In addition to assigning his own men to the investigation of Sidney Reilly, Roger Welles sent a copy of the Perkins’ memorandum1 to Maj. Ralph Van Deman of the US Military Intelligence Division, as it clearly had military implications:
From: Agent L.S. Perkins, New York City 3 April 1917
In Re: SIDNEY G. REILLY: NEUTRALITY MATTER
According to Winfield S. Proskey, consulting engineer for Flint & Co., 120 Broadway, close watch should be kept upon Sidney G. Reilly, Room 2721, Equitable Building, 120 Broadway. Col. Proskey says he has it from Capt. Gaunt of the British Consulate here that Reilly was a spy for the Japanese during the Russo-Japanese war, and is now an enemy of the Allies. Therefore, the conspicuous advocacy of the scheme to present 300,000 discarded Krag-Jorgensen rifles to the Russian army, which has attracted some attention to Reilly, as he seems to be the originator of it, should be looked upon with suspicion. In spite of his name, Reilly is of Semitic origin says Col. Proskey, and is of Oriental appearance. He is denounced by a prominent Russian, Peralstrauss, of 42 Broadway, as a pro-German.
The US Army had discarded the Krag-Jorgensen rifles back in early 1915. At the time it was believed that Franz Von Rintelen, the German intelligence agent, was seeking to purchase the rifles through an intermediary. It was thought that he intended, in turn, to supply them to the supporters of former Mexican President Gen. Victoriano Huerta to aid his restoration to power. Alternatively, his motive could simply have been to deprive the Allied powers of the opportunity to acquire them. At any rate, it seemed to Van Deman that here was a possible link between Reilly and a German attempt to purchase arms. Reilly was, by repute, a British citizen and Van Deman therefore wrote, on 7 July, to Sir William Wiseman requesting any information the British might have on Reilly.2 Wiseman, who was based in New York City, was nominally part of the British munitions purchasing operation and responsible for British propaganda. In reality, the thirty-two-year-old Baronet was head of SIS in the United States. On 9 July Wiseman replied that Sidney Reilly:3
…claims to be a British subject, but doubt has been cast on this and it has been said that he is in reality a Russian Jew. In any case he is married to a Russian Jewess. For the last two years he has been mixed up with various scandals in connection with the purchase of Russian munitions here and his reputation is a bad one. He is said to do a certain amount of honest company promoting, but his chief line of business is collecting brokerages in more or less dishonest ways on any contract that he can possibly have something to do with. Reilly is said to have been at Port Arthur in 1903, where he was suspected by the Russians of acting as a spy for the Japanese. While in this country, during the present war, he has been mixed up with various undesirable characters and it would not be in the least surprising if he was employed by enemy agents in propaganda or other activities.
This letter no doubt spurredVan Deman to extend the investigation further in order to identify the ‘various undesirable characters’ referred to by Wiseman. The investigation itself was deputed to APL agents Hollis H. Hunnewell and Abel Smith, who worked under the supervision of McGregor Bond of the Office of Naval Intelligence. He in turn sent copies of all reports and memorandums to Lt-Col. Townsend Irving of the Military Intelligence Division. Not being experienced professional investigators, Hunnewell and Smith soon found themselves sinking into the mire of Reilly’s complex personal and business relationships. One suspicious character seemed to open the door to several others. Before too long the investigation was taking on a momentum of its own. This may be one reason why it went on for so long. Neither were the investigators helped by the fact that within six months of Agent Perkins’ memorandum, Reilly left New York and proceeded to Toronto to join the RFC. He was therefore absent for the remainder of the war and indeed for the remainder of the investigation. While it is clear that Hunnewell and Smith were certainly more than successful in tracking down a large number of individuals who were able to supply information, they seemed unable to successfully interpret what they found or discriminate in favour of what was relevant and meaningful. A seasoned investigator would no doubt have done a more circumspect job, but would not have committed to paper the same wealth of detail and trivia as Hunnewell and Smith. To them we should be eternally grateful for inadvertently documenting, in such depth, the many dimensions of Reilly’s life in New York.
Indeed, there seemed to be no shortage of people who were willing to come forward and testify against Reilly, which is not surprising given his ruthless approach to business. During the two and a half years he had been in New York he had undoubtedly crossed, or more to the point, double-crossed, a good many people. Norbert Rodkinson was one such person. Described in the reports as an Englishman,4 Rodkinson is very much an enigma. He had lived in Russia for many years and now worked in New York for the brokerage firm Wagner & Company of 33 New Street. He told the investigators that Reilly’s reputation as a spy and scoundrel was well established in Petrograd. He also commented on Reilly’s marriage to Nadine, stating that it must be bigamous, as Reilly already had a wife and two children who had until recently been living in Port Arthur.5 He further added that Reilly had sent them to Petrograd in 1916 where they had been left in ‘dire straits’. The English colony in Petrograd had apparently taken up a collection for the family ‘so that they could exist’. An Englishman by the name of Fred Hill is named in the testimony as being responsible for the money that was donated.6 Rodkinson also confirmed his belief that Reilly had not been born in Ireland but in the town of Bendzine in Poland and claimed that both Reilly and Alexandre Weinstein asked him to transact business for them when he arrived in New York in 1916, but knowing of their ‘evil reputation’ he refused.
Col. Proskey, a consulting engineer for Flint and Company, the man who had sparked off the enquiry in the first place, told the investigators that he considered Reilly, ‘one of the most astute and dangerous international spies now at large’.7 It was well known, he said, that Reilly was a crook and an enemy of the Allies. He restated his earlier charge that he had spied for Japan and introduced the investigators to John F. Cordley, also from Flint and Company. Cordley identified Alexandre Weinstein as Reilly’s right-hand man and described the pair as ‘dangerous’. In his view they would ‘do anything for the almighty dollar’.8 Cordley believed that Reilly had been educated at the University of Berlin, and stated that in 1914 he had visited Japan, but not ‘as a member of the Russian Purchasing Commission’.9 He further ventured that Reilly was said to be an officer of the Allied Machinery Company, and had made $1 million in Russian contracts.10
The Bureau’s enquiries indicated that Weinstein was born in Kiev, Ukraine, in 1873,11 where his father was a prominent banker. However, he was believed to have run a brothel there and served a prison sentence for bribery. Maj. Norman Thwaites, Wiseman’s SIS deputy, was approached and permitted Hunneman and Smith sight of MI5 material on Weinstein, which indicated that he was viewed as an undesirable character during the eighteen months he spent in London. He was also reputed to have done business with German firms during this time in London. Another report from Thwaites stated that ‘Weinstein claims to be a Russian and professes strong pro-British and pro-Ally sentiments but assurances have been received on good authority that he is in touch with prominent Germans’.12 Known to be a gambler and womaniser, he resided at 60 St James’s Street in Mayfair and had a reputation as an extravagant spender. This was hardly surprising, given that he had earned some £800,000 in commissions during the time he was in London.13