Authors: Nick Barratt
This was a stunning success but had eaten up precious months. By the time he was able to join Bazarov in Paris towards the end of 1930, several meetings between Da Vinci and Charlie had already taken place to continue the handover of material, but Bazarov had made little progress in finding out any more about the mysterious Briton’s background. He remained as cagey and elusive as ever. Bystrolyotov and Bazarov therefore hatched a plot designed to win Charlie’s confidence – posing as Perelly, Bystrolyotov showed up at a restaurant where Bazarov and Charlie were meeting, claiming to have mixed up the time of his own rendezvous. Joining the two men, Perelly introduced himself and, when Bazarov made an excuse to leave temporarily, started to explain his own dealings with OGPU. Perelly claimed that he had been ruined by the Great War and turned to Bolshevism, eventually taking money from OGPU to maintain his lifestyle with the result that he was now beholden to Bazarov and could not extricate himself.
Thus the ‘good cop, bad cop’ dynamic had been established. Returning to the meeting, Bazarov assigned Perelly to work with Charlie and oversee the transfer of future information, with Perelly beseeching Charlie to help him deal with ‘that cruel and angry Bolshevik, Da Vinci’, and give him what he needed, otherwise Perelly would pay the price. However, Charlie refused to thaw during the next few meetings, held in Paris over several months.
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Frustrated that the Perelly story had failed to elicit the sympathy that he had hoped for, Bystrolyotov decided to break the cardinal rule that had been laid down by Charlie and brought in PEEP and ERIKA to help shadow him. Remarkably, despite several attempts to follow Charlie back to his accommodation, he gave them the slip every time – the man seemed to know the back streets of Paris remarkably well for a modest Foreign Office typesetter, leading Bystrolyotov to suspect that he possessed some form of counter-surveillance training.
In desperation, Bystrolyotov tried another tack at their next meeting and plied Charlie with alcohol. He certainly seemed to like a drink, but despite showing signs of inebriation when they parted, Charlie was still sufficiently possessed of his wits to be able to spot Bystrolyotov following him in the crowd. More amused than annoyed, Charlie told him to ‘stop playing the
street spy’ and suggested a new venue for their next meeting – an address in Paris where he said his relatives lived. Buoyed by this apparent slip, rather than suspicious at the ease with which he’d secured personal information, Bystrolyotov raced to the apartment the next day only to find that Charlie had tricked him – it was the site of a demolished building.
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The game of cat-and-mouse continued throughout 1931, until one day ERIKA had a stroke of luck – she spotted Charlie dashing into the foyer of the Hôtel Napoleon, a rather grand establishment not far from the Arc de Triomphe. Mindful that this might be another attempt to shake any pursuers, she cautiously followed him inside where she spotted him requesting a room key from the main reception desk; he entered an elevator and disappeared out of sight. ERIKA approached the desk and asked which room the man was staying in, and was told he had booked into room 86 on the third floor. She slipped away to report her findings to Bystrolyotov, who returned immediately and checked into the Hôtel Napoleon himself. It did not take him long to extract the information he was looking for – Charlie had registered as Ernest H Oldwell.
With another meeting imminent, Bystrolyotov bided his time until the point when Charlie needed to leave the hotel to make his way to the agreed rendezvous and took direct action – adopting his Perelly guise, he burst into Charlie’s room, asking him to forgive the intrusion on account of an emergency that had arisen which necessitated a change in the time and location of their meeting. Charlie was furious, but relented somewhat when Perelly explained that he was being sent to Turkey on an urgent OGPU mission. Perelly apologised profusely once again, bowing as he left the room – but in doing so, managed to spot Charlie’s travel bag in the corner with the monogram ‘EHO’ embossed on the side.
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Initial checks showed that there was no-one with the name Oldwell in the Foreign Office but Bystrolyotov reasoned that EHO still represented Charlie’s real name, given the monogrammed case. He also deduced that a Foreign Office employee in Paris was almost certainly connected with the forthcoming League of Nations meeting in Geneva, since the French capital was used as a base for daily diplomatic correspondence between London and Geneva. The
most likely destination for EHO was therefore the Hôtel Beau Rivage, where UK delegates traditionally stayed. This was the perfect cover for Bystrolyotov. In the words of Antrobus, who regularly made the Paris to Geneva run:
A vast concourse of politicians – for that is what a League meeting amounted to – is bound to bring all the ragtag and bobtail of the earth sniffing at their heels. Never, I suppose, were more secrets divulged than at one of these meetings. All the paraphernalia of leakage on a grand scale there assembled. The delegates were mostly amateurs, politicians or freelances, not professional diplomats; the press of every country was there in force, ready to extract the juices of their fat prey; worst of all, the place swarmed with spies and secret agents who, I imagine, got what they wanted handed to them on a plate.
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In this febrile atmosphere, Bystrolyotov stalked his target. It could not have been made any easier for him to find the identity of Charlie, as a list of delegates and attendees had been posted in the hotel lobby. Scanning the names, he located someone amongst the British delegation that was a perfect match for the initials EHO. Bystrolyotov did not have long to wait to test his theory, as he soon spotted the man he knew as Charlie take a seat at the hotel bar. Quietly, Bystrolyotov walked across the foyer and slipped into the seat next to him, without saying a word. The man’s face drained of colour as he recognised Perelly and knew his cover as Charlie had been blown.
Unmasked as the mole in the Foreign Office, Ernest Holloway Oldham must have immediately realised that he was now in the clutches of OGPU. He could no longer rely on anonymity to protect him. In a blind panic, he dashed from the bar, gathered his things together and fled Geneva at the earliest opportunity.
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Attach complaint received from Commander Cotesworth regarding Mr Oldham’s behaviour in September and October last. Mr Oldham left the office on 9 November and has not been seen since. He has neither telephoned nor written to give any explanation for his absence. Suggest that an official letter be sent to him asking for an explanation of absence and failure to report the cause of it and telling him that he will be required to send in his resignation if he takes further unauthorised leave
.
E
NTRY IN
F
OREIGN
O
FFICE DAY BOOK
, 14 N
OVEMBER
1931
Why? The burning question – why would Ernest Holloway Oldham risk his career and freedom to sell codes to the Soviets? – is hard to answer. The risk was indeed enormous.
By 1929 Oldham held an important position within the Foreign Office at the heart of Britain’s diplomatic network. He was responsible for the King’s Messenger routes across Europe and he was in control of the security of the cipher codes for British colonies around the world. If caught, his actions would at the very least warrant a criminal charge and it could be argued that they were tantamount to treason, given he started selling information during a period when Britain had severed its diplomatic ties with the Soviets precisely because of this sort of activity. His actions do not appear to have been driven by ideology – the lengths he took to preserve his anonymity were hardly consistent with a communist supporter. It leaves the main motivation as money. This tallies with the obvious look of desperation painted across his face when
he first spoke to Helfand and the ludicrously high financial demands that he made in July 1929. However, this simply raises another question – what happened to Lucy’s inheritance?
As we’ve seen previously, the remnant of Thomas Wellsted’s estate was tied up in trusts to provide an income for his children, the £600 per year that Lucy received. If all factors are taken into account – global travel, overseas private schooling for her children, rented apartments in Kensington prior to the capital outlay involved with purchasing a new house in Pembroke Gardens and a penchant for luxurious living – then it is easy to see how Lucy’s income may well have diminished quite rapidly. However, Wellsted had made other stipulations in his will. Lucy was to enjoy the proceeds of the trust fund set up for her children only until they reached 23, when they would receive the money directly, as well as their share of the investment fund.
In addition, her annual net income from the fund would only be paid on the condition that she remained unmarried. As soon as she married Oldham, the other trustee – the bank – would then have the right to administer the money as they saw fit, bound by a clause that the money should be expended for educational purposes. Her oldest son Thomas reached the age of 23 on 3 April 1927 and her marriage to Oldham meant that the other half of the estate ought technically to have been administered by the bank until her second son attained his majority in 1936. These conditions put Lucy’s financial affairs in a very different light and indicated that the couple was deeply concerned about access to money. Indeed, Oldham was negotiating a loan of £2,000 with Eagle Star and British Dominions Insurance at an interest rate of 4.5 per cent, using 31 Pembroke Gardens as security for the mortgage. This suggested that they had seriously over-extended themselves.
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Records also show that Lucy and her husband had dabbled in the stock market. Their solicitors, Walbrook and Hoskens, used the brokers Messrs Laurence Sons and Gardner of 11 Copthall Court, not far from where Wellsted had worked in the City. At some point after her arrival back in England, Lucy had invested alongside Mr D W Rees in Port of London 6 per cent inscribed stock 1930/1940. She decided to take the earlier repayment
option, cashing £951.8.9 in July 1930. Oldham had invested in a company called Visual Education Ltd in 1928, perhaps persuaded that this was a sensible move by his first-hand knowledge of his parents’ teaching profession.
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This was a dangerous time to be speculating. Prior to the great Wall Street Crash, there were runs on the stock markets in March and May in 1929, but during the summer there were steady gains, peaking on 3 September – after Oldham’s first contact with the Russians in Paris. Indeed, the London stock market only crashed on 20 September, while Wall Street suffered increasingly severe crashes on 24, 28 and 29 October (Black Thursday, Black Monday and Black Tuesday respectively) under the weight of of panicked selling. Lucy’s former dinner companion, President Herbert Hoover, was powerless to prevent the economic catastrophe that marked the end of the roaring twenties and the start of the Depression.
It is likely that these global events greatly exacerbated the Oldhams’ financial discomfort from risky stock market speculation, as well as the impact of the market turmoil on the trust fund, which would have further diminished their income. Perilously close to the brink, Oldham may well have been mindful of the rules governing bankruptcy in the civil service, which were circulated several times during his tenure in the Foreign Office. The general Treasury Chambers guidelines stated that:
A civil servant who becomes a bankrupt or insolvent must, under pain of dismissal, at once report the fact to the Permanent Head of his Department.
In such cases, the officer concerned should be required at the earliest possible moment to submit a complete statement of the facts of his case to the Head of his Department who will decide, in his discretion, whether the circumstances are such as to call for disciplinary action, it being understood that, if the officer who has become bankrupt or insolvent has committed any act of dishonesty or has otherwise acted discreditably he will be dismissed. The Department should take steps to prosecute the offender if there is evidence of the misappropriation of public monies.
Pending the result of the Departmental Inquiry into his case, the officer concerned should be continued in his post, unless there is
prima facie
reason to believe that public monies have been or are likely to be involved, in which cases he should be suspended;
Provided always that in no circumstances can a Civil Servant who is bankrupt or insolvent, continue to be employed on duties involving the handling of money.
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Under these guidelines, Oldham would have been suspended and – even before his illegal activities in France – have faced demotion to a position of lesser importance or even dismissal, bringing to an end his career and flamboyant lifestyle. Perhaps it was a fear of losing everything that drove him to roll the dice in one desperate gamble, trying to remain anonymous whilst he rebuilt his finances so that he could break with the Soviets on his terms at a time of his choosing. It certainly seems to be the case that Lucy’s determination to cling to her luxurious lifestyle was a key factor.
Given the enormous pressure this deception placed upon him at work, as well as the professionalism of the agents he was pitted against, an even harder question to answer is how Oldham managed to get away with leading a double life for so long. From July 1929 to September 1931, he was able to not only obtain cipher codes and important communications from his own department, transport them to France and find the time to deliver them initially to the Soviet Embassy and then to his handlers, but he also kept the OGPU illegals at bay without detection. No wonder the Soviets suspected him of being more than just a clerk, although it was his familiarity with the streets of Paris during his time at the Peace Conference as well as in support of the League of Nations that clearly paid off. Furthermore, it is possible that he had retained his knowledge of basic spy craft from his abortive attempt to join Military Intelligence in 1918, honed through a long working relationship with various security officers within the Foreign Office, along with a good knowledge of the importance of personal safety while travelling in Europe on King’s Messenger business.