Ace of Spies: The True Story of Sidney Reilly

^SIX THE HONEY POT

While Reilly and Nadezhda Massino were holidaying at St Raphael on the French Riviera,¹ a Bosnian Serb student named Gabriel Princip assassinated the heir to the throne of the Austro-Hungarian Empire, Archduke Francis Ferdinand, in Sarajevo on 28 June 1914. This set off a chain reaction that within six weeks would envelop the great powers in a world war. On 5 July Germany declared its support for Austria, who in turn issued an ultimatum to Serbia that was purposely designed to make acceptance impossible. As the great powers squared up to each other, Reilly hastily departed for St Petersburg, leaving Nadezhda to continue the holiday alone.

On his arrival back in the Russian capital, he soon learned from his contacts that Russia had resolved to take military action against Austria if Serbia was attacked. On 28 July Austria declared war on the Serbs and Tsar Nicholas mobilised Russian forces the following day. Germany’s declaration of war on Russia on 1 August found the Russians ill prepared. What would turn out to be a catastrophe for Russia, and the Tsar in particular, would provide Reilly’s big chance, not only to make the millions he dreamed of, but also to make his mark on history.

As the hostilities commenced, a small army of contractors and brokers set off to secure the guns, ammunition, powder and general military equipment that the Russian war effort would need in abundance. Within days of war being declared, Reilly had been commissioned by Abram L. Zhivotovsky of the Russo-Asiatic Bank and the Russian Army to acquire munitions for the Russian Army.² Before departing for Tokyo in early August he wrote to both Margaret and Nadezhda.³ For Margaret it would be the last letter she would receive from him until the war was over. Once in Tokyo, Reilly successfully secured a large powder deal with Taka Kawada and Todoa Kamiya of Aboshi Powder Company,⁴ and the contract was then put in the hands of Reilly’s agent in Japan, William Gill.

While Reilly was in Tokyo, Samuel M. Vauclain, vice president of the Baldwin Locomotive Works of Philadelphia, arrived in St Petersburg seeking contracts for narrow gauge locomotives and munitions.⁵ Although Reilly was absent from St Petersburg, Vauclain found that his main competitor for the munitions contract was Reilly. It was obvious to him that Reilly had tremendous political backing in Russia which emanated from the office of the Tsar’s cousin, the Grand Duke Alexander Mikhailovich, a contact Reilly had made at the time of the Russo-Japanese War through Moisei Ginsburg. The grand duke showed Vauclain a telegram from Reilly, sent through his London office, in which he had cut his contract price.⁶ However, on this occasion, Vauclain won the contract, and took back an order for 100,000 military rifles, converted to use Russian cartridges, to be manufactured by the Remington Arms Company. Not long after, Vauclain shrewdly converted the Baldwin plant at Eddystone, Pennsylvania, which was running two thirds below capacity, to manufacture arms and munitions.

Before the war was over, the United States would manufacture over a third of all Russia’s war munitions and equipment. American industry quickly saw the opportunity that beckoned, as indeed did brokers such as Reilly. Having concluded the powder deal in Tokyo, Reilly booked a passage on the SS Persia, which sailed from Yokohama Docks bound for San Francisco on 29 December 1914. It arrived in San Francisco on 13 January 1915.⁷ On arrival he declared to US Immigration that he was a forty-one-year-old merchant of British nationality, born in Clonmel, Ireland. He further declared that this was his first visit to the United States, that his journey had started in St Petersburg and that he had a through ticket to his final destination, New York City.⁸ Apart from his claim to have been born in Clonmel, the rest of the informa-tion he gave was true. From San Francisco he travelled to New York by train, where he took an apartment at 260 West 76 Street.⁹

Through the Russo-Asiatic Bank he was introduced to Hoyt A. Moore, an attorney specialising in import and export matters. Moore not only provided advice to the new arrival but also recommended an acquaintance, thirty-year-old Dale Upton Thomas, whom Reilly took on as his office manager. Hays, Hershfield and Wolf, at 115 Broadway, another Moore introduction, became Reilly’s legal representatives. A short walk away, with its classical arched entrance and grand marbled lobby, was the Equitable Building, at 120 Broadway, which Reilly chose as his New York base. He took 2722, a prestigious high-floor suite overlooking the downtown financial district of Manhattan, from where he and Thomas were to operate for the next three years.¹⁰ The Equitable Insurance Company was well established in Russia¹¹ and its Broadway building was already home to a number of Russian tenants, a good number of whom were dealing in wartime munitions contracts in America. It was also through Hoyt Moore that Reilly met Samuel McRoberts, vice president of the National City Bank, who was also keen to profit from the honey pot that the war in Europe promised to deliver. To this end he procured Reilly’s appointment as managing officer of the Allied Machinery Company, which was also based at 120 Broadway.¹² It has been suggested that Allied Machinery was a Reilly front company, when in fact it had been established since 1911. McRoberts was elected to the board of directors the following year, from which position he was able to introduce Reilly into the company. Company records indicate that Reilly was neither a shareholder nor a director, and was purely an employee, albeit a senior one.¹³ The purpose of the company was to ‘manufacture, produce, buy, sell, export, lease, exchange, hire, let, invest in, mortgage, pledge, trade and deal in, and otherwise acquire and dispose of machinery, machine-tools and accessories, machinery products and parts and goods, wares and merchandise of every kind and description’. In other words, it had an extremely wide remit and was ideal for trading within the new munitions marketplace.

While it is clear that Reilly used his exceptional networking skills to their full advantage and no doubt made the acquaintance of a large number of businessmen in NewYork, these often tenuous relationships have been used to associate Reilly with a range of events with which he had no connection whatsoever. His rivalry with J. Pierpont Morgan, the Anglophile American financial magnate, is a prime example. Morgan, best remembered today for his ownership of the White Star Line and its ill-fated flagship the RMS Titanic, was the main player in the allied quest for munitions in the United States. His desire to monopolise the arms trade on behalf of the Allied powers alienated him from the small army of independent brokers, like Reilly, who sensed they would be squeezed out of the munitions marketplace if Morgan succeeded in his aims. The very month that Reilly arrived in New York, Morgan had signed an agreement with the British Commercial Agency that made him the sole agent in the USA for munitions purchases. As part of this deal, Morgan made his ambitions clear so far as the Russian market was concerned, by offering Russia a $12 million credit on the proviso that his company acted as agent for all contracts signed as a result.¹⁴

On 3 February 1915 an explosion rocked the DuPont Powder Plant in DuPont, near Tacoma, Washington. According to the Tacoma Daily News (an afternoon publication):

Richard Spence has speculated that Reilly’s hidden hand was behind the explosion, as DuPont had opted to do business with Pierpont Morgan rather than Reilly.¹⁶ Spence believes that German saboteur Kurt Jahnke executed the deed on Reilly’s instructions, drawing attention to Jahnke’s supposed later admission to his German superiors that he was responsible. The more likely scenario was that Jahnke was seeking to take credit for something that was none of his doing, and was, in all likelihood, a complete accident. Indeed, the official verdict remains, in the absence of any compelling evidence to the contrary, that it was an accident. According to former DuPont employees, explosions at the DuPont Works were not unusual. They did not happen often, but when they did they were usually due to accidental causes.

Furthermore, Reilly had been in America for less than three weeks when the explosion occurred. It would have been somewhat difficult for him to have sought a powder contract with DuPont, to have been rebuffed by the company, and then to have planned and executed such a response, all within the space of some nineteen days. In short, there is no tangible evidence to connect Reilly with either Jahnke or this tragic accident.

Since his departure from St Raphael back in July 1914, Reilly and Nadezhda had been exchanging letters. Her divorce, which had recently been granted, meant that they could now marry. Although there is no doubt that she was in love with him and that he was very fond of her, doubt remains as to whether he actually wished to marry her. Although in his letters to her he promised to send for her as soon as he arrived in New York, she could well have had reason to doubt him. The fact that throughout their three-year relationship she had been married and latterly awaiting a divorce meant that the issue of marriage had not been a consideration. Once the divorce came through in 1914, he may well have had second thoughts, being perfectly content for her to remain as his mistress. If this was not the case and he really did have every intention of marrying her, there would have been absolutely no need for the Machiavellian scheme Nadezhda now embarked upon.

At her own expense she purchased a ticket in the name of Nadine Zalessky at Le Havre and took the SS Rochambeau to New York. As the liner neared New York she cabled Reilly to notify him of her arrival in order that he might meet her at the pier. She also cabled the New York police, informing them that Reilly was importing a woman into the state for immoral purposes – a criminal offence under the Mann Act.¹⁷ When her ship docked on 15 February,¹⁸ Reilly was there to meet her and so too were the police. The police arrested Reilly and, despite his insistence that she was his fiancée, informed him that he could only avoid prosecution and possible imprisonment if he married her immediately. As he had already promised to marry her and she had stated that this was the purpose of her journey, he did not have a leg to stand on. It was the first day of Lent under the Orthodox calendar, however, and Orthodox weddings do not, by custom, take place during the first week of Lent. Reilly, therefore, had to appeal to the head of the Russian Orthodox Church in America, Metropolitan Platon, to give special dispensation for the wedding to take place.¹⁹ As luck would have it, for Nadine at any rate, Platon gave his permission, and the wedding took place the next day at St Nicholas’s Cathedral in Manhattan.²⁰ Nadine claimed in the marriage register that she was the twenty-seven-year-old daughter of Pierre and Barbara Massino, residing at the Ritz Carlton Hotel, at 313 East 63rd Street. She was, in fact, twenty-nine years old. Reilly stated that he was a forty-one-year-old bachelor, the son of George and Pauline Reilly of Clonmel, Ireland, residing at 260 Riverside Drive, an address that did not exist until 1925. Petr Rutskii from the Russian Consulate was one of the witnesses.

G.L. Owen²¹ believes that the Reillys left New York shortly after their wedding and undertook a visit to Petrograd. The timing of this visit may seem incidental, but it is of crucial importance in terms of authenticating a claim by Owen that the Reillys sailed back to New York on the same ship as a prominent German spy. Franz Von Rintelen was sent to America by German intelligence to co-ordinate a campaign of sabotage and disruption that would hopefully stem the flow of munitions to the Allies. Von Rintelen arrived in New York on 3 April aboard the SS Kristianiafjord, travelling on a Swiss passport under the name of Emil V. Gasche.²² A search of the passenger list, however, reveals no Sidney or Nadine Reilly on board, nor indeed any male passenger fitting Reilly’s general physical description (around 5ft 9 or 10ins tall, brown eyes, dark hair, in the region of forty years of age). This is purely and simply because the Reillys had been in New York all the time. They did not, in fact, leave the city until 27 April, when they boarded the SS Kursk bound for Archangel.²³

Arriving in the north Russian port on 11 May, they proceeded immediately to Petrograd. While Nadine spent some time with her family, Reilly entered into negotiations with the Russian Red Cross, with a view to securing, on their behalf, ambulances and auto-mobiles from Newman Erb and the Haskell and Barker Car companies.²⁴ He also met with the Tsar’s cousin, Grand Duke Alexander Mikhailovich. The grand duke had been head of the Directorate of Commercial Navigation and Ports during the war, and worked closely with Ginsburg in organising coal supplies to Vladivostok. A keen photography enthusiast, Alexander Mikhailovich was no doubt much impressed by the American automatic camera Reilly brought with him.²⁵ According to G.L. Owen, the Reillys were in Petrograd between June/July and September of 1915, a view shared by Richard Spence.²⁶ Although originally intending to leave Archangel on 13 June,²⁷ their departure was postponed until 26 June, when they headed back on board the SS Czar.

The delayed departure was more than likely caused by the attentions of the Ochrana, who were taking a close interest in Reilly and the war materials he was trading in. Before going aboard the SS Czar, he was searched on the orders of Col. Globachev, head of the St Petersburg Ochrana. Nothing incriminating was found on him or in his trunks and he was allowed to proceed on his way.²⁸ One such deal that attracted Globachev’s interest concerned a consignment of nickel ore ordered through Reilly by the Russian government. The consignment was duly shipped to Russia via Sweden in a deal Reilly brokered through the Swedish Russo-Asiatic Company. All had proceeded smoothly until a routine check indicated that the weight of the ore unloaded in Petrograd was somewhat less than the amount loaded in New York.²⁹ This immediately lead to rumours that the missing ore had been appropriated in Sweden and sold on to Germany. A more likely scenario, however, was that the Russian government had been short-changed in New York by a sleight of hand on the paperwork. It would not have been the first time that a Reilly consignment was loaded underweight but the customer invoiced for the full cargo.

Reilly’s postponed departure lead to a rumour reaching the Russian General Staff that the Ochrana had detained him. Maj.-Gen. Leontyev of the Quartermaster-General’s Office immediately sent a cable on 24 June³⁰ to the staff of the commander-in-chief of the 6th Army, instructing that urgent enquiries be made to establish what had happened to Reilly. In a reply from Maj.-Gen. Bazhenov, Leontyev was assured that Reilly had not been detained and that he had been allowed to depart unhindered.³¹

Arriving in New York on 10 July,³² Reilly returned to his desk at 120 Broadway. It did not take him long to work out that the main problem being encountered by American companies was not in securing munitions contracts per se, but in ensuring that the order, once manufactured, was actually accepted on delivery. Russian inspectors, whose job it was to ensure that shells, for example, were up to standard, were exceptionally careful about passing them. In the first six months of the war it was found, to the great cost of those at the battlefront, that some shell deliveries were not compatible with Russian guns and could not be fired. The result of this was a more vigorous system of quality control. This inspection system applied to all munitions including rifles, which had to be specially converted to take Russian cartridges. This presented an opportunity for Reilly, who had a close relationship with those issuing the surety bonds necessary before the Russian government would accept the consignment. On 19 April 1915, for example, Reilly signed a deal whereby he would, ‘assist in the performance of the said contract and in particular in reaching an understanding with the Russian Government as to the assurances required… that the contract will be performed’.³³ In other words, Remington Union would pay Reilly a large sum of money to ensure that their rifles successfully passed through the quality control process and were accepted by the Russian government. Over three years later, Samuel Prior, who had signed the agreement with Reilly on behalf of the Remington Union Company, quite accurately described the deal as a ‘hold-up’³⁴ on Reilly’s part, for unless he was given a commission on the deal, the implication was that he would use his influence to frustrate their ability to get the rifles accepted.

In late 1915 the Russian government sent an official purchasing supply committee to New York headed by Gen. A.V. Sapozhnikov, another old Reilly acquaintance from St Petersburg. Whilst the committee was an understandable attempt to rationalise Russia’s munitions purchases in America, it was dogged with scandal almost from the day its members arrived. Although, as usual, Reilly had a personal motive for writing to Lt-Gen. Eduard Germonius on 21 December 1915, he was essentially correct in drawing attention to the disorganised and over-optimistic state of affairs concerning Russian munitions purchases in America. In his report he stated that:

Reilly went on to draw attention to the fact that the allied countries had placed orders in America for approximately 7.5 million rifles, 3,500 million cartridges and about 1.5 million gun barrels. His conclusion was that in their haste to take advantage of these large Russian contracts, many American firms had seriously overreached themselves and were highly unlikely to be able to deliver on schedule.

This eventually turned out to be the case, although the situation was not helped by the over-enthusiastic quality-control system. Before too long the system began to have serious repercussions on Russia’s ability to fight the war. The problem now was not the quality of the munitions they were receiving, but the fact that the inspection system was slowing the delivery process down to such an extent that the Russian Army at the battlefront was virtually out of shells to fire at the enemy. When Gen. Germonius became head of the Russian Purchasing Commission in America, this issue was one that was very much to the fore.

Again, Reilly saw a golden opportunity to exploit this opportunity. According to Vladimir Krymov he visited the plants that were contracted to manufacture shells and were experiencing difficulties in getting them passed, and proposed that in exchange for a commission he could ensure that the inspectors would pass the finished munitions.³⁶ It is not surprising that the companies were initially sceptical to say the least, as he was not the first person who had approached them with this proposal. He told the companies, however, that he and Gen. Germonius were related and that through the general he could not only ensure the successful acceptance of their current orders but could also secure new orders for them. As proof he persuaded the managing directors of two companies to have lunch at the Coq d’Or, a country restaurant outside New York, and told them they would see him, his wife and Gen. Germonius having lunch together. The directors knew that Germonius never went anywhere, let alone had lunch with middlemen or suppliers. Nadine persuaded Germonius to have lunch with them at the Coq d’Or, and Reilly was thus able to show off the unsuspecting general to the directors. On 7 January 1916, an agreement was signed between Reilly and Samuel M. Vauclain, John T. Sykes and Andrew Fletcher on behalf of the Eddystone Ammunition Corporation. The agreement gave Reilly 25 cents commission on every round of three-inch shrapnel shell that was accepted.³⁷

Within a very short space of time the orders were accepted and Reilly collected a healthy commission. What the companies did not know was that before approaching them, Reilly had heard that fresh instructions were shortly to be issued to the inspectors to be less circumspect as the Russian army was virtually out of shells. The companies, however, were sure that Reilly was responsible for this miracle.

On 16 July 1916 Reilly was reunited with Alexandre Weinstein, who arrived in New York aboard the liner the St Louis. Having already made a small fortune in London on munitions commissions, Weinstein now no doubt hoped to get a share of the American honey pot Reilly had often boasted about. Having secured himself a desk in Reilly’s office suite at 120 Broadway, he enthusiastically threw himself into the murky but lucrative world of US munitions deals, as did Moisei Ginsburg, who arrived from Petrograd shortly after Weinstein. Corrupt practice was not the only difficulty the Russian Purchasing Commission had to contend with. In 1916 Col. Sergei Nekrassov, the chief inspector of the Russian Purchasing Commission’s Artillery Department, was accused by George Lurich, an Estonian linked to a pro- Allied intelligence ring, of being a German spy.³⁸ In particular he accused Nekrassov of obstructing munitions production and of diverting supplies to Germany. This was a very serious allegation, and Lurich took the matter up with the commission, but the allegation was dismissed. Lurich then took the matter to Capt. Guy Gaunt of British Naval Intelligence, who passed it on to Maj. Norman Thwaites of SIS to investigate.³⁹ The depth to which Thwaites looked into this matter is unknown, although we do know that he spoke to Reilly to elicit his opinion of Nekrassov. Thwaites, not for the first time, gave a different account of this matter in his autobiography to that which appears on the official record. According to a US Bureau of Investigation report written some two years later, Thwaites ‘had lunched with both Reilly and Weinstein and they had aroused his suspicions in their efforts to get Nekarossov out of trouble’.⁴⁰ In his 1932 autobiography, Velvet and Vinegar, however, Thwaites recalls:

He makes no reference to Lurich or Nekrassov by name or indeed anyone else apart from Reilly and Weinstein in this account. He also gives the impression that his enquiry was not concerned solely with Nekrassov, and refers to a young girl who had apparently given testimony ‘against them’. The impression one gains is that she herself had close associations with the Austrian and German Consulates.

The Nekrassov affair is seen by some as a further validation of the view that Reilly was a German agent, or was at least in league with them. It is more likely, however, that Reilly was seeking to shield Nekrassov purely for his commercial value. Bearing in mind that Reilly had already made over $1million from munitions deals, a good number of which resulted from his ability to ‘assist’ in the inspections process, it would be hardly surprising if he had sought to defend one of his key contacts in the inspections network.

So far, talk of German sabotage and disruption was confined to the type of activities alleged by Lurich. This was about to change abruptly. At 2.08 a.m. on Sunday 30 July 1916, New York City was rocked by a thunderous explosion caused by the ignition of munitions on nearby Black Tom Island. The ground shook and flaming rockets and screeching shells filled the night sky. Shock waves caused thousands of windows in the Manhattan skyscrapers to shatter, sending a deadly shower of glass raining down on the streets below. Water mains burst, the telephone system went dead and panic gripped motorists on the Brooklyn Bridge as the mighty structure shuddered and swayed. Almost immediately New York was alive with people as thousands took to the streets in bewilderment. Looting was reported on 5th Avenue and the police were thrown into a state of confusion as burglar alarms triggered by the blast sounded off all over the city. Some twenty minutes later a second huge blast shook the city, sending more shells and rockets into the night sky. More than 13,000 tons of explosives had been ignited by the two separate blasts, one in a rail wagon and the other in a barge moored at a nearby pier.⁴²

Richard Spence believes Reilly again played ‘a critical role’⁴³ in the destruction of the Black Tom munitions terminal, supposedly for two reasons. Firstly, Spence draws attention to the fact that most of the munitions orders on Black Tom, waiting for dispatch by ship to Europe, were ‘the fruits of Morgan inspired contracts’,⁴⁴ and secondly that Reilly was aware of the ‘contents, security and layout’ and could ‘arrange easy access to the site for the team of saboteurs led by Jahnke’.⁴⁵ The charge that Reilly had background knowledge of the Black Tom Terminal seems to centre on the fact that Allied Machinery was one of a number of companies that had an office on the Black Tom site. The reality, however, was that the perpetrators would not have needed someone like Reilly to guide them through the intricacies of Black Tom’s security. As official investigations have clearly demonstrated, security at Black Tom was, in practice, virtually non-existent.⁴⁶

Security at the terminal was the responsibility of two private agencies. The Lehigh Valley Railroad Company, who owned the terminal, employed their own force. In addition, the British authorities had contracted the Dougherty Detective Agency to undertake patrols. In spite of this, police and federal investigators noted that there was no gate separating the Black Tom Terminal from adjacent land. Although still referred to at this time as Black Tom Island, a landfill scheme had linked it to the mainland some years before. Those who worked the barges came and went at will and were never challenged or stopped by patrols or security officers. Critical areas of the terminal’s perimeter were unlit. In terms of the waterside boundary it was revealed that no river patrols of any kind were undertaken beyond the occasional passing coast guard or New York City Police boat. Again, lack of lighting on the river side of the terminal would have made it exceptionally difficult for such passing boats to observe any untoward goings on. In fact, the most likely scenario was that saboteurs Franz Jahnke and Lothar Witzke entered the terminal by a small rowboat, while Michael Kristoff made his way in from the land side.

Spence further develops his theory by suggesting a scenario whereby Reilly, Jahnke and Sir William Wiseman, SIS representative in New York, are effectively involved in a loose-knit plot to entice the then neutral United States into the war on the Allied side. Jahnke, it is argued, was more than likely a double agent working for SIS.⁴⁷ According to Spence:

Further outrages did indeed occur. Within six months of Black Tom, residents of New York City once again heard the thunderous roar of exploding munitions. On the afternoon of 11 January 1917, 500,000 three-inch shells ignited at the Canadian Car & Foundry Company’s shell assembly plant in Kingsland, New Jersey, some ten miles from New York Harbour. Thankfully, the shells were not primed with detonating fuses and none of the 1,400 workforce was killed or injured. However, for some four hours those living in northern New Jersey and New York listened to the ongoing explosions as fire engulfed the entire Kingsland plant.⁴⁹

Spence asserts that Jahnke led the German sabotage team responsible for the Kingsland explosion, and states ‘again, Reilly could provide the means to breach the plant’s security’.⁵⁰ As investigation records clearly demonstrate, however, there was no need for anyone to covertly effect an entry into the plant. The official verdict was that one Fiodor Wozniak, who was working in Building 30 where the blaze began, was responsible for starting the fire that led to the plant’s destruction. Indeed, the foreman in Building 30, Morris Chester Musson, later testified that ‘Wozniak had quite a large collection of rags and that the blaze started in these rags. I also noticed that he had spilled his pan of alcohol all over the table just preceding that time’.⁵¹ Wozniak was questioned during an internal company enquiry, and although he denied any involvement, he did admit that he was not Russian, as he had stated when he entered the company’s employment, but was instead Austrian. He further revealed that he had served in the Austrian army and police force. After questioning he was shadowed by private detectives, but disappeared without trace.

