Thede Palm was the quintessential grey man. With grumpy looks and thick spectacle frames he looked more like the librarian he once was rather than a spymaster who schemed with the heads of CIA and MI6, operated with ex-Nazis, ran agents behind the Iron Curtain and covertly influenced Sweden’s foreign policy. Those who liked him described him as low-key, taciturn, sceptical and thoughtful. Those who did not described him as a control-freak who could not stand anyone interfering with his work. He was, in other words, well cut out for the intelligence world. Through his memoirs and 1,000-page diary, available at the Swedish War Archives, we get a unique insight into early Cold War intelligence. In the history of the CIA this period is a ‘golden age’ of espionage, with plenty of wiggle-room but little or no government oversight.

Palm’s military career did not get off to a great start. In the 1920s, when he was supposed to do his military service, Sweden was disarming and did not have any use for a young man with severe asthma. Instead, his future lay in academia. In 1937, he defended his rather esoteric dissertation on medieval cult-sites in northern Germany before moving on to a position at Lund University, where he rose to assistant librarian. When war broke out two years later, he enlisted as a volunteer, but his asthma prevented him from being called up after Germany invaded Denmark and Norway. Instead, a fellow academic recommended him for ‘special service’ at the newly established secret G-bureau, G for gräns (border), where Palm worked undercover as a customs official keeping track of travellers arriving at ports in southern Sweden. According to his short memoirs, the job, which involved speaking to strangers and working with the police, came in handy when he was transferred north to interrogate Norwegian refugees.

As the war progressed, the G-bureau changed its name to the C-bureau (C as in ‘central’), a ‘proper’ military intelligence agency. Palm’s new tasks included monitoring the Wehrmacht’s movements in Norway and assisting the Norwegian resistance in moving across the border. Additionally, he also served as head of counter-propaganda at the government agency for information, Statens Informationsstyrelse. As a C-bureau intelligence officer he was asked to travel as a courier with goods wagons to the Swedish embassy in Germany in 1944, bringing back an anti-aircraft cannon from Switzerland. He later reflected that his immediate acceptance of the assignment was most likely to show others that he was unafraid – ‘the thoughtful assistant librarian from whom no one expected anything adventurous’.

The C-bureau also supplied machine guns from Finland to Norwegian and Danish police troops trained in Sweden. After the war, Swedish newspapers reported that C-bureau operatives (Palm was not among them) had made money from the arms trade. In combination with the bureau’s less flattering cooperation with German authorities, especially during the early phases of the war, Swedish secret intelligence needed a restart. What the government and military leadership wanted was an organisation led by someone completely unknown who could keep a low profile. The choice fell on a somewhat surprised Palm in 1945. As he put it in his memoirs, within the General Staff he was now ‘an unknown librarian from Lund in charge of a department that did not exist’.

Under Palm’s leadership the name was changed again, this time to T-kontoret, the ‘T-office’ (T as in ‘technical’). The main task was to gather human intelligence in Sweden’s near-abroad to assess military threats: ‘We really only had one question that we wanted an answer to. We would warn in time if the Soviet army began to gather troops and prepare fast attacks across the Baltic Sea against us.’

At the onset of the Cold War, Sweden’s geostrategic position looked bleak. Finland was independent but under Soviet influence through the ‘Friendship Agreement’ of 1948; the Baltic States were gone; and Soviet troops were stationed in Poland and East Germany. When Denmark and Norway joined NATO in 1949 the Swedish preference for a Scandinavian defence union was abandoned. Sweden continued instead with its non-alignment policy, supposedly neutral between the two emerging superpower blocs. The policy was, however, two-sided. While in its rhetoric the government pursued neutrality, secret cooperation with the West continued. This was especially true in the case of air defence, munitions, intelligence and, to a lesser extent, Swedish resistance under occupation (a so-called Stay Behind group, in which Palm also played an important role). For the policy to remain credible it was extremely important that the collaboration westwards was kept hidden.

As the need for qualified intelligence grew, Palm increased the efforts to get more information through his own sources and to cooperate with like-minded intelligence services abroad. In Finland, the T-office established an extensive network of agents and hidden radio transmitters. Getting information from the Baltic States was much more difficult, but in the late 1940s and first half of the 1950s, the T-office recruited agents among Balts who had fled to Sweden. The agents were trained in radio transmission, coding and weapons-handling. They were given equipment, including German weapons, which could not be traced to Sweden, and pills for suicide if they were captured. Palm’s CIA contact in Stockholm provided radio transmitters. In his diary, Palm confided before the first expedition to Estonia, that ‘this is all new to me’. The intelligence historian Wilhelm Agrell has noted that Sweden got drawn into a major intelligence game dominated by the CIA. While Sweden’s goal with the Baltic agents was to create a warning system for Russian war plans, the Americans had greater ambitions, creating and supporting armed resistance movements deep within the Communist bloc.

Getting the agents across the Baltic and safely ashore was difficult. The need to find a boat fast enough was was solved through a collaboration with MI6, Britain’s foreign intelligence agency, which provided a speedy and relatively quiet former German torpedo boat as a part of Britain’s clandestine Operation Jungle. What none of the Western intelligence agencies realised at the time was that the KGB knew about the expeditions beforehand through their own spies among Baltic exiles in Stockholm. Russian intelligence material indicates that most, if not all, of the agents from Sweden were captured or killed as soon as they landed. Palm and his associates started to realise in the early 1950s that something was not right and gradually decreased their efforts to infiltrate the Baltic States.

In 1957, the effort came to an end definitively when the Soviets exposed the operations through an official note to Sweden and by running detailed articles in Russian newspapers, published in both Russian and English, containing names of agents and their handler in Stockholm, as well as the addresses of where their training had taken place. The Swedish government, which Palm had not informed, quickly denied the allegations and its defence staff managed to get the newspapers to not pay the story much attention.

For Palm, the affair was a burden as it created an embarrassment for the government and shone a light on a part of the Swedish military that was supposed to be kept secret. He also had to fire the handler who had been ‘burnt’ after the publication of the Russian articles. Perhaps worse, he now knew what it meant to send people on lethal missions. When discussing his potential successor, Birger Elmér, with a colleague in 1956, he said that Elmér ‘was too weak. He can’t send people on highly dangerous expeditions and take responsibility for their deaths… he has no idea what active intelligence entails’.

If the operations in the Baltics turned out to be a fiasco, Palm was more successful in establishing relations with the leadership of Western intelligence agencies, where his social skills and fluency in English, French and German came in handy. Over the years he developed trusting relationships and collaborated with Denmark, Norway, the US, the UK, France and, to a lesser extent, Switzerland and Israel. If war broke out, cooperation would be much easier with such relationships already in place.

The collaboration with the fellow Scandinavians had been established during the war and continued seamlessly even after Norway and Denmark joined NATO. Palm also initiated the so called ‘Triangle’ between the three countries in 1947 in order to share intelligence on a regular basis, especially regarding economic analysis of the Eastern bloc.

What Palm could offer was maritime intelligence in and around the Baltic Sea, especially concerning Soviet ships and ports. Civilian Swedish sea captains, enrolled by T-office, photographed and reported what they saw on their journeys and on several occasions Palm was the first to brief his Western partners on new Russian naval vessels and their whereabouts. In return, he got intelligence on military development in the Warsaw Pact and hardware in the form of radio transmitters.

Although a junior partner, he was careful not to give away too much. Within MI6, Palm was known as ‘The Doctor’. Stewart Menzies, the legendary ‘C’, said Palm was one of the hardest negotiators they had ever dealt with, which he considered a compliment. He also had close connections to the CIA, especially with Allen Dulles, who, like Palm, was the first civilian spy chief. The cooperation with the CIA ‘gave us a lot and we gave them quite a lot in return’, Palm noted. It was also occasionally fractious. The Americans wanted to use Sweden as a base for operations against Russia that Palm considered to be too risky. When Dulles suggested the use of the Baltic Sea as a training ground for agents seeking to go behind the Iron Curtain, Palm said that ‘they can do that in China but not with us’.

The CIA also provided Palm with radio-transmission crystals to be used for direct communication with Dulles if war broke out. Palm’s diary tells of a private meeting with James Jesus Angleton, head of CIA’s counterintelligence for over 20 years and another well-known cold warrior. Angleton explained that Sweden’s neutrality forced the US to be reluctant, but it could be accommodating, and he proposed a closer cooperation between the countries’ intelligence agencies. If war came and things were ‘turned upside down’, as Angleton remarked, it was clear on which side Sweden would be.

Even more controversial than confidential meetings with the heads of American, British or French intelligence was Palm’s connection to ‘The Org’ in West Germany, led by one of Hitler’s former generals, Reinhard Gehlen. The contact was established in 1947. Palm was aware of the risky political implications, but as Gehlen was by then approved as ‘denazified’ by the Americans, he was willing to take a chance. It will ‘greatly contribute to our security’, he wrote in his diary. This was an astute assessment; the West German connections would prove very valuable to Palm over the years in terms of intelligence received. In 1961, he welcomed Gehlen to Stockholm without the government knowing.

Three years later, the government replaced Palm as spy chief. His own interpretation was that he was outmanoeuvred by the increasingly powerful social democratic politician Olof Palme, who had a background in Swedish intelligence. The soon-to-be prime minister wanted control of the intelligence service and replaced Palm with his old friend and party colleague Birger Elmér, now head of Sweden’s secret military security unit, Group B, which spied mainly on domestic communists.

There were other reasons, too. An almost decade-long conflict with a subordinate, who discredited Palm in talks with government ministers and military commanders, created political bad will. In 1963, Sweden’s biggest spy scandal erupted when air force colonel Stig Wennerström was arrested for having supplied the Russians with thousands of classified documents for almost two decades. Although Wennerström had no direct connections to T-kontoret or Palm, he had given the KGB information on Sweden’s military cooperation with the West, especially as it related to air defence, signals intelligence and munitions. The government was increasingly uneasy over the secret Western connections and Palm’s organisation came up for discussion. With a new generation of politicians and senior military commanders, the politically conservative Palm had few friends in high places who could speak for him. Yet he considered himself to be the most competent person for the job and did not want to leave. According to his diary, his last day at the office, when the staff thanked him for his service, was ‘difficult’.

The old librarian did not look back with a bad conscience. His mission had been to predict Russian aggression against Sweden and build an intelligence organisation that could survive full-scale war. In his memoirs, he asks rhetorically if he exceeded his authority by cooperating with other Western intelligence agencies, including a former Nazi general, and by sending secret agents to Soviet territory. He answers: ‘I was not given any authority; I took it myself’, and that ‘everything relied on my judgement of what was good for Sweden’. Although he could talk to some of the senior military commanders, there was no one who decided over him and the loneliness was not always easy to bear: ‘I got to decide on my own… sometimes I felt sorry for myself.’ The responsibility was always his and it was out of the question to ask the government for permission; the point of T-kontoret was that it was secret and completely unregulated.

Palm spent his last years before retirement as head of research at the Swedish Defence University’s history department, where he wrote essays on military history and a book on resistance under occupation. The younger historians liked their elder colleague with the sharp tongue and an ‘air of mystery and inscrutability’. His 19 years as spy chief included both failures and successes, but there is no doubt that his ability to build personal trust within the wider Western intelligence community served Sweden well. If war had come, these contacts would have proven even more important for a country without formal allies.