The Defence of the Realm (146 page)

The advertising campaign had the additional advantage of extending the Service's openness policy – as did the decision in 1997 to begin releasing its early files to the Public Record Office. Some of the favourable publicity generated by the Service's public recruitment campaign and other aspects of its openness programme was undone as a result of the allegations made by David Shayler, a disaffected officer who left in October 1996 after an undistinguished career lasting less than five years.
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Sir Richard Wilson found both Lander and Eliza Manningham-Buller, who became DDG in 1997, ‘desperately upset' by what they regarded as Shayler's treachery: ‘It really got to them.'
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The dilemma, Lander reported, was that:

While his allegations of Service impropriety and incompetence do not stand up to close scrutiny . . . it has not been possible for the Service to put the public record
straight for fear of undermining the legal actions in train and also of compounding the damage to sources and methods already caused by his revelations.
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Among Shayler's claims taken up by some of the media were that SIS had told him it had been involved in a plot to assassinate Qaddafi; that, but for MI5 incompetence, PIRA's hugely destructive 1994 bomb attack on the NatWest Tower in Bishopsgate
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could have been prevented; that MI5 was involved in the attempted blackmail of a Libyan student who was secretly filmed having sex and taking drugs; and that Peter Mandelson MP had been suspected of being a Soviet ‘sleeper' and his phone had been bugged.
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In Lander's view, the injunction obtained by the Attorney General against the publication of information derived from Shayler by the
Mail on Sunday
in August 1997
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‘stopped the media feeding frenzy in its tracks'. After the injunction had stemmed the flow of information, the Service was ‘able to put the record straight to ministers privately as new allegations seeped out'.
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In Sir Richard Wilson's view, the fear of the Service leadership that the Shayler affair might turn ministers against them was exaggerated; neither they nor Whitehall regarded it as more than a minor irritant.
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After seeking refuge in France for three years (four months of which were spent in jail after the issue of an extradition warrant), Shayler returned to Britain in 2000 and was sentenced to six months' imprisonment on official secrets charges.

During Tony Blair's first term as prime minister (May 1997 to June 2001) the Security Service thought it detected only limited interest in its work at Number Ten, save on issues concerning PIRA and Northern Ireland. As shadow home secretary, Blair had described as ‘a matter of grave concern' proposals for the Service to expand its operations into fighting organized crime and other areas.
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During each public spending round in Blair's first term, the intelligence agencies feared Treasury attempts to make their Whitehall customers pay for the intelligence they received – thus inevitably cutting their budgets. The threat to Security Service funding was exacerbated by a sudden huge increase in the cost of the new GCHQ headquarters in Cheltenham. The Treasury line was that this had to be absorbed within the Single Intelligence Vote (SIV, the successor from 1994 to the Secret Vote) – and thus to be paid for by the whole of the intelligence community.
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The support of the cabinet secretary in keeping the Treasury at bay was of great, possibly crucial, importance in protecting the Security Service budget.

After the cuts of the mid-1990s, the Service was thus able to grow slightly during the remainder of the decade. In the course of the
decade, the proportion of operational staff increased steadily. In Lander's view:

We ended the 1990s as a result far better equipped to handle the demands of our ‘new work' than we began it with:

  i.   larger operational teams for surveillance, interception, eavesdropping and other technical operations;

 ii.   more officers capable of hard agent running (e.g. against terrorist or drugs targets);

iii.   a far smaller clerical and bureaucratic tail facilitated by an excellent new building; and

iv.   an SCS [senior civil service] equivalent senior management nearly 40% smaller.

 By any measure as a consequence we left the decade a more capable and efficient organisation than we began it.
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One of the Service's ablest strategic thinkers at the end of the Cold War, H1/0, had correctly forecast in 1990 that, though the disappearance of the Communist threat might diminish the coherence of its role ‘during the next few years', it would recover that coherence if it succeeded in gaining ‘responsibility for all internal and external terrorism'.
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At 6 p.m. on 9 February 1996, PIRA abruptly announced the end of a seventeen-month ceasefire. Just over an hour later, a huge bomb placed in a car park near South Quay Docklands Light Railway station by Canary Wharf on the Isle of Dogs exploded, killing two men, injuring more than a hundred, laying waste a large area and causing £85 million worth of damage. A close observer of the Provisionals concluded that ‘Had the IRA not bombed Docklands, it would have probably split.'
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The South Quay attack was followed by the planting of two smaller devices; one was successfully defused, the second exploded prematurely on 18 February. An arms cache discovered subsequently indicated that these were probably intended to be the beginning of a prolonged campaign.
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Though there were three relatively small-scale bomb attacks in London during March and April, T2 reported on 11 June: ‘Intelligence suggests that PIRA is disappointed with the performance of its mainland-based ASUs since South Quay, and is anxious to rectify the situation.'
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On the same day the DDG told the Cabinet Official Committee on Terrorism, ‘It seemed that preparations for a major attack in Great Britain were well advanced . . .'
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Five days later, on the morning of 15 June, a total of five warning telephone calls, using an authenticated PIRA codeword, were received by three television stations, Salford University and North Manchester General Hospital, warning that a bomb would explode at the Arndale Centre in central
Manchester in an hour's time. Though, thanks to a hasty mass evacuation of the city centre, there were no fatalities, more than 200 people were injured in the blast, which also caused damage to buildings estimated at £450 million. Operation SITUATED failed to identify the members of the ASU responsible.
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The Security Service leadership remained anxious that the Manchester bombing should not stand in the way of negotiations with the Provisionals. One of the directors recalls being struck by the ‘step-change' in the Service's intelligence assessments, which now regularly included political analysis: ‘We had helped to formulate similar assessments produced at Stormont for SOSNI, but earlier Box 500 reports issued on the mainland focused on security intelligence, and presumably left political assessments to the Cabinet Office and the JIC.' Though ASCRIBE was partly responsible for the ‘step-change', it was also influenced by ‘the personalities driving our Irish work, especially Stephen Lander and Eliza Manningham-Buller'. On 17 June, two days after the bomb attack in Manchester, Lander, who had succeeded Rimington as DG two months earlier, recommended to Major that ‘the Government should
continue with its current strategy
', which included ‘providing reassurance to the Provisional leadership about the nature of the talks process which is on offer'.
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While Lander was briefing the Prime Minister, PIRA was launching an audacious attempt to disrupt the whole of Greater London's power supply. Operation AIRLINES, which defeated the PIRA attempt to do so, began with intelligence that a member of an ASU had taken up residence at 58 Woodbury Street, Tooting Broadway. Surveillance on 8 July 1996 observed an individual codenamed PARADISE NEWS (later identified after his arrest as Donal Gannon, a trained electrician and one of PIRA's leading experts in the design and manufacture of explosive devices) arriving at the address. Less than an hour later another individual, codenamed ANOTHER TOMORROW (subsequently identified as the former US marine John Crawley, who had served ten years in jail in the Irish Republic from 1984 to 1994 for his part in shipping arms from America to the Provisionals),
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emerged from the house. Not long afterwards Gannon and TULIP STEM (later identified as Gerard Hanratty, who had been convicted in 1988 on the continent of relatively minor arms offences) were followed as they travelled in a blue Peugeot 405 to reconnoitre electricity sub-stations. While Gannon returned to Woodbury Street, Hanratty was tailed to a flat in Verona Court, 68 St James's Drive, in Tooting. Next day a fourth member of the ASU, codenamed BREAD BOARD (quickly identified as Eoin Morrow, a PIRA specialist in the manufacture of
improvised explosive devices (IEDs) and the use of radio-control systems who had served a prison term in the Republic for armed robbery), was observed at Woodbury Street, and Gannon was followed to a house at 61 Lugard Road in Peckham. In the course of the day Crawley and Gannon were observed making inquiries about self-storage facilities and the transmission of Irish money orders. That evening Gannon was observed meeting a fifth ASU member, RAVE DOWN, at Wimbledon Park Underground station; RAVE DOWN went to stay with Hanratty in the Verona Court flat. On 11 July Gannon was followed to Birmingham where he met an individual codenamed GALLERY PICTURE in the Brewery Tap public house, before the two men went to view a storage unit on the Brownhills industrial estate. Meanwhile two further ASU members were observed entering 61 Lugard Road: CRAFT FAIR and EXCESS MONEY (later identified as, respectively, Patrick Martin, a Belfast Provisional and known associate of Hanratty, and Francis Rafferty, also from Belfast but previously unknown to the Security Service).
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John Grieve, commander of SO13 at Scotland Yard, later described the ASU as one of the ablest and most experienced in PIRA history.
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Over the next few days the members of the ASU were observed purchasing a Ford Sierra for £2,200 in cash, moving around bulky holdalls, reconnoitring further electricity sub-stations and carrying out various antisurveillance procedures. At 2.35 a.m. on 15 July the police entered all three ASU addresses. Crawley, Gannon, Hanratty, Martin and RAVE DOWN were arrested at Woodbury Street, Rafferty and Morrow at Lugard Road. The timers and power units (though not the detonators and Semtex explosive) for thirty-seven partially assembled IEDs were also discovered during the search of Lugard Road. The flat at Verona Court was empty; it was subsequently discovered that the ASU had abandoned it after compromising its security by using a forged £20 note to pay the rent. Later the same day, GALLERY PICTURE was arrested in Birmingham. With the exception of RAVE DOWN, whose case in court was that he had been a mere messenger, and GALLERY PICTURE, the arrested ASU members were each convicted and sentenced to thirty-five years' imprisonment. Had the ASU achieved its aims, the results would have been devastating.
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The ASU members claimed improbably during the trial that they had intended only to use hoax devices and not actually to disrupt the London power supply.
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But for the arrest of the AIRLINES ASU, its next major target might well have been Birmingham – as had been indicated by a series of intelligence reports in June and July. Gannon's attempt to obtain a storage
facility in Birmingham also points clearly in that direction.
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AIRLINES, possibly the Security Service's most successful anti-PIRA operation, was followed by Operation TINNITUS, which disrupted a Provisional attempt during August and September 1996 to mount a major attack – probably using vehicle-borne IEDs – against central London. On 23 September 1996 four members of an ASU operating in London were arrested; a fifth (Dermot O'Neill) was shot during the arrests and later died from his wounds. Four large boxes each containing a large quantity of HME-ANS (ammonium nitrate/sugar), an additional 3 tonnes of bagged HME-ANS, weapons and under-vehicle devices were recovered from a self-storage unit in Cranford Way, Hornsey.
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In the aftermath of AIRLINES and TINNITUS, Lander was in cautiously confident mood. In a private lecture on terrorism, he told the audience: ‘Even terrorists regard the UK as a hostile and risky environment. We know this from what intelligence tells us terrorist groups and hostile states think. We also hear it from the terrorists themselves.' ‘No one', claimed Lander, ‘has a better record.'
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That record, in the Service's view, contributed to PIRA's renewed willingness to consider a compromise political settlement.