by Nick Barratt
The seriousness of the situation required the intervention of Oldham’s own medical advisor, Dr Henry Rowan of 33 Onslow Square, Kensington, to reassure the officials about Oldham’s condition. Writing on 5 December 1931 in response to a request sent two days previously from the Foreign Office to provide an accurate assessment of Oldham’s condition, Rowan stated that he
...considers that there is every prospect of his making a recovery which will enable him to carry on with his work regularly and efficiently.213
The crisis was averted by a whisker, but alongside growing interest in his attendance record, a further investigation was started about his personal affairs – in particular the fact that ‘no income returns have been received from him for the years 1928–29 to 1931–32’.214 This was, in many ways, more challenging to deal with than the issue of his sick leave, as full disclosure of his financial affairs during this specific period would have raised serious questions about where his money had come from. It was not illegal for staff to enjoy private income streams – after all, it had been actively encouraged until recent years – but it would have been difficult to explain the regular appearance of payments in dollars from overseas sources. Nevertheless, it would appear that he was able to dodge these inquiries, as the question was not raised again when he finally returned to work.
During the winter of 1931–32, Bystrolyotov increasingly based himself in London and became integrated into the Oldhams’ family life – witnessing first-hand their financial hardship and forming the opinion that it was Lucy who had driven Oldham to take the desperate measures in 1929. She was reluctant to give up her lifestyle even though the money had gone. However, despite Bystrolyotov’s presence to ensure Oldham complied with the delivery of material, it was far too risky for Bystrolyotov to take it across the Channel, so Oldham was still required to travel abroad. A range of locations were used as well as Paris, such as Madrid, Trouville-sur-Mer, and a Swiss resort near Brienz, in the canton of Bern, where technical bases were set up to process the material and ensure its safe despatch back to the OGPU centre in Moscow.
Given the increasing concern about Oldham’s performance at work, a cover story was required to explain the trips overseas, so Bystrolyotov arranged for Lucy’s youngest son, James Raymond Wellsted, to be placed with a German family near Bonn to undertake his schooling, giving the Oldhams a reason to travel to see their son. Bystrolyotov also assisted with somewhat darker aspects of family life. According to his notes, he arranged for Lucy’s daughter in law, Yolande, to visit a clinic in Berlin to have an abortion, since she had exceeded the legal time limit for the operation in Britain.
To help him travel, Oldham applied for a new passport on 16 February in his rather blunt, almost arrogant, style; he claimed he had lost the old one, but it might have been part of a ploy to create a new identity for himself or Bystrolyotov:
Dear Holloway,
Would you like to issue me with a new passport?
I am unable, at the moment, to lay my hands on the old one, No 151, issued at Bucharest on March 17 1921; it is not here, and a hurried search at home last night failed to bring it to light.
I will send it over as soon as possible.
Yours ever
EH Oldham215
Included with the papers was a declaration signed by Oldham that the passport was needed for travel to Europe for the purpose of ‘duty’. Rather disingenuously, given the covering note, he declared that all previous passports granted had been surrendered for cancellation to a British Passport or Consular office. The counter-signing officer was his Communications Department associate, Thomas Eldred Kemp, who was to play an increasingly important role in Oldham’s life. He was happy to state that he could vouch for him as a fit and proper person to receive a passport, having known Oldham for 13 years. The order to issue the passport was initialled by ‘PCH’ on the same day as Oldham submitted his application – presumably Percy Clarence Holloway, another war veteran and one of Oldham’s cronies who had worked with him as a temporary clerk after the war before switching departments to find employment as an examiner in the Passport Department. A replacement was issued immediately, entered on the Passport Office register that no fee was paid as it was ‘gratis – FO’.216
By this stage, Bystrolyotov was regularly joined by his colleagues Bazarov, Leppin and Weinstein in London, as well as another Great Illegal, Theodor Mally – just in case further pressure had to be exerted on Oldham, who was still insistent that he was acting on behalf of a ‘source’ within Whitehall. The deployment of so many key operatives in London as a functioning cell shows the importance with which ARNO was held within OGPU and the Soviet hierarchy as an intelligence asset. Yet the strain on Oldham was beginning to show once more.
Shortly after he gained his new passport, with Bystrolyotov breathing down his neck, and worn out from over two-and-a-half years of deception, Oldham turned to drink again with the inevitable consequences in his department. Discussions among his superiors took place between 2 and 9 March about his ‘irregular attendance at the office’.217 For the first time the spectre of dismissal was raised with him directly, when he was brought in to be ‘interviewed on the question of his proposed resignation’218 – the sort of proposition in which he had little choice but to comply.
In the world of the Foreign Office, where the gentleman’s code of conduct still operated, openly discussing the retirement of a 39-year-old permanent official was an extraordinary step and demonstrated just how much trouble Oldham was in. The patience of his superiors had been tested to breaking point by his lack of attendance and served notice that everything Oldham did was now under microscopic scrutiny. Oldham was not helped by the actions of Bystrolyotov, who himself was under just as much pressure to ensure Oldham did not fall apart and thus expose the cell.
As a result, mistakes crept into Bystrolyotov’s work; on one occasion Oldham brought cipher codes and correspondence to Paris for Bystrolyotov to copy, but when pressing the material under glass to enable easier photography, he cut his finger and a drop of blood stained the paper. Despite his best efforts, he was not able to remove the stain and was forced to hand it back to Oldham in the damaged state. Remarkably, no-one noticed, demonstrating the amazing lack of security or scrutiny within the Foreign Office as well as the trust placed in civil service colleagues.219 Other cracks in Bystrolyotov’s once meticulous cover were gradually exposed as he became more jaded.
One evening, Oldham and Bystrolyotov took some time out to socialise together by watching a film in the local cinema. ‘God Save the King’ was played – a standard custom to demonstrate loyalty to the Crown – but Bystrolyotov failed to rise from his seat. This gaffe reduced the panicked Oldham to a state of near hysteria for fear their fellow patrons might think they were spies.220 Nevertheless, he continued to do his best for Perelly and we can discern a glimpse of Oldham’s relationship with Bystrolyotov from a report sent from Bazarov back to the OGPU centre on 18 April 1932:
ARNO sees in him an aristocrat, a Hungarian nobleman who impresses him very much (he seems to have seriously believed his legend), who somehow found himself a Bolshevik, but since he is not Russian he is far more acceptable. How exactly he imagines it in his mind is not clear. Obviously, he thinks that either HANS was our prisoner of war or had got lost in Europe. HANS only asks for something, explains the pressure on my part, as if he himself were placed in such as position in which lack of success in the work means transferring him to another, non-European section.221
With great effort, Oldham pulled himself together after the ‘final warning’ from his superiors and resumed work back in the Communications Department – as well as his covert activities on behalf of Perelly. Having gathered together more material, he sailed to Calais twice in April and flew to Paris in May and Amsterdam in June with Imperial Airways,222 but his real value to the Soviets came with the Lausanne Conference that was convened between 16 June and 9 July.
Representatives from Britain, France and Germa
ny met to discuss Germany’s reparation payments under the terms of the Treaty of Versailles. These had been suspended the previous year due to the global economic crisis post-Wall Street Crash and much depended on whether Lucy’s old friend Hoover would accede to European demands for a relaxation in the terms of the loan repayments to the USA. The negotiations had repercussions beyond the nations in attendance; the Soviet Union was fearful about any diplomatic agreements between Germany and France that might threaten their security and were desperate for access to the conversations that were taking place.
The exact details concerning the material that Oldham provided from Lausanne is open to interpretation by historians, but what is beyond doubt is that he was able to pass across some very valuable documents. According to the OGPU files, and the notes compiled by Bystrolyotov, these included a Foreign Office cable dated 28 June in which Sir Horace Rumbold, the British ambassador to Berlin, stated that he obtained information about the intentions of the newly appointed German Chancellor, von Papen:
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.
Other useful pieces of information were obtained:
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 100,000 serving a 12-year stint.223
Bystrolyotov provided unsubstantiated intelligence back to his masters within OGPU, including various informal conversations between the British Prime Minister, Ramsay MacDonald, von Papen and the French Prime Minister, Édouard Herriot – with von Papen taking the negotiating position that military concessions were required to enable him to halt the rise to power of Adolf Hitler and the National Socialists. The official British papers from Lausanne are housed at the National Archives and provide ample corroboration for Bystrolyotov’s access to the most secret conversations in Europe. For example, the MacDonald–von Papen–Herriot summit took place at midday on 28 June and the following notes were sent back to London:
Herr von Papen said that the task of his government was to prevent a social revolution inspired by the nationalists. How could he do that? These people were moved by the discrimination which they thought was directed against Germany. They felt that she was being treated as a nation of second rank. If reparations could not be wiped out and if Germany could not feel that she was a nation having equal rights with the others, it would be impossible to restore confidence. All this could be covered up in a general plan for the restoration of Europe.224
This was not an idle threat; Adolf Hitler, leader of the National Socialist (Nazi) party had been defeated in the presidential elections in April, despite polling nearly 13.5 million votes in the final run-off, but the party’s popularity had been growing rapidly in the years since the Wall Street Crash had exacerbated German economic crises.
Herriot’s response was also recorded:
The second means of disposing of the reparation question was to make it an occasion of reconciliation between France and Germany. The Franco-German dispute had poisoned history and was poisoning Europe. The French delegation clearly understood that if the end of reparations could be made the occasion of Franco-German reconciliation the disappearance of the solde [payments] would have little importance… He understood that if they could bring back from Lausanne a Franco-German reconciliation that would be more important than any solde.225
All official communications were ciphered and sent back to London, usually by the secretary to the British delegation, Victor Perowne, who was on secondment from the Foreign Office. In a series of accompanying letters, Perowne revealed the level of work undertaken by the secretariat to preserve security. On 27 June he wrote:
This has been a frightful day but there is very little to report that pertains to our own muttons. The cipher officers were working from 3.00 am to about midday; I was up at 6.15 am to start typing out their decipherages as the PM insisted on knowing what was in the telegrams by 7.00 am if possible. It is a sad business this running reparations, European reconstruction etc, disarmament and Ireland all from Lausanne!226
On 29 June he noted that meetings with ministers from the French and German delegations had taken place the previous day, and that transcripts had been made, ‘but the confidences exchanged on these occasions are regarded as too secret for copies of these records to have reached me.’227 Yet he was eventually made privy to some of the behind the scenes deal-making; on 4 July he wrote back that:
I have now secured a copy of the record of the mysterious conversation which took place between the prime minister and von Papen on 27 June and I enclose four copies herewith. One copy has, on the PM’s instructions, been sent to Herr von Papen.228
In this meeting, MacDonald revealed information on the French and British negotiating position to von Papen ‘in great confidence’ to help the Germans understand what was needed to reach a crucial consensus and ensure the conference was a success.
Clearly, Oldham gained access to a large proportion of this secret, coded correspondence, as well as the despatches sent back to London in the official bags. This level of insight into the diplomatic position of three major powers was invaluable to the Soviets, who were excluded from the negotiations. The information assisted them in developing their own diplomatic responses. As it transpired, only an informal agreement to remove German war debt and suspend reparations was announced, contingent upon agreement from the USA. The proposal was rejected by Hoover’s administration in December. After the Conference, Oldham was able to extend his usefulness by providing another key resource for Bystrolyotov – a British passport under the name Sir Robert Grenville, delivered on 27 July. Oldham claimed that it was signed by the Foreign Secretary, Sir John Simon, who was a personal acquaintance. Bazarov reported the acquisition to the OGPU Centre, in doing so revealing his ignorance of the way Britain’s passport system operated:
Charlie has brought a book for HANS. This book has been issued not by the Ministry of Home Affairs, as is usual, but by the Foreign Office. This book is British and not Canadian, as originally intended, it is like the one Charlie has.229
However, Oldham’s exertions at Lausanne had taken a huge toll on his physical and mental well-being and drink once again took hold. He failed to make appointments with Bystrolyotov: the delivery of the passport took place ten days after the scheduled meeting date and it is clear that Oldham had started to deteriorate physically. As Bazarov reported at the time:
HANS has just come back from his trip; this time his partner made him wait for as much as ten days. He has brought nothing interesting. I think this is explained by his careless attitude to his job. He keeps convincing us that his partner was extremely busy in connection with the Lausanne conference so he had no opportunity to interest us in different matters which are of significance to us.230
Far more seriously, though, Oldham’s mistakes at work were becoming increasingly obvious and far too serious to avoid. Among other things, he failed to respond to the inquiries of other officials within the Foreign Office, possibly linked to the fact that a code book had gone missing from the safe in the basement of the Foreign Office in which Oldham had been seen wandering during periods when he had been officially signed off on sick leave. In addition, he had been spotted using the ambassador’s side entrance to leave the building rather than the front door, thus avoiding security in the form of the door keepers. Add to this the fact that he was often found drunk or even asleep and it was clear that he had become a dangerous liability.231
The final straw came on 12 September, when yet another medical certificate was issued in regard to a leave of absence on the grounds of sickness.232 Although he had been considered a capable official and every effort had been made to give him chance after chance, the impact of his alcoholism upo
n his work had grown too serious to ignore any longer and made his position within the Foreign Office untenable. On 30 September, Oldham was summoned to see his superiors. He was told that his work over the last two years had been unacceptable and a litany of mistakes was used as evidence. In addition to the issues described above, Oldham was blamed for the loss of confidential papers which he had unaccountably taken home over the previous six months and he was equally unable to explain unauthorised visits to the cipher room. Rather than formal dismissal, he was instructed to:
…submit his resignation on account of ill health. As his doctor is of the opinion that he will in due course regain his normal health, Mr Oldham is not in a position to put forward, for submission to the Treasury, a claim for pension on the grounds that he is permanently unfit for duty. Enquires whether some form of gratuity can be applied for in the circumstances.233
The failure to grant a pension or gratuity was a particularly devastating blow on two accounts. Not only did this further compromise the Oldhams’ parlous financial affairs but it also raised the chilling prospect that the Foreign Office suspected him of wrongdoing or illegal activity rather than simple incompetence caused by his alcoholism. On the handful of previous occasions when a permanent official had not been awarded their pension, the person removed had been under suspicion of espionage.234
Rocked by this catastrophe, but compelled to continue the charade that they still had access to sensitive material of value to the OGPU, the Oldhams travelled to Croydon Aerodrome and flew with Imperial Airways to Berlin on 18 October on the 9.20 am flight to meet Bystrolyotov as previously arranged. They failed to mention Oldham’s dismissal although, from his poor physical condition, it was clear that Oldham was in the grip of alcohol addiction once more. According to Bystrolyotov’s biographer Draitser’s account of the meeting: