It is apparent that, while being able to penetrate so deep into enemy territory, Dmitri didn’t know much about Oldham’s background. From the outset of the operation, both Bazarov and Dmitri were wrong in assuming the agent’s aristocratic standing. In truth, Oldham was of humble origin: his parents were schoolteachers, he didn’t go to university, and he entered the civil service at the age of nineteen. What seemed to make an impression of Oldham’s high station in life was the spacious house in Kensington, complete with a maid and a uniformed chauffeur driving a luxurious car, and Oldham’s penchant for dressing in expensive suits, with matching shirts adorned with monograms. All these signs of belonging to high society were of his wife’s, Lucy’s, making. The daughter of a wealthy man herself, before marrying Oldham, she inherited considerable funds after the death of her first husband, Thomas William Wellsted, a rich gold-mining engineer. It was her money with which the house was purchased and domestic help hired. Apparently, something happened to her inheritance (risky investments?); she lost her fortune—but not the taste for high life. It looks like she was the one who prompted Oldham to do whatever he could to support the level of life she was used to, which brought him to the doors of the Soviet Embassy in Paris to begin with.7
Meanwhile, it became clear that sooner or later, ARNO would be trouble. Squeezed by the OGPU, worn out from the fear of being caught, and tormented with pangs of conscience, ARNO again took to drink, this time very heavily. Yet, it was at that time when he managed to do a great turn for Dmitri. In the summer of 1932, Dmitri learned that Oldham was personally acquainted with the British Foreign Secretary, Sir John Simon, and decided to use this connection. Perusing the Canadian press, he established that the second son of Lord Grenville, Robert, was born at his father’s estate in Canada, Points North, and decided to obtain a British passport issued in Robert’s name. Preparing himself for a possible British counterintelligence inquiry, and as was his method when assuming a new identity, he immersed himself in books on Canada’s geography, history, economy, and everyday life. Once he felt sufficiently prepared, he signaled ARNO to proceed in getting the passport. On its delivery, ARNO boasted that as an exception and a sign of special attention, Sir John signed the passport himself, allegedly saying, “Hm, I didn’t know that Lord Robert was here in Britain again.”8
It was truly a stroke of luck. At the time, customs officials across Europe considered British passports most reliable. Traveling abroad, the Russian poet Vladimir Mayakovsky observed that British passports were treated with great reverence. It is known that Kim Philby took advantage of this circumstance in smuggling radical Marxist literature across West European borders. Dmitri resorted to this passport generally when he was carrying the most dangerous materials. He made a point, however, not to stay in any country for long because that would require a visit to the local British consulate, where his thick accent would give him away.9
During that period of summer 1932, the bulk of material collected by ARNO and passed on to the Soviets was related to the Lausanne Conference, which took place between June 16 and July 9 and concerned a whirlwind of diplomatic and behind-closed-door activities of many European countries. It was an important conference aimed at relief of international tensions caused by Germany’s burden of paying World War I reparations, especially in view of the worldwide depression triggered by the Wall Street crash of 1929.
Even before the crash, it had become increasingly clear that the defeated nation, Germany, would have a hard time meeting the obligations stipulated by the Treaty of Versailles. In fact, back in 1923, with its economy unable to sustain war reparation payments, Germany defaulted on them. As a punishment, French and Belgian troops occupied the Ruhr River valley. This occupation of the center of the German coal and steel industries struck at the heart of the German economy and contributed to the country’s hyperinflation.
After the failure of several additional attempts to solve the problem of war reparation payments, in a final effort to find an orderly solution to the issue that had caused so much political tension, representatives of Germany, Great Britain, France, and Japan convened the Lausanne Conference.
What was the nature of the information received from ARNO? On this point, there are discrepancies between Tsarev and West’s book, Crown Jewels, and its Russian version, KGB v Anglii. According to Crown Jewels, in a Foreign Office cable of June 28, 1932, the British ambassador in Berlin, Sir Horace Rumbold, reported that he “had held confidential discussions” with the chancellor of Germany, Franz von Papen, about the “imminent” Lausanne Conference and the “approach to be taken with the French.” The reader is thus led to believe that British and German officials on opposite sides of the conference negotiations conducted secret talks about how to deal with the French.10
However, the text of the same cable in the Russian version of the book quoted from the Bystrolyotov file does not report any “confidential talks” between Rumbold and von Papen. It merely states that Rumbold used a “secret informer” to learn about Chancellor von Papen’s intention “to reach a compromise with France at all costs about all points of contention even at the price of sacrifice on the side of Germany.” It states that Rumbold also learned through the same secret informer that the German “cabinet insists that a firmer tone be taken in Lausanne.” It adds that “on the day of von Papen’s return from Lausanne, during the cabinet meeting before signing the treaty, a secret session took place during which General Schleicher insisted on the necessity to come to an agreement with France on the question of armament, stating firmly that Germany cannot exist any longer with an army of one hundred thousand serving a twelve-year stint.”11
Another document procured through Dmitri’s efforts was a copy of a telegram from the Foreign Office about information collected by the Belgian military attaché and passed on to the British attaché concerning Germany’s diplomatic maneuvers to offer a compromise that would persuade France to lift limitations in armament.
The Russian version of Tsarev and West’s Crown Jewels also extensively quotes Bystrolyotov’s handwritten memorandum of that time. Without citing any sources, he describes the behind-the-scenes political maneuvering of British Prime Minister and Leader of the House of Commons Ramsay MacDonald, French President of the Council and Minister of Foreign Affairs Édouard Herriot, and von Papen. This memorandum makes it clear that von Papen used the threat of Hitler’s possible rise to power as leverage in persuading the French to make political concessions to Germany during the Lausanne negotiations.
Knowing the minute details of these and other diplomatic maneuvers was of great importance to the Soviets. The diplomatic activities between Germany and the Western Allies aimed to establish guarantees for stability of the borders west of Germany, leaving the country’s eastern borders to possible revisions in the future. Although bound by the 1922 Treaty of Rapallo on cooperation and territorial integrity, the Soviet Union and Germany did not fully trust each other. Each party feared that the other would find a way to create a strong alliance with the French Third Republic, at the time considered the greatest military power in Europe.
The importance of these documents for the Soviets explains the OGPU gesture of gratitude toward Dmitri for his work at that time. By order no. 1042/s of November 17, 1932, “for successfully carrying out several assignments of major operative value and exceptional persistence in doing so,” he was awarded a personal gun bearing the inscription: “For a merciless fight with the counterrevolution from the OGPU Collegium. OGPU Deputy Chairman Balitsky.”12
The Russian modifier besposhchadnyi (merciless) is rendered as “relentless” in Tsarev and West’s Crown Jewels (69) and “unstinting” in Andrew and Mitrokhin’s The Sword and the Shield (48). But “merciless” is truly the only way to describe the treatment of the OGPU British “source,” Ernest Oldham, especially in the course of actions that followed after the end of the Lausanne Conference when it became clear that ARNO was falling behind in his ability to be useful to the OGPU.
Meanwhile, on July 27, 1932, ARNO delivered a British passport to Dmitri, but not only was he ten days late for their meeting, he brought nothing else of value. He assured Dmitri that his “source” was busy with the Lausanne Conference papers and, therefore, hadn’t the time to get his hands on anything of interest to the Soviets.
The relationship with ARNO continued deteriorating rapidly. He missed appointments, and when he did come what he delivered was often worthless. To make things worse, he began failing physically. When he came to Berlin to see Dmitri in the last week of October 1932, he was in exceptionally poor shape. Although he swore he would continue to bring British diplomatic mail in the future, in Dmitri’s judgment, he couldn’t last more than a few months before becoming fully incapacitated. During their meeting, ARNO was totally apathetic, vomited, and often couldn’t even move. Dmitri decided on having a decisive talk with him during their next meeting, also set in Germany, but a week later, when he hoped the Brit would be in better shape.
But the meeting never took place. On November 11, 1932, instead of ARNO, his wife, Lucy, came to Berlin. It is doubtful that Soviet intelligence would ever have found out much about ARNO if Dmitri had not won Lucy’s full confidence by becoming her lover. At that meeting, she delivered bad news: her husband had failed to inform the count that he was no longer employed by the Foreign Office. Moreover, he hadn’t left on his own volition—he was fired. According to Lucy, the reasons given to Oldham for his dismissal were his heavy drinking and careless work for the past two years. Over the past six months, he had also taken confidential papers home and lost them. For months, he had failed to respond to the inquiries of other officials of the Foreign Office.14
As Dmitri would learn a year later, Oldham’s former assistant and friend Mr. Kemp had told Lucy that until mid-1932 her husband was not suspected of any wrongdoing. Considered a capable official, albeit lacking in discipline, he was tolerated at work although everyone was aware of his alcoholism. He was even given a leave of absence to get treatment. But one day, they found some code books missing from the safe in the basement of the Foreign Office. It was established that Oldham had visited the Cipher Room for no apparent reason. It was also established that he had used the side entrance to the building—the “ambassadors’ entrance.” Though no formal charges were filed against Oldham, they fired him “just in case.”15
As if that weren’t bad enough, the very way he was let go was highly alarming. Lucy was outraged that her husband, a distinguished official of the Foreign Office and a war veteran, after twenty years of service, was thrown into the street without even a partial pension. This would not usually happen to a Foreign Office employee even if he were fired for carelessness. Dmitri recalled ARNO’s having told him about two other cases of employees fired by the Foreign Office without a pension (one took place in Beijing and the other in Oslo). In both cases, the fired workers were suspected of espionage. There was a good chance this was the case with ARNO as well.16
Lucy also told Dmitri that their family finances were in a terrible state. Since ARNO had very little money to his name in the bank, she planned to leave him after selling their house, the luxurious car, and whatever else she could get some money for. She thought of settling at some French resort area where many Brits resided and finding employment as a home companion. Moreover, she told Dmitri she was so desperate that she would also consider becoming a prostitute, not an easy task considering her age (at the time, fifty-two). She begged Dmitri to help her in one way or another.
Reporting this meeting to the Center, Dmitri suggested the following plan of action. Considering that ARNO had been fired from his job and that he was sick and incapable of working for the Soviets in any capacity, he should be offered a lifetime pension in exchange for making a direct contact with “the source.” One can only marvel at how, even on the brink of total collapse, Oldham was capable of continuing his game of deception with the OGPU by holding on to his original plan—presenting himself as only a go-between for another Foreign Office employee, some “retired captain” whose name he couldn’t reveal to anyone as a matter of honor.
When Dmitri checked with Lucy, she told him that her husband’s story was total hogwash. She knew of no such man in the Foreign Office. Moreover, she told him that he lied about almost everything and that there was no reason to believe any of his stories. Clearly, ARNO could become a liability for the entire operation to penetrate the British Foreign Office. Intoxicated, ARNO might start talking. Now, when he was apparently suspected of treason, he could do considerable damage, the least of which was to alert the Foreign Office regarding OGPU activities.
Of course, the most reasonable way of handling the situation would have been to sever all ties with ARNO. But then, the most important task of establishing direct contact with “the source,” whose existence the OGPU still believed in, would be hard to achieve. Andrew and Mitrokhin rightly point out that the OGPU’s blindness regarding Oldham’s true place in the Foreign Office was due to the Russians’ ignorance concerning the overall structure and functioning of the Foreign Office and other branches of British government.17
To find a replacement for ARNO, Dmitri decided to return to England to extract enough information from him about his colleagues, even though it meant putting himself in harm’s way. Shortly before Christmas 1932, he went to London. There he found ARNO on a nonstop binge. In an alcoholic stupor, he paid no attention to Dmitri’s pleading that he get hold of himself. The pressure only irritated him intensely. Dmitri told Lucy to give her husband no more alcohol under any circumstances. When he visited the Oldhams on Christmas Day, ARNO was in terrible shape: unwashed, hair uncombed, eyes sunken and pinched looking. He looked like an alcoholic who had totally let himself go. Dmitri had to shake him considerably to wake him up. Without opening his eyes, ARNO groped around, found a bottle of cognac, took a gulp from it, and, apparently taking Dmitri for his wife, said, “Get lost, you old bitch!” Then he fell asleep again.
Dmitri told Lucy not to give him any more cognac and that when her husband woke up she should call a doctor. At night, Oldham came back to life and demanded another drink. When Lucy refused him, he grabbed for her throat and began strangling her. By luck, a doctor, for whom she had called sometime earlier, arrived. He gave ARNO a strong dose of morphine. With Dmitri’s help, the man was transported to a sanatorium in the countryside. After his departure, Lucy had a nervous fit and wanted to end her life. During the next three days, Dmitri succeeded in talking her out of doing away with herself. With bruises from ARNO’s fingers on her throat, she finally took to bed, and the doctor injected sedatives to soothe her.
After treatment in a sanatorium, ARNO felt better, but after a while, he resumed drinking and beating his wife.18
Toward the end of 1932, before going to London, Dmitri took a short break from his spy work. He was informed that since her tuberculosis had reactivated, Iolanta’s sentence had been commuted, and she was about to be released from jail. Crisscrossing the European continent on OGPU business (Berlin, Amsterdam, Paris, London, Geneva), Dmitri had been feeling uneasy about being so seldom able to visit his wife, who was serving her term in an Austrian military prison. Overwhelmed with assignments, barely once every couple of months did he manage to swing by Vienna to see her. Of course, he was always attentive about providing her with whatever she needed in captivity. But, busy as he was, to be efficient, he had to rely on a trustworthy assistant. And there was only one person who could fill that role—Isolde Cameron. As soon as she had learned from the papers about Iolanta’s arrest, she threw herself at her love’s disposal. To be closer to Iolanta and visit her frequently, she immediately cut loose all her business and social ties in Prague and moved
to Vienna.19
Grudgingly, Dmitri had to accept the reality of the situation. With him being away for long stretches of time, it was only right to put Iolanta’s interests before his own feelings. And Isolde’s help, the help of a loving woman, was indispensable. He made an effort to suppress his animosity toward her and to find a way to deal with her for their common good. They agreed to cooperate: he financed everything that Isolde undertook to mitigate Iolanta’s conditions in prison.
As time went by, doing good things for the sake of the same person improved their relationship. First openly hostile and cold, they gradually became more tolerant and respectful of each other. Both knew that Iolanta’s health was fragile, and they avoided doing anything to worry her. To coordinate their efforts for Iolanta’s benefit, Dmitri phoned Isolde when he was coming to Vienna. They would meet in some café or restaurant to discuss what they could do next for Iolanta. After a while, they met out of habit without having any chore at hand related to her. Their mutual hostility began subsiding; at times they would even joke and laugh in each other’s company. Once, they went to see a play together. Seemingly, whatever had divided them several years ago had faded from memory.
In the fall of 1932, when Iolanta’s lawyer filed a petition to grant Iolanta amnesty on the grounds of poor health, the upsurge of hope to see their beloved free again created a truly warm relationship between Dmitri and Isolde. They seemed to feel close to each other as never before. When the day of Iolanta’s release was announced, in an expression of shared joy, they hugged each other. Enthralled, they began making plans about how to take care of Iolanta once she was out of jail. During these meetings, they came up with the idea of settling Iolanta in the Swiss mountains, where her weak lungs could recuperate faster. Dmitri gave money to Isolde, who ordered train tickets and made all of the other arrangements.
Stalin's Romeo Spy Page 17