Despite the fact that he represented himself as an Irishman with a Russian mother, Reilly did not openly associate himself with the self-styled ‘English colony’ in St Petersburg. By the turn of the twentieth century there were some 4,000 British citizens in St Petersburg, most of them living on the Vasilyevsky Ostroff or in the mill districts. Many families had lived in Russia for several generations, and avoided having to become Russian citizens by sending pregnant wives back to England to give birth. It was from among this community that the ‘New English Club’51 was founded in 1905. Unlike the English Club, it was essentially an English membership institution where members drank Scotch whisky and English beer, played football, cricket, golf and billiards and held dinners to mark British national holidays. Among its 400 members was the club president, Ernest Durrent, and his nephew Alfred Hill, who joined British intelligence in the war.52 Alfred’s cousin, George Hill, would also become an intelligence officer and an associate of Reilly’s in the aftermath of the October Revolution of 1917. Another member of the club, Cecil Mackie, who was a secretary at the British Embassy in St Petersburg, later recalled that, ‘at one time we had some doubt as to his right to British nationality, but the matter was never thrashed out’.53
It would take a world war to provide Reilly with the opportunity of making more money than he could actually spend. In the meantime, the ubiquitous wheeler-dealer soldiered on with mixed results in the scramble for naval contracts. A letter written by Reilly on 25 April 1912 to Kurt Orbanowsky gives some very pertinent clues to his relationship with the various players involved in the naval warship programme. The purpose of the letter was, ostensibly, to explain why Blohm & Voss had not been successful with a particular tender:
Dear Mr Orbanowsky,
Yesterday evening I looked into the dock dossier and gather from this that the rejection of our project and the acceptance of the Russian or English offer resulted mainly from technical reasons.
I am at a loss to judge to what extent the General Director K, on the basis of purely technical decisions, can contend the fait accompli. The only contentious point I could discover was that the weight was incorrectly given, for in the N54 project the weight is 15310 and not 15910 – thus, the difference between the two projects is not nearly so great. There is no doubt that a second swindle occurred with the price, and that RSO have been informed about the price of the N project, but this cannot be proved. The final price of RSO project is 4,800,000 roubles (earlier it was 4,960,000). The final price from N is 4,930,500 roubles (compared to 5,175,000 roubles earlier). The final N price is 4,709,000 has for some reason gone totally without mention.
The Count55 informed me yesterday that the General Director K takes great comfort in the hope (I believe as a result of his discussions yesterday with Georg) that the decisions can be changed to his favour. My most recent information is that it is more or less a waste of energy
The engineer from the technical committee who will supervise construction of the dock steamed to England yesterday at the expense of RSO. I heard yesterday from my friend Grigorovich, who is in the south with Georg, that progress made by RSO in their shipyard construction is very admirable. Georg is convinced that everything RSO has ordered will be ready by the date and has sent an enthusiastic telegram to SM. In contrast, Georg found that the situation at N is extremely miserable. Furthermore, I hear that P is as good as delivered and that B himself will leave soon as a precaution. I also hear that Professor B’s days in the interdepartmental commission are numbered because there is opposition to his belonging to the Nicolai direction at the same time.
The general opinion among them is that the gr.Kr56 project will be built after the Admiralty plans. I was strongly advised that you and Bisch should contact Georg often to keep him continuously informed about Putt and their suggestions. Georg is very interested in this and it is very important that his interest is maintained and that in the future he is informed about us directly by you or Bisch and not from P or B. I am furthermore told (but I must have your word that this remains between you and I) that Jach is very unwelcome at Georg’s and that in our own interests we should not send him there. You know how dear this common friend is to me but I consider it my duty to tell you this. It is doubtful whether it is planned to build the gr.Kr in Germany, and indeed there are national and political reasons for this. In regard to the kl.Kr,57 it is probable that no one except B and V would be considered.
On 25 April 1912 Reilly hypocritically complained to Obanowsky of insider dealing.
It can be assumed that the programme will be settled in the Duma at the start of May; there is no doubt that money will be received. Serious work should get going immediately after Easter and the contracts will be allocated by the end of July. During the holidays I will have various opportunities to see my friends and will work with them on the aspects that interest you. For now and wishing you the most pleasant of holidays,
In reality, the letter is a subtle example of Reilly’s ‘divide and rule’ approach to life. He not only casts aspersions on the judgement of Count Lubiensky and his ability to get a more favourable verdict on the proposal, he also tries, in a very underhanded way, to drive a wedge between Orbanowsky and his ‘dear friend’, Lubiensky’s senior colleague Jachimowitz. Ironically, Reilly is the first to complain in this letter about the ‘insider-information’ swindles being perpetrated on Blohm & Voss, but his own hands were far from clean when it came to obtaining the particulars of rival tenders. In September of that year, Sir Charles Ottley, of the British shipbuilders Armstrongs, visited St Petersburg with a view to tendering for contracts.59 Although Armstrongs had initially shown some reluctance to participate, they seem to have been persuaded to do so by Alexei Rastedt, who was ultimately appointed their Russian representative. Alexei Rastedt was no newcomer to the shipping business, and had, several years previously, been one of Reilly’s ‘background men’. When eventually Armstrongs did decide to enter a last-minute tender, this caused much friction between themselves and their Tyne- side neighbours, Vickers, which was gleefully picked up by the St Petersburg press. When the contracts were eventually awarded, there was a very strong suspicion that Armstrong’s bid had been reported to one of their rivals.
Vickers’ ruthless and unscrupulous representative Basil Zaharoff was the biggest player in the arms trade at this time, and it is hardly surprising that his name has been subsequently linked with the equally unsavoury Reilly. Zaharoff was featured as a prominent character in Troy Kennedy-Martin’s television adaptation of Ace of Spies,60 despite the wholesale lack of evidence linking the two. Richard Deacon, who also proffered the theory that Reilly was an Ochrana agent, believed that ‘one of the tasks which the Russian Secret Service set for Sidney Reilly was to build up a dossier on the notorious international arms salesman, Basil Zaharoff’.61 Ochrana records at the Hoover Institute in California and in the State Archive of the Russian Federation in Moscow contain no corroboration for this belief, nor for any kind of association between Reilly and Zaharoff.