Three months after Kingsland, on 10 April 1917, an explosion occurred at the Eddystone Works in Pennsylvania, killing 132 men at the plant. Richard Spence draws attention to the fact that some weeks before the explosion, managing director Samuel Vauclain had been in negotiation to sell the plant to the US government. Reilly, in Spence’s words, was ‘cut out completely’⁵² from the deal. Was the explosion, asks Spence, Reilly’s revenge?⁵³ Again, not a shred of evidence was produced to connect Reilly or indeed anyone else with the catastrophe at Eddystone. Indeed, while Spence rightly states that sabotage was suspected, it was, in fact, never proven or established.

The whole thesis is somewhat fanciful and an example of the conspiracy theory at its worst. Reilly was without doubt a ruthless man who would stop at little to meet his ends. The foundations which support this theory are somewhat shaky, however. The earlier meetings and coincidental journeys by train and ship clearly could not have taken place. As for the acts of sabotage themselves, it seems evident that some were quite simply tragic accidents. Others, such as Black Tom and Kingsland, did not require the kind of covert role attributed to Reilly – poor security and a lack of employee vetting is explanation enough for the ease with which German saboteurs were able to carry out their objectives unhindered.

By 1917, Reilly’s cumulative earnings from war munitions contracts were well over $3 million.⁵⁴ He was now occupying an entire suite at one of New York’s most expensive and luxurious hotels, the Saint Regis on 5th Avenue and East 55th Street. While his fortunes had never looked better, back on the Eastern Front the tide of the war was turning against Russia. Two and a half years of conflict had confirmed that Russia was neither strong enough militarily or economically to meet the challenge of all-out war. Heavy defeats quickly made conditions worse at home, triggering a wave of strikes. These developed into a general strike which began on 9 March.⁵⁵ Two days later the Tsar mobilised army units, but they sided with the strikers. On 15 March, under pressure from all sides, Tsar Nicholas abdicated on behalf of himself and his son and a Provisional Government took power.

Closer to home, a telegram from the German Foreign Minister to the German Ambassador in Washington was intercepted and decoded by British Naval Intelligence. The telegram instructed the ambassador to approach the President of Mexico with a view to them joining the war on Germany’s side and launching an invasion of the United States. When the story became public, President Wilson frantically tried to find an alternative to war, but the Germans sealed their own fate by commencing a policy of unrestricted submarine warfare in March. After three American merchant ships had been sunk, Wilson asked the Congress for a Declaration of War on 2 April, and got it four days later. America’s entry into the war would, in due course, turn its direction decisively in the Allies’ favour.

As these dramatic events unfolded on the world stage, Reilly was, according to virtually everyone who has ever written about him, working behind German lines as a British agent. According to Pepita Bobadilla, who Reilly would later marry, he:

Reilly told his first wife, Margaret, a similar story.⁵⁷ Robin Bruce Lockhart asserts that Reilly enlisted in the German Army and, disguising himself as a colonel, bluffed his way into the headquarters of the German High Command and sat in on a briefing attended by the Kaiser.⁵⁸ In the 1992 revised edition of Ace of Spies, Lockhart challenged John Major’s Conservative government to ‘open a window on the past’ in order that Reilly’s ‘amazing’ exploits in Germany could be made known.⁵⁹ The Official Secrets Act aside, no government could do this, for the reality is that Reilly’s work behind enemy lines was nothing more than a fanciful fabrication on his part. Throughout the Allied offensives at Messines, Passchendaele and Ypres, Reilly was comfortably billeted at the Saint Regis Hotel on 5th Avenue. The only action he saw on the Western Front was in the newsreels shown in Manhattan’s picture palaces.

With America now at war with Germany, the US Bureau of Investigation was charged with the responsibility of tracking down and apprehending any American citizen or alien who might be an enemy spy. Aided and abetted by the Office for Naval Intelligence and the Military Intelligence Division, they avidly set about investigating possible enemy agents and sympathisers. Within days of America’s declaration of war, Roger Welles, director of Naval Intelligence, received a report from Agent Perkins of the US Bureau of Investigation concerning an individual suspected of enemy sympathies.⁶⁰ As a result of reading the report, he immediately ordered an investigation into the subject of Perkins’ report, one Sidney George Reilly.