Ace of Spies

by Andrew Cook

  …a man who was a very great friend of mine and who was… at one time a spy… became a friend of Rasputin’s and, strange as it is, really did have mixed feelings for him, part loathing and part liking. At all events he lived with him for about a year, travelling about Russia with him, and Rasputin confided his own spiritual history to him, and told him that he had formerly and of his own choice surrendered his soul to the devil and from that time had been able to work many more cures.32

  While Reilly certainly had connections and contacts with Rasputin and his circle, his claim to have lived and travelled with him for a year is easily refuted by Ochrana records. Rasputin’s activities and associations were probably the best documented of anyone in Russia bar the Tsar himself. Reilly’s name is nowhere to be found in the Ochrana’s vast record of Rasputin and his movements.

  Another friend of Caryll’s from her days at the St John’s Wood Art School was Eleanor Toye.33 Eleanor became Reilly’s secretary for approximately two years, and later confided to Jean Bruce Lockhart (Robert Bruce Lockhart’s wife) her experiences of the darker side of his compelling personality. Reilly, she said, ‘suffered from severe mental crises amounting to mental delusions. Once he thought he was Jesus Christ’.34

  On the business front, Reilly was far from idle. Recognising a kindred spirit in Leonid Krasin, the corrupt head of the newly established Soviet Economic Mission in London, he suggested a scheme of mutual benefit, whereby the Soviet government and Marconi signed a deal for the supply of a wireless service in Russia.35 Reilly and Krasin were to work together on a number of other deals from which they were to line their own pockets. Some months after the Marconi deal, for example, Krasin was involved in smuggling a hoard of diamonds out of Russia to be secretly sold in the West. Lenin’s government was in dire need of foreign currency and such covert deals were one of the ways in which foreign trade missions obtained it. This was, however, to be a deal with a difference. According to Georgi Solomon, a Russian colleague of Krasin’s, the diamonds were sold by Krasin at below the best obtainable market price to a third party, the proceeds of which went back to Moscow. The third party then had them recut and resold in Paris for a significantly higher price with Moscow none the wiser. This windfall was then, no doubt, shared with Krasin. In 1930, Solomon recalled that the third party with the Parisian connections was a British officer of the rank of captain who was an Anglicised Russian Jew.36

  According to Reilly’s SIS file, other allegations about his conduct were also coming out of Paris at this time. On 3 September SIS received a note from the Naval Intelligence Division:

  Sidney Reilly, Paris

  This man is reported from a reliable source to be wearing naval uniform in Paris and his conduct is not satisfactory. Is he still working for C?37

  C replied to the DNI on 7 September in his usual bluff manner:

  With reference to the attached report, Mr Sidney Reilly is employed by me and is engaged at present on a highly important and confidential mission. Will you cause further enquiries to be made from the reliable source as to the precise respect in which this ex-officer’s conduct is not satisfactory. I feel confident that the statement that he has been wearing naval uniform is not correct and I think it, therefore, at least possible that the accusation as to his conduct is also incorrect.38

  The DNI replied that the source was a Russian who had left Paris two weeks previously and had stated that Reilly had been boasting of being in close touch with the Secretary of State for War, and confirmed that Reilly had indeed been wearing naval uniform.39 C wrote a dismissive note boldly across the bottom of the page – ‘The further information does not give anything sufficiently definite to bear out the original accusation’.40 This incident, while a minor one, was no doubt remembered unfavourably by the Director of Naval Intelligence, Admiral Sir Hugh Sinclair. Within three years he would suceed Cumming as chief of MI1c, and would not prove to be so tolerant of Reilly and his antics as Cumming had been.

  After a brief respite in London following his return from Paris, Reilly was called in by C to be briefed about a new mission. While the Treaty of Versailles had redrawn the map of Europe, there was still a good deal of unfinished business to be settled in Paris. Poland’s frontier with Russia was a prime case in point. The Poles themselves favoured the frontier of 1772, while the Council of Ambassadors in Paris proposed on 8 December 1919 a border closely resembling the old eastern frontier of Poland when she had been part of the Russian Empire.

  The matter was ultimately settled not by negotiation in Paris, but by the Russo-Polish War which broke out in April 1920, following Polish incursions into the Ukraine. While the war initially ran in the Russians’ favour, the Poles took the upper hand following their victory at the Battle of Vistula in August 1920.

  With talk of an armistice between the Poles and Russians in the air, first-hand intelligence was required about the possible outcome of a settlement and the implications this might have for Gen. Wrangel, Denikin’s successor as commander-in-chief of the White Volunteer Army in the south.

  On 21 October 1920 Reilly left for Poland41 where he and ST25 (Sir Paul Dukes) linked up. On 29 October Reilly was able to send a cable through the British First Secretary in Warsaw, Sir Percy Loraine:

  Armistice concluded on the 25th at Bolsheviks’ request between Ukrainians and Bolsheviks must be regarded for the present only as cessation of military operations till latest 7 November. It involves neither military restrictions nor political clauses. Was in first instance called forth by independent action of several Bolshevik divisions anxious for rest.42

  By sending the cable through Sir Percy, Reilly had clearly ruffled feathers at the Foreign Office. As a result of a Foreign Office letter to SIS on 3 November,43 a rather terse but polite cable was sent to Reilly by Section G2 on 8 November, pointing out that while ‘no real harm has been done in the matter’ he should not in future use this open means of communication.44 Reilly’s papers also show that this was not the only example of his misusing embassy facilities, for included in his correspondence are a number of letters written on embassy notepaper.

  Although these minor transgressions hardly endeared him to senior SIS officers, it was his growing association with Boris Savinkov, whom he regarded as Russia’s Napoleonic saviour, which would ultimately put the most strain on his relationship with the Service.

  A perfect case in point was Reilly’s visit to Savinkov’s headquarters in Warsaw. From here Col. Sergei Pavlovsky was leading regular guerrilla raids into Soviet territory, attacking Red Army camps and derailing troop trains. Not content with gathering intelligence, Reilly (not for the first or last time) exceeded his remit by becoming actively involved:

  At the end of 1920, having become a rather close intimate of Savinkov’s, I went to Warsaw, where Savinkov was then organising a foray into Byelorussia. I personally took part in the operation and was inside Soviet Russia. Ordered to return, I went back to London.45

  Whether Reilly actually bore arms or was merely observing the attack is unknown. Whatever role he ultimately played, he certainly had no authority to cross the Soviet border or become involved, hence C’s order for him to return.

  A peace treaty was signed between Russia and Poland on 18 March 1921, which resulted in the Poles eventually succumbing to Russian pressure to withdraw the facility for Savinkov to use Warsaw as a base for his operations. In the autumn of that year he was forced to leave and go to Prague, where he found a less than enthusiastic welcome from the Czech government. Funding was another major problem as his main benefactor was Reilly, whose finances were now somewhat stretched.

  Despite filing a law suit against the Baldwin Locomotive Company for an unpaid munitions commission of $542,825, Reilly no doubt realised that the claim could take a considerable time to get to court (as indeed it did). Confronted with the additional pressure of having to prop up Savinkov, he now faced the very real prospect of financial ruin. As unpalatable as it was, there seemed only one way out of the rut – s
elling the treasured Napoleonic collection that had taken some twenty-five years to build up. He therefore made the momentous decision to put the collection up for sale in New York, where he sensed he would get the best return. Not unsurprisingly, the sale attracted great attention. It was not everyday that such a major collection was put on the open market. The New York Times reported that the:

  …notable collection of Sidney G. Reilly of New York and London, consisting of literary, artistic and historical properties illustrative of the life of Napoleon Bonaparte, will be sold at the American Art Gallery on 4 and 5 May. It is one of the finest gatherings of material on this interesting subject that has ever been brought together by a private collector and sold in America. It contains some of the most important items illustrative of the life and times of the great Emperor from his first appearance as a factor in the military life of France, through the eventful days following, down to the final stages of his career and death on St Helena.46

  The proceeds of the sale, a little under $100,000, do not appear to have lasted long. In June 1921 Savinkov convened the first meeting of the Anti-Bolshevik Congress, which met in Warsaw between 13 and 16 June. The initiative was one more attempt to try and weld together the disparate groups opposed to Lenin’s regime. Apart from overcoming the mutual suspicion of the various groups, it was obvious that lack of funds was the main obstacle to putting their plans into action. After the congress had ended, Reilly received a letter from Savinkov’s aide Dmitry Filosofoff:

  I will tell you frankly that I felt ashamed to associate with people who had come to attend and would return to Russia full of hope and would risk their lives in their work – whereas we were unable to give them help to continue the struggle.

  I repeat for the um-teenth [sic] time that it all depends on money. The press is ready, the peasants await liberation, but without a fully planned organisation, it is hopeless. Our chief trouble is that it may not be possible to prevent abortive or premature riots. This applies especially to Petrograd from whence we received detailed intelligence (after your departure). From this we see that riots can be expected at any moment and, if they cannot be supported, it is possible that they will be suppressed. Even Boris Savinkov will not be able to go there owing to insufficient financial aid. In other words – money, money, money!47

  With renewed energy Reilly responded to Filosofoff’s call for funds, pulling out all the stops he could think of. A letter to the Air Board, written on Reilly’s behalf by one H.F. Pougher, is indicative of the lengths Reilly went to:

  Dear Sir

  Pardon the liberty but Lt Sidney G. Reilly late RAF gave me your name with a view to having his promotion gazetted which entitles him to arrears from 2nd to that of lieutenant, and arrears of gratuity. He mentioned in letter you understood his case copy of same I enclose. I should esteem it a great favour if you would hasten same.

  Thanking you

  H.F. Pougher48

  When the letter was referred to SIS for their comments, Reilly was clearly embarrassed at being seen to be chasing money, and with mock disdain claimed that ‘Pougher is a small clerk at Holt’s [Bank] whom I have assisted financially from time to time. I promised him any arrears of pay or gratuity he can recover’.49

  He also continued lobbying through all channels in Savinkov’s favour and began to put plans in place to bring Savinkov over to England to drum up support for his cause. In submitting a report on Savinkov to SIS, he asked that it be gone over and polished up:

  …and when ship-shape have it roneo’ed and put in circulation in the ordinary way. As Savinkov is coming over with me to London, I am very anxious that the people who count and whom he will probably see, should get it well in advance (say – Winston Ch; Leeper. The PM’s secretary Sir Edw. Grigg and anybody you think useful).50

  His plans for Savinkov’s visit very quickly ran into the opposition of the Foreign Office, however, when it refused to grant him an entry visa. Not to be deterred by this, Reilly approached C directly and requested that he ignore the Foreign Office and instruct the Paris Passport Control Officer51 to issue a visa regardless. Not unsurprisingly, C refused. Never able to accept no for an answer, Reilly went straight back to Paris to appeal to the Passport Control Office to issue the visa directly. Maj. Thomas Langton was the Passport Control Officer in Paris, but it is more likely that Reilly made a beeline for his deputy, Maj. William ‘Robbie’ Field Robinson, who was a close friend of his. Whatever persuasion he used, the upshot was that a British entry visa was issued to Savinkov by the Paris PCO.52 Not surprisingly, this incident caused major fallout within SIS and indeed in wider government circles. It is perhaps no coincidence that by early 1922 SIS had, to all intents and purposes, officially severed its links with Reilly.

  In a revealing letter to an SIS colleague dated 23 January 1922, Reilly ends by saying, ‘I am not calling at the office; as Morton may perhaps have told you, just now it is healthier for me to keep out of the way for a while’.53

  C’s position is made even clearer by a cable from SIS headquarters in London to the Vienna station, dated 1 February 1922, who were clearly seeking clarification about Reilly’s status:

  In reply to your letter about Reilly, I wired you yesterday to say that you should give him no more information than was absolutely necessary.

  To be quite frank I rather share your views and am of the opinion that he knows far too much about our organisation. Owing to his unofficial connection with us he knows such a lot that it would hardly do to quarrel with him, or, in fact, to let him see that he is receiving different treatment to that which he has become accustomed.

  He worked for this office during the war in Russia and he then undoubtedly rendered us considerable service. Since the Armistice he has kept in touch with us and I think that, on the whole, we have received a great deal more information from him than he has obtained from us, although we have been able in many cases to give him facilities which he would otherwise not have enjoyed.

  You no doubt know that he is Boris Savinkov’s right-hand man, and it is probably Reilly who is financing the whole movement and he can therefore be looked upon as being of some considerable importance.

  He is exceedingly clever, certainly not anti-British and is genuinely working against the Bolsheviks as much as he is able.

  I think the above will give you the cue as to how to deal with him; you should certainly not appear to be hiding anything from him or show a want of frankness, but at the same time be careful not to tell him anything of real importance.

  It just strikes me that he may ask you to give facilities for two individuals, with whom he is in touch and who are two of Savinkov’s principal assistants, to proceed to Constantinople. Naturally any such request must be forwarded to the competent authorities, as the last thing in the world we should wish is to become embroiled in any way with Savinkov, although of course we are not adverse to hearing all about the gentleman and his plans.

  Yours sincerely

  BM54

  If Reilly’s position was in any doubt, an SIS cable to the New York Passport Control Officer the following July was even more succinct:

  S.G. Reilly worked for us during and after the war in Russia, and knows a certain amount about our organisation as it was then constituted. He is apparently familiar with your name as he asked for a letter of introduction to you personally, in case he had difficulty with his passports. We avoided giving him any letter, as although he probably thinks Passport Control is cover for this department, it is just as well that he should not be certain. In fact, if he puts any questions, it will be as well for you to say that your work is entirely Passport Control and that you know nothing of any other work as the organisation is now completely altered. As Reilly travels on a British passport, there is no reason why he should worry you at all, but in case he rolls up this is just to warn you that he has now nothing to do with us.55

  Reilly’s departure from SIS was not, of course, an isolated one. SIS were at this time shedding a good num
ber of operatives who had initially been recruited during the war. George Hill and William Field Robinson also left SIS in 1922. With the onset of peace, rapprochement with Russia, and government budget cuts, the service could no longer maintain its establishment at previous levels. Reilly apparently took the decision to dispense with his services rather badly and appealed to C to reconsider.

  The appeals evidently fell on deaf ears. For Reilly there were to be no more second chances – the final curtain had indeed fallen on his brief but highly eventful SIS career.

  TWELVE

  A CHANGE OF BAIT

  Reilly’s relationship with SIS was not the only one that hit the rocks in 1922. In the early months of the previous year he had struck up a business association with Brig. Sir Edward Spears, who had left the army the previous year. Whilst Spears had good connections that he had built up in the army, he lacked, by his own admission, business experience.1 He proposed to make good this deficiency by taking on Reilly as a partner in the tobacco business they set up in the Czech capital Prague. Their biggest venture was, however, an attempt to commercially market Czech radium, to which end they founded the Radium Corporation Ltd.

  Spears’ first impression of Reilly was ‘rather seedy but really quite nice’.2 Throughout their tempestuous business relationship Spears, like Lockhart and C before him, seems caught between these two opposing sides of Reilly’s character. Often frustrated, and at times angered by his methods, he can never bring himself to dislike Reilly on a personal level.

  In July 1921 Reilly met Lockhart again while on a business trip to Prague with Spears. Lockhart, who was now commercial secretary at the British Legation in Prague, was involved in ‘smoothing the way for the revival of Central European banks’.3 Spears and Reilly lunched with Lockhart, and discussed with him the situation concerning commercial opportunities and the banking negotiations that he was involved in. Reilly was, as usual, mixing business with pleasure, and seems to have taken Spears on a hectic round of socialising during their stay. The same day as their lunch with Lockhart, Spears recorded in his diary: