Telling The Secrets – Writing The Official History Of ASIO

Professor David Horner is Official Historian and Professor of Australian Defence History, School of International, Political & Strategic Studies. He has now completed and published the first volume in the official history of Australia’s Security and Intelligence Organisation (ASIO) –The Spy Catchers. According to former Australian PM John Howard, David Horner’s The Spy Catchers is “a fascinating account of ASIO’s early years when the main threat Australia faced was from the Soviet regime“. Australian Ambassador to the USA, Kim Beazley, believes the history is “one of our most important official histories”. David Horner addressed The Sydney Institute on Tuesday 17 February 2015.

TELLING THE SECRETS – WRITING THE OFFICIAL HISTORY OF ASIO

DAVID HORNER

In November 1986, just over 28 years ago, a court case took place in Sydney in which the British government sought to prevent the publication of a book with a similar name to mine, namely, Spycatcher by a former MI5 officer, Peter Wright. At one stage, in the court case, Secretary of the British Cabinet Sir Robert Armstrong admitted that Sir Dick White had been chief of the British Secret Intelligence Service, MI6.

Pressed by Wright’s 32-year-old lawyer, Malcolm Turnbull, Armstrong acknowledged that MI6 existed when White was head of it, but he could not admit that MI6 had any prior or subsequent existence.

Well things have certainly changed since those times with regard to talking and writing about intelligence organisations. But the whole idea of publishing a history of an intelligence organisation based on its classified files seems counter-intuitive. Intelligence services trade in secrecy. If they reveal their sources, the sources will dry up. If they reveal their techniques their opponents will counter them. If the identities of officers are revealed they will no longer be able to operate with the freedom that is necessary to achieve their tasks.

Nevertheless, the appearance of histories of Britain’s MI5 in 2009, and MI6 in 2010 seemed to set a precedent for an intelligence service publishing its own history. Beyond this precedent, however, there are other good reasons for publishing a history of the Australian Security Intelligence Organisation (ASIO). Through a series of historical and political circumstances many myths or half-truths have flourished about the early decades of the Organisation.

Indeed these myths have continued through to the present. In August last year, the author of a new book about ASIO wrote a newspaper article that was syndicated around Australia. The author began with the statement that “since its creation in 1949, ASIO Directors-General have not had their names published, let alone addressed the National Press Club”. This of course is another myth. Rather, every Director-General since the first one, Geoffrey Reed, have had their names published. Charles Spry, Director-General from 1950 to 1970 had his picture splashed across the front pages of newspapers during the Petrov Royal Commission.

One Director-General, Harvey Barnett, wrote a book about his experiences. Previous director-generals have certainly addressed the press club.

The perpetuation of these myths have damaged the Organisation’s standing in the Australian community, and this is unfortunate because ASIO does not exist for itself. Rather, ASIO exists to serve the nation. As a government instrumentality, it ultimately needs to justify its existence to the people of Australia and both sides of parliament, and to retain their confidence.

My history, based on full and unrestricted access to ASIO’s records, seeks to dispel many of the myths about it. This particular volume explains why ASIO was formed in 1949, describes ASIO’s role in the defection of the Petrovs in 1954, and ends with the expulsion of Ivan Skripov in 1963. It also describes many other activities that have never before been revealed.

I chose the title of my volume, The Spy Catchers, for three reasons. First, this is a history of the Organisation. It is not about Soviet espionage in Australia, the Communist Party of Australia, the Cold War, or ASIO’s effect on particular groups in the community, although all of these appear prominently in the story. The focus is on the Organisation, how it dealt with certain challenges, how it changed over time, how it achieved its successes, and how at times there were shortcomings in its performance.

Second, the title is a reminder that ASIO was set up to catch spies. Evidence of Soviet espionage in the 1940s was damaging Australia’s national security and its relationship with its Allies. ASIO’s prime role was counter-espionage; to deal with the immediate problem and to counter the threat in the following years.

Closely allied with this role, ASIO was charged with countering subversion. In simple terms, subversion is an activity aimed at overthrowing or undermining the legitimately elected government of Australia by non-democratic means. In the 1950s, it was undertaken by certain members of the Communist Party, who rejected the accepted democratic process.

Since ASIO had evidence that members of the Communist Party had engaged in espionage on behalf of the Soviet Union, it followed that a prudent precaution was to remove members of the Communist Party from jobs where they might have access to sensitive information about national security. Hence ASIO was involved in vetting people for security clearance; but this major task was a by-product of its prime role, namely counter-espionage.

The third reason for the title is that it reflects the fact that the book is about ASIO’s people. ASIO’s officers were, and are, normal, dedicated Australians. In the 1950s, they believed that they were doing a job that was vital to the security of the nation. I wanted to bring them out of the shadows, and recognise their efforts.

I will elaborate on some of these issue later. First, I want to describe how the project began and how we went about our task.

In 2008, the Commonwealth Attorney-General approved the writing of an “official history” of ASIO and the Organisation advertised for authors or institutions to research and write it. In this context an official history is not the organisation’s view of its history and its own assessment of its achievements. Rather it is a history written by an independent historian for an organisation, and based primarily on the organisation’s own records.

Several universities submitted tenders for the job. The ANU was successful and the project began formally in August 2009. As the principal author, I was adamant that we would not accept any direction from ASIO as to how we would tell the story, and we would write the history as we saw it, based on ASIO’s records. To achieve this aim we would need complete and unrestricted access to all ASIO records relevant to the period we were researching. I am pleased to say that ASIO kept its part of this bargain to the full. We were not denied access to any file we asked for, and indeed we found files that ASIO did not even know they had.

Naturally there are some aspects of the story which we have not been able to publish for reasons of national security. But, surprisingly, few of these matters have been deleted from this volume.

Although it is illegal under the ASIO Act to release the names of ASIO officers, we were keen to identify as many of them as possible. When we interviewed former ASIO officers we asked them to agree to have their names revealed. Most did so. We were then able to seek permission from the Director-General of Security to release the names.

We wanted to be sure that if we encountered any problem we could appeal to a semi-outside body. ASIO therefore established a history advisory committee.

It was chaired by the Director-General and included one of his deputies. But it also included two outsiders – Professor Geoff Gallop, a former Labor Premier of Western Australia, and Jim Carlton, a former minister in the Fraser Coalition government. This committee did not seek to give any direction to the writing of the history, but provided valuable advice.

We believed that it was important to engage with the views and arguments about ASIO that have appeared in books and articles over the past three decades, including many dealing with ASIO’s treatment of individuals or groups in the community.

On the other hand, conscious that our task was to tell the story of the Organisation, I decided that rather than beginning with the files on individuals, I should start by examining ASIO’s policy files so that we had a broad picture of the Organisation’s activities.

I found a more complex and multi-faceted story than was previously recognised, while some widely-publicised issues seemed less important when viewed from within ASIO. For example, whereas some journal articles and books had suggested that ASIO’s surveillance of writers and artists required closer examination, I found that it was just a relatively small part of ASIO’s activities. I just did not have the space to deal with such issues in any depth.

Primarily, this history is based on ASIO’s official records, and for this volume alone we have accessed 1900 files (most of which have multiple parts) from ASIO, as well as numerous ASIO and other departmental files at the National Archives.

The project could not have been undertaken, let alone completed, without the outstanding work of our research officer, Dr Rhys Crawley. The Spy Catchers is the first of a three-volume series, and to assist with the writing task, we were joined by Dr John Blaxland, who had previously served as an intelligence officer in the Australian Army.

The series is shown on the screen. Dr Blaxland is the author of Volume II and he and Dr Crawley are writing Volume III. It goes up to 1989, which is effectively the end of the Cold War.

I am pleased to report that Volume II is now going to the publishers after being cleared, and we hope that it will appear before the end of this year. We expect to have a draft of Volume III completed by the middle of this year. It too will then need to be cleared for publication.

I now want to turn to some of the themes of the book. The first theme is the importance of signals intelligence. In the mid and late 1940s American and British cryptanalysts deciphered the encrypted cabled messages between the headquarters of the Soviet intelligence service, the KGB, and its resident intelligence officers in embassies around the world. This Venona intelligence, as it was known, revealed the existence of a Soviet spy ring in Australia, and ASIO was then set up to try to catch the spies. The Venona program was extremely secret, and over the succeeding years ASIO spent much effort in trying to protect knowledge of Venona’s existence.

Another major theme is the role of Britain’s Security Service, MI5, in establishing and fostering ASIO in 1949. The first heads of ASIO were determined to ensure that it become an independent Australian security service, even though they relied heavily on advice from MI5. Soon ASIO learned to stand on its own feet. My volume describes how at first ASIO relied on MI5, and then how it developed its own worldwide network of contacts.

