealing Wilson's property, a witness claimed he had paid pounds 2,500 to a stranger in London's Great Portland Street to get some documents back.
Wilson endeavoured to identify who was behind the 'dirty tricks' and in mid-1975, learned from Sir Maurice Oldfield, then MI6's chief, that there was 'a section of MI5 which was unreliable'. He even asked to see his own MI5 file only to find it contained a solitary letter. However, another MI5 file on Wilson, codenamed 'Henry Worthington', was kept from him. The file was not totally disguised: the address in the papers was clear enough - 10 Downing Street.
Wilson then questioned Hanley, Oldfield's MI5 counterpart, who confirmed there was a 'disaffected faction' within his service. But what Hanley did not disclose was that his personal assistant, Wright, suspected Wilson himself of being communist agent, nor did he reveal that the prime minister, and members of his staff, had been the victims of MI5 burglaries and buggings.Exactly 12 months later, Hanley reflected his unease inside MI5 when he wrote to Wright, who by then had retired to Tasmania: 'It would take some imagination to say things are improving here but they are certainly no worse than when you went away. The firm is doing quite well and passed the recent examinations. '
Those 'recent examinations' included questions Wilson wanted answered before handing power over to Jim Callaghan in May that year. With Wilson no longer prime minister, Hanley could afford to relax about Wright's unlawful activities ever becoming known.
WILSON also asked Hanley about what he called a smear campaign against him and his friends. He claimed that a series of fabricated stories had been leaked to the press. Stories were appearing, he said, falsely linking him to Labour personalities engaged in tax fraud and other brands of financial, political or sexual misconduct.
Until Wright became an MI5 whistleblower, evidence to support Wilson's claims was almost impossible to find. However, others have now confirmed elements of what Wright is alleging. For example, three former intelligence operatives in Ulster during the 1970s maintain they were part of an elaborate black propaganda campaign.
One of them, Colin Wallace, an army intelligence officer attached to MI5 who resigned in 1976 protesting about MI5's anti-Wilson activities, has given Merlyn Rees confidential files about his part in a campaign to discredit Wilson's policy in Northern Ireland. It is partly this which has triggered Rees's fears that he was an MI5 victim, both as Northern Ireland secretary between 1974 and 1976 and later as home secretary.
Wallace says the files show that MI5 faked political leaflets and other documents designed to link Wilson's administration with terrorist groups and communist-front organisations. According to Wallace, MI5 also produced forged bank statements to suggest, wrongly, that politicians like Ian Paisley and John Hume, the SDLP leader, had embezzled funds.
One leaflet forged by MI5 to look like a genuine Labour policy statement has Rees's name printed alongside Dr David Owen, then Labour's foreign secretary, and Stan Orme, at the time a junior Northern Ireland minister. The message MI5 wanted to get across to an unsuspecting public was that Labour was soft on terrorism.
Wallace claims part of these covert psychological operations (known as 'psyops') were designed to prevent the election and re-election of a Labour regime. 'We also had a campaign going against Edward Heath and other prominent Tory MPs thought to be too liberal', says Wallace.
'The aim was to discredit them politically by planting smear stories against them in the press. ' For example, Heath and other bachelor politicians were wrongly 'linked' to homosexual scandals, such as the Kincora boys' home affair in Ulster. The ultimate aim, Wallace says, was to remove Heath as leader of the Conservative Party and replace him with someone of a more resolute approach to political and industrial unrest.
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