Espionage 1939–1941
On the outbreak of war in 1939, Sempill was given a position in the Department of Air Materiel at the Admiralty. This gave him access to both sensitive and secret information about the latest British aircraft.
By June 1941, MI5 had intercepted messages between London and Mitsubishi and Marshal Yamagata's Tokyo headquarters indicating payments were being made to Sempill: "In light of the use made of Lord Sempill by our military and naval attaches in London, these payments should continue". On further investigation, MI5 suspected that Sempill was passing on top secret information about Fleet Air Arm aircraft. The matter was passed to the Attorney General and Director of Public Prosecutions. Once more, the Attorney General advised against prosecution. On 5 September 1941, Sempill attended a meeting with the Fifth Sea Lord, and was given "a strict private warning".
On Friday 2 August 1940, Special Branch arrested Japanese businessman Makihara Satoru, head of Mitsubishi Shoji Company's London office, and several others on suspicion of espionage, and took them to Brixton prison. On discovering that Makihara was in custody, Sempill telephoned and then called at Paddington police station to assure the police of Makihara's innocence and character. He was released a few days later, on Monday 5 August, due to "insufficient evidence".
Sempill was also probably passing on detailed information about the British government. In August 1941, Winston Churchill and President Franklin D. Roosevelt held a meeting in Newfoundland aboard HMS Prince of Wales to discuss the military threat posed by the Japanese. Soon after, communications between the Japanese embassy in London and Tokyo were deciphered by the Bletchley Park code breakers. The decrypted messages were transcripts of the conference notes. When passed to an alarmed Churchill, he called them "pretty accurate stuff". Three months later, more notes from Churchill's personal agenda and inner circle were intercepted as they were being sent by the Japanese Embassy in London to the Foreign Ministry in Tokyo. Privately, Churchill concluded with Anthony Eden that only two men could be the source of such leaks: Commander McGrath or Lord Sempill.
On 9 October 1941, a signed note from Churchill read: "Clear him out while time remains." The following week the Admiralty told Sempill he must either resign or be sacked.
After Sempill made an official protest, Churchill backtracked. The Prime Minister told the Admiralty: "I had not contemplated Lord Sempill being required to resign his commission, but only to be employed elsewhere in the Admiralty." A subsequent note from Churchill's aide Desmond Morton, dated 17 October 1941, outlined the new position: "The First Sea Lord ... proposes to offer him a post in the North of Scotland. I have suggested to Lord Swinton that MI5 should be informed in due course so they may take any precautions necessary."
On 13 December 1941, six days after the attack on Pearl Harbor, Sempill's office was raided. A search revealed secret documents that he should have handed back to the Admiralty over three weeks earlier. Two days later, Sempill was discovered making phone calls to the Japanese Embassy. Despite the evidence of treason in wartime (see Treachery Act 1940), no arrest or prosecution was ordered; Sempill agreed to retire from public office.
