Stalin's Romeo Spy

by Emil Draitser

  Soon Oldham collapsed from heavy drinking. He became totally incapacitated, and one of the operatives undressed him and put him to bed.

  As Oldham slept soundly, the operatives thoroughly searched his clothes and the room and made a list of what they found. Upon examination, Oldham’s belongings revealed nothing noteworthy, except a dozen addresses in his papers, one of which was for a “J.P.”—which could possibly stand for “Joe Perelly.” The address, however, was just a post office in Trouville-sur-Mer, commonly referred to as Trouville, a commune in the Calvados département in the Basse-Normandie region of France.

  The next morning, Oldham, who had a terrible hangover, accepted a lunch invitation from one of the plainclothesmen. Later, the operative visited him again and engaged in light conversation, during which Oldham said that he was staying at the hotel while his house was being redecorated and his wife was out of the country, visiting their son in Germany. The operative offered a good excuse for leaving, and he and Oldham parted as buddies.

  For the next three weeks, the observation team reported having spotted Oldham receiving envelopes, one every seven days, each containing ten-pound notes. (Today the sum would amount to around four hundred and forty pounds, that is, in 1933, the notes had substantial buying power.) The security services tried to trace the sender of these banknotes, but they were unsuccessful. Oldham remained at the Jules Hotel, spending every evening in the Chequers Pub, where he drank mostly hard liquor and lots of expensive beers. He seemed to associate only with the pub habitués, among whom were female servants from adjoining rooms of the hotel, a permanently intoxicated artist, and various antique dealers from neighboring shops.

  It was also observed that he usually didn’t appear in public before 5:00 P.M., explaining to everyone that he had to stay in his room to receive telephone calls from the continent relating to “international currency” about which he had to make “quick decisions.” When drunk, he was usually talkative; he boasted of acquaintance with some prominent people. He kept giving everyone around him the same reason for staying in the hotel, sometimes adding a few details, such as that his son had just graduated from Bonn University in Germany. In the opinion of the observers, Oldham was going down the drain.

  For another week, nothing unusual was spotted about Oldham, except for a few telephone calls to and from the Jules Hotel, but the interceptors were unable to identify any of the callers on either end.

  According to the British files, Oldham disappeared from surveillance on September 27, on which date he was found neither at the Chequers Pub nor in any surrounding restaurants. But the KGB files fill in the picture. In a letter that arrived on September 20, Lucy informed Dmitri that her husband had checked out of his hotel and left no forwarding address. From Kemp, who remained in touch with her as a family friend and tried to find employment for her and one of her sons, she found out that in mid-September, Oldham had sent a porter from the Jules Hotel to the Foreign Office with his passport and a note asking Kemp to indulge him as a friend and mark up his passport, raising it to the status of a diplomatic courier passport; the holder of such a passport was not subject to border-crossing disclosures.

  As is known now, this request took place around the time that Oldham was supposed to return to Europe to see his friend “Joe Perelly” and deliver a list of British secret service operatives posted abroad. Whether he collected the information or not is unclear today. But he seemingly intended to take some sensitive information across the British border. According to Lucy, when Kemp put a hold on the passport and asked the messenger to tell Oldham to come pick it up from the Foreign Office himself, Oldham became scared and disappeared.31

  The surveillance officer reported to his superiors that the last time Oldham was seen in the pub he usually frequented was Wednesday, September 27. On Friday, September 29, an item titled “A Kensington Mystery: Unknown Man in Gas-Filled Empty Kitchen” appeared in one of the London dailies:

  The Kensington police are trying to discover the identity of a man, aged about 35, who was found dead in a gas-filled kitchen at a house in Pembroke Gardens, Kensington. Except for a table, there was no furniture in the house, but in a cupboard were a number of suits of clothes, including evening dress. The man was five feet six inches in height, well built, clean shaven, and had dark brown hair and eyes. He was wearing a brown mixture suit, and a brown striped shirt, with a collar and tie to match. The shirt bore the initials “E.H.O.” It is believed that the man formerly lived at the address.32

  Thus, according to this report, Oldham was found dead the day before, September 28. The cause of death was assumed to be suicide due to the man’s financial difficulties. Indeed, as the records show, Oldham owed money to the pub owner, the hotel he was staying in, the Savoy Turkish baths, and various restaurants. Alcoholism and drug addiction were also cited as contributing factors. It was further observed that, during his stay at the Jules Hotel, before he would return to the hotel, he usually stopped at a local chemist shop and bought large doses of paraldehyde. At the time, this drug was widely used in hospitals to treat delirium tremens associated with alcohol withdrawal, and many patients became addicted to the drug. It was also used as a sedative to calm or relax nervous or tense patients and as an insomnia remedy.33

  There was, however, something else that might have speeded up Oldham’s demise. As reported by the surveillance officer, on Monday of the week that he disappeared from the hotel and the pubs, it became known that he had received a “letter from Geneva, the contents of which appeared to upset him.”34

  The letter was never found, but knowing that Oldham’s OGPU controllers often chose Switzerland as their place to meet him, the letter that upset him could well have come from them. If this is true, what could possibly have been in the letter that would have made Oldham feel that resorting to suicide was the only way out? According to the published KGB sources, in the course of the past year, while playing the “good cop–bad cop” routine, as a harsh measure, Bazarov and Dmitri had threatened Oldham, saying they would “cut him off completely,” the last time, during their early August meeting.

  While in Crown Jewels, Tsarev and West do not mention the threatening of Oldham during his last meeting with Bazarov and Dmitri, in their Russian version, KGB v Anglii, they quote the document from the KGB files to that effect. Reporting to the Center, Bazarov wrote that he and Bystrolyotov “conducted [their talk with Oldham] in such a way that ARNO has formed the impression that we’re on the verge of breaking off with him.”35

  However, Tsarev and West do not mention another, much more powerful, pressure applied to Oldham—blackmail—that is, the threat to inform the British authorities about his espionage activities. Although in his Handbook of Intelligence and Guerrilla Warfare, a high-ranking Soviet spy, Alexander Orlov, who defected to the West in 1938, states that, unlike Western intelligence services, Soviet intelligence treated its informants with “genuine solicitude,” it was certainly not the case with Oldham. In the course of his debriefing about the OGPU spy network in the West, another Soviet defector, Walter Krivitsky, revealed that Oldham was threatened with exposure.36

  Apparently, combined with his other troubles, already mentioned, the admixture of adverse circumstances was too much for Oldham to handle. It looks as if he chose to end his life by going back to his house, getting drunk, and after sealing off the kitchen door and window, opening the gas jets. In KGB v Anglii, Tsarev and West also char acterize Oldham’s death as suicide caused by alcoholism and depression. However, in his memoirs, Bystrolyotov writes that Oldham, “our wonderful ‘source,’ failed and was killed by us” (that is, the OGPU). Although there is no archival evidence to corroborate this statement, as Gary Kern rightly points out, “there was sufficient cause for foul play: Oldham was unstable and knowledgeable about current OGPU operations.” If that is true, then the suicide version, recorded as the official cause of death, was highly convenient for the OGPU. Tsarev and West underscore the “naturalness” of the way Oldham
’s days ended: “ARNO’s tragic death was not surprising to anyone who knew him. A voluntary hostage of greed and drunkenness, vices that mutually nourish each other, he was doomed to end badly.”37

  For over two months after the death of Oldham, the OGPU was in the dark about what was going on in the Foreign Office. Most important, they did not know whether his ties with the Soviets had been revealed. Though Dmitri arranged secret (indirect) correspondence with Lucy, she could not possibly write about all that was going on around her husband’s death. She only wanted to be sure that her dear “Count Perelly” would not reappear in Great Britain, for they were still trying to trace where Oldham’s money had come from. Dmitri invited her to the continent for a discreet meeting, and during the last ten days of December, Lucy told her acquaintances she was going to the provinces to visit her friends and flew to Vienna. As a matter of precaution, before seeing her, Dmitri made sure that she was not being shadowed.38

  When they met, Lucy reported what their family lawyer had disclosed to her: at the beginning of October, a few days after her husband’s death, the Foreign Office had asked him to collect the most complete information on Oldham’s financial transactions for the past two years. Apparently, trying to conceal the fact that sensitive state secrets had long been leaked from the Office, they instigated an inquest by citing a police report about some of their employees being involved in drug smuggling. They were especially interested in establishing Oldham’s ties with Germany.39

  The German connection may have been construed from Kemp’s report on his conversation with “Joe Perelly” back in July, when “Joe” had mentioned some fictitious German real estate ownership he had allegedly been arranging for Oldham. Lucy told the lawyer that she knew nothing about Germans other than the name of the main buyer of her husband’s papers, “Da Vinci” (one of Bazarov’s aliases). As did her deceased husband, Lucy also believed that her dear “Hungarian count” was in the hands of that “evil man.” Apparently, Dmitri was able to convince her that “Da Vinci” was a German agent: working “under a false flag” was one objective of Soviet illegal operatives. Citing the need to find the count as a link to the “Germans [who had] pulled Oldham into some dirty business,” the lawyer and the family guardian repeatedly pressed Lucy to reveal Dmitri’s address. They explained to her that it was the only way to get money from the Germans. But Lucy denied knowing anything about “Count Perelly’s” whereabouts. Besides, she insisted, he was above suspicion—he was only a go-between and knew nothing.40

  Soon Kemp picked up where the lawyer and the guardian had failed. First, he used a soft approach. He resumed his interest in Lucy’s life by visiting her and asking her sympathetically how she was managing since her husband’s death. While engaged in conversation, he tried unobtrusively to change the subject to “Count Perelly” and his possible whereabouts. When this failed, he threatened Lucy with arrest as an accomplice of her husband, a spy and a smuggler. It scared Lucy. She became hysterical and told him everything she knew about Oldham’s shady business except “Perelly’s” address, stating that she had lost all contact with him.41

  Dmitri informed the Center about these events, noted that Lucy hadn’t given any leads concerning the investigation, and added that, in his opinion, “the time and effort of dealing with her were justified.” To keep her as a connection that might be useful for any renewed attempts to penetrate the Foreign Office, Dmitri offered her an unspecified amount of OGPU money as a means of financial assistance. He told her that he was doing it “in order to save her and her children.” Indeed, at the time of their meeting, Lucy was on the brink of total financial disaster. In Dmitri’s words, the desperate “aging lady was about to become a prostitute,” and she accepted the offer “with tears of ecstatic gratitude.” Taking care of their former agents was not a philanthropic gesture on the part of the OGPU. As Alexander Orlov explains, “This solicitude toward the informant [was] based more on consideration of self-interest than on moral or humanitarian grounds.” In his opinion, the Soviet intelligence “simply came to the conclusion that such a policy toward the informants benefited its cause and contributed to its success.”42

  Meanwhile, in London, everything calmed down. The Foreign Office decided to put a lid on the scandal. As Lucy told Dmitri, Kemp assumed that Sir Robert Vansittart did not want it made public that such a disaster—which in Kemp’s account was extremely rare in Foreign Office history—had struck on his watch. Dmitri rightly concluded that ARNO and the whole Soviet spy ring would have been caught red-handed long ago if the inquest were conducted not by homegrown sleuths like Kemp but by “professional detectives from the Admiralty or Scotland Yard.”43

  Lax security in the Foreign Office at that time continued to contribute to the leaking of state secrets after Oldham’s death. Although no longer able to appear in England without endangering the OGPU’s renewed efforts to penetrate the stronghold of British diplomacy, Dmitri remained at the forefront of the OGPU offensive. Despite the considerable experience he acquired while dealing with ARNO, he was forced to pull back from the front line. He became the main controller of another front man chosen to replace him. He knew the man very well, for he had worked with him side by side while setting up the GADA company and during his search for “Nosik,” the Italian adventurist and seller of black-market codes ROSSI. It was the Soviet operative of Dutch origin, Henri Pieck, code-named COOPER.

  Personality-wise Pieck closely resembled Bystrolyotov—he was a painter and a bohemian, knew several European languages, was handsome, and knew how to attract women. He even had an advantage over Dmitri: he possessed genuine British citizenship and carried a legal passport. But some of his character traits were not useful for spy work. Dmitri found the man “disorderly, sloppy, and undisciplined,” and also “kind, softhearted, and sentimental.” That was not sufficient for the task, for he could not “put pressure on a man, grip him in a vise, break him down, blackmail him, and threaten to kill.” (More evidence of the qualities that the OGPU expected in an ideal recruiter.) Taking this into consideration, it was clear that Pieck had to be guided on a daily basis in how to handle his target depending on the circumstances at hand. Dmitri took upon himself the responsibility for this part of the operation.44

  Now the right employee had to be found among the Foreign Office staff who could successfully replace ARNO. Actually, the process had been started back in 1932: while Dmitri was still struggling with gaining full control over Oldham, the OGPU was already actively searching for the man’s replacement. Some leads had already been developed. Between his travels to London, Dmitri steered COOPER’s actions every step of the way. He led him first to another Foreign Office employee code-named BOY, whom ARNO mentioned as a prospect for recruitment. BOY was working in the British delegation to the League of Nations in Geneva. When his Geneva residence was discovered, Dmitri instructed Pieck to rent an apartment in the same building (in fact, it was just one floor up from the Brit). Of course, the first contact with BOY had to take place elsewhere. On Dmitri’s instruction, COOPER began visiting the Brasserie Universal, which was frequented by Englishmen living in Geneva.

  In a few months, thanks to his social skills and his ability to attract attention to himself as an artist, COOPER made friends with many Brasserie Universal habitués, BOY included. However, he turned out to be a tough target, requiring much cultivation before an attempt could be made to recruit him. Overly prim, he treated every person who approached him during social interactions with icy cold politeness.

  Soon a prospect appeared on the horizon who looked much more promising than BOY. The new target, code-named SHELLEY, seemed to be an easy target for recruitment because of his permanent debts and inability to keep money in his pocket. Although in ARNO’s opinion he was known among his colleagues for his stupidity, he was a good specialist and was often sent abroad on business trips. There was a natural way for Pieck to get acquainted with him: the man’s fiancée was the daughter of the local British vice-consul, Captain
John Harvey—code-named CHIEF in the OGPU correspondence. Pieck was able not only to strike up a friendship with CHIEF but also to earn his confidence. Once, CHIEF even introduced COOPER to a diplomatic courier as “our own man” who could be fully trusted.

  Lacking the finances to pursue his marriage plans, SHELLEY quickly agreed to provide COOPER with some confidential material that he was made to believe would be used by a big Dutch bank for stock market speculation. In the long run, the man turned out to be too timid and was soon replaced by a perfect agent, a cipher clerk, Captain John Herbert King. He was given the code name MAG, a Russian word meaning “magician,” because one of his hobbies was magic and magician’s acts. At the beginning of 1935, when SHELLEY refused to continue working for COOPER, Pieck turned to MAG.

  (Several sources identify another Soviet operative who had tried to recruit King before Pieck but had failed because he lacked finesse in the skills required for such a delicate operation. Andrew and Gordievsky, as well as Gary Kern, identify the OGPU illegal operative as Sergei Basov, or Basoff. His background as a sailor in the Black Sea and his proximity to Dmitri in the operation may well point to his identity as Dmitri’s old friend Evgeny Kavetsky. Bystrolyotov mentions bringing him into some of his intelligence operations in Europe.)45