The Spy Who Painted the Queen (5 page)

During the war, the Special Section officers found themselves having to exercise much greater discretion than previously over whether a particular piece of correspondence should be photographed or copied, or have extracts copied or tested for invisible ink. Their expertise in identifying codes within telegrams resulted in the belated discovery of two German agents, Haicke Marinus Jannsen and Willem Johannes Roos, after a retrospective examination of over 200,000 sent telegram forms, when it was feared that naval intelligence was reaching Germany by this route and being missed by the normal censorship. Roos and Jannsen were shot in the Tower of London. Some highly trustworthy postmasters in the rest of the country were trained in their methods but, as they pointed out in a report:

To the inexperienced the opening and re-sealing of a letter once demonstrated appear to present little difficulty, but except when dealing with the simplest type of envelope, it is found that the novice's handling betrays itself on close inspection. The expert opener is able to avoid difficulties which the novice does not foresee, he is able to remedy accidents, to remove incriminating traces of his operations, to adapt his methods to the emergency.

London-based suspects such as De László continued to be monitored by the three Special Section officers. The normal Censorship Department was not aware of this arrangement, or of any special checks to be made on De László's correspondence until July 1916.

Robert Nathan, the MI5 official leading the investigation at this stage, had joined the organisation on 4 November 1914. A 48-year-old Indian civil servant, he had returned home on sick leave and been sent to serve as an interpreter to the Indian troops at the front, then joined MI5, where his previous experience in counter-terrorism work was most useful. Educated at St Peter's College, Cambridge, he was a qualified barrister. Joining the Indian civil service in 1888, he had held a number of important posts, including private secretary to the Viceroy. Whilst commissioner of the Dacca Division, Eastern Bengal, in 1907, he had, working pretty much on his own, uncovered the Anusinal Samitia nationalist terrorist organisation in Bengal. He was later officiating chief secretary to the governor of Eastern Bengal and Assam and president of Dacca and Patna University committees. He held the Companion of the Order of the Indian Empire (awarded in 1903) and the Companion of the Star of India (1911). Though there are occasional allegations that MI5 was anti-semitic, Nathan was Jewish, as were at least two other prominent MI5 officers of the period, and their religion seems not to have held him, or them, back.

In the summer of 1915, Nathan was working as an officer in MI5's A2 section, responsible for the ‘Investigation of cases of suspected espionage, sedition or treachery in the United Kingdom without the Metropolitan or City of London Police Areas'.
Presumably this was A2's case, because the original transgression had been committed in Bath. Alongside Nathan in A2 were fellow Indian civil servant Percy Marsh, a former assistant magistrate and adviser to the governor of the United Provinces, and Captain Hugh Steuart Gladstone, son of a former governor of the Bank of England, ornithologist, landowner, county councillor, former Boer War intelligence officer and amateur cartoonist.

It was clear from De László's naturalisation papers, when Nathan examined them, that he was a man who had to be treated cautiously. As in all naturalisation applications, he'd been obliged to provide statements from men who knew him well, testifying to his good character. Rather than the usual neighbours and local businessmen one generally finds in such applications, De László produced statements by The Right Honourable Arthur James Balfour, former Conservative prime minister, The Right Honourable Baron Devonport, former Liberal MP for Devonport, chairman of the Port of London Authority and wealthy businessman, Arthur Lee, MP for South Hampshire, and De László's brother-in-law, the banker Henry Guinness. It was quite possibly because of the involvement of these senior and influential people that it was decided merely to keep a postal check on him.

Every piece of mail that was posted to De László's address was now being opened and read by the Special Section and reported to MI5. It's clear from later material that a considerable amount of evidence had slipped through the normal censorship system relating to the clandestine sending of messages to his family in Hungary through the Dutch diplomatic bag, and the sending of money to them, also by surreptitious means, must have ended up on MI5's file, but still it did not act. It was most important that its main method of gathering information on suspects remained unknown.

It was only in November 1916 that the normal censorship produced evidence that might be acted upon. An outgoing letter to Madame van Riemsdyk was intercepted in which it was disclosed that De László had apparently sent money to his relatives in Hungary via Madrid. On 5 December 1916, Detective Constable Percy Isaac of Paddington police station was sent to De László's residence to raise the allegation that he had been sending money out of the country. After making several attempts to get his maid to let him in, Isaac announced that he was a detective and was invited in.

De László apologised profusely, saying, ‘I am sorry I refused to see you, but I've so many beggars call here that unless a person makes an appointment, I have given instructions that I am not to be seen.' Detective Constable Isaac's report said:

Mr De László stated that his brother Marczel, residing at 28 Eotica Utza, Budapest, has been in need of money. The friend in Madrid, mentioned in the censored letter is Baron Mayendorff member of the Russian Embassy there. The Baron owes Mr P de László £1000 for portrait painting and de László wrote to him asking him to send £200 to his brother Marczel, but he has since heard that his wish has not been complied with.

Mr de László further stated that he had sent money to his brother in Budapest, Hungary, but at the time he was ignorant that he had first to obtain permission.

The last occasion that money was sent from this country was in February last, when Mr de László directed his bankers, London County and Westminster, Lombard Street, City, to forward £500 to Mr Van Riemsdyk, 8 Orange Street, The Hague, Holland, who forwarded the money to Marczel László at Budapest. It was not until he was informed by a friend that he was doing wrong in sending money to an enemy country that he discontinued sending. I would beg to draw notice to the fact that although he knew he had been doing wrong by sending money out of England, he attempts to persuade an ally to send money to his brother.

There was no evidence, after all this time, that De László was a security threat, so on the basis of this report and the other evidence gathered by means of the censorship, the Home Office submitted a case against De László for prosecution under the Trading with the Enemy Act in January 1917. The case was based upon the transmissions of money made to his mother and brothers at various times in 1915 and 1916, and upon the fact that he had been warned against such transactions by Bath Police in February 1915.

As Trading with the Enemy came partially under MI5's remit, on 31 December, MI5's Major Anson sent the Foreign Trade Department a brief summary of the evidence, including D.C. Isaac's report, ‘for such action as you think necessary'. The Foreign Trade Department queried Anson's brief letter and asked for further information. Anson sent it copies of the Bath telegram, Inspector Marshfield's report, and a copy of his letter of 25 September 1916. He also suggested an examination of De László's bank account would show further transactions sent to Holland. There was some concern about how De László would react and who his friends were. A note written on the file read, ‘Mr De László is pretty certain to write either to Lord Robert [Lord Robert Cecil, Minister of Blockade], or the Secretary for State. As you will notice, he knows Mr Balfour personally and is apparently an MVO.' It was suggested Lord Robert Cecil be consulted and he, in turn, while agreeing that De László should be prosecuted, suggested that it be referred to Mr Balfour, who was now serving as Foreign Secretary. A brief resumé was sent to Mr Balfour, who said that De László had painted him ‘twice' and said he was sorry he had got into trouble but added it was not the Foreign Office's business.

The Foreign Trade Department staff certainly felt there was a
prima facie
case to answer. One noted, ‘The seriousness of the offence depends upon the total amount sent, but I don't think we can pass over the matter as we have prosecuted for remittance of much smaller sums.' Another added:

It is important to stop such transactions being carried on … It is important that all citizens and naturalized British subjects shall conform to the law … the case would act as a deterrent to others, and illustrate that no object however good, and no motive however well-intentioned can prevail against the law. In this view I think that proceedings should be commenced.

Sir Robert Cecil agreed, but having taken the advice of counsel it was decided an examination of De László's bank account would be required, and a warrant was drawn up authorising an accountant, Mr Wyatt Williams, to examine his records.

Wyatt Williams duly visited De László's residence and examined his books and records. In his report he set out the basic details of the case then gave details of the money transactions overseas. He went on to present his own analysis of what had happened. He explained he thought the Bath Police report was the result of confusion as to the telegram being discussed. The telegram Marshfield had questioned De László about was a follow-up to a previous one attempting to arrange a meeting with his brother, and amended it. Upset at the thought of his mother's death, he had concentrated on the proposed change to the meeting and forgotten about the remittance. It was this confusion and his failure to answer the question properly, said Wyatt Williams, which led Major Anson to think he was lying. As to the other transactions, Wyatt Williams said that in the light of the numerous postcards and letters mentioning the transfers that had passed through censorship, De László had no idea that there was a problem. If there had been, he said, De László thought that the authorities would have advised him. They hadn't, so he assumed he was doing nothing illegal.

Wyatt Williams presented his report on 19 March 1917, and the Department of Foreign Trade officials added their notes. Mr Eady said, ‘It is quite clear that an offence has been committed. On the other hand the openness of the correspondence shows that M De László had no idea of his offence, tho' that is no defence.' Mr Spens added, ‘I agree, though it is difficult to swallow M. De László's amazing ignorance of very elementary law.' The final comment by Mr Eady is more telling: ‘Mr De László is a British subject and must accept the responsibilities of the position. He must inform himself of the law. He has no right to commit a breach of it, as if he were a foreigner whose interests and sympathies lay only abroad.' Turning to the correspondence (all of which MI5 would have had copies of thanks to the Special Measures Censorship, though Eady would not have been aware of this), he went on:

When put together the letters show clearly what was going on; but individually to the censor, many of the letters reveal nothing necessarily amiss and may have been allowed to pass on that ground. Most of the letters do not necessarily indicate an enemy destination for the money and that dated 18th March is the only one, I think, that indicates that the money had come from the UK. Indeed many of the letters are cryptic in their silence as to the origin and destination of the money. After the warnings given in Febry 1915 the plan for remittance by a Russian friend needs further elucidation. I think that all these matters had better be investigated in their proper place when Mr De László will be given a full opportunity of explanation. If he had been born in England he would have been clearly in the wrong.

It was only in June 1917 that the Attorney General decided that no prosecution was to take place, on condition that De László was interviewed by Mr Matthews of the Attorney General's Office, and the gravity of his offence explained to him. The interview duly took place on 18 June, and ‘Mr De László very willingly and with expressions of gratitude' signed a solemn undertaking ‘never hereafter to send any monetary remittance to my relatives in Hungary, or to any enemy of this country, without first having obtained the sanction of the proper authority'. Whether MI5 continued the special censorship of his mail is uncertain. But events were soon to take a further, and more sinister, series of turns.

O
N 7 JULY
1917, MI5 received, via the Bureau Central Interalliée (Inter-Allied Intelligence Bureau) in Paris, forwarded by Charles Bigham, British representative there, a message he'd received from the French secret service. It read:

The Austrian services in Switzerland are getting very good political information from England by means of Madame G. (they have not got her name) who perhaps belongs to the Swiss Legation, but certainly possesses a diplomatic passport. She sends her correspondence by the Dutch diplomatic bag. It is believed that she is already suspected in diplomatic circles in London. They would be very glad to hear of any information you may have about this.

The Bureau Central Interalliée had been formed in the autumn of 1915 and was based in the French Ministry of War. There were, at first, representatives from the intelligence services of Britain, France, Russia and Belgium, with Italy, Portugal and the USA joining as they entered the war. Each country was represented by its own intelligence mission. British officers served under SIS though some had previous MI5 experience, as did some of the female clerical staff. The main office was in the Boulevard St Germain, though the British seem to have had a sub office at 30 Avenue Marceau. It was a vast clearing house for information, much of it relating to attempts by the Germans to break the economic blockade, but there was a steady exchange of information on possible enemy agents and their methods.