In The Hague, Klop Ustinov and Nicholas Elliott established an instant rapport, and would remain friends for life. ‘Klop was a man of wide talents,’ wrote Elliott, ‘bon viveur, wit, raconteur, mimic, linguist – endowed with a vast range of knowledge, both serious and ribald’. Ustinov put Elliott to work, boosting the spirits of the increasingly gloomy and anxious Wolfgang Putlitz.
Putlitz was a ‘complicated man’, Elliott wrote, torn between his patriotism and his moral instincts. ‘His motivation was solely idealistic and he went through acute mental torture at the knowledge that the information he gave away could cost German lives.’ One evening in August, Elliott took Putlitz to dinner at the Royale Hotel. Over dessert, he remarked that he was thinking of taking a holiday in Germany: ‘Is Hitler going to start the war before we get back at the end of the first week of September?’ he asked, half in jest. Putlitz did not smile: ‘On present plans the attack on Poland starts on 26 August but it may be postponed for a week, so if I were you, I’d cancel the trip.’ Elliott swiftly reported this ‘startling statement’ to Klop, who passed it on to London. Elliott called off his holiday. On 1 September, just as Putlitz had predicted, German tanks rolled into Poland from the north, south and west. Two days later, Britain was at war with Germany.
Not long afterwards, the German ambassador to The Hague showed Wolfgang Putlitz a list of German agents in the Netherlands; the list was identical to one which Putlitz had recently handed over to Klop Ustinov and Nicholas Elliott. Clearly, there must be a German spy within the MI6 station, but no one for a moment suspected Folkert van Koutrik, an affable Dutchman working as assistant to the station chief, Major Richard Stevens. Van Koutrik had ‘always displayed perfectly genuine faithfulness’, according to his colleagues. Secretly he was working for the Abwehr, German military intelligence, and ‘by the autumn of 1939, the Germans had a pretty clear picture of the whole SIS operation in Holland’. Van Koutrik had obtained the list of German spies Putlitz had passed to MI6, and passed it back to German intelligence.
Putlitz knew ‘it could only be a matter of time before he was discovered and dealt with’. He immediately requested asylum in Britain, but insisted he would not leave without his valet, Willy Schneider, who was also his lover. Putlitz was whisked to London on 15 September, and lodged in a safe house.
The loss of such a valuable agent was bad enough, but worse was to follow.
On 9 November, the head of station, Major Stevens, Elliott’s new boss, set off for Venlo, a town on the Dutch border with Germany, in the expectation that he would shortly bring the war to a speedy and glorious conclusion. He was accompanied by a colleague, Sigismund Payne Best, a veteran military intelligence officer. Elliott liked Stevens, considering him a ‘brilliant linguist and excellent raconteur’. Best, on the other hand, he regarded as ‘an ostentatious ass, blown up with self-importance’.
Some months earlier, Stevens and Best had secretly made contact with a group of disaffected German officers plotting to oust Hitler in a military coup. At a meeting arranged by Dr Franz Fischer, a German political refugee, the leader of the group, one Hauptmann Schämmel, explained that elements within the German High Command, appalled by the losses suffered during the invasion of Poland, intended to ‘overthrow the present regime and establish a military dictatorship’. The Prime Minister was informed of the anti-Hitler conspiracy, and Stevens was encouraged to pursue negotiations with the coup plotters. ‘I have a hunch that the war will be over by the spring,’ wrote Chamberlain. Stevens and Best, accompanied by a Dutch intelligence officer, headed to Venlo in high spirits convinced they were about to link up with ‘the big man himself’, the German general who would lead the coup. In fact, ‘Schämmel’ was Walter Schellenberg of the Sicherheitsdienst (SD), the Nazi Party intelligence agency, an intelligent and ruthless master spy who would eventually take over German intelligence, and Dr Fischer was in Gestapo pay. The meeting was a trap, personally ordered by SS Reichsführer Heinrich Himmler.
Shortly before 11 a.m., they arrived at the rendezvous point, Café Backus, on the Dutch side of the frontier, a few yards from the border post. ‘No one was in sight except a German customs officer,’ wrote Stevens, ‘and a little girl who was playing ball with a big dog in the middle of the road.’ Schellenberg, standing on the café veranda, beckoned them over by waving his hat. That was the signal. As they climbed out of their car, the British officers were immediately surrounded by SS commandos in plain clothes, firing machine guns in the air. The Dutch officer drew his revolver and was shot down.
‘The next moment,’ recalled Best, ‘there were two fellows in front of each of us, one holding a pistol to our heads and the other putting handcuffs on. Then the Germans shouted at us “March!”, and prodding us in the back with their pistols and calling “Hup! Hup! Hup!”, they rushed us along toward the German frontier.’ The commandos bundled the captives into waiting cars, dragging the dying Dutch officer with them.
‘At one stroke,’ wrote Elliott, ‘all British intelligence operations in Holland were compromised.’ Worse still, Stevens had been carrying in his pocket, idiotically, a list of intelligence sources in Western Europe. MI6 scrambled to extract its network of agents before the Germans pounced.
The Venlo incident was an unmitigated catastrophe. Since the Dutch were clearly involved, and had lost an officer, Hitler could claim that Holland had violated its own neutrality, providing an excuse for the invasion of Holland that would follow just a few months later. The episode left the British with an ingrained suspicion of German army officers claiming to be anti-Nazi, even when, in the final stages of the war, such approaches were genuine. Stevens and Best were imprisoned for the rest of the war. By December, through information derived from the British captives and the double agent van Koutrik, the Germans were ‘able to construct detailed and largely accurate charts of [MI6’s] agent networks’, as well as the structure of MI6 itself. It was the first and most successful German Double Cross operation of the war. Oddly, it was also one of the last.
Looking back on the Venlo incident, Elliott blamed the ‘intense ambition’ of Stevens, who had scented the ‘possibility of winning the war off his own bat, and this completely clouded his operational judgment’. Instead of maintaining the fiction of a resistance cell inside German High Command, Schellenberg sent a crowing message: ‘In the long run conversations with conceited and stupid people become boring. We are cutting off communications. Your friends the German opposition send you hearty greetings.’ It was signed ‘The German Secret Police’.
In his first six months as a spy, Elliott had learned a salutary lesson in the forgery and fraud that is the currency of espionage. His boss was now in a German prison, having fallen for an elaborate deception; a valuable spy had fled to London, betrayed by a double agent; the entire intelligence network in Holland had been fatally compromised. Even the innocuous Captain John King, the cipher clerk who had taught Elliott coding, was now in prison, serving a ten-year sentence for spying, after a Soviet defector revealed that he had been ‘selling everything to Moscow’ for cash.
So far from being repelled by the duplicity around him, Elliott felt ever more drawn to the game of skulduggery and double cross. The Venlo debacle had been ‘as disastrous as it was shameful’, Elliott concluded, but he also found it fascinating, an object lesson in how highly intelligent people could be duped if persuaded to believe what they most wanted to believe. He was learning quickly. He even made up a ditty in celebration: