Ace of Spies: The True Story of Sidney Reilly

^SEVEN CONFIDENCE MEN

Those regarded as dangerous aliens had always been the responsibility of the Labor Department’s Immigration Bureau, but in early 1917 the US Congress introduced new immigration legislation making it easier to deport undesirables. The Immigration Bureau now found it had neither the time, the manpower, nor the resources to conduct the investigations that would be prompted by the new law.

Two competing civil agencies, the Secret Service, which came under the US Treasury Department, and the US Bureau of Investigation, which came under the Justice Department, carried out domestic security investigations. As America entered the war they were also joined in this endeavour by the Military Intelligence Division and the American Protective League. The APL was a voluntary association of patriotic citizens created on 22 March 1917 as an auxiliary to the Bureau of Investigation.

In addition to assigning his own men to the investigation of Sidney Reilly, Roger Welles sent a copy of the Perkins’ memorandum¹ to Maj. Ralph Van Deman of the US Military Intelligence Division, as it clearly had military implications:

The US Army had discarded the Krag-Jorgensen rifles back in early 1915. At the time it was believed that Franz Von Rintelen, the German intelligence agent, was seeking to purchase the rifles through an intermediary. It was thought that he intended, in turn, to supply them to the supporters of former Mexican President Gen. Victoriano Huerta to aid his restoration to power. Alternatively, his motive could simply have been to deprive the Allied powers of the opportunity to acquire them. At any rate, it seemed to Van Deman that here was a possible link between Reilly and a German attempt to purchase arms. Reilly was, by repute, a British citizen and Van Deman therefore wrote, on 7 July, to Sir William Wiseman requesting any information the British might have on Reilly.² Wiseman, who was based in New York City, was nominally part of the British munitions purchasing operation and responsible for British propaganda. In reality, the thirty-two-year-old Baronet was head of SIS in the United States. On 9 July Wiseman replied that Sidney Reilly:³

This letter no doubt spurredVan Deman to extend the investigation further in order to identify the ‘various undesirable characters’ referred to by Wiseman. The investigation itself was deputed to APL agents Hollis H. Hunnewell and Abel Smith, who worked under the supervision of McGregor Bond of the Office of Naval Intelligence. He in turn sent copies of all reports and memorandums to Lt-Col. Townsend Irving of the Military Intelligence Division. Not being experienced professional investigators, Hunnewell and Smith soon found themselves sinking into the mire of Reilly’s complex personal and business relationships. One suspicious character seemed to open the door to several others. Before too long the investigation was taking on a momentum of its own. This may be one reason why it went on for so long. Neither were the investigators helped by the fact that within six months of Agent Perkins’ memorandum, Reilly left New York and proceeded to Toronto to join the RFC. He was therefore absent for the remainder of the war and indeed for the remainder of the investigation. While it is clear that Hunnewell and Smith were certainly more than successful in tracking down a large number of individuals who were able to supply information, they seemed unable to successfully interpret what they found or discriminate in favour of what was relevant and meaningful. A seasoned investigator would no doubt have done a more circumspect job, but would not have committed to paper the same wealth of detail and trivia as Hunnewell and Smith. To them we should be eternally grateful for inadvertently documenting, in such depth, the many dimensions of Reilly’s life in New York.

Indeed, there seemed to be no shortage of people who were willing to come forward and testify against Reilly, which is not surprising given his ruthless approach to business. During the two and a half years he had been in New York he had undoubtedly crossed, or more to the point, double-crossed, a good many people. Norbert Rodkinson was one such person. Described in the reports as an Englishman,⁴ Rodkinson is very much an enigma. He had lived in Russia for many years and now worked in New York for the brokerage firm Wagner & Company of 33 New Street. He told the investigators that Reilly’s reputation as a spy and scoundrel was well established in Petrograd. He also commented on Reilly’s marriage to Nadine, stating that it must be bigamous, as Reilly already had a wife and two children who had until recently been living in Port Arthur.⁵ He further added that Reilly had sent them to Petrograd in 1916 where they had been left in ‘dire straits’. The English colony in Petrograd had apparently taken up a collection for the family ‘so that they could exist’. An Englishman by the name of Fred Hill is named in the testimony as being responsible for the money that was donated.⁶ Rodkinson also confirmed his belief that Reilly had not been born in Ireland but in the town of Bendzine in Poland and claimed that both Reilly and Alexandre Weinstein asked him to transact business for them when he arrived in New York in 1916, but knowing of their ‘evil reputation’ he refused.

Col. Proskey, a consulting engineer for Flint and Company, the man who had sparked off the enquiry in the first place, told the investigators that he considered Reilly, ‘one of the most astute and dangerous international spies now at large’.⁷ It was well known, he said, that Reilly was a crook and an enemy of the Allies. He restated his earlier charge that he had spied for Japan and introduced the investigators to John F. Cordley, also from Flint and Company. Cordley identified Alexandre Weinstein as Reilly’s right-hand man and described the pair as ‘dangerous’. In his view they would ‘do anything for the almighty dollar’.⁸ Cordley believed that Reilly had been educated at the University of Berlin, and stated that in 1914 he had visited Japan, but not ‘as a member of the Russian Purchasing Commission’.⁹ He further ventured that Reilly was said to be an officer of the Allied Machinery Company, and had made $1 million in Russian contracts.¹⁰

The Bureau’s enquiries indicated that Weinstein was born in Kiev, Ukraine, in 1873,¹¹ where his father was a prominent banker. However, he was believed to have run a brothel there and served a prison sentence for bribery. Maj. Norman Thwaites, Wiseman’s SIS deputy, was approached and permitted Hunneman and Smith sight of MI5 material on Weinstein, which indicated that he was viewed as an undesirable character during the eighteen months he spent in London. He was also reputed to have done business with German firms during this time in London. Another report from Thwaites stated that ‘Weinstein claims to be a Russian and professes strong pro-British and pro-Ally sentiments but assurances have been received on good authority that he is in touch with prominent Germans’.¹² Known to be a gambler and womaniser, he resided at 60 St James’s Street in Mayfair and had a reputation as an extravagant spender. This was hardly surprising, given that he had earned some £800,000 in commissions during the time he was in London.¹³

As the investigation gathered pace, the Bureau began to suspect that Weinstein was involved in business deals with those under suspicion of being German agents. The Elliot Bay Shipbuilding Company, for example, alleged that Weinstein had been involved in a recent, questionable shipbuilding transaction and that he possessed plans and specifications belonging to the company which must have been stolen.¹⁴ He had apparently been introduced to them by Nicholas Kousnetzoff, who was involved in a wireless contract backed by Germany in 1917. It was noted that he had employed as his valet a German, Frederick Herron, who was apparently connected with Louis Miller, a saloonkeeper on West 30 Street, who had been charged with being an anti- American propagandist.¹⁵

Antoine Jahalsky, alias Tony Farraway, was an even greater concern to the investigators. He, too, was referred to as a womaniser and gambler. They believed him to be the author of a pamphlet entitled ‘Why Poland Should Stand By Germany’.¹⁶ He claimed to have been born in Russian Poland, although Hunneman and Smith suspected that he was in fact Austrian, and may have been connected with the sale of Russian military documents to the Austro-German consuls-general in New York.¹⁷ Their suspicion appears to have been kindled by a statement from the actress Clare Kimball Young, who related that he had told her on one occasion that he had a brother who was an officer in the Austrian army.¹⁸ She firmly believed that he was an Austrian and added that she knew him as Tony Farraway. The actress Nita Naldi, a former mistress, also mentioned that he had told her about his brother, who had served in the Austrian army.¹⁹

The statement of another female acquaintance of Jahalsky only added to the suspicion that he was a German spy. Former chorus girl and actress Peggy Marsh had met Weinstein in London in 1915, where she said he had a great reputation as a spender and was constantly showering money and presents on the chorus girls. She said that few women liked Weinstein because of his appearance (he apparently had very prominent teeth), but were willing to accept his friendship because of his extravagant generosity.²⁰ Marsh’s testimony also asserted that her friend and fellow chorus girl Gertie Millar had been Weinstein’s mistress before he left for America. When she herself returned to New York a short while later, she had met Weinstein again. He had introduced her to Jahalsky, with whom she had an affair, and who had in turn introduced her to Sidney and Nadine Reilly. In 1916 she had travelled with him from New York to the west coast. In her opinion Jahalsky gave every impression of being a German spy²¹ – he had apparently asked her to mix with officers and businessmen and get as much informa-tion from them as possible. She said he was interested in the study of maps and had taken photographs, one apparently of the Roosevelt Dam, with a ‘remarkable camera’. She recalled that he had made a mysterious visit to the mining country outside Phoenix, Arizona, to visit a Polish miner he had known ‘in the old country’. She eventually left him in California and returned to New York.²²

At the time Jahalsky made the Phoenix trip, Kurt Jahnke was co-ordinating a desperate, half-baked plan to slow down US troop movements to France by creating trouble for the US on the Mexican border.²³ German agents were to foment a wave of strikes among Arizona’s copper miners with the connivance of the radical Industrial Workers of the World (IWW). These mines had a history of militancy, and it was hoped the strikes would soon lead to violence. In conjunction with inducing mutiny among black army units in Arizona and attacks on US border posts, Jahnke hoped this cocktail would send US troops rushing south. It was also noted that the British Secret Service had stated that Jahalsky was a ‘most dangerous German spy’, and was acquainted with Col. Nekrassoff of the Russian Commission.²⁴

The third associate, former Russian naval lieutenant T.N. Agapeef, came to New York in 1917, taking an apartment at 29 West 52nd Street. The Russian Navy Department had purchased a converted yacht for use as a patrol vessel in the White Sea. Although commissioned under the Russian flag it had not left New York due to the ‘present conditions in Russia’. According to the report:

Agapeef had clearly thought better than to return to a country in the midst of revolutionary turmoil and could not resist the temptation to redeem the letter of credit, valued at $40,000. The Russian Embassy had requested his arrest, but this had been refused by the US State Department because of ‘the present Russian situation’. He soon joined Weinstein in Reilly’s office suite, where he also sought out commissions on war contracts.

Beatrice Madeline Tremaine, Reilly’s twenty-eight-year-old mistress, lived with her mother at 140 Wadsworth Avenue, New York. Sometimes referred to as Reilly’s ‘ward’, he had first met her at ‘Lucille’s’, a dressmaking establishment in the spring of 1916, where she worked as a model. Shortly thereafter Reilly had taken her from Lucille’s, sent her to a finishing school in Orange, New Jersey, and paid her an allowance of $200 per month.²⁶ She had then entered the ‘moving picture’ industry and was clearly making some headway. According to her testimony, Reilly had stated that Nadine intended to divorce him, and as a result she and Reilly were to marry on his return to New York.

Beatrice Madeline Tremaine also corroborated the fact that Reilly had been forced by the Mann Act to marry Nadine. Her account was supported by two former acquaintances at Lucille’s, Madame Paul, the head of millinery and Madamoiselle Chauson, a salesperson. Madamoiselle Chauson also stated, however, that Miss Tremaine was a ‘most skilled and dangerous liar’.²⁷ It was from Chauson that the investigators got the name and address of Norbert Rodkinson, who they were told knew a great deal about Reilly and Weinstein. Investigators later spoke with Beatrice’s friend Delores Rose, an English chorus girl in the Follies show. Miss Rose is described as ‘not of the best reputation, but loyal to her country’.²⁸ She worked at Lucille’s at the time Beatrice had been a model there, and said it was an open secret among the models that Reilly had taken a liking to her. She also corroborated Beatrice’s claim that Reilly had asked her to marry him, and related how she had told Beatrice of Norbert Rodkinson’s claim that Reilly had deserted a family in Russia.²⁹ Denying that this was true, Beatrice had become angry and almost slapped her face. At the instigation of the investigators, Miss Rose met Beatrice again at her apartment and engaged her in conversation on several topics the investigators were interested in. Beatrice said that she did not believe that Reilly was in anyway disloyal to his own country. She confirmed that she was still receiving the monthly allowance from Reilly, even though he had not returned in June as she had expected.³⁰

She was then interviewed for the third and final time, when it was reported that, ‘in spite of careful questioning, Tremaine professed not to know any more about Reilly and his affairs than she had already related on the two previous occasions’.³¹ It was concluded that her attitude was ‘not altogether frank’, and doubt was expressed that she was telling the whole truth. Quite possibly because of the investigation, which Delores Rose reported had ‘greatly disturbed’ her, Beatrice decided to leave New York and spend the winter in Florida, as she had been ‘working hard in moving pictures and needed a rest’.³²

The investigators never questioned Nadine herself, although it is clear that she was kept under very close observation. Enquiries suggested that she was aware of Reilly’s attachment to Beatrice Tremaine and was very jealous. The investigators had, so they thought, good grounds for believing that in Reilly’s absence Nadine had affairs with Weinstein and Jahalsky. Her maid Alice Todd had described Weinstein as her constant companion. However, although it was ‘generally understood about the club that Mrs Reilly and Weinstein are intimate’,³³ Alice Todd denied this, saying that while there was no doubt that a strong friendship existed she had never seen anything in their relations that might be interpreted to prove any immorality. The nearest the investigators got to an incriminating statement was an admission from Miss Todd that Weinstein ‘is in the bungalow late at night’.³⁴

It is clear that they fared much better when they questioned a man named Murray, the superintendent of the apartment block where Jahalsky lived. At the time they met Murray, Jahalsky was away in Texas. Murray volunteered that he did not like Jahalsky and was able to recall a number of women who had visited him. He had been particularly intimate with Gertrude Grimes and the actress Nita Naldi before he left for Texas. To the astonishment of the investigators, Murray stated that Nadine Reilly had come to Jahalsky’s apartment at around 11 p.m. one night shortly after Reilly had left for Canada. He thought she had stayed all night, as the maid had seen her leave the following morning.³⁵

At the time of the investigation Nadine was living alone in a bungalow in the grounds of the Allenhurst Club, in New Jersey. Thomas Harrison, the clerk of the Allenhurst Club, described as a ‘loyal American’, had assisted the investigators and stated that Russians of good standing at the club would have nothing to do with either Weinstein or the Reillys.³⁶

While Weinstein was staying at the club he handed in a business suit to be pressed. In it were found four papers, including ‘an elaborate type-written description, on a single piece of paper, of a new machine gun’.³⁷ Thomas Harrison showed the papers to another guest at the club, Alfred Johnson, City Chamberlain in New York, suggesting that Weinstein should be investigated as the matter seemed suspicious. Suspicious or not, this, like much else in the investigation, failed to lead to anything concrete.

Turning again to the British authorities, the investigators made an appointment with Col. F.W Abbott at 165 Broadway, who was responsible for Russian contracts on behalf of the British government. He confirmed that he had met Reilly when the British Mission took over the management of Russian munitions contracts. Reilly had given him a great deal of trouble and implied that he had held up production to demonstrate that nothing could be done unless it went through him first. Abbott’s conclusion was that Reilly was ‘a clever schemer’,³⁸ who was probably dishonest, although proof was so far lacking.

In search of that elusive proof, the decision was made to make a search of Reilly’s office in the hope of at last unearthing some hard evidence. The search was carried out by agents Hunnewell and Smith, accompanied by two Russian translators. They opened a large portmanteau (a leather travelling trunk) that Reilly had brought with him from Japan. Inside they found a bag concealed within a compartment, which contained two packets of letters. These were clearly exchanges of correspondence between him and Nadine dating back to when she was in the south of France and he was in Russia, Japan and New York. She signed her letters ‘Kisenka’, meaning kitten in Russian. The two bundles of letters were shown to the interpreters, who concluded that they were merely love letters and of little consequence.³⁹ Hunnewell and Smith were, however, puzzled by her frequent references in the letters to his ‘system’ and how she hoped it would be successful. There was no indication anywhere to suggest what she meant or what the system was.⁴⁰ Richard Spence has claimed that Reilly’s ‘system’ was an approach to business dealing gleaned from the arms dealer Basil Zaharoff.⁴¹ To Zaharoff, ‘le systeme was essentially the strategy of playing all sides off against each other in order to maximise profit. As we have already noted in Chapter Five, there is no concrete evidence that Reilly and Zaharoff ever met, let alone knew each other. His assertion must therefore remain at best speculation.

Hunnewell and Smith next turned their attention to Reilly’s safe, which was opened and the contents searched. What they found confirmed that he did indeed have ‘tremendous political backing in Russia’.⁴² They also found many ammunition contracts made by Reilly on behalf of the Imperial Russian government for ‘vast amounts’.⁴³ Of particular interest were the records of cheques issued by Reilly and by office manager Upton Dale Thomas on Reilly’s behalf. Several had been written to the NewYork Club, where Reilly was a member. A cheque written to a Carl Lowie caught their eye as this showed that Reilly was transacting business with ‘someone who apparently has a German name’.⁴⁴ Thomas, who had issued the cheque, volunteered that Lowie was in fact Danish. Also of interest were several large cheques, one for $6,000 made out to Weinstein and another for $2,000 made out to Jahalsky. Thomas stated that Weinstein’s cheque was in part settlement of a shipping commission, while Jahalsky’s was in part payment of money he had loaned to Reilly. A search ofWeinstein’s desk was equally fruitless.

Thomas was questioned about his knowledge of Reilly, Weinstein and Jahalsky. He told them that he knew very little about Reilly’s or Weinstein’s affairs and confirmed that he was also representing Jahalsky while he was away in Texas. The investigators found Thomas convincing and referred to him in their report as a ‘loyal American’.⁴⁵ With little to show from their search at 120 Broadway, the investigators had to face the fact that their enquiry was running out of steam and out of time. The war in Europe was now drawing to its bloody conclusion as thousands of fresh American troops flooded into France, tipping the scales in favour of the Allies.

Of the three individuals the investigators initially focused upon, Reilly, Weinstein and Jahalsky, very little of worth was found that corroborated the view that they were either in sympathy with Germany or that they had aided or abetted the enemy in any way. Of the three, only Jahalsky would seem to have warranted any real cause for suspicion, although this in itself was founded on the flimsiest of circumstantial grounds. He was later arrested and closely questioned in Texas, but was released through lack of evidence.

The investigation’s inconclusive result also calls into question the reliability of those who testified against Reilly. To a greater or lesser extent, a good number were themselves up to their necks in the murky pool of war profiteering. Some, like Vauclain, would later justify their actions by claiming their involvement was motivated purely by a desire to shorten the war, or in the earlier days of the conflict to ‘keep America out’.⁴⁶ Some had lost out to Reilly in the scramble for contracts, while others had been double-crossed or conned by him. Reilly’s perceived permissive lifestyle would equally have made him a marked man among the ‘respectable’ business community.

The allegations made by Norbert Rodkinson are the most significant, as they again raise the possibility that Reilly had married bigamously during the period 1904–1909, before he met Nadine. He could, of course, have heard about Margaret’s earlier appearance in St Petersburg while living in the city. There is also a possibility that Margaret was actually in St Petersburg at some point in 1916. She herself referred to having been in Russia for a period of time during the course of the war, a claim given some credence by Foreign Office records indicating that she was issued with a passport in January 1916.⁴⁷ If she was there, her presence might be explained by her work for the Red Cross or in order to take up a position as a nanny in the city’s large English colony.⁴⁸ The latter scenario could also explain how children might have made their way into Rodkinson’s story of the ‘deserted family’.

Rodkinson is also important in that he seems to be the direct source for the claims about Reilly’s past which were later recycled by others and which resurface in a number of intelligence files, including those of SIS. When subjected to scrutiny, Rodkinson hardly emerges as a particularly savoury or reliable witness. Although the investigators believed him to be an Englishman, he was certainly not born in Britain. In fact, he later claimed to be an American. A memorandum from the Office of the Counselor at the US State Department, shortly after the war had ended, casts Rodkinson in an entirely new light:⁴⁹

More revealing is a Bureau of Investigation memorandum, written some three months earlier, based upon information supplied by Col. Proskey, who sparked off the Reilly investigation in April 1917. Agent R.W Finch of the Bureau’s New York City office states that:

Proskey goes on to relate that Rodkinson had formerly represented Flint & Co. in Petrograd, during which period his house had been raided twice by the police. He also refers to Rodkinson’s ability to speak German and Russian and states that after his ‘troubles in Russia’ he returned to the US and joined the firm of Renskorff, Lyon & Co. What lay behind his troubles in Russia is not known for sure. There was certainly a great deal of substance to the concerns outlined by the US State Department and Bureau of Investigation. For example, in the 14th US Census held in 1920, Rodkinson appears at 159 West 78th Street, New York City, living with Corinne, his English-born wife, and their English maid, Maud Peddar. He declared in his Census return that he was born in Louisiana. However, there is no record in Louisiana of anyone of that name or similar being born in or around 1874, his declared year of birth.⁵³

He first appears in US Immigration records on arrival in New York on 10 June 1903 aboard the Kaiser Wilhelm der Grosse, which sailed from Bremen, Germany. Over the next two decades he, his first wife Susanne and second wife Corinne, crop up repeatedly, criss-crossing the Atlantic. Prior to the First World War, all journeys to New York began in Germany. Although he always described himself as a US citizen, as we have seen, he was never able to prove that he was born in the USA. While his general statements about Reilly’s character are very much along the lines of a good many other people who knew him, his claim about Reilly being born in Bendzine and allegedly deserting his family in 1916 are very different matters. Whether Rodkinson’s statements were true or not, he was certainly not an unblemished witness.

The result of the investigation was, to put it kindly, inconclusive. Roger Welles, the director of Naval Intelligence, who had initiated the enquiry back in April 1917, probably best summed it up, when, two months after the end of the war, he wrote to the director of the Bureau of Investigation, Bruce Bielaski, enclosing a copy of the file containing the results of the investigation:

On that rather resigned note, Welles signed off. In spite of everything he now knew about Reilly’s nefarious disposition, even he would have found it hard to comprehend that within months of joining the RFC, the ‘international confidence man’ would be walking into the London headquarters of SIS for a personal audience with C, the service’s legendary chief.