It is impossible to understand the early history of ASIO without appreciating the political and social climate of the early Cold War period. Australians, who had lived through the Second World War when the threat of invasion seemed frighteningly real, were determined to confront and defeat what they perceived as a new and equally dangerous threat. Thus in the 1950s, with the Cold War between the communist bloc and the West at its height, ASIO’s officers saw themselves as front-line warriors in a war against a twofold enemy – the Soviet Union and the Communist Party of Australia (the CPA).

With regard to the Soviet Union, ASIO saw its main task as ensuring that Soviet intelligence officers, operating under diplomatic cover, were unable to conduct espionage in Australia.

As for the CPA, ASIO first had to ensure that its members and sympathisers were excluded from positions where they might have access to sensitive information. ASIO therefore needed to establish a comprehensive list of CPA members, and also to develop procedures for vetting people who might need access to sensitive information. Vetting became a major ASIO preoccupation.

Next, ASIO needed to deal with the threat of subversion. ASIO and the government believed that the CPA, on behalf of the Soviet Union, was engaged in a concerted campaign to undermine the public’s confidence in the Australian democratic system and ultimately to overthrow it. Based on the statements of CPA officials, this was a reasonable assessment, although some would challenge whether the CPA’s capability would ever be likely to match this intent. The Coalition government, led by Prime Minister Robert Menzies, hoped to deal with this threat through legislative means, such as banning the CPA, but this did not prove possible.

Meanwhile, ASIO sought, through a range of measures including covert surveillance and infiltration, to gain a comprehensive picture of the CPA’s membership and activities. It also focused on “front” organisations — that is, organisations that had been covertly set up by the CPA or were controlled by the CPA. The manner in which ASIO allegedly spied on innocent Australians and produced voluminous dossiers on them to find out if they were CPA members or sympathisers is an enduring theme in ASIO’s history and the focus of much criticism of the Organisation.

Some of the moral dilemmas faced by ASIO officers were caused by the fact that for much of the period covered by my book, ASIO operated without a legislative framework. When ASIO was established, Prime Minister Ben Chifley issued the new Director-General of Security, Justice Geoffrey Reed, with a charter in which he was charged with “the defence of the Commonwealth from external and internal dangers arising from attempts at espionage and sabotage, or from actions of persons and organisations . . . which may be . . . subversive of the security of the Commonwealth”.

Reed was not told how he was to fulfil this mandate, except he needed to be satisfied that “an important public interest bearing on the defence of the Commonwealth” was “at stake”. When Reed decided he needed to intercept the telephone conversations of selected individuals, Chifley verbally approved the phone taps. There was no written approval.

When Charles Spry succeeded Reed in July 1950 he received a similar charter and continued the phone taps. Nonetheless, Reed and Spry understood clearly that ASIO’s role was to collect intelligence and advise the Government. ASIO had no executive function — that is, unlike the police, it could not apprehend and arrest people.

In the meantime, ASIO’s most noteworthy activity was the successful management of the defection of Soviet intelligence officer Vladimir Petrov and his wife, Evdokia, in April 1954. As Sir Charles Spry commented, the defection “gave ASIO world class standing amongst the democratic world intelligence communities. It strengthened immensely our liaison with them”.

The story of the ensuing Royal Commission on Espionage, however, is more complex, and its outcome had long-term implications for Australia and ASIO.

The imprudent response by the Leader of the Opposition, Dr Bert Evatt, exacerbated tensions in the Australian Labor Party (ALP), which contributed to the split of the party and the formation of the Democratic Labor Party (DLP). In subsequent federal elections, the DLP directed its preferences away from the ALP and thereby kept the Coalition in power for the next seventeen years. The misfortune for ASIO was that Evatt accused it of manufacturing the Petrov defection to assist the election of the Menzies Coalition government, and he even alleged that ASIO officers falsified documents in order to link his staff with Soviet espionage. These intemperate and untrue charges by Evatt poisoned the relationship between ASIO and the ALP for the next two decades. Many people in the community accepted the ALP’s assertions about ASIO, and the Organisation’s reputation was damaged. Some people still believe these false assertions.

With ASIO under attack from the alternative government, Spry was concerned about the survival of his Organisation.

