IT expert at MI6 'set up £2m deal to sell secrets to the Dutch'

By Cahal Milmo, Chief Reporter

Thursday, 15 July 2010

A computing expert formerly employed by MI6 yesterday admitted he had attempted to disclose a welter of stolen top-secret information, including a list identifying 39 field agents, by setting up a "naive" £2m deal to sell the data to the Dutch security services.

Daniel Houghton, 25, claimed he had been "directed by voices" to accumulate a vast bank of highly sensitive information, including files detailing advanced intelligence-gathering techniques, while he worked for the Secret Intelligence Service (SIS) as a computer programming specialist between September 2007 and May 2009.

After his arrest in a sting operation by Scotland Yard at a central London hotel in March this year, searches of Houghton's home in Hoxton, east London, recovered a treasure trove of secret data including copies of classified paperwork and a memory card containing 7,000 files that disclosed the names of hundreds of employees and dozens of agents of MI6, which is Britain's foreign intelligence service.

Houghton, who is half Dutch, thought he had set up a deal with the security service in the Netherlands to sell the information for £2m but Dutch agents tipped off MI5. He was wrestled to the ground holding a briefcase containing £900,000 which he had been given moments earlier as a final price for two memory cards and a hard drive holding the files.

Despite a claim from the computing genius, who was recruited to develop software used by MI6 to glean intelligence from electronic sources, that he had handed over "everything" to his Dutch contacts, British experts fear that some files remain at large and could still fall into hostile hands. A memory card containing information which he said he had hidden at his mother's home has never been recovered.

Judge David Bean, sitting at the Royal Courts of Justice in London, warned Houghton that he almost certainly faces prison when he is sentenced in September after he pleaded guilty to two charges under the Official Secrets Act of unlawfully disclosing intelligence material. He denied a third charge of theft, of which prosecutors will now offer no evidence.

Duncan Penny, defending, told the court: "He accepts that a custodial sentence is inevitable in this case, given the gravity of the offences."

Houghton, who told his flatmate in their rented ex-council flat in a trendy corner of the East End that he worked for Lloyds bank as a graduate trainee, had been recruited to work in MI6's Thameside headquarters after graduating from Birmingham University with top marks in interactive computer systems.

Over the next 18 months, while developing the sophisticated software used by MI6 to trawl cyberspace for information, the one-time graphic-design student exploited an apparently major breach in security safeguards by copying secret files on to CDs and DVDs from his office computer. As well as gathering SIS data, he also copied MI5 files detailing intelligence-gathering techniques used by agents.

Despite being described as highly intelligent, security service officials said Houghton went about the business of selling his damaging material with breathtaking naivety. Some three months after he left MI6, he contacted the Dutch domestic intelligence service, AIVD, on a published telephone number using his mobile phone.

The Briton, who speaks Dutch but had little contact with his Dutch father, held a series of phone calls with his contacts in the Netherlands during which he was asked to describe what he proposed to sell before a meeting was held in February this year to set up a deal. MI5 bugged and secretly videoed the encounter as Houghton showed off his wares to the Dutch agents.

One source said the computer expert, who was raised in Devon, had limited social skills, adding: "He was not James Bond."

During the meeting, Houghton offered to boost the information available by adding two lists: one containing 300 names of MI6 employees and another detailing the home addresses and mobile phone numbers of 39 agents. MI6 sources said the disclosure of such information would have severely compromised operations to protect the United Kingdom.

Some two weeks after the initial meeting, Houghton was intercepted at a lift in a luxury central London hotel by plain-clothes officers moments after leaving a room believing he had successfully pulled off his deal. As he was wrestled to the ground holding a briefcase filled with bank notes, he shouted: "I haven't done anything."

Police, backed by MI5, feared that Houghton, who had few social ties in London, could have been preparing to flee the country using his savings of £32,000.

Piers Arnold, prosecuting, told the court that he would not accept the findings of a psychiatric report carried out for the defence which found that Houghton believed he was "directed by voices to do what he is said to have done in the charges".

A senior intelligence source said Houghton had quickly become bored while working at MI6 and his actions were motivated by greed, adding that he had been living a "champagne lifestyle on ginger-beer wages".