The Sword and the Shield: The Mitrokhin Archive and the Secret History of the KGB

De Ry, meanwhile, was providing Bystroletov at meetings in Berlin with a mixture of genuine diplomatic documents (Italian ciphers probably chief among them) and colorful inventions. According to Bystroletov, when asked whether some of his material was genuine, he replied indignantly, “What kind of question is that? Of course they are… Your Japanese are idiots. Write and tell them to start printing American dollars. Instead of paying me 200,000 genuine francs, give me a million forged dollars and we’ll be quits.” The Centre was taken in by at least some of de Ry’s inventions. Possibly to disguise the fact that he was also trying to sell Italian ciphers to the French and other purchasers, he claimed that Mussolini’s son-in-law, Count Galeazzo Ciano di Cortellazzo (later Italian foreign minister), had organized “an extensive trade in ciphers” and, when a cipher was missing from the Berlin embassy, had ordered the liquidation of an innocent scapegoat to divert attention from himself. Since the OGPU believed that Western intelligence agencies, like itself, organized secret assassinations, it had surprisingly little difficulty in crediting de Ry’s improbable tale.²⁸ De Ry appears to have tried to deceive the OGPU on two other occasions by putting it in contact with bogus officials who claimed to have German and British diplomatic ciphers for sale. ²⁹

The Centre attached great importance, however, to an introduction provided by de Ry to his friend the Paris businessman Rodolphe Lemoine, an agent and recruiter of the French foreign intelligence service, the military Deuxième Bureau.³⁰ Born Rudolf Stallmann, the son of a wealthy Berlin jeweler, Lemoine had begun working for the Deuxième Bureau in 1918 and acquired French citizenship. Intelligence for Lemoine was a passion as well as a second career. According to one of his chiefs in the Deuxième Bureau, “He was as hooked on espionage as a drunk is on alcohol.” Lemoine’s greatest coup was the recruitment in 1931 of a German cipher and SIGINT clerk, Hans-Thilo Schmidt, whose compulsive womanizing had run him into debt. For the next decade Schmidt (codenamed HE and ASCHE by the French) was the Deuxième Bureau’s most important foreign agent.³¹ Some of the intelligence he provided laid the foundations for the breaking of the German Enigma machine cipher by British cryptanalysts in the Second World War.³²

After Bystroletov had made the initial contact with Lemoine (codenamed REX by the Deuxième Bureau and JOSEPH by the OGPU), he was instructed to hand the case over to another, less flamboyant Soviet illegal, Ignace Reiss (alias “Ignace Poretsky,” codenamed RAYMOND) so that he could concentrate on running Oldham. At meetings with Lemoine, Reiss posed initially as an American military intelligence officer. Lemoine appeared anxious to set up an exchange of intelligence on Germany and foreign cipher systems, and supplied a curious mixture of good and bad intelligence as evidence of the Deuxième Bureau’s willingness to cooperate. An Italian cipher which he provided in May 1931 seems to have been genuine. In February 1932, however, Lemoine reported the sensationally inaccurate news that Hitler (who became German chancellor less than a year later) had made two secret visits to Paris and was in the pay of the Deuxième Bureau. “We French,” he claimed, “are doing everything to hasten his rise to power.” The Centre dismissed the report as disinformation, but ordered meetings with Lemoine to continue and for him to be paid, probably with the intention of laying a trap which would end in his recruitment.³³

In November 1933 Lemoine brought with him to meet Reiss the head of the SIGINT section of the Deuxième Bureau, Gustave Bertrand, codenamed OREL (“Eagle”) by the Centre. To try to convince Bertrand that he was an American intelligence officer willing to exchange cipher material, Reiss offered him Latin American diplomatic ciphers. Bertrand, predictably, was more interested in European ciphers.³⁴ Soon after his first meeting with Bertrand, Reiss informed Lemoine that he worked not for American intelligence but for the OGPU. The Centre probably calculated that it had caught Lemoine in a trap, forcing him either to admit to his superiors that he had been both paid and deceived by the OGPU or to conceal that information and risk being blackmailed into working for the Soviet Union. The blackmail failed.³⁵ Lemoine had probably realized for some time that Reiss, whom he knew as “Walter Scott,” worked for Soviet intelligence. Reiss had several further meetings with Lemoine and Bertrand, at which they exchanged intelligence on Italian, Czechoslovak and Hungarian ciphers.³⁶