Ace of Spies: The True Story of Sidney Reilly

^FOUR THE BROKER

If Reilly did marry bigamously after the Russo-Japanese War, the question arises as to how he managed to conceal his second wife’s existence for so long. The most likely explanation is that she was found secreted away in ‘backwater’ locations where he had contacts and connections who would ensure she was well taken care of. Odessa and Port Arthur are two such possibilities.¹ After Russia’s defeat in the war of 1904/05, the Liaotung peninsula became a Japanese possession, eventually becoming part of the Japanese puppet state of Manchukuo. Whatever the reality of Reilly’s connections with the Japanese during the war, it is evident that he had, and continued to have, very close business connections with a number of businesses in Japan and her occupied territories. As someone known to the Japanese authorities, Reilly would have had no trouble in accommodating his new spouse in Port Arthur, which after the war was rebuilt and restored by the Japanese. His representative and principal agent in Japan was William Gill, in Narunouchi, Tokyo.² Again, Gill would have been well placed to act as conduit and to ensure that Reilly’s wife was well provided for.

Likewise, Alexandre Weinstein became a trusted lieutenant of Reilly’s before the Russo-Japanese War, and remained such for over a quarter of a century. If Reilly did take a second wife, then Weinstein above all would not only have been aware of her, but would more than likely have played a pivotal role in liaising between ‘husband and wife’. When a decade later Reilly joined the Royal Flying Corps, he named his next of kin as his wife, ‘Mrs A. Reilly’, who in the event of his death could be contacted at 120 Broadway, New York City, a business address being run on his behalf at the time by Alexandre Weinstein.³ Further evidence concerning a possible second marriage is examined in later chapters.

In contrast to the comings and goings of wives, ex-wives and mistresses, one female relationship that survived the test of time was that with his first cousin Felitsia. Born in the Grodno gubernia of Russian Poland, she later moved to Vienna during the closing years of the 1890s. The city’s large Jewish population lived principally in the old quarter, and it was here that Reilly visited Felitsia⁴ whenever he could. She was the only member of his immediate family that he kept in touch with after leaving Odessa in 1893, and her existence was kept a closely guarded secret from all who knew him. It was through these visits to Vienna that he made the brief acquaintance of an influential businessman whose precise role in Reilly’s story has since become a source of some controversy.

Josef Mendrochowitz, an Austrian Jew, was born in 1863 and came to St Petersburg in 1904.⁵ In partnership with Count Thaddaeus Lubiensky he founded a firm of brokers, Mendrochowitz and Lubiensky, who successfully secured the right to represent Blohm & Voss shortly thereafter. Under the representation contract, Blohm & Voss undertook to pay Mendrochowitz and Lubiensky a commission of 5% on each successful business deal.⁶ In Ace of Spies, Robin Bruce Lockhart argues that ‘Mendrochovitch and Lubensky’ were awarded the rights of representation in relation to Blohm & Voss in 1911, as a result of Reilly’s chicanery with the Russian Admiralty. Blohm & Voss archives and Mendrochowitz and Lubiensky’s own business records demonstrate quite clearly that this was not the case. At the time the contract was awarded, Reilly was not even in Russia. According to the St Petersburg Police Department, Reilly first arrived in the city en route from Brussels on 28 January 1905,⁷ where he seems to have stayed for a comparatively short period of time before moving on to Vienna. By the summer of 1905 he was back in St Petersburg, this time with the intention of staying on a more or less permanent basis.

Thanks to a chance meeting with George Walford, a British born lawyer, whom he accompanied to St Petersburg’s Warsaw Railway Station on 10 September 1905, an account of his activities at this time have found their way into Ochrana records. Walford was under Ochrana surveillance, and Reilly was watched and followed from 11–29 September as a result of his being seen with him. Why Walford was under surveillance is unclear, although it was routine practice for the Ochrana to keep a watchful eye on foreign citizens, a task they took even more seriously in the wake of the Russo-Japanese War. The surveillance on Reilly yielded nothing of value for the Ochrana, although it is most helpful to us in confirming that on arrival in St Petersburg, Reilly made contact with Mendrochowitz and Lubiensky, and actually lived in their apartment building at 2 Kazanskaya. According to the surveillance report, Reilly also visited the offices of the China Eastern Railway and introduced himself as a telephone supplier. Whether or not he succeeded in making a sale is unknown. Bearing in mind that Ochrana ‘tailers’ often gave their targets nicknames in written reports, Reilly was appropriately referred to as ‘The Broker’.⁸

If Reilly had nothing to do with Mendrochowitz and Lubiensky securing the right to represent Blohm & Voss, did he have any connection or dealings at all with the firm? Details of the firm’s dealings are contained in six volumes of files containing over 1,000 pages of correspondence and records now held by the Hamburg State Archive. In addition to the two partners, there appear to have been four other employees, including deputy manager Jachimowitz, who ran the office in the absence of the partners and was particularly well connected with influential Russian politicians. Reilly’s name is not among those employed by the firm, but is mentioned in letters and invoices concerning his work on behalf of Blohm & Voss, as a freelance broker during the winter of 1908 and the spring of 1909. During this time he was working with Mendrochowitz and Lubiensky, assisting them in marketing a new Blohm & Voss boiler system. Company records show that agents or brokers like Reilly were often used to ‘influence’ people in favour of the company.

Exchanges of correspondence and telegrams between Mendrochowitz and Lubiensky and Blohm & Voss in Hamburg during this period give some impression of the working relationship between the firm and the freelance Reilly. His name first surfaces in a telegram dated 14 December 1908⁹ in which Blohm & Voss are told that ‘Reilly asks for advance payment of 1,000 roubles urgently. Please notify us whether we should pay’. It is apparent from Blohm & Voss records in Hamburg that Reilly was not only waging his campaign for a higher fee through Mendrochowitz but was also making personal representations to Blohm & Voss. On 13 April, while staying at the Hotel Bristol in Berlin, he sent them a handwritten letter:

The following day, while he was in Paris, a telegram duly arrived from Blohm & Voss: ‘Nothing against a visit this week, next week not possible’.¹¹ Whatever the outcome of this meeting, it seems clear that despite the impression he sought to create, namely that his approach was being made at Mendrochowitz’s instigation, Mendrochowitz had no idea he was doing anything of the kind. In ignorance of the meeting, Mendrochowitz wrote to Blohm & Voss on 23 April¹² expressing some frustration at Reilly’s demands for a higher commission:

Reilly’s stock with Blohm & Voss was clearly somewhat higher than it was with Mendrochowitz, for on 26 April they sent a telegram agreeing to raise Reilly’s portion from 6,700 roubles to 10,000 roubles.¹³

On 27 April Blohm & Voss sent Mendrochowitz and Lubiensky a cheque for 27,500 roubles made payable to the firm’s bankers, Crédit Lyonnais, St Petersburg, and a statement¹⁴ setting out how the money should be dispersed:

The fact that Reilly had clearly been asking for more than 10,000 roubles is apparent from Mendrochowitz’ reply on 27 April:

When Mendrochowitz issued Blohm & Voss with a receipt¹⁶ he informed them:

Mendrochowitz was clearly unwilling to give in to Reilly and his demands and was waiting to see if his behind-the-scenes work actually got the results in terms of the boiler order. Unfortunately, the file contains no more correspondence between Reilly and the firm of Mendrochowitz & Lubiensky on this or any other matter. This absence may, in itself, tell a story, namely that having already had a taste of Reilly’s business methods, the firm had no further associations with him from that time on. This episode also contrasts sharply with Robin Bruce Lockhart’s argument that Mendrochowitz offered Reilly a fifty-fifty partnership in the firm, and that Reilly was effectively running the firm in all but name by 1911.¹⁷ Lockhart further states that Reilly ousted Lubiensky as Mendrochowitz’ partner and replaced him with a banker named ‘Chubersky’,¹⁸ yet not a single reference to a Chubersky or Shubersky is to be found anywhere in the company’s records or indeed those of Blohm & Voss. On the contrary, they show Lubiensky playing a key role for many years to come.

Mendrochowitz’ chagrin is understandable because, if Reilly’s demands were met, his earnings from the transaction would be comparable with Mendrochowitz’ own. What, then, was Reilly actually doing for Blohm & Voss to warrant such rewards? Rapid industrialisation coupled with a massive naval rearmament programme created a heaven-sent opportunity, not only for Russian firms but also for those in Britain, France and Germany. Competition for contracts was little short of cut-throat and almost any means, fair or foul, were sanctioned to gain an advantage over a competitor.

Kurt Orbanowsky, a Blohm & Voss engineer who spent considerable time in St Petersburg negotiating with Russian officials about shipbuilding contracts, wrote several hundred pages of reports back to the company in Hamburg, which provide a most revealing insight into the role Reilly played.¹⁹ It would seem that Reilly’s main function was to oil the wheels of business, working primarily behind the scenes, something at which he had always excelled. As a master of intrigue and corruption in its many forms, Reilly was clearly someone whose services would be invaluable in the cutthroat market place that existed in pre-war St Petersburg.

Orbanowsky’s reports are peppered with references to Reilly, who clearly has a pipeline into the Ministry of Marine. On 28 April 1909,²⁰ for example, Orbanowsky reported that ‘Reilly thinks he will know the day after tomorrow whether the Programme discussions will be postponed’. In another report a year later, it is again clear that Blohm & Voss were receiving inside information from Reilly via Orbanowsky:

The modus operandi for one such as Reilly would appear to be something along the lines of identifying potential opposition and spreading misinformation about them and their product. Through a web of political, court and ministerial contacts, listening posts could be established that would pick up news of new contracts, specifications, deadlines, budgets and costings. Of course, this network would need to be supplied with suitable rewards, be they monetary gifts or other favours and services. Such ‘representational’ work would also involve paying journalists and editors to write favourable articles about Blohm & Voss and negative ones about competitors. Reilly had particularly cosy relationships with the Novoe Vremia (New Times) and Vechernee Vremia.²² Perusal of these, and indeed other, newspapers during this period will bear testimony to the success of such tactics. Under Reilly would be a lower tier of ‘rear-rank’ or ‘background’ men, who would be employed by him on a retainer basis to do the low-level footwork.

In addition to clarifying Reilly’s relationship with Mendrochowitz and Lubiensky and his role in representing Blohm & Voss, the correspondence files also indicate that while Reilly was based in St Petersburg, his business took him all over Europe, where he stayed in style at the best hotels in cities like Odessa, Kiev, Paris, Berlin, Vienna and London.²³ His visits to Paris appear quite frequent and were no doubt motivated by two new obsessions in his life – aviation and Eve Lavallière, the wife of the director of the Parisian Théâtre des Variétés.²⁴ The Wright brothers may have been the first into the air in 1903, but it was not until 1909, when French engineers invented the rotary engine,²⁵ that the aviation age dawned. Blériot’s cross-channel flight in the same year kindled the imagination of thousands and before too long an aviation boom was underway. The Farman brothers, Henri and Maurice, quickly established the Farman Aviation works near Paris and set about displaying their aeroplanes at air shows throughout Europe. Despite the pioneering steps taken by the French, they were still, at this stage, very much reliant on German magnetos, which had to be imported.

Robin Bruce Lockhart relates a tale about Reilly’s supposed involvement in obtaining a newly developed German magneto at the Frankfurt International Air Show.²⁶ According to his account, a German plane lost control on the fifth day of the air show and nosed-dived to the ground, killing the pilot. The plane was alleged to have a new type of magneto that was far ahead of other designs. An SIS agent by the name of Jones, posing as one of the exhibiting pilots, enlisted Reilly’s help in diverting attention while he removed the magneto from the wreck of the plane, substituting it for another. According to Lockhart:

As with so many of these Ace of Spies tales of derring do, the facts tell a very different story. SIS at this point was barely ten months old and could count its agents on the fingers of one hand. None of its agents fit Lockhart’s description of ‘an engineer commander in the Royal Navy who had been working for ‘C’ for some time’. The official exhibition catalogues and guides of the air show equally fail to mention anyone by the name of Jones. The Frankfurt Institute for Urban History contains well over 1,000 pages of material on the Air Show, including newspaper accounts and some 300 original photographs. From these records it is clear that there were no accidents at all during the show involving any aircraft, be they of German or any other nationality.²⁸ This is not to say that Reilly was not at the Air Show or that he had no interest in German magnetos. On the contrary, as a bona fide agent of Bosch, the leading manufacturers of German magnetos, he was enthusiastically promoting their virtues to Farmans and enjoying a good commission into the bargain.

Apart from his growing interest in aviation, patent medicine was a racket never too far from his heart. In 1908 and 1909 he made regular visits to London in order to re-establish the Ozone Preparations Company he had wound down on his departure from England ten years previously. It was during a visit in the autumn of 1908 that he finally took steps to legally change his name from Rosenblum to Reilly. Sandford & Company, the solicitors who made the application on his behalf, had been associated with Reilly since 1896. Although the wording of his petition,²⁹ submitted to the High Court on 23 October 1908, is dressed in the appropriate legal verbiage it is none the less significant:

It confirms the fact that a much earlier move to change his name by Deed Poll had, ‘never been enrolled and has since been lost or destroyed’. This is almost certainly a reference to the Deed Poll application that was being drawn up on behalf of Sigmund and Margaret in the summer of 1899, which was more than likely abandoned in the wake of their swift departure from England. It is most likely that he now resolved to make the change of name official in light of his plans to resume business in England. Robin Bruce Lockhart also refers to his return to the patent medicine business in Ace of Spies.³⁰ According to his version, Reilly entered into a partnership with a young American chemist by the name of Long and launched the company Rosenblum & Long from 3 Cursitor Street. Although he gives no precise dates for this venture, the implication is that the company was in existence for a four-year period somewhere between 1905 and 1911. Lockhart relates that despite a great deal of hard work on Reilly’s part, the company failed to prosper, due in part to Reilly being ‘something of an innocent in business’. The business finally collapsed when Long absconded with £600 and Reilly was forced to wind the company up with the assistance of a solicitor by the name of ‘Mr Abrahams’. The fact that no trace of Rosenblum & Long has ever been found is due to the fact that the business adopted the name he had first used in 1897, the Ozone Preparations Company.

A search of City of London records confirms that the Ozone Preparations Company traded for some three years between 1908 and 1910, occupying not 3 Cursitor Street, but the first floor of 97 Fleet Street on a sub-lease from the owner, S.R. Cartwright.³¹ Reilly certainly had a partner in the venture, William Calder.³² It is most unlikely, however, that he absconded with company funds, as he was involved in other Reilly business ventures in the 1920s. The business was indeed wound up in 1911 by Michael Abrahams Sons & Co., other associates of long standing.

The Fleet Street address was within walking distance of the Hotel Cecil in the Strand, where Reilly occupied a suite whenever he was in London. In Edwardian times the Cecil was England’s largest and most luxurious hotel to which the rich flocked and where foreign heads of state were received. The Savoy next door was very much the poor relation by comparison. Opened in 1896, the Cecil had 1,000 rooms and boasted interiors of multicoloured marble, and corridors with hand-wrought tapestries.³³ The adjacent Cecil Chambers housed a number of businesses, which at the time included the British Tobacco Company at No. 86 and a number of its European and Empire subsidiaries. Two decades later Stephen Alley, George Hill, Ernest Boyce and William Field Robinson (all of whom we shall meet later in our story) were to work for the company. In 1908, however, one Basil Fothergill worked at the company’s Cecil Chambers office and was a known acquaintance of Reilly. Fothergill’s father, Charles, was a retired British Army major and may well have been known to Reilly through his son.³⁴ To what extent, if any, Fothergill senior served as an inspiration for the Maj. Fothergill in Reilly’s Amazon story is very much open to debate.

It was also at the Cecil that one Louisa Lewis disappeared without trace, on the evening of 25 October 1908. Louisa had worked at the hotel for four years, having moved to London from Sussex. She was last seen early that evening in her coat and hat speaking to a gentleman at the foot of the hotel’s main staircase.³⁵ It was assumed that they left the hotel together. The gentleman was described as being between thirty and forty years of age, medium height with dark hair. Whilst this description could easily apply to a good many men who were in London on 25 October 1908, one particular thirty-five-year-old, who was 5ft 10ins with dark hair, might have had good cause to remember Miss Lewis. In fact, more to the point, she might well have had good cause to remember him – ten years previously Louisa Lewis lived and worked at the hotel managed by her father, Alfred – the London & Paris at Newhaven. On the morning of 13 March 1898 she had encountered Dr T.W. Andrew, who had examined the dead body of the Reverend Hugh Thomas, and declared his death to be by natural causes. Such a death was not an everyday occurrence at the London & Paris, and it would no doubt have remained etched forever in her mind. Is it too much to speculate that ten years later, by pure chance, she happened to meet Dr Andrew again at the Hotel Cecil? Reilly’s face was not one that could be forgotten in a hurry. Had such a crossing of paths occurred, what might Reilly’s reaction have been? Although Hugh Thomas’s death was never suspected of being anything other than natural if untimely, could he afford to take the chance of allowing someone who could match his face with the identity of Dr Andrew seeing him again?

We know from his Deed Poll petition that Reilly was residing at the Hotel Cecil on 23 October 1908, two days before Louisa’s disappearance. Such evidence is purely circumstantial, but compelling all the same. Equally of interest is a story related by Donald McCormick³⁶ in his book, Murder by Perfection, which concerns the activities of Arthur Maundy Gregory, the honours tout,³⁷ and his possible involvement in the death of Edith Rosse. McCormick relates how Gregory established his own private detective agency and was apparently observing the comings and goings in the West End’s major hotels. On one such observation, he was initially suspicious of a ‘free-spending foreigner who was masquerading as an Englishman’.³⁸ This suspicious character turned out to be none other than the ‘flamboyant womaniser’ Reilly.

McCormick, who had no knowledge of the fact that the Hotel Cecil was Reilly’s home from home, mentions that Gregory was exploring the possibility of leasing a small theatre in John Street, off the Strand. Although there is no street off the Strand by the name of John Street today, John Adam Street is the nearest fit, running parallel with the Strand from Villiers Street, next to Charing Cross Station, to Adam Street. According to London County Council records,³⁹ in 1940, streets by the names of John Street and Duke Street were administratively joined, and properties renumbered, to create John Adam Street.

Contemporary records also indicate there was indeed a small theatre in John Adam Street during this period,⁴⁰ which turns out to have been briefly let to one A.J.P Maundy Gregory. Anyone walking down John Adam Street today cannot help but be aware of the imposing former Shell Mex House, which overshadows the street. Shell Mex House was built in 1930 following the controversial demolition of one of the Strand’s great landmarks – The Hotel Cecil. This places Maundy Gregory in the near vicinity of Reilly at this time. Maundy Gregory’s nocturnal detective activities are corroborated by Superintendent Arthur Askew of Scotland Yard, who investigated the mysterious death of Mrs Rosse and the ‘honours for sale’ charge against Maundy Gregory.⁴¹ Whether there was any connection at all between Reilly and Louisa Lewis’s disappearance, and whether Reilly met Maundy Gregory at this stage can only remain speculation. However, the fact that all three were in the same place at virtually the same time can no longer be in any doubt.

If, on his return to St Petersburg in late October or early November 1908, Reilly felt any sense of relief, this was to be short lived, for the reappearance of another face from the past was about to set in motion a chain of events that would end in tragedy.