Enemies Within

Bystrolyotov @ Gallas @ Perelly arrived in Geneva for a League meeting in, it seems, July 1931. He deduced that ‘EHO’ would attend the League sessions, found that a man with those initials was staying at the Hôtel Beau-Rivage, spotted ‘Scott’ in the hotel bar and sat next to him there in silence. ‘Scott’ looked aghast on catching sight of ‘Perelly’ and realized that OGPU had broken his anonymity. Bystrolyotov intended to consolidate his advantage by visiting Oldham at home and asserting OGPU control over him, but when he called at Pembroke Gardens in September with false credentials identifying him as a Dresden banker, Lucy Oldham, looking tense, explained that her husband was away from home. The courteous foreigner invited her for lunch at the Ritz. Amid the restaurant’s gilt and mirrors she revealed that Oldham was undergoing an expensive cure for alcoholism in a sanatorium in Suffolk called Rendlesham Hall.

She besought ‘Count Perelly’ to visit Oldham at Rendlesham, and insisted that he take the spare bedroom in Pembroke Gardens. On the night before Oldham’s return home in October, Lucy Oldham rolled up the hem of her dress, spread her legs and begged the Count not to waste time. He obliged, and reported his performance to Moscow, where the codename of MADAM was bestowed on her. Bystrolyotov came to suspect that she had instigated her husband’s approach to the Russian embassy in Paris in 1929, and that she had encouraged the subsequent espionage as a way of perpetuating their Kensington prosperity.

OGPU in Moscow and the rezidentura in Berlin continued to assess Oldham as too dicey to risk agents receiving material direct from him in London. Instead, he was required to travel to Bonn, Ostend, Paris, Calais, Trouville, Madrid, Amsterdam and Switzerland for handovers of purloined documents. Throughout he insisted that he was only an intermediary, acting on behalf of the material’s true source. Oldham became such a valued source that Bystrolyotov was joined in London in 1932 by two well-tried agents. Joseph Leppin @ PEEP @ PEPIKA, a young Prague journalist who was then working under Boris Bazarov in the Berlin rezidentura, was fluent in French, English and German, had intellectual and artistic interests and was used by Bystrolyotov as the courier carrying Oldham’s product out of England on its journey to Moscow. Leppin was married for ‘operational purposes’ to a fellow Czech agent, Erica Weinstein (ERIKA), who collaborated with him on operations for Bystrolyotov. Bazarov (presenting himself as an Italian communist called da Vinci) and Theodore Maly also came to London to help in running Oldham.15

Theodore Stephanovich Maly @ Theodore Mally @ Tivadar Mály @ Willy Broschart @ Paul Hardt @ Peters @ der Lange @ Mann is the most famous of the illegals. Born in 1894, the son of a provincial official in the Hungarian Ministry of Finance, he trained for priesthood in a seminary before his military mobilization at the age of twenty-one. He was an ensign-cadet by the time of his capture by tsarist forces in 1916. After gruelling train journeys, he was held in a prisoner-of-war camp at Astrakhan by the Caspian Sea, and later was transferred to the frontier town of Orenburg at the southern end of the Ural Mountains. ‘I lost my faith in God,’ he later said of his incarceration, ‘and when the revolution broke out I joined the Bolsheviks. I broke with my past completely. I was no longer a Hungarian, a priest, a Christian, even anyone’s son … I became a communist.’ Maly was a Chekist for ten years before joining INO in about 1931. He could pass as Austrian, Hungarian, German or Swiss. As described by his biographer William Duff, a special agent of the FBI who specialized in Soviet bloc espionage, Maly had ‘a tanned and strangely aesthetic face highlighted by deep-set but sad, almost childlike eyes’. For Elizabeth Poretsky, ‘“Teddy” … combined extreme sweetness with a great deal of determination, so that one felt at ease and protected in his company.’ OGPU admired Maly’s abilities, but felt perturbed by his outbursts of drunken and indiscreet remorse. They forced him to marry a woman whom he disliked because she kept him under watchful guard and kept him from binge-drinking.16

During the Lausanne Conference of June–July 1932, at which the British, French and German governments discussed the suspension of German reparation payments, Oldham provided Bystrolyotov with coded messages, dispatches and even a British passport bearing the invented name of ‘Sir Robert Grenville’. The strain of duplicity drove Oldham into dipsomania. His department began investigating the disappearance of a codebook from a basement safe, in a part of the building where Oldham had been seen when he was on sick-leave. He was reported for using the Office’s ambassadorial side-entrance so as to avoid the doorkeepers who maintained security at the main doors. Other reports had him in a drunken stupor. On 30 September 1932 he was summoned to a disciplinary meeting, confronted with a list of transgressions, including unexplained visits to the cipher-room and losing confidential material which he claimed to have taken home. He was asked to resign without any gratuity. Like other members of his department, he had no pension rights.

Oldham did not admit to the illegals that he had been sacked. On 18 October, avid for more OGPU money, he flew with his wife from Croydon aerodrome to Berlin for a rendezvous with ‘Perelly’. During their meeting he was so helplessly drunk that he could hardly move or speak, and vomited. MADAM subsequently revealed to her partner in adultery, ‘Perelly’, that Oldham had been fired from his job. She added that she was leaving him, would sell the house and go to work in a French resort either as a lady companion or, if that failed, as a prostitute. Just before Christmas 1932 Oldham tried to strangle her when she refused to give him brandy. He was sent for another cure at Rendlesham.

After drying out, Oldham revisited his old department to jaw with friends there, notably Thomas Kemp, who was in charge of the King’s Messengers’ itineraries, and a clerk named Raymond Oake. He had a further excuse for visits, because he had been allowed, incomprehensibly to modern thinking, to keep a safety-deposit box in the building after his dismissal. He used the pretext of examining personal papers in the box as the justification for two or three further visits. One evening in May 1933, he arrived at 6 p.m., loitered around Room 22, his speech slurred with drink, waiting for other clerks to go home. He asked for the combination number of the safe where keys were kept at night and briefly got custody of the keys to the cupboards known as ‘presses’ containing confidential material. Those ex-colleagues who saw him felt a mixture of pity, embarrassment, annoyance and suspicion at his conduct, but the blokey ‘good form’ of the department meant that his manoeuvres were watched but not challenged. During one of these forays he obtained documents which he sold in Paris to the Soviets in May 1933. He and his wife commuted by air between London and Paris during May and June to see Bystrolyotov. OGPU became so alarmed by the likelihood of Oldham’s exposure that all illegal operatives, including Bazarov and Maly, were withdrawn from England.

On 13 July 1933, desperate for OGPU money and under incitement from Bystrolyotov, Oldham returned to the Office in an attempt to lay hands on the cipher codes for the following year. He arrived just before 6 p.m., ostensibly to see Kemp who had already gone home, got hold of a set of keys left momentarily in the door, rushed to the lavatory and there took wax impressions of them. When he reappeared with the keys, he was sweating and his hands shook. Wax was found on the wards of the keys. Eastwood reported the incident next day to Sir Vernon Kell of MI5, who set Harker on the case. Oldham’s correspondence was intercepted, his telephone was tapped and he was put under John Ottaway’s surveillance. Bystrolyotov met Oldham on a bench in Hyde Park, and urged him to try again to get into the safes to obtain up-to-date codes. At lunchtime on Sunday 16 July Oldham was refused admittance when he called again at the Office.

Some days later he was heard in a bugged telephone call to say that he was going to Vienna. He evaded his watchers by instead flying from Croydon to Geneva. From there he hastened to Interlaken, where he met Bystrolyotov calling himself ‘Perelly’ and Bazarov calling himself ‘da Vinci’. After returning from Basel to Croydon on 4 August, Oldham was traced by Ottaway to the Jules Hotel at 85–86 Jermyn Street, St James’s, and tracked to a nearby pub, the Chequers, off a narrow alley joining Duke Street, St James’s to Mason’s Yard. At the poky bar in the Chequers, two MI5 operatives, Herbert (‘Con’) Boddington, a bookie’s son who had been Chief of Dublin Special Branch targeting the IRA in the early 1920s, and Thomas (‘Tar’) Robertson, set to work on Oldham. Robertson (born in Sumatra in 1909) had only recently joined MI5 after working in the City, and was known to his new colleagues as ‘Passion Pants’ because he wore Seaforth tartan trews at headquarters. ‘Con’ and ‘Passion Pants’ got Oldham hopelessly drunk in the Chequers, put him to bed in the Jules Hotel and searched his belongings while he was comatose.17

Oldham was not questioned or detained, although it was obvious to his watchers that he was falling apart. MI5 wished to learn from watching his activities and contacts. Probably the Foreign Office shrank from discovering the extent to which diplomatic secrets had been broached. Still striving to earn OGPU money, dosing himself with paraldehyde (a foul-smelling, addictive sedative taken by alcoholics and insomniacs), Oldham finally broke. He went to his former marital home at 31 Pembroke Gardens, now vacant and unfurnished, and gassed himself in the kitchen. The suspicions of some of his Room 22 colleagues and Russian handlers that he had been killed by MI5 seem unwarranted. In retrospect Antrobus despised his department’s first traitor. ‘A clever little upstart,’ he called him, ‘with a face like a rat and a conscience utterly devoid of scruples.’18

Until Oldham’s attempted break-in, members of the Foreign Office were often visited at work by friends. After 1933, however, visitors were filtered by policemen and doorkeepers: once admitted, they were escorted everywhere by hardy factotums. The locks and keys of the ‘presses’ were changed. Algernon Hay was retired from overseeing Room 22 in 1934. His replacement Antrobus thought of his staff as a ‘little brotherhood’ of ‘learned friends’. He explained: ‘everybody gave of his best, although (very properly) he got no credit for it beyond his own satisfaction’. He believed that ‘in all classes of life and among all sorts and conditions of men’, especially ‘in teams, regiments, and ships’, the best-performing organizations had consciously developed ‘the Spirit of the Old School Tie’. This Spirit motivated and unified men without appealing to class bias: public schools did not hold ‘a monopoly of true fellowship and devotion to an ideal’, insisted Antrobus. A minority of his staff had attended public schools.19

The Foreign Office conducted an internal, amateurish and self-protective investigation of the Oldham case without MI5 or Special Branch assistance. There was little investigation of Oldham’s overseas air journeys, or of his ultimate destinations and contacts, which might have given leads to Bystrolyotov and Bazarov. In gathering clues from outsiders, such as Oldham’s solicitor, it was represented that he was suspected of drugs-smuggling. No hint was permissible that he had been betraying official secrets to a hostile power. There were few leads, as ‘Count Perelly’ and ‘da Vinci’ had vanished and reverted to their true identities as Bystrolyotov and Bazarov. ‘I could have ended up in the Tower, but only if Vansittart had been willing to wash his dirty linen in public,’ Bystrolyotov judged; but the Foreign Office saw no benefit in publicizing the lax security. As to Moscow, OGPU had been exasperated by Oldham’s alcoholic volatility. At times the risks for his handlers seemed nightmarish. His low status in the Office hierarchy had moreover limited his access to secret material. OGPU’s frustrations with him perhaps contributed to the strategy of placing more reliable penetration agents in the Diplomatic Service through the device of recruiting young Cambridge high-fliers.20

Hans Pieck and John King

Oldham had supplied personal assessments of his colleagues. One of these was Raymond Oake, born in 1894 in Finchley and the son of a railway clerk. After wartime naval service, Oake joined the Communications Department as a clerk in 1920. He was used as an occasional King’s Messenger without being promoted above the level of clerk, amassed debts and borrowed money from colleagues. His bank manager told MI5, when it was investigating Oake’s finances in 1939, that his customer was ‘a weak, foolish man, whose vanity leads him to live above his income, which is about £600 per annum. On one occasion when he was warned as to his account, he created a wild scene and ended by bursting into tears.’21

Bystrolyotov delegated the task of cultivating Oake to Hans Pieck, a Dutchman codenamed COOPER. Pieck, who was the son of a naval officer, had joined his country’s communist party in 1920 under the alias of Donat. He had visited Moscow on party business in 1929. He spoke German, English, French, Danish and perhaps Italian. He was a man of culture and charm, well reputed as a decorative artist, architectural designer and cartoonist, who lived with his wife in The Hague in style (subsidized by OGPU money). ‘He is a good actor who plays his role naturally, sometimes masterfully, finds his bearings quickly in conversation, manoeuvres well and is already ready for initiative,’ Bystrolyotov declared. Pieck was not a staid communist: rather he was ‘Bohemian, disorderly, untidy, inaccurate, incoherent and undisciplined’. Although effective as a talent-spotter and recruiter, he was too fastidious to coerce targets, to kidnap them, to apply blackmail or to threaten lives. Bystrolyotov attributed to Pieck ‘Love for intelligence work bordering on a passion, a romantic attitude to his role close to that of an actor’s enjoyment’.22

Pieck installed himself at the Hôtel Beau-Rivage in Geneva, befriended Communications Department men and consular officials in bars and brasseries, spent a fortune on hospitality and gave handsome presents. In the summary of Valentine Vivian of SIS, Pieck ‘allayed suspicion by posing as the prince of good fellows, habitué of the International Club, always “good” for a drink, a motor expedition, or a free meal – a histrionic effort worthy of a better cause’. Pieck moved deftly towards his target of Oake, who was given the codename SHELLEY. On Christmas Day of 1933 Pieck visited him in Room 22. They had festive drinks together in a nearby pub, where Pieck learnt that Oake had already spent his December wages and loaned him money to cover some cheques. Six years later, under interrogation by MI5, Oake described Pieck as ‘absolutely a white man’, whose lavish generosity had sometimes embarrassed him. Pieck posed as the representative of a Dutch bank interested in collecting economic and political intelligence, but although Oake agreed to supply him with material, it was always meagre pickings. Security had been tightened after Oldham’s disgrace. Sitting at a table in Room 22 with four other men, Oake found no opportunities for clandestine work. He was so chary of being caught that he was dropped by OGPU in December 1934.23

Three months earlier, in Geneva, Oake had however introduced Pieck to another clerk in the Communications Department, John King. King had joined the Rhineland High Commission, a supra-national body based in Coblenz and supervising the Anglo-French occupation of the Rhineland, as a cipher officer in 1923. He was promoted to be personal clerk to the High Commissioner, the Earl of Erroll, in 1925. After Erroll’s death in 1928, he had a posting in China. ‘He is about fifty years of age, an Irishman who lived in Germany for about ten years and speaks German perfectly,’ reported Bystrolyotov. ‘A lively and inquisitive person … he draws a sharp distinction between himself with his cultured ways and the “pompous fools” of Englishmen.’ He was keen on the theatre and liked magic tricks. His salary was too small for his needs, he cadged drinks and tried to touch people for loans.24

After dropping Oake, Pieck approached King to provide political information and weekly summaries for use by a Dutch bank. King agreed, and a secret bank account was opened for his remuneration. He received the codename MAG. King’s first delivery of secret material included an account of Hitler’s conversations with the Foreign Secretary, Sir John Simon, in March 1935. ‘His conviction that he is destined to bring about the moral rehabilitation of the German people after being crushed and humiliated by the treaty of Versailles’, Simon noted,

is very dangerous to peace in Europe, and it is all the more dangerous for being very sincere. And he is adored by those who follow him as no German Emperor has ever been adored. Hitler made it perfectly plain that he would never agree to enter into a pact of ‘mutual assistance’ with Russia. Communism, he declared, is the plague: unlike National Socialism, which he claims seeks only to embrace Germans, it is a contagious infection which might spread over all Europe and all Asia. He has stamped it out of Germany, and Germany is the barrier to prevent the pestilence coming westward.25

King, like Oake, found it hard to obtain the Foreign Office daily bulletins which Oldham had been able to supply. Files, registers, the flimsy papers on which decrypts were scrawled – all were now guarded by the men who had responsibility for them. Any official found in a part of the department where he had no business was challenged. In order to justify his frequent visits to London, Pieck started a flimsy cover business called the Universal Barter Company. He then devised a better front after Oake had introduced him to Conrad Parlanti, with whom Oake often commuted by train from Herne Bay to Victoria station. Pieck suggested that he and Parlanti should go into business together as shopfitters. Among other commissions, Pieck and Parlanti revamped the shop-window displays at Marshall & Snelgrove’s department store in Oxford Street. At Pieck’s insistence Parlanti rented offices at 34a Buckingham Gate, close to Victoria station but also a few minutes’ stroll across St James’s Park from the Foreign Office. Parlanti was puzzled by Pieck’s insistence on leasing these offices, which were a secret amenity for spying rather than for the shop-window design business. Pieck kept a floor there for his own use, with one room which was always locked. King could walk over from Room 22, let himself in with a key and draw the curtains to indicate that he had left papers to be photographed in the locked room. Buckingham Gate was only a small deviation from King’s homeward route to Flat 9, St Leonard’s Mansions, Smith Street, Chelsea. Copies or originals of the documents were collected from Buckingham Gate by Brian Goold-Verschoyle, a communist electrical engineer and Comintern courier. The more important material was telegraphed to Moscow from the Soviet embassy.

Parlanti eventually picked the door lock when Pieck was away. Inside the mystery room he found a Leica camera fixed to photograph articles on a table. When he confronted Pieck, he was told that the Leica was for photographing ‘dirty pictures’. On another occasion Parlanti saw Pieck receive documents typed in red from a man in the lounge of the Victoria Hotel in Northumberland Avenue, off Whitehall. Pieck invited him to visit The Hague, but then made a show of being suddenly called to Germany. As Parlanti told MI5 in September 1939, ‘Mrs Pieck began very soon to make love to him, in order, as he is now convinced, to get him to entangle himself. He resisted her wiles, and finally lost patience with her.’ Mrs Pieck then wept, and told him that she and her husband were engaged in financial manipulations, ‘with big people and for big money’, and received official secrets from a man in the Foreign Office’s code section.26

At a party in London in January 1936 Pieck was approached by William John (‘Jack’) Hooper, a British-Dutch dual national whom he believed to be the British Commercial Attaché at The Hague but who in fact worked for SIS there. In a quiet corner at the party Hooper referred to Pieck’s Comintern activities in the 1920s: ‘We know about your past and keep a constant watch on you. I want to know if you are still in the same business.’ Pieck insisted that he had abandoned his youthful political enthusiasms, but was sufficiently rattled to stop using the Buckingham Gate office as King’s drop-off because Hooper knew of its existence. Possibly Hooper was exploring Pieck’s availability to inform on his old communist friends without knowing that Pieck was an important communist agent.27

In September 1936 Hooper was dismissed by SIS after the head of station in The Hague, Major Ernest Dalton, shot himself. As Passport Control Officer, Dalton had been selling visas to Jewish fugitives from Hitler who wanted to reach Palestine. When Hooper had spotted the racket, he was given a cut by Dalton, whose corruption was discovered during a routine audit. After being discarded by SIS, Hooper enlisted as an NKVD agent and went to work in Pieck’s Dutch office, where he watched his employer, asked questions and amassed material which he gave piecemeal to SIS as a way of vindicating himself after the Dalton scandal and regaining official British employment. SIS ignored his information and did not rehire him, because of his complicity with Dalton. The NKVD decided that Hooper was untrustworthy or compromised, and dropped him later in 1937. Rejected by both London and Moscow, Hooper turned to Berlin. In 1938–9 he worked for the Abwehr, to which he divulged that the Soviets had a source in the Communications Department.

For two years, as the head of SIS’s counter-espionage section Valentine Vivian noted in a retrospective of the King case, SIS had known Hooper’s information about Pieck’s clandestine activities in London, which ‘could have been acted upon then had it been credited. It was, however, treated with coldness and even derision, largely as a result of the prejudice against X [Hooper] himself.’ Vivian was impressed that Pieck had ‘included in his confidences one conscious and artistic lie – for the purpose undoubtedly of discrediting “X’s” story in the unlikely event of his passing it to the British authorities – i.e. he gave the name of his “inside agent” in the Foreign Office as Sir Robert Vansittart’. Pieck embroidered this critical misdirection with other absurdities, including an imaginary mistress of Vansittart’s who acted as a cut-out in transmitting betrayed secrets.28

Hooper’s activities resulted in Pieck being withdrawn from handling King. The Dutchman was next sent by Moscow to Athens, where he tried to induce the Minister of War to order forty fighter planes, ostensibly for the Greek government, which were to be shipped to Republican forces in Spain with the Minister’s connivance. This intrigue failed, and Pieck had to leave Athens in a hurry, according to an SIS source; but he proceeded to Paris, where he found a South American legation ready to help.

The eminent illegal Walter Krivitsky, codenamed GROLL, was briefly charged with delivering the photographic film for use on King’s material in London. Theodore Maly, who succeeded Krivitsky in London, reported to Moscow Centre that King wished to ‘rid the world of poverty, hunger, war and prison’, but was not left-wing. Socialism meant ‘the terrors of Bolshevism, it is chaos, the power of the mob, Jews and endless bloodshed’, he told Maly. ‘I am against Fascism but if here, in this country, I had to choose between Sir Oswald Mosley and British Labourites, I would choose the former, for the latter logically lead to Bolshevism.’ He assessed Hitler as ‘a maniac but an honest person’ who had saved Germany from the Reds. The English aristocracy was ‘good for nothing, in the first place because it was English, and in the second because it is mixed with Jews and other lower classes’. The Irish and Scottish nobility was however ‘clear of foreign taint, and it has preserved its race’. King, like Oldham, was a mercenary who needed money, and had no interest in communism. He was conceited like Oldham too, but had stronger nerves: he enjoyed the sense of superior but secret privileges that accompanied his hidden life; he did not get rattled by the dangers of discovery and launch himself into panicky binges.29