Joseph Kagan

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Joseph Kagan was the head of Gannex Textiles and a prominent supporter of the Labour Party under Harold Wilson.[1]

Background

Kagan came from a family of Jewish woollen manufacturers in Kaunas, Lithuania, and studied textiles at Leeds in the 1930s. After the Russians occupied Lithuania in 1939, they kept him on as a manager at the expropriated family mill. During the German occupation from 1941, he carried out forced labour while hiding his family.[2]

At the end of the war, the family walked to Romania, where they made contact with Douglas Morrell, a Jewish SOE officer. According to Morrell, he and Kagan engaged in black-market trading and smuggling refugees to Israel. Eventually, the family obtained a visa for Britain, where they arrived in 1946.[3]

Gannex

Once in Britain, Kagan opened a factory in Huddersfield where developed a waterproof nylon fabric, 'Gannex', which he marketed by ingratiating himself with prominent celebrities. He eventually obtained a royal warrant for selling shooting coats to the Duke of Edinburgh.[4]

Wilson

Kagan first met Wilson, his local MP in Huddersfield, in 1954. His Gannex coats would eventually become a Wilson trademark.[5]

MI5 had already launched an inconclusive investigation into Kagan before Wilson became Prime Minister in 1964.[6]

In 1967, Wilson presented the Soviet premier Alexei Kosygin with a list of humanitarian cases which included members of Kagan's wife's family.[7]

Vaygauskas

In 1969, according to journalist David Leigh, a Lithuanian from Kagan's wife's hometown called Richardas Vaygauskas turned up as a Soviet diplomat in London. He soon struck up a friendship with Kagan, who was still trying to get his family out of the Soviet Union.[8] Christopher Andrew places Vaygauskas' arrival earlier in 1964.[9]

MI5 officer Peter Wright claimed that British intelligence received damaging information about Kagan in the late 1960s from Russian agent Oleg Lyalin:

While Lyalin was still in place, he told MI5 about a friend of his called Vaygaukas. Vaykaugas was a KGB officer working under cover in the Soviet Trade Delegation in London. Lyalin told us that Vaygaukas had claimed to be in contact with a man called Joseph Kagan, a Lithuanian emigre who was a close friend of Harold Wilson's.[10]

According to David Leigh, Wright places these events a year too early. Lyalin was not under MI5 control until February 1971 after Wilson left office.[11]

Leigh notes a story given by Peter Wright to Chapman Pincher, according to which Vaygauskas had asked Kagan to get some information from Wilson at No.10, which Kagan had done the same evening, with Lyalin informing his handler the next day.[12]

Leigh describes this as "Wright's account of Lyalin's version of what Vaygauskas boasted that Joe Kagan had asserted to him about Harold Wilson", and suggests it could not have happened as described because Lyalin had not been turned until after Wilson left office.[13] The official MI5 historian, Christopher Andrew confirms this, stating that Lyalin made contact with Special Branch on 21 April 1971.[14]

Andrew confirms that during Wilson's time in opposition, "the business friends Wilson had made while involved in East-West trade during the 1950s attracted the unfavourable attention of the Security Service", and that it was Kagan they were most concerned about. He cites the MI5 archives as recording that Vaygauskas congratulated Kagan on his knighthood in August 1970, and that Kagan invited Vaygauskas to his investiture.[15]

Wright states that, as a result of the Lyalin incident, MI5 placed Kagan under intensive surveillance.[16]

Under the pseudonym 'Colonel Brewster', MI5 officer Tony Brooks recruited a network of agents close to Kagan, led by his London representative Arthur Parker. Kagan's links to the royal family were a particular concern.[17]

Later in 1971, Lyalin was exposed and the British Government chose the moment to expel 105 Soviet diplomats, Vaygauskas among them. This troubled both Wilson and Kagan, who each sought the offices of the head of the City of London Police, Sir Arthur Young. As a result Kagan was interviewed by MI5 in Rooom 55 of the War Office.[18]

According to Andrew, Kagan was interviewed by a K5 officer two months after Lyalin's expulsion, and told him that he had met Vaygauskas almost every week since 1964, not realising that he was a KGB officer.[19]

At a later interview, according to Andrew, Kagan told Tony Brooks (K5B/1) that Vaygauskas had asked him to help get a British campaign against the trial of Russian Jews in Leningrad called off. Andrew records the following note by Brooks:

I thanked Kagan for telling me this as it was first-class example of the KGB exploiting him as an agent of influence, because surely he was not so naive as to believe that calling off the legitimate protest in the West would have any effect on the fate of Jews in the USSR.[20]

According to Wright, Wilson approached Young seeking to discuss Kagan with MI5. The agency's head, Martin Furnival Jones was bemused by this, but allowed Lyalin's handler, Harry Wharton to brief Wilson. Wilson said he knew nothing about the matter, and never discussed confidential matters with Kagan.[21] In Andrew's account, Wilson was interviewed in October 1972 by an officer identified as K5, who briefed Wilson on Kagan's links with Vaygauskas, and who recorded his impression of "Wilson's high regard for this Service which he mentioned on a number of occasions.[22]

According to Leigh, Wharton confirmed Wright's account and a note of the interview ended up in the 'Worthington' file on Wilson.[23]

Andrew records that, immediately after the meeting MI5 chief Sir Michael Hanley discussed the case with the Permanent Under-Secretary at the Home Office, Sir Philip Allen, and that were both were baffled by Wilson's continued association with Kagan, despite the latter's "dishonesty and indiscretion."[24]

Andrew also records the following note by the director of MI5 KX section, John Allen:

Kagan is clearly a target of the highest importance for the K.G.B. because of his close association with Mr Wilson and other Labour Party leaders. I do not believe Kagan has been, or is now likely to become, a conscious Soviet agent but I am sure he has been a valuable source of intelligence.[25]

According to Wright, Wilson regarded the Vaygauskas-Kagan episode as a smear, but at this time the Conservatives were in government and 'took a great interest in the material'.[26]

MI5 continued to view Kagan's social and financial links with the Soviet Union with suspicion. His wife's cousin Yasha Bum, was allowed to leave Russia for Israel in 1972, while her brother Alex Shtromas, arrived in Britain in 1973. Kagan also set up a Kagan Trust Fund, chaired by Israeli parliamentarian Menachem Savidor to help Jewish emigrés from the Soviet union. Brooks suspected that this activity was a front for planting 'illegals' (non-diplomatic cover spies).[27]

Private Eye

After May 1971, Wilson's links with Kagan became a regular target of Private Eye.[28]

Colin Wallace

Allegations about Kagan feature in the notes taken by Colin Wallace as part of Operation Clockwork Orange in Northern Ireland, based on briefing material which Wallace believed came largely from MI5 in London:

It can be shown that both Wilson and Heath are under Soviet control through Dick Vaskgaukas(?) and Lord Rothschild. It can also be shown that Wilson has received about sixty thousand pounds from East German sources for campaign funds and that he has a friend in the Soviet Government. [29]

Lessiovsky allegations

In late 1974 Conservative MP Winston Churchill wrote to Wilson:

In case, he may be unaware of the fact, I think your friend Sir Joseph Kagan should be informed that his houseguest, a delightful Russian, Victor Lessiovsky, is a senior serving officer in the KGB.[30]

Kagan denied meeting Lessiovsky, whose cover as a KGB officer had already been 'blown' at the time. This latter fact leads Leigh to conclude the episode was a provocation, either by the KGB or by MI5.[31] Ramsay and Dorril conclude that the latter was more likely, and that MI5 may have been trying to discredit Lessiovsky in the eyes of US intelligence, where some officer believed he was the double-agent FEDORA.[32]

In 1974, Kagan set up a tax avoidance scheme with his old colleague Douglas Morrell. Leigh notes that this apparently escaped the notice of Tony Brooks, and Morrell denied ever meeting Brooks, though they were both former SOE officers.[33]

Ramsay and Dorril quote a 'Special Branch contact' as stating that Kagan's office was entered and documents copied in 1974.[34]

In January 1975, with talk of a 'businessman's Government in the air' Frank Taylor, head of Taylor Woodrow wrote to Kagan asking him to help 'save Britain' by joining a group that would prevent communists or fascists taking over. Ramsay and Dorril conclude from this that MI5's fears about Kagan were not taken seriously by the City.[35]

