September 20 1998

MI6 and MI5: the allegations

A RENEGADE British spy has claimed that MI6 recruited a high-level mole inside Germany's central bank, paying him large sums of money to betray his country's most sensitive economic secrets.

The mole, codenamed Orcada, is said to have betrayed to MI6 Germany's negotiating position during talks on the Maastricht treaty. He is also said to have provided inside information on Germany's proposed interest-rate movements.

Orcada is a civil servant and a senior officer in the Bundesbank - Germany's equivalent of the Bank of England. He is said to have been leaking Bonn's financial secrets to British intelligence for the past 12 years.

The claims have been made by Richard Tomlinson, the fugitive former MI6 officer, in a letter to a parliamentary committee. This evidence is also on the Internet, placed there by journalists in Switzerland, where Tomlinson is considering applying for asylum.

The allegations that British intelligence has been paying Germans to spy on their government will call into question Robin Cook's ethical foreign policy. Security experts say such sensitive operations usually require approval by Foreign Office ministers.

Tomlinson has disclosed details of Operation Orcada and a second MI6 plot to steal military secrets from France in letters to the parliamentary intelligence and security committee, which oversees the activities of MI6 and MI5.

In his dossier Tomlinson says: "Orcada is a German national . . . He was recruited by MI6 in approximately 1986 . . . His motive is entirely financial, and he is paid very substantially. Indeed, he is among the best paid and most important of any of MI6's agents. He provides regular and detailed intelligence on all German interest-rate movements, and provided detailed information on the German position during the Maastricht treaty negotiations."

He added: "What is clearly alarming about this case is that [the MI6 officer] and his predecessors and successors have paid Orcada very substantial sums of money to break German law. I think it unacceptable and amoral that a UK government official should bribe a German official in this manner and abet him to break the laws of his country."

The former spy, who left Britain two months ago after serving six months in prison for breaking the Official Secrets Act, says that espionage operations against our European allies are regarded as highly sensitive within MI6. "Officers are aware that this work would be deemed illegal under European law and has not been authorised by parliament."

He says spying against our European allies is "accorded the same level of secrecy and need-to-know indoctrination as highly sensitive Russian casework".

The dossier claims MI6 officers working in European countries are supported by a secret unit called UKB, which consists of about 10 officers based at MI6 headquarters at Vauxhall Cross, south London.

The unit's work involves MI6 officers posing as businessmen or journalists who pay European agents to provide low-level economic or military intelligence on European Union countries.

Tomlinson claims that in addition to spying on Germany, MI6 has targeted France, Spain, Italy and Switzerland. "The primary intelligence requirement against Germany is economic intelligence, though there [are] also some requirements against its military capabilities," he says.

"Many, if not all, of such operations would be illegal under European law as it is illegal for UK government officials to bribe government officials of fellow European states."

With the end of the cold war, economic intelligence gathering has taken on a greater priority among British spy agencies. Intelligence experts say the operation falls within the remit of MI6, one of whose statutory tasks is to protect "the economic wellbeing of the United Kingdom".

Tomlinson was sacked from MI6 three years ago for "going on frolics of his own". He accepts that he does not have direct knowledge of current espionage operations.

MI6 has taken out a sweeping injunction preventing The Sunday Times and other newspapers from reporting any of Tomlinson's previously unpublished allegations.

However, the new allegations have been released on the Internet and legal experts say that means they have effectively been published and are now in the public domain.

Tomlinson's credibility was questioned last month after the Foreign Office dismissed as "fantasy" evidence he had given to a French judge which appeared to suggest MI6 might have been involved in the car crash that killed Diana, Princess of Wales. Tomlinson said his evidence to the judge had been misrepresented. He has never suggested that MI6 had any role in the accident.

But his previous revelations, including claims that Serbian businessmen had made substantial contributions to the Conservative party, have proved to be true.

Disclosure of the alleged Bundesbank plot was greeted with a mixed response by economic experts.

Norman Lamont, chancellor of the exchequer between 1990 and 1993, said he was unaware of the operation.

"I see no need to use MI6 to find out about confidential German monetary policy," he said. "That would seem to me a complete waste of money. I also think it would be highly improper and utterly pointless."

The Bundesbank has effectively been the interest rate-setting body for Europe for the past two decades. Information about its changing stance on the single currency and German unification would have proved invaluable to ministers and Treasury officials in Britain.

Patrick Minford, professor of economics at Cardiff Business School, said that leaks from the Bundesbank would be of "extreme importance" to the Treasury.

"The Bundesbank was a major player in our leaving the exchange-rate mechanism [ERM]. It was incredibly important then to know what it was up to," said Minford. "Now we're not in the ERM we have been terribly interested in whether monetary union would happen and the Bundesbank has been a major player. Had it behaved differently in the past six to nine months they could have made it extremely difficult for the German government to sign up to monetary union."

This is not the first time that it has been claimed that British intelligence has spied on our European allies. Peter Wright, the former MI5 assistant director, claimed in his book Spycatcher that Britain bugged the French embassy in London in a bid to discover France's attitude towards Britain's application to join the Common Market.

Earlier this year, two former foreign secretaries, Lord Owen and Lord Hurd of Westwell, admitted in a BBC television documentary that MI6 had spied on Britain's European partners. In the documentary, Robin Cook, the foreign secretary, declined to comment on the suggestion but did not deny it.

Last year it was reported that a CIA agent had tried to recruit an official in Germany's economic ministry as an informer. The CIA man, who used diplomatic cover, was immediately recalled to America.

In a separate letter to the committee, Tomlinson discloses details of an alleged MI6 proposal to assassinate President Slobodan Milosevic of Serbia. He describes a meeting in 1992 with another MI6 officer - known as P4/Ops - to discuss the plan.

The officer showed him a two-page document which attempted to justify the scheme by stating that there was evidence that Milosevic was providing arms and support for Radovan Karadzic, the Bosnian Serb leader.

The remainder of the document purportedly proposed three methods to assassinate Milosevic. The first involved training a Serbian paramilitary opposition group to carry out the attack. "The second method was to use the Increment [a small cell of SAS and Special Boat Squadron, which is especially selected and trained to carry out operations exclusively for MI5/MI6] to infiltrate Serbia and attack Milosevic either with a bomb or sniper ambush."

A third proposal was to try to kill Milosevic in a staged car crash. "[The MI6 officer] even provided a suggestion about how this could be done, such as by disorientating Milosevic's chauffeur using a blinding strobe light" as his cavalcade passed through a motorway tunnel.

Tomlinson claims the minute was copied to senior MI6 officials, including the SAS liaison officer attached to MI6, and to the private secretary to Sir Colin McColl, the then MI6 chief.

Tomlinson said last week that because his own laptop computer had been seized by police he chose to type the letters on a publicly accessible computer at an Internet cafe in Geneva. The documents were found last week by two Swiss journalists. They have posted them on the Internet.

Tomlinson's claims follow separate allegations by David Shayler, a former MI5 officer who is being held in France pending extradition to Britain. Shayler was arrested by French security police last month shortly before he was to put his claims out on the Internet.

Shayler claimed that MI6 had been involved in a plan to kill Colonel Gadaffi, the Libyan dictator. The Foreign Office said the claim was untrue.

Insight: David Leppard and Chris Hastings

MI6 and MI5: the allegations

Richard Tomlinson and David Shayler, the two former spies, have made a series of allegations about the operations of the security services. They include claims that:

MI6 plotted to kill Col Gadaffi. A bomb plot was organised in 1996 by Libyan dissidents but Gadaffi survived. However, an inquiry by Robin Cook, the foreign secretary, cleared MI6.

MI5 retained security files during the 1970s on Jack Straw and Peter Mandelson and also spied on other prominent Labour politicians.

MI5 failed to pass a tip-off to police or the Israeli government about intelligence pointing to a terrorist attack in 1994 on the Israeli embassy in London.

MI6 used a Tory MP to help monitor Serbian businessmen making secret donations to the Tory party in the early 1990s.

MI6 spied on the French navy base at Brest, obtaining secrets about satellite tracking technology used to monitor nuclear submarines.

MI6 drew up a plan to assassinate President Milosevic in 1992. The plan was never carried out.