As a result of his initiative, in December 1956 the government passed the Australian Security Intelligence Organization Act 1956, which for the first time publicly specified the functions of the Organisation. In 1960, the government amended the Crimes Act to spell out what was meant by treason, treachery and sabotage. Also that year, the government passed the Telephonic Communications (Interception) Act, which specified the conditions under which ASIO could intercept telephone conversations.

These acts helped articulate ASIO’s lawful parameters. The legislative cover for many of ASIO’s activities, however, still remained unclear. For example, in the late 1950s ASIO carried out disruptive “spoiling” operations against the CPA. ASIO officers, agents or contacts also wrote articles exposing CPA activities for publication in newspapers and magazines. These actions did not seem to fit the functions specified in the Act.

I now want to give a few glimpses of the history as it appears in the first volume.

ASIO’s first task, when it was established in 1949, was to investigate a Soviet spy ring that had been identified by the Venona program. You will recall that this program involved the intercept and deciphering of communications of the Soviet intelligence service, that is the KGB. The details of this spy ring were first described in detail in a 1998 book called Breaking the Codes, which I co-authored with my ANU colleague, Professor Desmond Ball. ASIO simply called this investigation task “the case”.

The Soviets used cover-names to describe their officers and the Australians who were assisting them. The central figure was an official of the Australian Communist Party, Wally Clayton, who was given the cover-name Klod. Two other important personalities were Ian Milner (cover-name Bur) and Jim Hill (cover name Tourist) who worked in the Department of External Affairs. They gave classified information to Clayton who passed it to Semyon Makharov, the KGB resident in the Soviet Embassy, and to Fedor Nosov, the TASS correspondent, who also passed it to the Soviet Embassy. Another key personality was Frances Bernie (cover-name Sestra) who worked in the office of the Minister for External Affairs, Doc Evatt, and passed information to Clayton.

This story has been previously told, but I have been able to add more detail. The experience of Len Heilig, an ASIO officer who kept watch over Clayton’s house at Mosman, gives some idea of the conditions endured by those conducting surveillance, as well as ASIO’s operating methods at that time. Aged 28, Heilig had served in the Army during the Second World War, had joined ASIO’s Brisbane office in June 1949. The following month he was brought to Sydney and accommodated in a boarding house three kilometres from Clayton’s residence in Mosman. He was instructed to observe the house from 6.30 a.m. until all lights were extinguished, which invariably was never before 1 a.m. If Heilig observed Clayton or any of his visitors leaving by vehicle he was to phone Bob Wake, the deputy head of ASIO who was running “the case”, and he would arrange to have Clayton’s car followed as it crossed Sydney Harbour Bridge.

The only suitable vantage point from which to observe Clayton’s house was a rocky outcrop jutting out into the harbour at the bottom of Clayton’s street. So Heilig obtained a fishing line and dangled it in the water. This was pleasant enough in fine weather, but in bleak, rainy weather in mid-winter it was a little incongruous. At night and in poor light conditions Heilig moved to a bus shelter nearer Clayton’s house. It was during the height of the 1949 coal strike and parts of Sydney were frequently blacked out. With an upsurge in crime, the police stepped up their patrols, and at times Heilig had to explain that he was “waiting for his girlfriend”.

Because Heilig was from Brisbane he should have been paid by that office, but this was not possible while he was in Sydney. There was no electronic transfer of funds in those days. So when he ran out of money he would phone Wake. An old Morris car would then drive past and Wake would throw out a rolled up newspaper, which Heilig would retrieve and hopefully inside find his fortnightly pay packet.

Meals were another problem. There were no eating houses in the area and, in any case, no one to relieve him. Heilig’s diet consisted of Devon sausage and packets of potato crisps, which was about all that he could obtain from the only shop in the area. After nearly five weeks on this enforced diet, combined with an average of three hours’ sleep per night and a touch of pleurisy due to continually wet clothing, Heilig, who had prided himself on being fairly fit, went back to Brisbane 10 kilograms lighter. He arrived home feeling relieved that the observation stint was over, but that evening his phone rang. It was Wake instructing him to return to Sydney to commence surveillance of Fedor Nosov. The episode show the devotion of ASIO officers in trying to complete tasks that they were led to believe were vitally important to the security of Australia.

Len Heilig went on to a long and distinguished career in ASIO. At one stage he helped look after the Petrovs when they were in their safe house during the Royal Commission on Espionage.

In the book I spend a bit of time explaining how ASIO recruited and ran its agents who reported on the activities of the Communist Party and the front organisations. Agents are not the same as ASIO officers. ASIO officers are full-time employees of the Organisation.

By contrast, ASIO agents work in the community at their day jobs, but under direction from ASIO they report on what they have seen and heard. The names of ASIO agents are never revealed. However, some have become known, usually because they have revealed their work themselves. One well-known ASIO agent was Michael Bialoguski who gained the trust of Vladimir Petrov and persuaded him to defect.

A lesser known agent was Anne Neill, who worked as a typist for Eliott Johnston, Secretary of the South Australian Peace Council. He was also a member of Central Committee and the South Australian state committee of the Communist Party. Anne Neill became a secret member of the Communist Party and passed a mass of reports and copies of documents to her ASIO handler.

In December 1952 she attended the Third World Peace Congress in Vienna and then took up an invitation to return via Moscow and Peking. According to ASIO legend she became the first allied agent to be invited behind the Iron Curtain. She resigned from the Communist Party in 1958 and went public about her role as a spy in December 1961.

The story of the expulsion of the Soviet diplomat and intelligence officer Ivan Skripov in February 1963 is reasonably well known, but we have been able to provide more details. Skripov recruited a British-born woman, Kay Marshall and groomed her to deliver messages to illegal Soviet agents. Actually, she was an ASIO double agent.

My final glimpse of the ASIO story is about the bugging of the headquarters of the Victorian branch of the Communist Party. The target was the office of Ted Hill, Secretary of the Victorian Branch of the CPA. Ted Hill was the brother of Jim Hill who, according to the Venona intercepts, had passed External Affairs documents to the Soviet Union in 1945-46.

Ted Hill’s office was on the ninth floor of a building in Elizabeth Street, Melbourne. Between November 1952 and August 1953 ASIO officers bugged Hill’s office with a microphone and also entered his office to photograph documents and check the microphones. ASIO temporarily halted the operation when CPA officials became more security conscious.

In October 1956 ASIO tried another approach and leased an office on the eighth floor, below the CPA premises, to establish a listening post there. ASIO officers then installed another microphone in Hill’s office. The cable from the microphone was dropped down the wall cavity and connected to the equipment in the listening post. The technicians ensured that the length of cable from the microphone was twice the length necessary to reach to the eighth floor, so that if it was discovered it would give the impression that it led down to the seventh floor.

Two ASIO officers, a husband and wife team who had recently arrived from England and were not known in Melbourne, opened a dummy market research business on the eighth floor. The husband operated primarily as the front man for the “firm”, while his wife listened to the conversations in Hill’s office and produced reports from the raw product.

The intelligence gained by this operation was of very high quality, but ASIO succumbed to the temptation to use some of it in a “spoiler” type operation. A significant Communist Party crisis developed in mid-1958 over the expulsion of a well-known member who was a university lecturer. ASIO floated the story to the Melbourne Herald newspaper.

After an investigation among party members, Hill concluded that few knew about the events described, so he enlisted the assistance of a CPA technician, Harry Stanistreet, who was employed by the Postmaster General’s Department. Stanistreet successfully located the microphone on 20 January 1959. The ASIO officer in the floor below was listening to proceedings above and, when the line went dead, she had the presence of mind to disconnect the cable attached to the audio equipment she was monitoring and to drop the end of the cable down the wall cavity. Stanistreet pulled up the cable, measured it, and calculated that the listening post was two floors down. He visited the seventh floor, where a firm of investigators were located, and accused them of being connected with ASIO. ASIO maintained the bogus market research firm for a couple of months before quietly closing it.

The party publicised the incident widely, naming the firm of investigators in its newspaper Tribune. The Communist Party state president also wrote to Prime Minister Menzies, protesting at the installation of a microphone in their offices and demanding that those responsible be punished and ASIO be disbanded.

Spry advised Menzies that the microphone had been installed because “ASIO had every reason to believe that Edward Fowler Hill, in whose room it was discovered, was engaged in work for the illegal apparatus of the Communist Party of Australia, and probably in espionage on behalf of the Soviet Union”. No evidence was ever produced to prove this latter claim.

Well these are just a few glimpses of the stories in our book. Many of the stories have never been told before. However, I accept that some of the stories in the book have previously appeared in other books and articles. That was always going to be inevitable. But at least readers can be confident that what we have told is correct as far as ASIO’s records are correct.