In theory, you can watch anybody, but for this to work, you'd need someone to actually look at the evidence i.e. suspect the person in the first place. Quis custodiet ipsos custodes... And in this case it's the guardians of the guardians: who are you going to trust with watching the head of MI6's counter-intelligence division 24/7?
As the CIA found in its paranoid early days, over-suspicion is highly counter-productive (see e.g. [1]). You just HAVE to trust your managers. Even if all services have some kind of internal intelligence setup to watch the watchers, it's focused downwards where the risks are higher and cost of suspicion lower, and it has to be run by people you trust the most. You balance the cost of a mole, versus the opportunity cost of turning down genuine defectors and trusting your own staff.
This is why (according to [2]) many European services are run by people from wealthy, old families, preferably with at least a few members who have served. It's expected that on average, these people have profound ties to their country - if nothing else, in the form of immense property portfolios - and thus are much less likely to defect. You can't bribe them, you can't offer them a better life [3], what's left? Ideology, and that can be somewhat watched for. Of course, you deny yourself some great talent that way but as with managing a hedge fund, you want to limit downside rather than maximize upside. Nationalism and dynastic politics are a form of defense against foreign enemies.
Hence Philby. He was trusted by design, not because MI6 were "bloody incestuous fools" or whatever, and no amount of surveillance would have changed that.
[3] Kalugin recalls in http://www.amazon.com/First-Directorate-Intelligence-Espiona... that he was somewhat worried about Philby's living conditions in the Soviet Union (unheated flat, alcoholism, etc.). It's been a while since I read the book but I recall he or someone else decided to push for him to have a good quality of life as an advertisement to other potential defectors; only then was Philby put up in proper accommodation and welcomed by the Soviet system.
As the CIA found in its paranoid early days, over-suspicion is highly counter-productive (see e.g. [1]). You just HAVE to trust your managers. Even if all services have some kind of internal intelligence setup to watch the watchers, it's focused downwards where the risks are higher and cost of suspicion lower, and it has to be run by people you trust the most. You balance the cost of a mole, versus the opportunity cost of turning down genuine defectors and trusting your own staff.
This is why (according to [2]) many European services are run by people from wealthy, old families, preferably with at least a few members who have served. It's expected that on average, these people have profound ties to their country - if nothing else, in the form of immense property portfolios - and thus are much less likely to defect. You can't bribe them, you can't offer them a better life [3], what's left? Ideology, and that can be somewhat watched for. Of course, you deny yourself some great talent that way but as with managing a hedge fund, you want to limit downside rather than maximize upside. Nationalism and dynastic politics are a form of defense against foreign enemies.
Hence Philby. He was trusted by design, not because MI6 were "bloody incestuous fools" or whatever, and no amount of surveillance would have changed that.
[1] http://www.amazon.com/The-Main-Enemy-Inside-Showdown/dp/0345...
[2] http://www.amazon.fr/Missions-methodes-techniques-speciales-...
[3] Kalugin recalls in http://www.amazon.com/First-Directorate-Intelligence-Espiona... that he was somewhat worried about Philby's living conditions in the Soviet Union (unheated flat, alcoholism, etc.). It's been a while since I read the book but I recall he or someone else decided to push for him to have a good quality of life as an advertisement to other potential defectors; only then was Philby put up in proper accommodation and welcomed by the Soviet system.