Spy Taught Royal Family How to Slander U.S. Love Interests

Wallis Simpson, the American socialite whose marriage to Edward VIII sparked a royal crisis leading to his historic abdication in 1936, appears to have been the target of a calculated disinformation campaign orchestrated by British intelligence.

This new perspective, explored in Her Lotus Year, a book by author Paul French, sheds light on how high society and intelligence agencies allegedly sought to paint Simpson in an unflattering and scandalous light. The campaign’s goal, according to French, was to prevent Edward from marrying a divorced woman whose past and reputation posed risks to the monarchy and the British Empire.

Central to this smear was a so-called “China Dossier,” a rumored intelligence file supposedly filled with salacious stories about Simpson’s life in Asia.

Allegedly compiled by Harry Steptoe, a powerful intelligence operative stationed in Shanghai, the dossier reportedly described Simpson’s rumored involvement in risqué activities, including the learning of an exotic sexual technique referred to as “The Shanghai Grip.”

Although this dossier has never been found, its stories circulated widely in elite British circles, according to French’s research, contributing to an enduring image of Simpson as a morally questionable figure.

Simpson’s time in China was brief but transformative. In 1924, she moved to Asia with her then-husband, Earl Winfield Spencer Jr., a naval officer.

They separated while living in the region, and Simpson spent months there as a single woman—a situation that in itself likely fueled rumors among British social elites. The Times of London reported that the dossier included claims that Simpson had modeled for pornographic photos and frequented brothels, where she supposedly mastered “The Shanghai Grip.”

According to the book, this technique was a crude fabrication designed to make her seem both exotic and morally loose.

The smear campaign was rooted in sexist and racist undertones that reflected British attitudes of the era, says French. The tactics and narratives employed to defame Simpson echoed stereotypes commonly applied to Western women in Asia and drew on existing scandals in Shanghai society.

By overlaying these tales onto Simpson, Steptoe and his colleagues aimed to poison the public perception of her suitability as a royal consort.

French describes the “China Dossier” as one of the most “successful whispering campaigns of all time,” noting that the rumors about Simpson’s sexual prowess and alleged immorality persisted for decades, even appearing in popular culture, such as the 2010 film The King’s Speech, where Helena Bonham Carter’s character repeats some of these myths.

Simpson’s predicament bears a modern parallel in the story of Meghan Markle, another American divorcee whose entrance into the royal family was met with mixed reactions and tabloid scrutiny. Markle has publicly criticized the palace and the media for engaging in what she called a “smear campaign” against her, accusing palace operatives of framing her as a bully and leaking negative stories to the press.

Markle and her husband, Prince Harry, have since distanced themselves from the royal institution, echoing the sense of disenfranchisement that defined Simpson’s experience nearly a century earlier.

The success of the “China Dossier” campaign lay partly in its selective use of existing scandals, which intelligence operatives applied to Simpson. For instance, one rumor suggested she had posed for erotic photos taken by Italian hotelier Victor Sassoon.

In reality, Sassoon was not in Shanghai during Simpson’s stay and had instead taken provocative photos of journalist Emily Hahn. Other tales, like accusations of opium use and gambling, were borrowed from plotlines in contemporary plays, blending fiction with reputation-damaging rumor.

Her Lotus Year highlights how British intelligence capitalized on public fascination with Simpson’s alleged past to protect the monarchy.

French argues that the campaign ultimately succeeded in discrediting Wallis in the eyes of the British public, thus helping the government and palace sidestep a constitutional crisis. The orchestrated smear of Wallis Simpson remains a compelling example of how intelligence operations can shape public opinion to serve political ends.