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:
I had been asked to investigate certain charges brought against the Russian War Mission in New York. Reilly knew them and gave a clean bill of health. I came to the conclusion that our Russian friends were giving themselves a good time in the hospitable city on the Hudson, but I could find no evidence either of graft or of enemy contacts.41
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: