The Malaysian Insider

UPDATED

NOV 26 — The Far Eastern Economic Review, a magazine sometimes justifiably credited with breaking major regional news, missed reporting some riveting tales about itself.

A secret file held by MI5, Britain's counter-intelligence agency, that was recently released reveals that Eric Halpern, the man who founded the Hong Kong journal, had so dubious a reputation that London was highly reluctant to issue him with an entry visa to the territory.

After spending the World War II years as a Jewish refugee in Shanghai, Halpern had sought to settle in Hong Kong in 1946. But Sir Percy Sillitoe, then the newly appointed head of MI5, strongly disliked the idea.

Noting that Halpern had had close wartime dealings with the Japanese, possibly the Soviet and, briefly after the war, the United States' intelligence services, MI5's London headquarters asked the Hong Kong colonial authorities to “take some action to remove him from Hong Kong”.

Said a note from London: “He looks to us as if he is the kind of person who, as long as he remains, will be a perpetual and rather nagging security headache.”

The Review — or Feer, as it was also known — appears for the last time next month, a victim of the advertising downturn and new owner Rupert Murdoch's lack of interest in low profits. Many will miss the magazine, despite its often erratic editing and frequently turgid writing. Most readers might also be surprised to learn that at least two of its former editors had once been spies.

John Le Carre, author of espionage novels and himself as former British spy, has summarised a spy's life thus: “Tangle within tangle, plot and counter-plot, cross and doublecross, true agent, false agent, double agent, gold and steel...” MI5's files suggest that the Review's first editor was no stranger to this sort of life. Halpern was evidently involved in espionage for Japan, Kuomintang China, the United States and possibly the Soviet Union.

But he was not alone in his spying connections among Review editors. One of his successors, Derek Davies, an Englishman who edited the magazine for 25 years, was also a refugee from espionage — in this instance, MI6, Britain's external secret intelligence service.

Halpern's personal history is best studied in the context of China's coast in the 1940s. An Austrian Jew, he had fled Vienna just ahead of the Nazi occupation, ending up in 1939 in Shanghai. He obtained a position as a journalist with Finance & Commerce. This publication, which closed down in 1941, is sometimes described as a forerunner of the Review.

The Japanese occupied Shanghai within hours of the 1941 attack on Pearl Harbour. At the time Shanghai was, as historian Bernard Wasserstein has put it, a place of “bizarre synergy between criminal and political underworlds”.

According to MI5's records and other files held by Washington's Office of Strategic Services (OSS, predecessor of the Central Intelligence Agency), Halpern became an energetic wartime collaborator of the Japanese.

One MI5 report in 1950 says that he was “one of the chief rats for S. Saito, the former head of Foreign Affairs in the Shanghai Municipal Police”. The OSS also described Halpern as “a suspicious character”, a collaborator with Saito in black market speculations and extortions. Adds the OSS: “(Halpern) is said to have acted unpleasantly.”

When Halpern, then 37, reached Hong Kong on a visitor's visa in 1946, he immediately contacted the Special Branch, the colony's security force affiliated with MI5 in London. In a written statement preserved in the MI5 file, he said that he had come to Hong Kong “in order to resume publication of Finance & Commerce”.

However, the file also shows that at that time, an unnamed “police informant” told Special Branch that “his publishing activities were merely a blind” and that Halpern's main purpose was “to contact US intelligence”. And to the discomfort of Special Branch, he applied for a job with British intelligence.

Halpern told Special Branch that he had been working for the OSS in Shanghai, informing the Americans about, inter alia, “atomic research by the Japanese in China... especially the activities of General Tai Li (head of Nationalist Chinese intelligence) and his people in connection with atomic research”.

However, he said, he preferred “British progressiveness of thought” to the US “mode”. Accordingly, wrote Halpern of himself, “the applicant is desirous of serving the British Empire”.

Puzzled consternation seems to have been the initial British reaction. His job application, said one Top Secret cable to London, was “possibly... a penetration attempt on behalf of Americans or some other power”.

Some inquiries the British made to the OSS failed to satisfy. Said a follow-up cable to London from Hong Kong's Special Branch chief: “I am not at all convinced that the Americans have not made more use of him than they care to say.”

Americans spying on the British — and vice versa? Just so. During World War II, rivalry between London and a Washington often opposed to the restoration to Britain of her Asian colonies was not at all uncommon. In 1945, the British Admiralty, fearing a US scheme to hand Japanese-occupied Hong Kong to Nationalist China, had felt it necessary to order a Royal Navy flotilla to break away from an Allied Pacific armada and dash into Hong Kong harbour ahead of a US fleet under the Anglophobic Admiral Ernest King.

By 1946, the Hong Kong crown colony was very much up and running again. The MI5 file notes: “It was decided to allow (Halpern) to stay... in the hope that it would be possible to find out for whom he was working.”

Over the following years, Special Branch appears to have taken a desultory interest in his activities. But nothing of much consequence surfaced.

In December 1947, he was prosecuted “for giving frivolous information about his nationality when registering at a hotel”. When he visited Singapore and Sri Lanka, the local intelligence authorities were asked to report on his activities.

Colombo told Hong Kong: “Although nothing adverse is recorded by the police here, his behaviour is said by them to have been 'rather peculiar'.”

There was a flurry of interest in 1952 when a cable was sent offering to cover Halpern's expenses as a guest of a Soviet-organised economic conference in Moscow. It is the file's last item.

Halpern remained Review editor until 1958. After that, he fades from view. No photo seems to exist. (Probably not surprising, considering his life story.) Born in 1907, he is unlikely to be still alive, but I could find no record of his death.

An obituary revealed the intelligence connections of Davies, the Review's longest-serving editor (1964-89). A Wikipedia entry on him, containing many other inaccuracies, repeats such fiction as his alleged Welsh origins and a claim that his early career had been with the “British Foreign Office”.

The London Daily Telegraph's obituary on Davies in 2002 noted more accurately that ahead of joining the Financial Times and then the Review, he had been an MI6 agent in Saigon, Hanoi and Vienna.

Davies was certainly colourful, but not in the same way as Halpern. He was the main contributor of a column, Travellers' Tales, a mixture of regional commentary, gossip and humour, much of it scatological. The Telegraph obit correctly noted the flamboyant Davies' “contempt for all ideologies” — something that frequently landed him in trouble with authority, including Singapore's. — The Straits Times

* Following the publication of this article, a reader has written in to point out an inaccuracy as follows:
I noticed that during one paragraph on the subject of Derek Davies it refers to ‘such fiction as his alleged Welsh origins’. See quote below.
“An obituary revealed the intelligence connections of Davies, the Review’s longest-serving editor (1964-89). A Wikipedia entry on him, containing many other inaccuracies, repeats such fiction as his alleged Welsh origins and a claim that his early career had been with the “British Foreign Office”.”
I am in fact related to Derek Davies and can confirm that his Welsh origins were not fictitious at all.
I only found your news article because I happen to be doing some research on Derek at the moment.
Just thought you might like to be informed of the article’s inaccuracy.