Stalin's Romeo Spy

by Emil Draitser

  Caught by surprise, the only thing Mr. B. could think of was to immediately instruct the guard at the main entrance of the Foreign Office building to stop Oldham from exiting. Then both clerks rushed to the back door, the so-called ambassador’s entrance, to ensure that Oldham would not escape that way.

  Oldham reappeared about eight minutes later. His face sweaty and his hands shaking, he returned the key ring. As soon as he left, the clerks examined the keys one by one and, on one of them, the key to the Cipher Room, found crumbs of some substance, which looked like either wax or soap. They immediately suspected that Oldham had taken impressions of the key.12

  Only after that were the superiors informed and the DSS called in for investigation. Oldham’s home phone was wiretapped, and arrangements were made to check his mail and place him under personal surveillance around the clock. A sample of the substance found on the key was sent to the Chemical Section of the DSS for analysis.

  As Bystrolyotov recalls in his “Memo,” the next day Oldham visited him, his face “sallow gray.” He informed Dmitri that it seemed he was under suspicion and that he was not allowed to get close to the safes anymore. But neither the bad news nor Oldham’s poor health—he was bloated, and his heart barely worked—stopped Dmitri. He immediately placed the man in a private clinic again. As Dmitri explains his actions in the “Memo,” he wanted to “purify Oldham’s brain from alcohol and spur his heart on so that he could extract [from the Foreign Office vaults] the ciphers [for the next year] at all costs.”13

  Meanwhile, the soap from the Foreign Office lavatory was compared with the substance found on the key. But the microscopic analysis of the soap showed no traces of a red pigment found on the key. It became clear that Oldham had brought the substance with him in his pocket. (The lab never identified the substance—the dental paste that Dmitri had trained Oldham to use, as they sat together on a Hyde Park bench).14

  On July 19, at 11:00 A.M., a phone call originating from Oldham’s house was intercepted. It was Lucy calling the Foreign Office and inviting Mr. Kemp to come for lunch—“Joe Perelly” wanted to talk to him. Oldham’s ex-colleague and friend, Mr. Kemp was initially on Dmitri’s list of possible replacements for ARNO (in the OGPU correspondence he was code-named ROLAND). There was also a chance that he might be the primary “source” the OGPU had been trying to get to for a long time. Dmitri decided to check him out and prompted Lucy to invite him to her house for lunch.15

  Because it was clear that Oldham’s last visit alarmed the Foreign Office managers, meeting ROLAND face-to-face was a risky step. In both his memoirs and the 1968 KGB “Memo,” Dmitri describes the episode as the most dramatic in his spy career. In his account, the day before, as he sat on his “usual bench near the lake” and contemplated how he should behave during the fateful meeting with ROLAND, his wife Iolanta suddenly appeared before him. She had found him there to hand over his passport in the name of Alexander Gallas. Bazarov had sent her, knowing that he might need the reliable Greek passport to quickly exfiltrate himself from Great Britain. Iolanta also gave Dmitri his pistol, so that in case of his arrest he could shoot himself. “We said farewell to each other as if before a battle,” Dmitri recalls in his “Memo.”

  When he arrived at Oldham’s house, he found Mr. Kemp already there, talking about his friend Ernest’s recent strange behavior. Dmitri was nervous. Suddenly, Lucy also began talking about how upset she had been for a long time about her husband’s odd actions. She told Kemp that her husband traveled in such a regular pattern that it created the impression he was going to see the same person regarding the same business. As if that were not enough reason to suspect Oldham of shady dealings, she added that on one of his visits to the Foreign Office, he had stolen a briefcase with the designation “His Majesty’s Courier.” Moreover, she continued, he had managed to procure a passport for some “scoundrel,” as she put it. (Apparently, she was referring to a passport issued in the name of Robert Grenville. Recalling this scene in his “Memo,” Dmitri couldn’t help but comment that she was “remarkably stupid.”)

  Naturally, highly alarmed, ROLAND began grilling Lucy about the name of the person to whom the passport was issued and his physical features. In his “Memo,” Dmitri admits that at that moment, he got cold feet. But, to his relief, Lucy said that she did not remember either his name or his appearance. “That’s him!” Kemp roared and banged the table. “God damn it, it’s him!”

  And he explained to the count that the Foreign Office investigative team had concluded that a “foreign spy was somewhere near Ernest.”

  “The man has to be arrested,” Kemp said. “I’m entrusted to find him.”

  Writing about this episode three and a half decades later, Dmitri acknowledges that, at this moment, he was scared silly. He reveals his longtime observation about himself: in the first phase of fright, he suddenly gets a great upsurge of energy, his mind clears up, and he fills with resolve. In the second phase of fright, his reaction is complete paralysis, which usually comes later, after he is out of danger.

  “I’ll help you find him,” he said to Kemp. “I know the family business situation and have some ideas about what’s going on. The tracks lead to Germany, where the family owns significant property. I’ll risk disclosing some family secrets, although, as the trustee of a solid bank, I’m forbidden to do so. Let’s not tire our lady with boring details. May I invite you to the Ritz for lunch tomorrow, at one o’clock?”

  Knowing how poorly the Foreign Office employees were paid, Dmitri used the same bait that had proved successful during his first meeting with Lucy. He assumed that it might well be the first time Kemp would have a meal at such an expensive place. The gamble worked. Kemp thought for a while and agreed. Dmitri picked up the phone and ordered a table for two. Kemp shook Dmitri’s hand “especially meaningfully” and thanked him profusely for his invitation and his willingness to help. According to Bystrolyotov’s own account and the KGB files, he left Great Britain early the next morning on the first flight to the continent, using his Greek passport issued to the name of Alexander Gallas.16

  The declassified Oldham file shows that the events following the meeting of Kemp, Lucy, and Bystrolyotov were both more complex and less dramatic. After the lunch was over, later in the day, Dmitri went to see Oldham at a nursing home where he was recuperating from alcoholism and informed him about Kemp’s visit. At 5:50 P.M., when Dmitri was still at the nursing home, a telephone call from Oldham to Lucy was intercepted. Oldham asked Lucy whether she had told Kemp “everything.” Lucy replied, “No, I didn’t, but it’s about time I did.” What followed was a typical quibble between spouses on the verge of divorce. She told Oldham she was about to move out of the house for he “had done nothing” for her. He denied it and offered to put “Joe” on the phone to confirm it.

  In the meantime, on the very same fateful day of July 19, Kemp returned from the lunch at the Oldhams’ house and duly reported what he had heard from Lucy about Ernest’s behavior. A meeting was called at the Foreign Office, where the question of what to do next with Oldham was discussed at length. Two options were on the table: to arrest and charge him under the Official Secrets Act or just to interrogate him, bearing in mind that, according to the law, “any disclosures he might make could not be used against him in any future prosecutions.” A representative of the office of Director of Public Prosecutions (DPP) unofficially expressed the opinion that, under the circumstances of the case, he would “deprecate a prosecution, mainly in view of the disclosures that would be made about the Foreign Office.”

  Sir Robert Vansittart, head of the Foreign Office, also felt that before any rush actions were taken against Oldham it would be good to discreetly search Oldham’s room at the nursing home to find out what secret documents were in his possession at the time. Judging by the minutes of the meeting, in addition to what Bystrolyotov described in his 1968 “Memo,” during the lunch, Lucy had told Kemp that her husband also illegally possessed a “red passport,” a docu
ment given to any messenger of the Foreign Office carrying dispatches. Since it was unclear how Oldham had obtained the “red passport,” even if they found him with it, he could be prosecuted for larceny only if it was proven that he had stolen it after his dismissal. But if he just retained the “red passport” given to him while he was still employed by the Office, now after his layoff, this would constitute a non-prosecutable offense, a departmental misdemeanor at best.17

  In view of this situation, the DSS representative offered to continue observing Oldham’s activities for a few more days. If anything suspicious was seen, for example, if he met someone outside his nursing home or received any suspicious correspondence, he had to be interviewed. The DSS representative also suggested that the interview be conducted along “quiet and friendly lines.” Oldham should be asked whether he was in possession of a “red passport” and, if so, asked to hand it over. He should also be asked to explain the circumstances of his visit to the Foreign Office on July 13. If he would not cooperate and refused to reply, they could officially serve him with a notice of obstruction of justice.18

  Two days later, on Friday, July 21, the officials were still at a loss about what action to take against Oldham. It turned out that, acting along the lines suggested by the DSS, if Oldham refused, then by law he could not be searched unless a search warrant was obtained. In this case, the trouble inside the Foreign Office could no longer be kept from public disclosure. It was also not clear whether Oldham could be arrested if compromising material were found at his place. And, if he were arrested, should other governmental bodies, such as the attorney general’s office and the Home Office, be notified and involved? Therefore, the action was postponed again until early the following week.19

  Meanwhile, according to the current KGB account, with the money received from the Soviets, Oldham checked into a hospital and later, in the first ten days of August 1933, left for Switzerland.20

  Oldham’s declassified file tells a different story of what truly happened. Indeed, considering that his visit of July 13 had alarmed the Foreign Office a great deal, such a tranquil denouement of Oldham’s adventures was hardly possible. In reality, as the surveillance minutes show, Bystrolyotov’s visit to ARNO naturally alerted him that he was in trouble. His following actions may well have been thought out together with his friend “Joe Perelly.” First, he made sure to lull the vigilance of the external, around-the-clock surveillance, of which he was, apparently, quite aware. As the Oldham file shows, during the whole period from July 19, when the observation started, to July 25, no suspicious behavior on the part of Oldham was registered. Besides occasional visits from Lucy and “Joe Perelly,” he made daily trips to local pubs, where he drank lots of beer and spent some afternoons on a bench in Kensington Gardens, reading and sleeping.21

  Yet, he had a trick up his sleeve. On Monday, July 24, at 6:15 P.M., he placed another telephone call to his wife and informed her that the next day he was leaving for Vienna with “Joe.” The call was duly intercepted, and an order to shadow Oldham was issued. The next day he indeed took a taxi and asked to be driven to the Victoria Station. But, at that point, the surveillance team lost him. They immediately informed the Foreign Office about Oldham’s departure. The arrangements were made to inform all border controls and order them to search him if he produced a diplomatic passport or “red passport.” But it was too late. At 2:00 P.M., Oldham left the country on a flight to Paris, where he was to change planes and fly to Geneva.22

  From the documents, it is not clear whether Dmitri left in his company. But, after July 25, “Joe Perelly” was no longer observed by the Oldham surveillance team. Reporting to the Center, Bazarov informed them of Dmitri’s “exceptional selfless work,” that he had not left “even an hour earlier” despite the “real danger of failure with all its consequences.” The Center responded in kind, acknowledging Dmitri’s “self-lessness, discipline, and bravery” under the “exceptionally complex and dangerous” conditions of his work over the last days with ARNO.23

  Traveling from Geneva to Interlaken, Oldham showed up for a meeting with Dmitri and Bazarov, where he seemed surprisingly cool about what was happening back home and held his own. He continued to resist OGPU operatives’ demands to name his “source.”24

  Although Bystrolyotov assumed that the Foreign Office did not know that Oldham was in Switzerland at the time, he was mistaken—they knew. His presence in Switzerland was spotted by British intelligence. The Foreign Office was informed that he had left for Paris by train and that, so far, he had not shown his diplomatic passport at the borders. After Paris, Oldham went back to Switzerland and, on August 4, flew back home from the Basel airport. His arrival in the capital was immediately reported to the authorities. On August 9, another conference at the Foreign Office was held to decide on a further course of action. Sir Robert Vansittart suggested beginning an inquest into Oldham’s background, past service, and financial transactions, at least for the previous few years, and other related matters. He also instructed Mr. Kemp to get in touch with Mrs. Oldham and find out “anything he [could] regarding Oldham’s whereabouts, where he bank[ed], and his present business activities.”25

  Inspection of Oldham’s bank accounts didn’t produce much. The only thing achieved was that, through checks paid for air travel, it was possible to establish when and where he had gone for the past two years. While, as of August 16, the Foreign Office was still unable to locate Oldham’s residence in London, the KGB files show that, already on August 9, Oldham informed Bazarov that he was “safely” staying in a London hotel. It was assumed by the Soviets that he was working on his next assignment—to collect the names of British Secret Intelligence Service agents posted in other countries. In the middle of September he was supposed to return to the continent for another meeting with his handlers.

  At the Foreign Office meeting, Kemp reported that, as instructed, he had seen Mrs. Oldham, who, in his view, “had definitely broken off with her husband.” Therefore, it was decided to approach her to ask for Oldham’s pouch and, since it was suspected that he might have photographed the diplomatic dispatches in his possession, also his camera and any films found.26

  But nothing came of this attempt. The pouch turned out to be empty, and no camera or film was located at Oldham’s house.27

  Only on August 23, during another Foreign Office conference, a whole month from the day Dmitri had left the country, came a decision to make inquiries about “Joe Perelly.” They checked the Traffic Index, but no man with a passport issued in that name had recently crossed the British borders. Then they decided to ask Mr. Kemp whether he knew anything about the man. This contradicts the KGB files, according to which, after the lunch with Lucy and “Perelly,” Kemp had immediately reported the content of the conversations around the table to his superiors, who had “instructed him to establish contact with ‘Joe Perelly,’ secretly from Oldham, to collect everything he knew about the case and thus create a sufficient basis for arresting Oldham.”28

  Other details in the KGB files regarding the case seem plausible. They reveal that when “Count Perelly” was a no-show for lunch at the Ritz, Kemp was, understandably, alarmed. He checked the front desk of the hotel where the lunch should have taken place and found no guest registered there under this name. He began making the rounds of other hotels in the vicinity, but to no avail. It may well be that he did not report the incident because he was ashamed of being duped. Moreover, the contents of the British records suggest that, embarrassed by his own gullibility, Kemp not only failed to duly inform his superiors about what had happened between him and “Joe Perelly” but also attempted to distance himself from the count by stating that, in his view, “Perelly” was a “Jew [residing] in Vienna.”29

  In the meantime, Oldham was spotted at the Unicorn Pub on Jermyn Street, and an order was issued to “house him” if he turned up there again. Finally, on August 25, Oldham was confirmed as staying at the Jules Hotel on Jermyn Street, and all previous surveillance mea
sures, suspended at the time of his travel to the continent, were immediately transferred to his new place of residence.30

  On August 28, a surveillance team descended on the Jules Hotel. To avoid attracting the attention of the hotel servants to their special mission, first, one of the plainclothesmen pretended to be a “country cousin” from out of town, coming for a weekend visit to the capital. After checking into a room on the fourth floor, he came down to the lobby, where he sat in a position that allowed him to spot Oldham leaving or entering the hotel. After sitting there for quite a while, at about 5:00 P.M., realizing that his overlong presence in the lobby might look suspicious, the plainclothesman decided to call for help.

  He pretended to go out for a walk in the fresh air and from a phone booth around the corner called his superior, one Captain B., suggesting that the captain join him in the surveillance to make it less conspicuous. Captain B. arrived about two hours later, and the two men pretended to be old friends who had accidentally run into each other in the hotel lobby. They sat in the lounge and “discussed their affairs over a whiskey and soda in loud tones.”

  Then, acting as if he were a Londoner who wanted to show his “country cousin” around, Captain B. took his partner to the local Chequers Pub. There they instantly spotted Oldham sitting in the corner alone, impeccably dressed: he wore a brown mixture suit and a brown striped shirt, with a collar and tie to match. To avoid arousing suspicion, the plainclothesmen decided not to talk to him or to the pub’s owner, who was there at the time. After an hour or so, when Oldham left the bar, they also decided not to follow him back to the hotel but to leave him alone for a while.

  At 9:30 P.M., the two men returned to the bar, pretending to have a good time and enjoying themselves. They found Oldham back at the bar, too, sitting in the same corner as earlier, now in the company of the landlord and some Scottish woman. Unobtrusively, as they drank and talked, they involved Oldham in the conversation as well. Oldham joined the two plainclothesmen in heavy drinking and switched from beer to straight gin. As they drank, Captain B. was able to slip into the conversation that his “cousin” was staying at the Jules Hotel, thus making his appearance there later unsuspicious to Oldham. Then, the plainclothesmen announced their intention to continue drinking after hours at the hotel, ordering drinks by room service. When they returned to the Jules Hotel, Oldham joined them. By a stroke of luck, he suggested having drinks in his room. For show, the operatives quibbled about it for a while before finally agreeing to accept his invitation.