Snow (3 page)

On 8 October 1936 the Welshman was seen by MI5 watchers to post a letter to someone named L. Sanders at Post-box 629, Hamburg, written on the headed paper of the visitors’ writing-room of the Canadian High
Commission
in Trafalgar Square. The envelope was intercepted and subsequent scrutiny of its content suggested that Owens had adopted an alias, ‘G. D. Hunter’, and employed a primitive code in an attempt to convey
information
he was anxious to conceal. ‘Tooth Paste, shaving cream, etc. And the prices are very good and I am sure subject to duty being reasonable they should find a ready market in Holland and Germany.’

MI5’s postal inspector, who noted ‘submarine batteries being Owens particular line of electrical business’, ventured that ‘Tooth Paste’ meant ‘
torpedoes
, and ‘Shaving Cream’ stood for ‘submarines’. In his opinion, Owens was seeking to convey a secret message to his German contacts, so his SIS handler was warned and the decision was taken to confront him. Owens was summoned to a meeting at the St Ermin’s Hotel, a large establishment
in Caxton Street, conveniently close to Owens’ office in the same street, and to SIS’s headquarters in nearby Broadway Buildings. The location was much favoured by the British intelligence establishment, and at just after half past twelve on 14 October Edward Peal, a Royal Marines officer seconded to SIS’s Naval Section, picked a well-lit table in the centre of the room. While there he was under constant observation by MI5 personnel, and he would later report to Hinchley-Cooke that his ‘two blokes were at the next table and I could almost hear them swallowing their drinks.’

At this stage Owens was clearly unaware that his illicit links with the Germans had been discovered, and when he was asked by Peal if he had anything to disclose, the Welshman seized the opportunity to make a sales pitch, asking for help to get in touch with someone at the Home Office to discuss portable searchlights. Far from realising that he was being given the chance to make a declaration of his contacts with Mr Sanders in
Germany
, his only admission was a passing reference to his intention to travel to Hamburg to meet a business acquaintance. Once again, the officer asked Owens if he had anything he wanted to say, but Owens’ answer was a simple ‘No, thank you’ and the two men went their separate ways. The SIS officer strolled back to his office in Broadway to draft a report of his encounter that would be circulated immediately to his Security Service colleagues. The result, inevitably, was a more intensive surveillance on Owens, and his MI5 file contains the Watcher Service’s daily returns, reflecting the increasingly suspicious behaviour of their quarry. Typical were his activities recorded on the morning of Tuesday 27 October:

On the next day the watchers again trailed him from his home:

Then, on Tuesday 3 November, the MI5 surveillance team was on duty as the target made an unusual purchase.

Owens’ purchase for sixpence of a magazine illustrated with pictures of aeroplanes, together with a copy of a War Office pamphlet,
Photographs of Some Military Vehicles and Weapons in Service 1936
, at a cost of one shilling, and his simultaneous acquisition of a camera suggested that he planned to re-photograph both documents and then try to pass the pictures off as his own work. If that was truly his intention, it implies a certain desperation and lack of sophistication, but his intercepted mail confirmed that his financial circumstances were deteriorating. He had apparently abandoned his office without paying for its redecoration, as required by the terms of his lease, and had been sent reminders from the Colebrook Motor Company that his account was ‘seriously overdue’. It was at this crucial juncture, in November 1936, that SIS and the Naval Intelligence Division washed their hands of him, and told him bluntly that their relationship was terminated, permanently.

Although SIS was keen to learn more about the German intelligence
services
, the organisation was anxious not to put itself in the hands of someone beyond its control who had singularly failed to demonstrate candour in his dealings with the Germans. Actually, SIS knew very little about its
counterpart
in the Reich, known as the Abwehr and thought to be headed by a
Reichsmarine
officer of Greek extraction named Wilhelm Canaris, but the employment of a demonstrably unreliable source such as Owens as a means of learning more would have been sheer folly. Chances were, calculated SIS, the Germans would learn more about SIS and its operations than it would learn about the adversary. Any experienced case officer would have weighed the risks of continuing with Owens against intangible, likely advantages, and with the balance of opinion firmly against him, Owens had been cut loose.

Undeterred by his rejection, Owens was also seen in the company of a certain Erwin Pieper, who turned out to be a German agent to whom he had been introduced by Hans Hamilton. Initially Pieper had claimed to be in possession of valuable information that he wanted to impart to Owens, but although the pair met several times, and the mysterious Pieper reimbursed
Owens for his expenses, nothing transpired, even when Pieper mentioned that in the past he had been engaged in sabotage in Canada. Apparently this was all part of some elaborate test that was intended to ascertain the
Welshman
’s true loyalties, and it was one he must have passed because when he agreed to meet Pieper in Hamburg in December he was instead approached by a Luftwaffe intelligence officer and a man who introduced himself as a member of the
Kriegsmarine
’s intelligence branch.

During the two-hour meeting that followed, the two Germans asked for information and stated that in return they were prepared to pay very well. They offered to cover all of Owens’ expenses to and from Germany, his
travelling
and hotel costs in England, and any money that Owens needed for bribes. He was also provided with travel papers which would allow him to move in and out of Germany freely. Finally, he was handed a questionnaire listing the information required, together with instructions on how it should be communicated.

Having reached agreement with the two German officers, Owens now had a decision to make. Should he cultivate this much-needed source of finance or report this contact to the British?

By the time he returned to London in December 1936 Owens had made his decision and went to see the British Security Services. He was taken to Major Hinchley-Cooke of MI5. Owens told him about the meeting in Hamburg and that he had been given a map of England, and asked to acquire samples of the equipment used by the Royal Air Force. His
questionnaire
included particulars of the Sperry Auto-Pilot system, how it was used, and details of the RAF’s organisation, weapons and equipment, and the deployment of individual squadrons. The Germans were also keen to know about the location of fuel and ammunition storage depots and they wanted drawings of natural caves in the south-west of England where supplies were to be stored. Of special interest were any pictures of an electronic
height-finder
in use by the RAF.

The nature of the items listed in the questionnaire gave a good indication of what the Germans already knew on certain subjects, and suggested they already possessed a good deal of sensitive information concerning the RAF. Indeed, Owens told Hinchley-Cooke that Pieper had claimed to be already in receipt of information from ‘English people’ working in aircraft factories and that photographs were being taken by ‘people in authority’ in England. His role, he alleged, was to keep the information up to date and to act as the central link between Hamburg, Berlin and London.

At the time Owens made his offer, it might superficially have seemed quite attractive, in intelligence terms, for MI5 had only recently encountered a fully-fledged German agent based in Broadstairs who had been engaged in conducting a survey of RAF airfields in the south of England. Dr Herman Goertz had been arrested in November 1935 and had remained in custody until March the following year when he was convicted at a trial held at the Old Bailey in London and imprisoned. MI5’s review of the evidence, and the interrogation of Goertz, who was a lawyer who had flown a fighter in the First World War, proved that the Germans had taken the very closest of interest in the RAF. If Owens was telling the truth, it seemed that Goertz’s prison sentence had not acted as a deterrent. Indeed, the suggestion that others had been recruited in aircraft establishments to take photographs was especially alarming because MI5 had monitored a series of newspaper advertisements that had offered employment to men with service or business backgrounds and undefined technical skills who were invited to write to a post-box in Hamburg. Some thirty people had responded, including Christopher Draper, and no less than twenty-six had reported their correspondence to MI5. The Security Service had been unimpressed by this rather clumsy attempt to recruit agents, but had thought the amateurish operation had been quashed. Owens was now asserting that the Germans had been much more successful than MI5 had believed, but could he be trusted?

During the course of the interview, Owens let slip that he had been in touch with Pieper since September 1935, prompting the MI5 officer to suspect that the admission had been made deliberately, perhaps because he now realised that he had been placed under surveillance, or even because he had detected that his mail had been intercepted. Hinchley-Cooke supposed that, having failed to mention Pieper previously, Owens was now seeking to give the impression that he was now being entirely candid. It was a strategy that was bound to have the very opposite effect.

On 9 December, soon after the meeting with Hinchley-Cooke, Owens received a letter from Hamburg which he delivered straight to MI5,
observing
innocently that for some mysterious reason all his mail was arriving late. The content showed that ‘Mr Sanders’ was dissatisfied with Owens’ efforts and suspected he was peddling recycled information and pictures that were readily available in newspapers and magazines.

Having made a gesture of goodwill by submitting the original of a letter he must have been certain had already been intercepted and copied by MI5, Owens now made the bold offer to continue the illicit liaison and collect information about German troop movements. However, the problem was that, just like the material rejected by Sanders, the British were unimpressed. However, the appearance of a new correspondent, a certain Dr Rantzau who expressed an interest in scientific matters, seems to have persuaded MI5 to encourage the relationship, entering him in the Security Service files under the codename S
NOW
, a partial anagram of his surname.

The growing tensions in Europe caused by the rise to power of the Nazis resulted in large numbers of people having to flee Hitler’s Germany. Although they were badly undermanned and lacking in resources, MI5’s role as the primary counter-intelligence organisation meant that it would be their responsibility to sort through these refugees. The worry was that among their number might be German spies hoping to infiltrate the U.K and establish a network that could inform the Abwehr about Britain’s defenses. MI5 needed to know how the German Security Services operated and the number of agents they had in Britain. Arthur Owens offered MI5 a short-cut through this arduous task and a way of getting their hands on this information. Through Dr Rantzau, MI5 hoped he had gained a direct link to the upper eschelons of the Abwehr, so for all their concerns about Owens this was an opportunity which MI5 were keen to exploit.

During 1937 Owens exchanged several letters with Dr Rantzau, signing them J
OHNNY
, a codename that he had been given by his German contacts. All were intercepted by MI5, and some referred to ‘tests’ and ‘samples’, and at times to ‘batteries’, and on 23 August he reported: ‘I am unable at present to let you know when I will be able to assemble the Type FY 12 Volt 3 plate, battery with ebonite and wood [sic] as this type is continually changing however I will do my best.’

This letter was interpreted by MI5 as a coded message about aircraft, where the letters ‘FY’ referred to the Fairey Aviation company. A further letter, dated 21 August, mentioned a ‘SB 16 Volt 3 plate’ which was taken to mean Short Brothers, the arms manufacturers based in Belfast. These were potentially sensitive topics, so S
NOW
was called in for a discussion with MI5,
and serious consideration was given to mounting a criminal prosecution under the Official Secrets Act. However, as Hinchley-Cooke was absent from the meeting, this proposal was put on hold until he could be consulted, but before any decision was taken Owens requested a further meeting which was arranged for the afternoon of Thursday 23 September.