The Spy Who Painted the Queen

by Phil Tomaselli

  The committee feel –

  That they have no proof of these documents

  That they have no proof that they ever reached László

  That even if the originals did come into existence it might have been fraudulently prepared:

  By someone who desired to do László a bad turn;

  By someone who desired to sow the seeds of discord between England and France, and took this very clever and adroit way of doing it.

  It goes without saying that if the contents of the letter are true, László’s punishment ought not to be internment but the severest penalty which the law can inflict.

  The committee says that there is –

  No object proof

  No very strong grounds for suspicion

  They however came to this conclusion, that:

  Having regard to what László did in corresponding with an enemy country, and even accepting his explanation thereof

  Having regard to his position, which enables him to collect information and

  Having regard to his indiscretions and the way he repeats what he hears, whether innocently or with a sinister motive they could not advise the home secretary to allow him to be entirely free – they say this though they are greatly impressed by the testimony of his good faith, which all the eminent witnesses called on his behalf have spoken to.

  Then comes the difficulty of knowing what to do with the safety of the realm, in the case of a man who, in view of the facts, is likely to disseminate information, not with a sinister motive, but because he is, as his own witnesses say, talkative and indiscreet.

  No one of the committee thinks that it would be sufficient only to censor his correspondence – that would prevent letters reaching him but would not be a safeguard against letters going from him – is it possible then to suggest some method that would offer a middle course in this matter? It need hardly be said that no member of the committee is desirous of interning an artist of international standing for any length of time if it can be possibly avoided. The committee feel that upon the question of internment they are entitled to weigh carefully the views of Colonel Kell and Basil Thomson as to what would be an adequate safeguard which all the committee have in view, viz the safety of the realm.

  Colonel Kell seems to think an internment order pure and simple would be sufficient, Mr Basil Thomson on the other hand thinks that if De László could be secluded for a time any threads of communication which he might have between Holland and this country would probably be snapped, and he would not be able to resume communication if he should desire to do so.

  Now the committee feel, in this case, that the object they must try to secure is the greatest safety of the realm, coupled with the least injustice to De László, and after considerable hesitation they think that the best advice they can give to the home secretary is to intern De László to a date in December, say the 21st. It may be before the 21st December circumstances will have arisen which render the further internment of László unnecessary, but if on the 21st December László is still in internment, the committee think that his case ought to be reconsidered by then.

  On 7 November 1917 De László was removed from his small cell at Brixton and taken by taxi to the Internment Camp at Holloway. The camp had formerly been a workhouse rather than a prison, so was without the high walls, bars and gates he had hated so much at Brixton. He was placed in the former infirmary building, which he shared with other naturalised British subjects, and was given a large room with four windows, which contained the furniture of the former resident Baron von Bissing (brother of the former German governor of Belgium, interned in 1915 and recently released to house arrest on grounds of ill-health), who had arranged with Lucy De László to leave it (and Von Bissing’s personal servant) for him. Among his companions were Dr Whitehead, an Austrian-born chemist naturalised in South Africa, and Herr Ahlers, former German consul-general, both interned after the sinking of the Lusitania. It was an altogether more congenial arrangement than at Brixton, and De László was given a place at the ‘aristocrat table’. Here, he described:

  We were served by a waiter from the German camp and our cook had been a chef at the Hotel Cecil. I felt happy to be among intelligent men, to have a comfortable room and to be able to go out into the garden when I liked … I thanked God that I was able to sleep in a decent bed again, and was free of the cell door with the observation glass in it which had upset my nerves so much at Brixton.

  6

  NAMES, ADDRESSES AND

  THE ELUSIVE MADAME G

  DE LÁSZLÓ WAS certain to launch a further appeal against his internment to Lord Sankey and the internment review committee. To preserve the secrecy of MI5’s involvement as far as possible, Thomson took over the case and contacted Bigham in Paris directly asking for information.

  Bigham’s reply set out carefully the conditions on which the French were prepared to assist. Their conditions, quite natural given the highly secret nature of their source, were to hamstring any future attempts to prosecute De László for espionage. Having sent translations of three letters he went on to explain:

  These were got at the house of the Austrian Military Attaché at Berne, but neither this, nor the fact that we have received them from the French must be alluded to in any way whatsoever … I have had them retranslated into English so that if it is necessary to suggest they were procured from an agent it may be presumed it was from one of our own people. This is what the French desire and I have promised that we would not do anything that might disclose the means they had of getting the information.

  At some date (probably the end of September 1917 as it was forwarded to the Home Office on 29 September), MI5 received a copy of another letter to De László from Geneva, from the same source that had produced the letter dated 14 June (which tends to preclude Maundy Gregory as the agent who obtained it). It read:

  My dear friend

  Don’t bear me malice if I charge you with a new mission. I will not charge you with explications, reasons etc. Those are things only necessary with people whose zeal needs warming up and we are not like that. I ask you to collaborate with us in our pacifist propaganda. As soon as I receive your reply I will let you have details.

  I am very anxious about Madame G. Be on your guard. Have I told you already that my brother in law died suddenly some weeks ago. He left a very large fortune.

  Though too late to be used before the committee, this seemed to confirm the connection with the mysterious Madame G and the involvement of De László with pacifist propaganda.

  There was a growing necessity, for Austria at least, to pull out of the war. By early 1917 Austria-Hungary was in deep trouble and in desperate need of peace. The old emperor, Franz Josef, whom De László had so esteemed, had died in November 1916 and been succeeded by Karl, nephew of Archduke Franz Ferdinand whose assassination had precipitated the war. Karl was painfully aware that the country was on the verge of collapse. It had gone to war optimistic of a rapid victory over both Serbia and Russia and had suffered severe casualties on both fronts. By early 1917 there were nearly two million Austro-Hungarian prisoners in Russia alone. Italy’s surprise (and to the Austrians, treacherous) entry into the war on the side of the Allies in May 1915 created a third front. Even though the Italians behaved in exactly the way caricatured in Blackadder Goes Forth and Oh! What a Lovely War, hurling poorly armed and trained troops against a series of well-defended positions, they still inflicted a growing number of casualties as they inched forward and gradually learned the lessons of modern warfare.

  Over the winter of 1915, Austria had already called up men aged between 49 and 53; there had been food riots during 1915 too and the harsh winter of 1916–17 made things far worse. Industrial output was in steep decline and coal production was falling rapidly because so many miners had been called up. The British knew this perfectly well because a Foreign Office official, W.G. Max Müller, was producing a series of analyses of Austria’s economic performance. The ever-vigilant cen
sorship service had also been picking up information about conditions within Austria-Hungary throughout the war. From mail carried on neutral steamers (which were diverted into British ports throughout the world and the mail they carried opened) came stories of rationing, failing food supplies and near-starvation. A letter from Moravia to the United States, written in August 1916, complained:

  Oh! It really is enough to drive one mad. The people tear the potatoes out of the earth when they should still be flowering to have something for their hunger. Really you cannot believe the awful hunger … If we starve you cannot help us: and that is bound to happen if the war does not come to an end soon.

  A letter from Budapest to the USA in October 1916 read, ‘Many things are 5 and 10 times as expensive in peace time. From last week we have two meat and fishless days and 1 greenless day. Silver is fast disappearing, a few days ago all the nickel and copper coins had disappeared.’ Another writer wrote, ‘We have quite enough poverty here, they are taking away the corn, removing the bells from the churches, sealing up the grain and do not allow it to be ground.’ A letter from Hungary to the United States in November advised that all corn and maize had to be delivered to the military authorities, that they had not had sugar or oil for three months and that no meat could be purchased. It was clear that government rationing schemes weren’t working; a relatively wealthy peasant wrote that the government had taken over the provision of food, but even they couldn’t provide something that didn’t exist. Another writer told his American relatives that everyone had had to give up their copper and brass utensils and the churches had had to donate one or two of their bells. The censors noted that their Austrian equivalents had previously carefully deleted any references to these kind of matters (not realising the British censors could ‘restore’ the deletion), but now they seemed to be letting them through.

  It was becoming clear that it was only a matter of time before the empire collapsed. The emperor Karl had been warned by his foreign minister, Count Czernin, that the exhausted state of the army and food shortages might result in revolution and rebellion among the many nationalities that made up the empire. With the Allies beginning to discuss future peace terms, giving liberty to those very minorities, Karl approached them with terms of his own in March 1917. These included German withdrawal from Belgium and France (including Alsace-Lorraine), and Serbian independence. There were no proposals dealing with Italy so the Allies rejected them. Conditions in Austria were continuing to deteriorate, however, and peace was becoming increasingly necessary. It was in this environment that allegations of De László spreading pro-Austrian peace propaganda among his upper-class clients caused such concern.

  The Elusive Madame G

  Though De László’s hearing was told that it had not been possible to locate the elusive Madame G, there is one indication that perhaps MI5 managed to do so, but were unable to make the case for an arrest. There are two index cards for Foreign Office correspondence for 1918 at TNA naming Leopold Samuel Gompertz and Henrietta Charlotte Gompertz. They were allowed to leave Britain, but only with a visa that specified they were not allowed to return. The file that the papers are related to still exists (unfortunately without most of its contents), and the covering memorandum was issued by MI5.E.2. which had clearly circulated the latest list of non-return visas to military control offices around the world.

  The Madame G in question had been born on 3 February 1864 in Frankfurt Main as Henrietta Charlotte Wetzlar, daughter of a prominent Austrian banker. She had married Leopold Gompertz, of the Gompertz banking family, in Amsterdam in 1885. Leopold presumably represented the Wertheim and Gompertz Bank in London.

  In April 1915, MI5 had been warned by Consul Maxse in Rotterdam that the Germans were buying the services of Dutch agents who were to live in London and report from there. Dutch researcher Edwin Ruis, an expert on the intelligence activities of both sides in Holland, advises:

  Many Dutch Jews were originally from Germany or the Habsburg empire and sympathetic to Germany. German intelligence officers did recruit German wives of Dutch citizens to spy. A famous case is Dr Willy Brandt who did not only recruit the known spy Lizzy Wertheim, but who also tried to recruit other German women in the Netherlands.

  Brandt, whose doctorate was in economics, had recruited agents for the army intelligence Sektion IIIb, and from December 1914 worked for German naval intelligence. MI5 was certainly aware of Dr Brandt’s existence as his name and address had been signalled (presumably by Tinsley of SIS or Consul Maxse) to them on 6 February 1915 as being a post box used by the German secret service, and his address was put on the censorship watch list. Brandt is also named in MI5’s historical report on convicted spy Lizzie Wertheim as being her German contact in Holland (National Archives reference KV 1/42).

  The firm of Wertheim and Gompertz was under suspicion in its own right. In July 1915 the AlgemeenHandelsblad newspaper had reported that the bank had received 100 cases of gold to the value of 5 million kronen from the Austrian government. In October 1915 it was suspected of being involved in the shipment of gold from Germans in the USA to Holland for the credit of German banks.

  On 6 December 1915 the chief censor advised the Foreign Office:

  Wertheim and Gompertz of 30 Amstelstraat, Amsterdam, are the Firm with whom Sutro Brothers and Company, of New York, suggested the arrangement of a cable code to deceive the Censor into thinking that sales of securities on account of Amsterdam (and therefore possibly Germany) to New York were really sales by New York to Amsterdam. Sutro Bros and Company, of 44 Pine Street, New York, have a branch office in Berlin under Meyerhof who is presumably the man mentioned in Sir C Spring’s telegram. Wertheim and Gompertz are apparently the channel for messages, gold and securities between Meyerhof of Berlin and Sutro Brothers of New York (or the National City Bank of New York).

  The British Admiralty intercepted a telegram, dated 1 November 1915, from National City Bank, New York, to Ernst Meyerhof & Co., Berlin, reading, ‘Inform Wertheim and Gompertz that we will ship the gold to the extent of their credit balance under their risk our responsibility to end with delivery of gold to steamship.’

  Wertheim and Gompertz were closely aligned with the American bank Kuhn Loeb, and Sir Ernest Cassel, in railways and similar dealings. Sutro Bros was a New York investment bank that was basically a subsidiary of Kuhn Loeb. The British were well aware that a link to Kuhn Loeb meant one to Paul Warburg, the naturalised American banker of German origin, to one degree or another, and that meant a link to Germany, where Warburg remained a partner in his family-owned bank.

  Sutro Bros had been founded by Lionel and Richard Sutro, American-born brothers of German-Jewish ancestry. The leading figure during the war was Richard, amongst whose friends was Kuhn Loeb’s Otto Kahn. American Bureau of Investigation (the predecessor of the FBI) files contain nothing on Richard Sutro or Sutro Bros per se, but they do note that Theodore Sutro, a New York attorney, possibly a German-born cousin, was very active in the German National Alliance and later the Friends of Peace, which brought him under suspicion. There is also mention of a Victor Sutro, a broker with Sutro and Kimbley, who shows up as a suspected pro-German.

  Because of these suspicions, Wertheim and Gompertz were placed on the British government’s trade black list and a number of their securities in London were seized. It was only in mid-1916, after they joined the Netherlands Overseas Trust, an organisation founded in November 1914 to control Dutch trade and guarantee that imports were not re-exported to Germany, that they were gradually removed from the black list and able to resume dealings abroad.

  While investigations into Madame G were carried out, MI5 took De László’s address book and ran his contacts through its, by now extensive, index of suspects. Every report submitted to MI5 by its own small number of agents, by the police, SIS agents abroad, the censorship department and naval intelligence’s worldwide network of naval consuls, as well as from the public and press, were examined by officers and marked for indexing in a huge ca
rd index. Cards were generally held under the name of a person but suspect addresses were also ‘carded’ and there were various subject headings, all of which had to be cross-referenced. The whole business of carding, cross-referencing and filing was carried out by teams of mainly women clerks recruited from businesses, the best schools, and women’s colleges at university. Like the officers, many of them spoke several languages and some had travelled extensively. It was hard work. Sir Everard Radcliffe recorded in his unpublished memoir, ‘We were kept very hard at work at MI5, having one Sunday in two free, and a very occasional half day, and having to do one all-night duty once a fortnight.’

  As well as the initial carding and cross-referencing, the women staff also did the ‘look ups’, finding references to suspects from previous reports. This required a lot of ingenuity, and knowledge of foreign languages was invaluable in trying to tease out possible misspellings of foreign names or addresses. They would draw up a list of definite, likely and possible matches and submit them to the officer who would then examine the suggested reports in detail and decide which were relevant. When sufficient information was gathered to convince them that the suspect required it, the reports were copied and filed together in a Personal File (PF). These were initially held alphabetically but the system was changed to a strictly numerical sequence when it was realised it made filing easier; new files could be added to the end of the run rather than having to slot them into place. Other information, once analysed, was used to draw up black lists of suspect companies and addresses to be used by port security officers examining travellers entering the country and for consuls and passport control officers abroad who issued (or didn’t issue) visas for foreigners to visit the UK or the empire.