Person interviewed:      Michael John Smith


Place of interview:        Paddington Green Police Station


Date of interview:         10th August 1992


Time commenced:        20:19   Time concluded:           20:47


Other persons present: Detective Superintendent Malcolm MacLeod

                                   Detective Sergeant Stephen John Beels

                                   Richard Jefferies (Duty Solicitor)


Beels:  This interview is being tape-recorded. I am Detective Sergeant Stephen Beels, Special Branch, New Scotland Yard. The other officer present is Ö


MacLeod:  Detective Superintendent Malcolm MacLeod, Special Branch, New Scotland Yard.


Beels:  And you are sir Ö


Smith:  Mr Michael Smith.


Beels:  And you are sir Ö


Jefferies:  Richard Jefferies, Solicitor from Tuckerís Solicitors.


Beels:  We are in Interview Room No. 2, at Paddington Green Police Station. At the end of this interview, Mr Smith, I will give you a form explaining your rights of access to a copy of the tape. The date is the 10th August, and the time is 8:19 pm. I must caution you, Mr Smith, that you do not have to say anything unless you wish to do so, but what you say may be given in evidence. Do you understand that?


Smith:  I do understand.


Beels:  Do you agree that the tapes were unsealed in your presence?


Smith:  I do, yes I do.




Beels:  Your solicitor is present, and you know that youíre entitled to free legal advice?


Smith:  Correct.


Beels:  This is a continuing investigation into suspected offences under the Official Secrets Act. You understand, thatís the nature of the enquiry?


Smith:  Ok. I understand that.


MacLeod:  Right, letís begin Mr Smith. Perhaps you can tell me, are you in the habit of keeping large sums of money at home?


Smith:  We, I thought we already, er, I do keep money at home, yes.


MacLeod:  What sort of sums are you talking about?


Smith:  Not enormous. Iíd, er, in the region of, er, a £1,000, that sort of amount.


MacLeod:  A £1,000. What at home?


Smith:  My wife also keeps money. We, itís sort of emergency funds.


MacLeod:  Right, well, I see. Itís money that you accumulate, is it? I mean, itís money you just have, you just add to from time to time, is it?




Smith:  Yes, to, to keep, er, a certain balance. As I said before, I mean, Iím, Iím quite in the habit, if I want to buy something ...


MacLeod:  Um, um.


Smith:  Öto try and do a cash deal. I mean, er Ö


MacLeod:  So a £1,000 is quite normal for you to keep around the house, roughly?


Smith:  I wouldnít say normal, in the, er, full time. No, it goes up and down.


MacLeod:  Well, we found £2,000 in cash, in £50 notes, in your house when we searched it.


Smith:  Well, that doesnít surprise me.


MacLeod:  So, can you tell me where that came from?


Smith:  Well, itís money Iíve, Iíve withdrawn from my account.


Beels:  In what sort of quantities?


Smith:  In, in £50 notes.


Beels:  On one particular occasion, on separate occasions?




Smith:  Iíd say separate occasions.


Beels:  And approximately, how many separate occasions?


Smith:  I donít remember all this.


MacLeod:  So, this is quite normal, for you to, sort of, go to the bank and draw cash, and have something like £2,000 lying around the house?


Smith:  I wouldnít say, itís, itís not normal, in the sense that, er, I would do it in one go, or at one time, no.


MacLeod:  So, I mean, we are not to be too surprised that youíve got £2,000 in cash in a drawer, um, in a table in your bedroom, in your bedroom in a drawer. Is that quite normal then?


Smith:  Well, I think it is, yes.


MacLeod:  So, that was the money, that was brought up over a period of, how long would you say you, sort of, accumulated that sort of amount of money?


Smith:  Well, it doesnít take all that long, I, I get a reasonable wage. Er, I had, er, a tax rebate a couple of years ago Ö


MacLeod:  Um, um.


Smith:  Ö which gave me quite a lot. Iíve just had a redundancy payment. I mean, I Ö




MacLeod:  Yeah.


Smith:  If I find Ö


MacLeod:  But they wouldnít pay you cash in redundancy payment, would they?


Smith:  No, but I, I, I just pay that money into, into my account.


MacLeod:  Sorry, Iím not clear. You paid what money into your account?


Smith:  My redundancy cheque.


MacLeod:  Oh, you paid that into Ö


Smith:  It only, it only came a few days ago.


MacLeod:  How much was that for?


Smith:  £1,435.


MacLeod:  Fourteen thirty-five?


Smith:  Pounds.


MacLeod:  So, what youíre saying is that some of that money might be your redundancy money?


Smith:  Er, Iím not sure if thatís included, no.




MacLeod:  So, are we are talking about another sum of money, another Ö?


Smith:  Well, I Ö I said before, the way I do my accounting, run my finances, is, is rather chaotic. I mean, youíll probably find that if you look at my bank statements, I, I go up and down in balance. I withdraw large amounts when I want to, and itís, itís just the way I, I live.


MacLeod:  Yes, I find it quite interesting the way you live, in fact, that you have this amount of money lying around.


Smith:  Well, no. The fact is, my wife and I, um, we run our affairs separately to a large extent financially. We have a joint account, which, er, pays for the bills. As I say, we have a fairly low mortgage, which does help to, to allow us to buy the things we want.


MacLeod:  Right. So, what weíve got here, is an envelope containing £2,000 in £50 notes, that youíve put together over a period of, what?


Smith:  I didnít say over any period. No, Iím not, Iím not Ö


MacLeod:  Oh, well, well, just, just for arguments sake, I mean.


Smith:  Well, Iíve, Iíve only started to want to, to, to want to deal in cash more Ö


MacLeod:  Uh, uh.




Ö with, em, when, when thereís been these high interest rates, and, er, credit cards, um, being questioned sometimes when Iíve, Iíve tried to do a deal in a shop, and the guy said, well you know, ďIíd rather you not pay with credit card, because we have to pay a certain amount soĒ. Iíve, I got this habit from my father-in-law, who, who finds he can save quite a bit of money by ...


MacLeod:  By shopping around and getting a discount?


Smith:  By shopping around, and getting, getting the discount on cash. I mean, I, I thought this was, er, an accepted way of bartering, in, in ...


MacLeod:  But, I mean, what sort of things would you go out and buy?


Smith:  What, just everyday things that I might need in the house, or ...


MacLeod:  So really, this £2,000, we ought not to be surprised then, that this is ...?


Smith:  I donít see why. I mean, itís, itís not, I mean, when you say large amounts, I mean to me ...


MacLeod:  So itís not Ö


Smith:  I, I donít. I, as I said before, Iím a bit of a hoarder. I donít really feel that that amount of money bothers me.




MacLeod:  So, really, what Iím saying is, that amount of money, that £2,000 Iím talking about, is money that youíve sort of put together from your, your savings?


Smith:  Yeah, yes.


MacLeod:  Over just a period of, you know, time. So, you didnít, you didnít take that out of your bank in one large, in one single sum. It wasnít one withdrawal, is that what youíre saying?


Smith:  I would say itís not one withdrawal, no


MacLeod:  Well you are lying.


Beels:  How many?


MacLeod:  You are lying. Youíre lying through your teeth, because the bank notes were serial. The serial numbers Ö


Beels:  The serial numbers are sequential.


Smith:  Well I donít think theyíll all be sequential.


MacLeod:  Well, Iím telling you they were. So how do you account for that?


Smith:  I canít account for that.


MacLeod:  I think youíd better start thinking how you can account for that.




Beels:  Youíve just said itís an accumulation.


MacLeod:  Youíre lying.


Beels:  Over a period of time, and yet these bank notes run in sequence, and 2 separate amounts in sequence.


Smith:  I canít account for that, Iím sorry.


MacLeod:  Well, we will be able to account for it, because we should be able to find out when and where that money was withdrawn, and we will see what you have to say about that. Why are you lying about it?


Smith:  Iím not lying about it.


MacLeod:  Youíre sitting there. You told me, to begin with, that you, it was money that you had accumulated and, you wouldnít commit yourself as to how long it took you to put that together.


Smith:  I did not say that.


MacLeod:  You said it was, you said it wasnít a single withdrawal from the bank, and then, when faced with this incontrovertible evidence where the serial numbers were sequential, £2,000 in £50 notes, and youíre telling me, you, you donít understand how thatís happened. Iíll tell you how itís happened, because that was a lump sum payment,




a lump sum payment, paid to you by the KGB.


Smith:  Thatís not true.


MacLeod:  It is true, you know itís true. I know itís true, and thatís why Iím calling you a liar, and if Iím wrong you, you prove me wrong, tell me where Iím wrong, correct me. I donít call people liars unless Iím absolutely on firm ground. You are a liar, and Iíll keep repeating this as long as it takes to get the message through to you, youíre lying.


Smith:  Well you can accuse me of lying if you like.


MacLeod:  Right, well.


Smith:  Itís, itís your prerogative to call me what you like


MacLeod:  Well, Iím calling you a liar in front of your solicitor, just to make the position absolutely and unequivocally clear. Right, so we donít get very far with that lot. Found in the same envelope with the money, there was a, a letter from somebody called Williams. Can you tell me, have a read of that letter and tell me who that is. I produce exhibit JS/40, and Iím showing it to Mr Smith now, and itís an A4 size single sheet of paper.


Smith:  I remember a letter coming for me - I think this must be it - sometime ago, which was confusing to me, it wasnít the




letter, it was the envelope that bothered me, because the address was wrong on it, and ...


MacLeod:  So, if the address was wrong, how come they got the Christian name right, and it reads "Dear Mike, a lot of water has passed under the bridge after our latest appointment, I am sure we should have a chat in the nearest future. I would be happy to meet you, as previously, at the recreation in October. With best wishes, Yours sincerely, Williams".


Smith:  Yes


MacLeod:  And youíre telling me that that is something that wasnít written to you?


Smith:  Well, itís Ö


MacLeod:  I suppose, I suppose Ö


Smith:  Ö I didnít say it wasnít written to me. I received a letter, which I think this must be this one that youíre presenting here. The reason I, Iíve kept it, is because it was, er, something which I didnít understand at the time. [MacLeod laughs] I donít know why youíre laughing Ö


MacLeod:  You, you didnít understand it, and you kept it, and I suppose thatís where you got your £2,000 from as well, was it?




Smith:  No, there was no mention of money there.


MacLeod:  No, there was no mention of money, but it was in the same envelope as the money.


Smith:  I donít believe thatís true.


MacLeod:  Well, Iíve got evidence that it was true, because before we removed that from the drawer where it was contained, we had it photographed, and items were photographed as they were removed, and are you going to tell me thatís wrong. Explain it?


Smith:  I canít explain ...


MacLeod:  Explain it?


Smith:  Ö what youíre saying, what Iím, Iím explaining this letter. A letter arrived for me, which I did not understand. I did not understand.


MacLeod:  Thereís a lot of things you donít understand. You get strange phone calls that you donít understand, youíve got people standing outside your front address apparently.


Smith:  I was trying to explain that to you earlier. That I, I had Ö


MacLeod:  Who is Williams?


Smith:  I do not know who Williams is.




MacLeod:  You must take us for being idiots.


Smith:  I had a friend at EMI Electronics called Williams, er, Dave Williams, maybe it was him. I, I donít, I doubt it. The, the Ö


MacLeod:  I doubt it too.


Smith:  The letter that came was in an envelope, which as I say had an incorrect address on it. I was, er, I didnít recognise the handwriting, and I found it rather puzzling. I mean, I would have thrown it away, but I, I ...


MacLeod:  You kept it out of curiosity did you?


Smith:  Out of curiosity, yes.


MacLeod:  Uh, uh.


Beels:  How was the address incorrect?


Smith:  It was, I think they had the wrong road name, or something.


MacLeod:  Well how Ö?


Smith:  There was something odd about it, which ...


MacLeod:  Well, how did it find its way to you then, if it had the wrong address?




Smith:  Because, I wondered how it got to me, thatís why.


MacLeod:  Iím sure you did. And it was addressed to you, Mr Mike Smith, was it not?


Smith:  I donít remember that, Iíve not seen the envelope for sometime.


MacLeod:  Iíll show you the envelope in the next interview. Explain it, this is consistent with the kind of contact, you know, and I know, that the KGB make when trying to re-establish contact.


Smith:  I do not know that, Iím, Iím afraid to say.


MacLeod:  Yes you do. Yes you do.


Smith:  If I had any worries about that letter, I would have thrown it away.


MacLeod:  Where is your credibility, where is your credibility man. You get a letter from somebody that you donít know?


Smith:  Well, thereís no address on it, so I couldnít, I couldnít contact anybody about it. So whatís, whatís the point of you ...


MacLeod:  How come that was found in the envelope with the £2,000, and some other notes that Iíll produce in the next meeting, once weíve had a chance to look at them. Notes that appear to be quite interesting, regarding arrangements for rendezvous.




Weíll pay that a little bit more attention in the next interview. But letís take one step at a time. Here we have £2,000 cash, £50 notes, serial numbers running sequentially. Here weíve got a letter from a man named Williams, who clearly you had some recent contact with.


Smith:  No.


MacLeod:  And arranging to meet you again at the recreation.


Smith:  I do not know ...


MacLeod:  What is the recreation?


Smith:  I do not know anybody called Williams


MacLeod:  Whereís your credibility?


Smith:  Well, where is his first name. I mean, Williams is a surname... as well?


MacLeod:  Well, even I can work that out.


Smith:  As I say, the only Williams Iíve, Iíve known is a man called David Williams.




MacLeod:  Look, donít take us for idiots.


Smith:  I didnít say Ö


MacLeod:  You know as well, Iím not interested in your David Williams, you know that thatís probably a pseudonym for one of your KGB contacts.


Smith:  I, I canít answer that, because I donít know who this man is.


MacLeod:  Iím surprised youíre telling me that youíve never seen that before.


Smith:  I didnít say Iíd never seen that before.


MacLeod:  Well, I, thatís what Iím saying, Iím surprised youíre not saying that.


Smith:  Well, why should I?


MacLeod:  Because itís, itís only when youíre faced with irrefutable evidence that you have to admit.


Smith:  Well, well, I would not, em, say I hadnít seen that. When you raised the point before about the, er, TSC document, I say I hadnít seen it before, because I, I truly believed I hadnít seen it before. You, you showed




me this, and I say yes, I have seen it before. I, I kept it because it was Ö


MacLeod:  Yes, youíve seen it before, but youíre denying that it is intended for you.


Smith:  I didnít deny it was intended for me. What, what Iím saying is, it came through the post. I was trying to understand who might have sent it.


MacLeod:  So, youíre, youíre not denying it. It may have been, it was intended for you.


Smith:  No, I didnít say, er, I deny it, it was intended for me. I Ö


MacLeod:  So youíre saying it was intended for you?


Smith:  I donít know.


MacLeod:  Itís addressed to you. Youíre Mike. Youíre the only Mike at that address.


Smith:  Thatís correct. Well, what do you want me to say. I Ö


MacLeod:  Well?


Smith:  I saw this.


MacLeod:  Iím not pursuing that line of questioning any further, because I see Iím not going to get very far.




Right, have you seen that note before. Iím going to produce exhibit JS/8, which is an A4 piece of paper with some manuscript writing on it. Iím going to show this to Mr Smith. Have you seen that before?


Smith:  Yes, I think it was some, er, something I was doing at work. It was probably part of this documentation I said I walked off with on the last Friday I was there.


MacLeod:  Well, talk me through it, tell me what it means, go on.


Smith:  These were, um, I think they were numbers, related to contracts that we were dealing with at the company, at Hirst Research Centre.


MacLeod:  Well, can we just go through them one by one. Letís look at this top line here. Have you anything you can recall about what this relates to?


Smith:  I, I, I canít give you any factual information about these. These were contracts which came up in the course of my work, I, er, when I do my audits, have to check, er, sometimes the contracts which are in place in, in a particular, er, project group, and look up, um, the, the documentation to say which, um, - Iím trying to think of the word Ė which contract, which order is involved with that group. So that, when I audit them, I can ask them questions about particular contract requirements, and these, these are areas that I have actually covered in the last year or so.




MacLeod:  So, what are you doing with these references in your possession?


Smith:  I, I donít know why I kept them. They should not have, um, theyíve, theyíve no relevance to me now.


MacLeod:  Well, it, maybe a bit of relevance to somebody else, is that not true?


Smith:  No, I donít think so. I mean, because, because theyíre purely ...


MacLeod:  Purely what?


Smith:  But thereís no information there, if, if you look. Theyíre purely, um, numbers, and, and areas, um, within the company.


MacLeod:  Well, how come this was underneath the, the mat in the front of your car?


Smith:  The mat in my car?


MacLeod:  Yes, underneath your car mat, but at the driverís side in your car.


Smith:  I find that hard to believe, why it should be there.


MacLeod:  Well, you, you find it hard to believe?


Smith:  Well, well, the Ö




MacLeod:  We found that this morning.


Smith:  I had, I had a leak in the bottom of my car. I put something under there to stop it, er, making the mat wet. Maybe that was ...


MacLeod:  What, you put that Ö


Smith:  Iíd, I donít Ö


MacLeod:  It strikes me that Ö


Beels:  Itís bone dry.


MacLeod:  Itís not the kind of leak Ö


Beels:  Thereís no water stain.


MacLeod:  Itís not the kind of leaks that weíre interested in Mr Smith, I think you should concentrate, and tell me why that was under the, the mat at the front of the driverís side of your car. That was secreted, that was a document which was intended ...


Smith:  I wouldnít say it was secreted. I Ö


MacLeod:  If itís under a mat, itís got to be secreted. It wasnít intended to be found, was it? And youíre telling me you put it under the mat?




Smith:  Well, why should I put it under the mat? I didnít Ö


MacLeod:  Because, didnít you say, because there was a leak under the car? I donít know what.


Smith:  I donít know why that was there. I, Iím, Iím


MacLeod:  No, Iím sure you donít, but Iím at a bit of a loss why we put a, a document, containing those kind of references ...


Smith:  Well, I, I put, er, a plastic bag under the mat, to stop it.


MacLeod:  Oh, I see. Well how did that find itís way under there then?


Smith:  Maybe it was in the bag when, when I put it there. I donít know. I, I do, I canít Ö


MacLeod:  But we didnít find a plastic bag from the ...


Smith:  I cannot give you an explanation, because I, I donít know how long that has been there for, for one thing. We would have to check those contracts, and see when they actually, um, were being worked on.


MacLeod:  Well, well, it strikes me that thatís a fairly, er, clean piece of paper. Does it strike you as being a clean bit of paper?




Smith:  Well, it looks a bit scrappy to me, I mean.


MacLeod:  Scrappy, but itís, none the less, thereís no water marks, thereís no stains on it. Itís been handled a bit, granted, but it doesnít appear to have been under there for a very long time. Do you agree?


Smith:  I, I canít give an opinion on that, Iím afraid.


MacLeod:  Well, is it not obvious?


Smith:  Well, it could have been there for 5 years, for all I know.


MacLeod:  Come, come, look at it. It will be interesting to see if, what your company has to say about that.


Smith:  I think, thereís nothing there which I would be ashamed of showing anybody. If you think about it seriously. I mean, what is there there, but, er, a few numbers and ...


MacLeod:  Yes I know, but I find it interesting, that we should find a note like this under the mat of your car.


Smith:  The only explanation I can give is hypothesis, that it was included in something Iíd put in, in that bag. There definitely was a leak, the mat was wet. Youíll probably find some evidence that the mat was wet, at the edge, when it was raining heavily. Because I had a leak, the door was actually, the skin was replaced.




MacLeod:  So, if I have a leak in the floor of my car - and Iím still trying to work out how the rain gets in - but anyway, if I have a leak in the floor of my car ...


Smith:  But, Iím not sure if itís in the floor of the car?


MacLeod:  If I get an A4 piece of paper, it just might do the trick, is that what youíre saying?


Smith:  No. Iím, Iím telling you, it would, it would not have been that. There was a plastic bag which I, I was using, it might have been in the bag for some reason, I, I canít think why.


MacLeod:  Well, I think you know very well why.


Smith:  Well can you tell me then?


MacLeod:  Yes, because that was information that you took from the company, information that you compiled I should say, at some stage, relating to work that youíd carried out, or had knowledge of at the company.


Smith:  I think thatís conjecture.


MacLeod:  Conjecture? Well, how come I was, Iíll come back to it then. Well if itís not.


Smith:  Can we look at whatís actually on there, and is there anything that I should be ashamed of?




MacLeod:  Well, these figures and references mean nothing to me, and until ...


Smith:  Well, I mean, they mean something to me, and Iím trying to explain to you that they, they were contracts, that were taking place in the company, in areas that I was, I was auditing, and, and I may have, I may have .... I mean, the reason it was folded, it was probably in my pocket. I probably just put it in the bag.


MacLeod:  Yes, well, it would certainly appear to us as if it had been folded.


Smith:  When, I think, Iím walking around with my jacket on, I probably made, made some notes. I, I put it in my pocket, and it was there, and I put it in the bag. I donít, I mean, itís, itís all, er, speculation now, because I do not remember that actually being put in that bag.


MacLeod:  But youíre pretty good at making notes, arenít you?


Smith:  Well, itís in the nature of my business to make notes, Iím afraid. Er, if I donít make notes, I donít, I donít remember things.


MacLeod:  Well, I intend to come back to this subject later, but Iím now going to ask you again, about your visit to the United States in 1976. I want you to refresh my memory.



Smith:  Ok.


MacLeod:  Right, tell me where you went.


Smith:  Er, you mean the towns, or the countries?


MacLeod:  Yes, I am talking about the United States.


Smith:  Ok. In the United States I went to Chicago, I went to, um, New York, um, Philadelphia, Boston, Pittsburg, Detroit. I mean, these are places I passed through, I didnít necessary stop.


MacLeod:  And who did you go with?


Smith:  I went alone.


MacLeod:  And how long did you spend in Chicago?


Smith:  Er, about a week and a half, I would say.


MacLeod:  Um, um. Did you make any efforts to look for employment there?


Smith:  No, I, I did make an enquiry from the person I was staying with. Um, what sort of job prospects there were, how Ö


MacLeod:  And who Ö




Smith:  How people, people were paid for doing engineering work. But I was told that the prospects werenít too good. I didnít consider it, er, I certainly wouldnít have wanted to, to live in Chicago, having seen it.


MacLeod:  But you still took steps, did you not, to try to find suitable employment over there?


Smith:  No, I took no steps whatsoever. I Ö


MacLeod:  Well, why have you got a press cutting with, advertising job vacancies?


Smith:  Ah.


MacLeod:  Iím going to produce to Mr Smith.


Smith:  Youíve been pretty thorough, I must admit. That, I know, I know exactly what about this.


MacLeod:  Iím producing to Mr Smith now, exhibit PMS/26. This is a press cutting taken from United States newspapers.


Smith:  Was there a letter with it? Maybe you, youíve Ö I, I, threw it away I expect.


MacLeod:  Well?


Smith:  There was a letter.




MacLeod:  Talk me through it.


Smith:  I was talking to, er, in, in a period before I went to the States, and this maybe as much as a year before. I had, er, the girlfriend. I, I call her a girlfriend, she wasnít really a girlfriend, she was just, er, somebody I met on holiday in 1973. She was, em, a native of Chicago, living with her parents there, and, um, we met in Crete in 1973 whilst, whilst on holiday.


Beels:  What was her name?


Smith:  Her first name was Diane, I canít remember her second name. She was somebody, I didnít know her very well, but she wrote to me a few times, and I have made, not an enquiry, just that I mentioned in one of my letters to her, um, about the work I was doing, and whether, that there might be anything suitable there. It wasnít that I was looking for work. I was, I was curious, more than anything, because she told me about the sort of job she did, and I just wondered what, what sort of jobs were available, and she sent me this cutting, that was what, why I had it. I didnít collect that while I was in the States. Was there a date? I, Iím not sure if there was a date on this, I canít remember.




MacLeod:  Well, Iím sure, Iím sure, and Iíll take your work for it. It coincides with your visit. Er, how much did you pay for your trip to the United States?


Smith:  When you, you say pay, what do you mean, totally? I, I canít give you any ...


MacLeod:  Your fare. Just roughly, can you remember how much you paid for your fare, in those days, long time I know.


Smith:  Itís a long time ago.


MacLeod:  I agree. Well, put it this way Ö


Smith:  It was anything up to £200. I canít Ö


MacLeod:  Right, Ok.


Smith:  Less than £200, actually.


MacLeod:  So, I mean, we would expect to find a withdrawal from your bank?


Smith:  No, no. I think, I said, I paid for it on ACCESS, I believe.


MacLeod:  On ACCESS?


Smith:  I think? Youíre, youíre taking me back a long time here, and I ...




MacLeod:  Yeah, I know, Iíll take you as far back as you want. But youíre saying that you paid for your airline ticket by ACCESS, by credit card?


Smith:  I think. Iím saying, I think I did.


MacLeod:  You think you did. Right, Ok. Well, Iím going to put it to you, that that trip to the United States was financed by the KGB.


Smith:  You said this yesterday.


MacLeod:  And Iím saying it again, with even more authority.


Smith:  Well, you can say it as much as you like. I canít see how you could possibly substantiate an allegation like that?


Beels:  Right. At this point, the tape is coming to an end, so I am going to switch the machine off and change tapes. The time now is 8:47 pm.







Person interviewed:      Michael John Smith


Place of interview:        Paddington Green Police Station


Date of interview:         10th August 1992


Time commenced:        20:48   Time concluded:           21:16


Other persons present: Detective Superintendent Malcolm MacLeod

                                   Detective Sergeant Stephen John Beels

                                   Richard Jefferies (Duty Solicitor)


Beels:  The time is now 8:48 pm. The interview continues.


Smith:  Well, Iíd like to, to add about this, this girl in Chicago, that I had a, a number of letters from her, but that my wife destroyed them when we got married, when she found them, because she was very jealous of, er, there being, er, possibly another woman. So, I think, thatís the reason why you, you might not have found any letter with that.


MacLeod:  Right. Letís go back to your finances. Weíll take you through this in some, more detail tomorrow, but Iím very curious about this £2,000 in particular. Talk me through it again.


Smith:  Well, what can I say. I mean, Iíve, Iíve, I had some money at home. Iíd, er, it is my money.


MacLeod:  Itís your money, yes.


Smith:  Yes.




MacLeod:  Your money, in your possession?


Smith:  My possession, and, em ...


MacLeod:  And money, that you told me earlier, that you had accumulated?


Smith:  Iím sorry I ...


MacLeod:  You said that, didnít you?


Smith:  Yeah, yeah.


MacLeod:  Iím not putting words in your mouth?


Smith:  No, no, no.


MacLeod:  I wouldnít do that in front of your solicitor. You told me that, did you not?


Smith:  I think, I think thatís what I said.


MacLeod:  And here youíve got serial numbers, running in sequence, and youíre telling me that that was amount of monies that you had, and theyíre all brand new bank, bank notes. And thatís a bit of an oddity is it not, for money to have been built up over a period of time?




Smith:  O yeah. I donít know if I built it up over a period of time, or whether itís ...


MacLeod:  Or even just weeks, for them all to have sequential serial numbers. Seems a bit odd doesnít it. Do you want to reflect on that, because I mean, youíve, youíve told me another lie?


Smith:  Iíve told you another lie, when?


MacLeod:  Yeah, well, you told me that this was money. Explain to me how you can have money with serial numbers running sequentially. We, we have got them, weíve built the money up.


Smith:  All I can suggest is that I, I must have withdrawn the money in, er, one time. I, I, I think youíre trying to, to make too much of this issue.


MacLeod:  Too much of it?


Smith:  Yes.


MacLeod:  I asked you a simple question. I asked you a simple question, where did you get £2,000 worth, how, how come you had £2,000 in cash in your bedroom. And you explain to me, that that was money that had been built up out of salary, from other sources, I think you said, you still havenít clarified.


Smith:  Well?




MacLeod:  Well, tell me about these other sources, because Ö I mean, explain to me what other sources?


Smith:  Iíd, Iíd other sources. I donít mean other sources in the way you might imagine.


MacLeod:  Well explain?


Smith:  Iíve had, you know, other, other means of income apart from just, er, the work I do at GEC.


MacLeod:  Well explain to me the other, income?


Smith:  Well, Iíve, Iíve earned some money through, em, through playing the guitar.


MacLeod:  Yeah, where did you play?


Smith:  In a dance class.


MacLeod:  Whereabouts?


Smith:  Em, it was, ur, at a school in Lilly Road.


MacLeod:  A school in Lilly Road?


Smith:  Em.


MacLeod:  How often?


Smith:  It was in Fulham.




MacLeod:  How often do you play there?


Smith:  Ur, it was once a week.


MacLeod:  When did you last play there?


Smith:  I think it was about 2 years ago.


MacLeod:  2 years ago?


Smith:  I think


MacLeod:  So, how come youíve got this money in your, in your possession now that, are you telling me that, have you got any other sources of money then?


Smith:  Itís, itís difficult to remember when, when people have given me money in the past, er, in exchange for things, em, that Iíve not banked, er. Itís happening all the time, when I get, I get, er ...


MacLeod:  When youíre meeting your KGB controller. Itís difficult to know what to do with the money, because heís given you cash.


Smith:  I didnít say that.




MacLeod:  And you find that you have a need to spend the money.


Smith:  I did not say that.


MacLeod:  Well, Iím telling you.


Smith:  I get a bit, money from, from where I work, in the form of expenses, sometimes, and, er, I received over a hundred pounds only, er ...


MacLeod:  When?


Smith:  A week or so ago.


MacLeod:  Did you? So, if we check the company, the company will be ...


Smith:  Yes, Iím quite happy for you.


MacLeod:  A hundred, a hundred pounds?


Smith:  Over a hundred pounds.


MacLeod:  How much?


Smith:  Over a hundred pounds.


MacLeod:  Two hundred pounds?




Smith:  No, it was Ö I, I, I canít remember if it was hundred ...


MacLeod:  Well, it was just over a hundred pounds.


Smith:  A hundred and ten pounds.


MacLeod:  Yeah, Ok, fair enough, itís quite reasonable. But what I donít find reasonable, is how you can have £2,000 brand new bank notes, £50 bank notes with numbers running sequentially. Tell me, where did you get that £2,000 from?


Smith:  Iíve already explained to you.


MacLeod:  But you havenít. This, Iím sorry to labour the point, but you havenít satisfied my question. You havenít told me where you got this £2,000 from. Itís not logical. Think about it, youíre an intelligent man, for goodness sake. Two grand, fifty pound brand new bank notes, numbers running in sequence. Explain to me, where did you get the money from?


Smith:  I thought I had explained it. Iím sorry.


MacLeod:  Well, I must be pretty thick, but I canít quite reconcile your answers with the, with what is logical, a logical question. Brand new bank notes, £50 notes, numbers running ...


Smith:  As I explained before, Iím, Iím not in possession of my accounts documentation, and I, I find it hard to, to think about figures without ...




MacLeod:  Right. So, did you withdraw it from the bank? Did you make a cash withdrawal from the bank?


Smith:  I do not remember now. I mean, youíre, youíre, youíre expecting me, sitting here, to think about my, my, my accounts, going back over, I donít know how long, and not have any ...


MacLeod:  No, I Ö


Smith:  Ö figures at my, my finger-tips.


MacLeod:  No, I didnít intend to imply that at all.


Smith:  Well, I think thatís what youíre, youíre asking me to do.


MacLeod:  Iím talking about this money, that has obviously been withdrawn quite recently - £2,000. Iím sure, if the average man in the street withdrew £100, or £200, heíd probably remember when he made a withdrawal. Youíve got £2,000. You still havenít satisfied my question, and Iím going to labour this point until I get a satisfactory answer.


Smith:  You can labour it as much as you like. I mean, Iím not going to sit here and, er, give you an answer thatís going to satisfy you, without some, er, better access to my figures.




MacLeod:  I mean Ö Ok.


Smith:  I mean, youíve got to think, er, I Ö


MacLeod:  How can Ö


Smith:  I, Iím not dealing, um, over the, the period of 2 or 3 years. I mean, Iíve, Iíve hardly looked at my accounts, um, to know what, what Iím, what figures I, I have in the bank at any time. I have, I have, em, found Ö


MacLeod:  But Iím not.


Smith:  I found the figures of over, recently, I found over a £1,000 extra in my account, that I didnít realise I had, because I hadnít done my sums for about 2 years. I didnít - I hadnít really sorted out - all I knew is, bank statements were coming through, and showing that I was in the black, so I, I didnít worry about it.


MacLeod:  Iím not talking about your finances over the last number of years, or in recent times. That will be dealt with tomorrow in a separate interview. But what Iím concerned about, and what I want a satisfactory answer to, is where did you get that £2,000. Because, by tomorrow, I shall know exactly where that money was issued, and at what bank. Now, Iím giving you the opportunity to tell me now, where that money came from.


Smith:  Well, I think youíd better find out then, because itís, er,




obviously you, you have better access to these, er ...


MacLeod:  But youíre the one that can provide the answer. A simple question, where did you get £2,000 from in brand new £50 notes?


Smith:  Well, I explained before. I, I have withdrawn money from my account in the past, my, my Abbey National account.


MacLeod:  But how does that account for brand new bank notes, numbers running sequentially. Explain it?


Smith:  Well, I. I, I canít comment any further on it, Iím sorry.


MacLeod:  Is that because you feel it might incriminate you?


Smith:  No, I donít feel that at all.


MacLeod:  Well, explain £2,000. If I had £2,000 in my bedroom drawer, Iíd be able to tell you in an instant where it came from. If I had £200 stuffed in my bedroom drawer, Iíd be able to tell you where it came from. Here youíve got 2 grand stuffed away, and you donít know where it came from?


Smith:  Well, Iíve explained to you where it came from.


MacLeod:  But you havenít explained to me. Youíve, youíve just told me that you do some, or you did some time ago, you did some guitar playing, in some school down the Lilly Road.




Smith:  Yes.


MacLeod:  Going back, what, 2 years ago?


Smith:  Yes.


MacLeod:  Canít you come up with a better answer than that, Iím giving you a chance. I canít get, I canít be fairer than that. Iíll give you a chance, now, to think again. £2,000. The KGB werenít very clever there, were they, not very professional at all?


Smith:  I donít see, how that is in any way connected with the KGB?


MacLeod:  Iím telling you, it is in connection with your KGB activities. That was a lump sum paid to you by your KGB controller, and you know well. Thatís why you canít answer the question. You Ö


Smith:  Youíre speculating.


MacLeod:  Iím not speculating, Iím telling you.


Smith:  So, you actually know this, do you? Because I canít conceive, er, how that could implicate me with the KGB. Iím sorry.


MacLeod:  Well, right. Letís take Ö




Smith:  Youíre, youíre putting 2 and 2 together and making 5.


MacLeod:  Right, Ok, Letís, letís take it that the KGB donít feature in this. Tell me where the £2,000 came from. Just enlighten me?


Smith:  Well, youíre making it sound like Iíve stolen it, and I ...


MacLeod:  Oh, I didnít suggest that for one minute. Iím not suggesting that for one moment. Thatís your money, found in your bedroom drawer, and I want to know from you where that money came from, if I have to labour this point over and over again.


Smith:  Ok. Well. I, I, Iím saying it is my money, itís in my drawer, and itís my business.


MacLeod:  I know itís your money, I know itís in your drawer, and I know itís your business. It is also my business too, to try to establish where that money came from.


MacLeod:  Ok. If you feel there is a case here, then you, you, you need to show that thereís something dishonest about that money, Iím afraid.


MacLeod:  Well, there is something ...


Smith:  As far as Iím concerned, itís, er, not a ... thereís no, no question about it being my money.




MacLeod:  Itís in your possession, itís your money. But what Iím asking, is where it came from, and you still have not answered my question satisfactorily. You tried to tell me that was money that was built up over ...


Smith:  Well I, I think youíve reached an impasse on this question. I donít, donít Ö


MacLeod:  Iím not sure?


Smith:  You can carry on asking till the cows come home, thereís no way ...


MacLeod:  That youíre going to answer it?


Smith:  I didnít say that. Thereís no way I can answer it to your satisfaction, and, er ...


MacLeod:  Thereís no way that you can answer to my satisfaction.


Smith:  Well, you, you obviously donít accept what Iím saying.


MacLeod:  Are you surprised? Here youíve got £2,000, brand new £50 notes, serial numbers running, running in order, and all Iím asking you to do, is just give me a simple answer?


Smith:  I, I, Iím just wasting my time, I think, talking to you.




MacLeod:  Well, indeed. I think Iím wasting my time trying to pursue this point. Right. Letís go back to the, to the note under the, or, correction, the note that was found with the money. Iím going to reproduce the exhibit JS/40, produced earlier in this interview. Thatís a letter to, er, Mr Smith from somebody called Williams. Letís talk about Mr Williams again. Have you had any more thoughts on who this Williams is?


Smith:  I donít know anybody by the name of Williams, apart from the person Iíve, Iíve spoken about earlier. How could I possibly, er, know somebody called Williams, er, without a first name?


MacLeod:  Well, clearly, he must have known you, to have written to you, and I find it curious that that letter should have been in the same envelope containing the £2,000, and containing, and containing other pieces of scrap paper giving directions to rendezvous points.


Smith:  I think thatís impossible.


MacLeod:  Itís not impossible, because, when Iíve had them looked at Iím going to show you. You werenít very professional there, were you, two grand stacked away with a letter of, a letter from your handler, together with your previous instructions on how to re-establish contact. My goodness me, the KGB are not that bright are they, theyíll be disappointed in you.




Smith:  I have got nothing to worry about. That letter was from somebody else, to me, and I, I donít understand the message in it.


MacLeod:  You donít understand the message in it? I think thatís a fairly straight forward message. I mean, youíre an intelligent man, youíre not an idiot, youíve, youíve got a university degree, and youíre telling me you donít understand the content of a simple letter like that?


Smith:  Well, if I understood who this Mr Williams, or Williams something or other, was, I, I could perhaps, have, um, contacted him, but there was no address there, as you can see.


MacLeod:  "A lot of water has passed under the bridge, after our latest appointment".


Smith:  It doesnít make sense does it?


MacLeod:  Well, it, it probably makes sense to the actual sender, and to the recipient, and as you were the addressee, it must make a lot of sense to you Mr Smith.


Smith:  No it doesnít.


MacLeod:  "I will be happy to meet you, as previously, at the recreation in October". That clearly suggests that there is a continuing association with the sender and the receiver, does it not? Does that, does that?




Smith:  If thatís the implication you want to put on it. I mean, I donít see that I have to assume anything about that letter, because, er, I do not know who this man is. But I would be rather foolish, if I did know what it was, to, to keep it, wouldnít I?


MacLeod:  Well, I think you probably were, as a, a KGB spy. It was a bit careless of you, wasnít it? You should really have destroyed it.


Smith:  Well, if I had been a spy ...


MacLeod:  You say.


Smith:  Ö I would have destroyed it, I suppose. But the fact is, I havenít, which surely indicates that Iím not bothered about that.


MacLeod:  Well, you were certainly careless in putting it into the same envelope as the £2,000, and together with the other bits of paper, which were clearly instructions on how to arrive at a certain rendezvous point. Weíll talk about these other bits of paper tomorrow. But, letís talk about Williams. I find it strange that youíve got 2 grand, and all these bits of paper that obviously mean something to you, and the £2,000 together?


Smith:  I donít think they were together.




MacLeod:  Well, Iím telling you, I will prove, I will prove, because I had photographers photograph the envelope together with the contents as they were removed. They were found together in the drawer, in your bedroom. What do you think your wife thinks of that, £2,000 stashed away in the drawer.


Smith:  Well I, as I said before. I mean, the wife and I have, er, our own financial affairs. I donít dwell too much on what she spends her money on, and she doesnít do the same for me. Because we found, when we first set up in married life, we didnít want, er, to have a lot of arguments over money, so we decided to, er, have a joint account.


MacLeod:  So, I suppose sheís got another 2 grand stashed away somewhere else?


Smith:  She, she keeps her cash emergency fund, as she will tell you about, Iím sure.


MacLeod:  Well, I find it strange, I find it most strange.


Smith:  Well, it may be strange to you, Iím, Iím sure, if you donít, er, you donít see it the way I think.


MacLeod:  Oh, I think, I think, I think I see it the way you see it. £2,000, what was that for?




Smith:  Well, it was, it was for a rainy day, for, for things I might need.


Beels:  Such as, give us an idea?


Smith:  I was, I was thinking of buying something, er, if I hadnít been made redundant.


Beels:  Like what?


Smith:  A piece of equipment for, for my music system.


MacLeod:  I mean, going back to the days of your old chum Victor, that was of course the kind of advice he gave you, was it not.


Smith:  No, I would, I would not call Victor - Iím not sure which Victor youíre talking about now - I would not call him a chum.


MacLeod:  Well, certainly not now, that heís dropped you in it.


Smith:  I didnít, I didnít say that. I would not call him a chum, because I, I, I donít actually know this man.


MacLeod:  Well, Iím putting it to you, that thatís the kind of instruction that you received in your early days, when they were training you.


Smith:  What instruction?




MacLeod:  Instructions were simply this. You, you received your payments in cash, and that you were to invest the money, or rather, correction, spend the money in such a way as not to draw attention to yourself. Am I right?


Smith:  No, youíre not right. Nobody instructs me how I should spend my money. Iíve always been very, um, independent about my, my attitude to money. I, I think, er, Iím, Iím rather frugal, and, um, and tend to spend money on the things that I really want, rather than just to spend it. I mean, if, if this man Victor had told me something like that, I donít think I would have listened to him anyway, because spending money is, um, is about enjoying life, the way I want to enjoy life, not being told ...


MacLeod:  Well, maybe, maybe, maybe, um, I should, sort of, re-phrase that question. Not to spend the money, but to, however you use it, to use it wisely.


Smith:  Well, I always use money wisely. I mean, if, if heís offering that advice, then I think ...


MacLeod:  Iím not suggesting you should go and spend money, and then draw attention to your lifestyle. That wouldnít be consistent with the kind of advice that youíve received from Victor.


Smith:  Well, if, if Victor is offering advice, then perhaps I should listen to it, if, er, if you want to bring him here, if you think it would be any good, if he could tell me how to spend my money - but I donít, um, nobody has told me to spend money in that way.




MacLeod:  Not to spend the money, but not to put it into accounts, in such a way as would draw attention to yourself.


Smith:  Well, I mean, that, if, if, if thatís what Victor is saying, then perhaps he has a, a good point there. But, er, how thatís, er, associated with my financial affairs, I donít understand?


MacLeod:  Well, I think you perfectly understand Mr Smith. You know exactly what Iím saying. When were you last in France?


Smith:  France? Um, I canít think, actually.


MacLeod:  Was it a long time ago?


Smith:  It was a long time ago. Yes, thatís why Iím trying to think when.


MacLeod:  Well, it must be quite some time back, if you canít remember?


Smith:  No. Itís, itís not that I canít remember, Iím trying to think. You see, I was in France on several occasions, and Iím trying to think when was the last one.


MacLeod:  But in recent times?


Smith:  Not recent times, no. I do remember, yes. Yes, right. The last time I was in France was 1971.


MacLeod:  1971?




Smith:  Yes, sorry, 1981. When my wife and I were travelling around in the car, in Normandy and Brittany.


MacLeod:  How about trying 10 years later? How about Ö?


Smith:  1991?


MacLeod:  Ah well, weíll be even more precise. Letís try 7th September, 1991?


Smith:  1991 - that was only last year?


Beels:  In September.


Smith:  Em, I, I, I was, er, going to go to France on a holiday with my wife. But we didnít go.


MacLeod:  But where were you going to go?


Smith:  Where?


MacLeod:  Yeah.


Smith:  We had, um, well I had booked a ticket to Dieppe from Newhaven, and ...


MacLeod:  So what happened, that you didnít go?




Smith:  Um, my wife became ill, within a few hours of, er, us being due to leave on the boat, and so we had to cancel it. We hadnít actually booked any accommodation, we were, we were planning on finding something when we got there. But I think the destination, we hadnít decided that destination, but we thought somewhere in Brittany would be a good place to go at the time. But unfortunately, because we didnít make the visit, nothing materialised.


MacLeod:  So, you didnít go to, so, so, Iím wrong in saying that you went to Dieppe last September?


Smith:  Er, yes, thatís, thatís incorrect. I booked, well, what happened: I, um, I had the ferry ticket, everything was planned. We, we, we were packed up ready to go. I, we were going to take my wifeís car, and put yellow on the lenses of the, um, the, er, of the headlamps, and you can still see those on the, the headlamps now, and a GB sticker on the back. And, er, it was one oíclock, I think, in the morning of, um, was it the 7th you said, if that was the date, it was 1 oíclock in the morning or so, and my wife complained of pains in her abdomen. I had to take her to the hospital, and she was kept in for about 36 hours, I think. I rang the company, er, I think it was on the Sunday. Or maybe it was the Saturday, to say, ďweíre not going to make this, er, trip, can I change the date




to the following day, the sailing the next dayĒ. They gave me a reservation, I believe, er, but then we couldnít make that either, because the doctor recommended she shouldnít travel. So, I eventually, um, cashed in the ticket, which I didnít do until, I think, about May or June this year, which, because we were planning, possibly we could go this Spring instead.


MacLeod:  Ok. So, your wife will be able to tell me then, that you had made plans to go to Dieppe?


Smith:  Obviously, itís been a sore point between us, that we didnít go.


MacLeod:  And sheíll back that up?


Smith:  Yes, I think so


MacLeod:  And also, the fact that you didnít go?


Smith:  She certainly will.


MacLeod:  Well, youíre, youíre lying again.


Smith:  How could I lie about a thing like that. My wife is in hospital, I actually visited her there in hospital on the 7th.


MacLeod:  You might have done, before you left.


Smith:  I find that Ö


MacLeod:  You might have done on Ö




Smith:  That, that is Ö


MacLeod:  You might have done on your return.


Smith:  That is a downright lie on your behalf, because you know full well, I didnít go.


MacLeod:  I know.


Smith:  Because that ticket was not used. I refunded it earlier this year, and I, I may still have the receipt somewhere in my flat, to show that I, I got a refund of £75.


MacLeod:  £75?


Smith:  I think it was something like that. They, they, er, took a cancellation fee, so if, if I got the money back on the ticket, I, I couldnít have used that ticket.


MacLeod:  It cost £108, did it not?


Smith:  It was about that, I think, yes. Well, why, why would you suspect that I, I went to France, when I was visiting, visiting my wife in hospital?


MacLeod:  I dare say youíd visited your wife in hospital that day. I wouldnít dispute that. Was it not possible you made a day trip to France?




Smith:  No, itís certainly not possible. Because I, I ...


MacLeod:  That you went to France to meet your KGB controller, and that you were paid in francs?


Smith:  That is a Ö


MacLeod:  When you returned here, you changed it into sterling.


Smith:  No, thatís complete fiction. Iím, thereís no truth in, truth in that accusation at all.


MacLeod:  Well, why, why would your old chum say that, if it wasnít true?


Smith:  My old chum?


MacLeod:  Victor.


Smith:  If Victor, if Victor knows that I went to France, then Iíd like to see the evidence, because I, my wife would substantiate that I visited her in hospital. I spoke to her on the phone, I think, as well. Thereís no way I could have made a day trip to France, and her not knowing about it. I was also in communication with her, um, parents on that, that day and over the weekend. So, I mean, itís highly unlikely Iíd have the time to go to France, if, er, if thatís the accusation.




MacLeod:  Are you saying itís not possible, to go to Dieppe for a day and back?


Smith:  Itís perfectly possible, but not in the time that I had.


Beels:  Ok. I am concluding this interview. Is there anything else you wish to add or clarify?


Smith:  No.


Beels:  At the end of this interview I will be asking you to sign the seal on the master tape, will you do so?


Smith:  Yes.


Beels:  You have a form already, explaining your rights of access to the tape, and the time is now 9:16 pm, and Iím stopping the machine.