In 1975, watchers from MI5 A4 section followed Soviet agent-runner Boris Titov to a flat owned by Kagan. Further surveillance showed that on one occasion, Titov was in the building while Kagan was on the phone to Wilson's secretary Marcia Williams were all in the building at the same time.[36]

Kagan's office was still being bugged by officer from MI5 K5 section at the time of Wilson's resignation, on the theory that Kagan could be passing material from Williams to the KGB.[37]

Wilson made Kagan a peer in 1976.[38]

Later years

Kagan was sentenced to ten months in jail for fraud in 1980.[39]

MI5 evidently retained its interest in Wilson and Kagan even after this point. According to Andrew, the Service's archives record that the two men entertained a member of the Soviet trade delegation at the House Of Lords in the 1980s.[40]

Affiliations

Connections

External Resources

Notes

  1. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.92.
  2. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.112.
  3. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.112.
  4. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, pp.112-113.
  5. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.113.
  6. ↑ Stephen Dorril & Robin Ramsay, Smear! Wilson and the Secret State, Fourth Estate Ltd, 1991, p.114
  7. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.181.
  8. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.182.
  9. ↑ Christopher Andrew, Defence of the Realm, The Authorized History of MI5, Allen Lane, 2009, p.627.
  10. ↑ Peter Wright, Spycatcher: The Candid Autobiography of Senior Intelligence Officer, Viking, 1987, pp.364-365.
  11. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.183.
  12. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.183.
  13. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.187.
  14. ↑ Christopher Andrew, Defence of the Realm, The Authorized History of MI5, Allen Lane, 2009, p.567.
  15. ↑ Christopher Andrew, Defence of the Realm, The Authorized History of MI5, Allen Lane, 2009, p.627.
  16. ↑ Peter Wright, Spycatcher: The Candid Autobiography of Senior Intelligence Officer, Viking, 1987, p.365.
  17. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.188.
  18. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.189.
  19. ↑ Christopher Andrew, Defence of the Realm, The Authorized History of MI5, Allen Lane, 2009, p.627.
  20. ↑ Christopher Andrew, Defence of the Realm, The Authorized History of MI5, Allen Lane, 2009, p.628.
  21. ↑ Peter Wright, Spycatcher: The Candid Autobiography of Senior Intelligence Officer, Viking, 1987, p.365.
  22. ↑ Christopher Andrew, Defence of the Realm, The Authorized History of MI5, Allen Lane, 2009, p.628.
  23. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.183.
  24. ↑ Christopher Andrew, Defence of the Realm, The Authorized History of MI5, Allen Lane, 2009, p.629.
  25. ↑ Christopher Andrew, Defence of the Realm, The Authorized History of MI5, Allen Lane, 2009, p.629.
  26. ↑ Peter Wright, Spycatcher: The Candid Autobiography of Senior Intelligence Officer, Viking, 1987, p.365.
  27. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.183.
  28. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.204.
  29. ↑ Paul Foot, Who Framed Colin Wllace? Pan Books, 1990, p51.
  30. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.237.
  31. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.238.
  32. ↑ Stephen Dorril & Robin Ramsay, Smear! Wilson and the Secret State, Fourth Estate Ltd, 1991, pp.295-296.
  33. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.183.
  34. ↑ Stephen Dorril & Robin Ramsay, Smear! Wilson and the Secret State, Fourth Estate Ltd, 1991, p.293.
  35. ↑ Stephen Dorril & Robin Ramsay, Smear! Wilson and the Secret State, Fourth Estate Ltd, 1991, p.283.
  36. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.243.
  37. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.234.
  38. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.244.
  39. ↑ Christopher Andrew, Defence of the Realm, The Authorized History of MI5, Allen Lane, 2009, p.629.
  40. ↑ Christopher Andrew, Defence of the Realm, The Authorized History of MI5, Allen Lane, 2009, p.629.
  41. ↑ David Leigh, The Wilson Plot, Mandarin, 1989, p.92.
  42. ↑ Peter Wright, Spycatcher: The Candid Autobiography of Senior Intelligence Officer, Viking, 1987, p.365.
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