December 2016 – January 2017

Arts & Letters

Looking for moles

By David McKnight
The third volume in ASIO’s official history confirms infiltration by Soviet intelligence

I once asked a former ASIO officer to describe what it was like trying to expose KGB agents who operated under diplomatic cover. He recalled that in Canberra in the early 1970s one suspect diplomat would occasionally drive to the top of Black Mountain and sit and wait in his car. “Was he trying to draw us out? Or divert us, while his associate did something else? Or because it was a good place to send radio transmissions? Or was there a signal in chalk marked somewhere on the road to the top?” The ASIO officer never found out. He and other ASIO officers spent tens of thousands of hours trying to catch out such KGB operatives.

Apart from observing them on the tops of mountains, ASIO tapped their phones, watched them at diplomatic cocktail parties and tracked them discreetly through Canberra’s shopping centres. Every movement and every person to whom they talked was painstakingly recorded in labyrinthine files. Analysts then studied them, looking for patterns and connections. Yet countless attempts to identify and expose such Soviet spies ended in failure. The reason for this has now been revealed in the final volume of the history of ASIO, The Secret Cold War: The Official History of ASIO, 1975–1989 (Allen & Unwin; $49.99), by John Blaxland and Rhys Crawley. It confirms that in the final years of the Cold War the greatest threat to Australia’s security did not come from disloyal subversives or naive local fans of the Soviet Union or Red China. It came from betrayal within ASIO itself. For many decades, suspicion that several ASIO employees had been recruited for Soviet intelligence ran like a corrosive trickle through the intelligence community. Now it is official.

What is also damning is that ASIO received several tip-offs that it had been infiltrated but was unable to capitalise on them. In 1980, ASIO was told that a KGB officer based in Canberra in the 1970s, Gerontiy Lazovik, had been awarded a medal for an intelligence recruitment he had made while stationed in Australia. ASIO had studied Lazovik closely as he travelled around Canberra, mixing with public servants, diplomats, MPs and journalists, yet was unable to identify anything untoward. Worse, when the agency later returned to investigate its own surveillance of Lazovik it found that 19 volumes recording his movements had been destroyed in February 1980 without a reason being stated. This too was investigated but led nowhere.

The most remarkable thing about this final volume of ASIO history is that it deals with these issues at all. In a recent interview, co-author John Blaxland admitted that “we had a real argy-bargy over what we could and could not say”. The head of ASIO, Duncan Lewis, backed the authors’ insistence that the chapter ‘Looking for Moles: Counterintelligence and the Penetration of ASIO’ be included against unnamed others who wanted the chapter dropped or emasculated, presumably because embarrassing events occurred during their own careers. As it turned out, the chapter contains tantalising glimpses rather than a full-blooded account, which Blaxland attributed partly to legal difficulties. If “legal difficulties” mean defamation then presumably one or more of the Soviet moles are still alive and enjoying their retirement.

Of the ASIO chiefs the one who comes out worst in The Secret Cold War is Tudor Harvey Barnett (1981–85), who presided over the Combe–Ivanov Affair that rocked the Hawke government in its first weeks in 1983. Shortly before Labor’s election, ASIO was bugging the Canberra home of a Soviet diplomat, Valery Ivanov. To its surprise it found Ivanov, believed to be a KGB officer, was cultivating David Combe, a former national secretary of the Labor Party who had many influential friends in the new government. Barnett imagined that Combe was about to be recruited by Ivanov and took the matter to the Hawke government. While Ivanov was legitimately declared persona non grata and expelled from Australia, it was an unwitting David Combe who suffered most. Spooked by ASIO’s revelations, Hawke banned Combe from contact with the new government, thus destroying his livelihood as a lobbyist. Into the bargain his name was smeared when it all went public.

From that point onwards the episode became a series of embarrassments for ASIO. Barnett was ill-prepared for a crucial briefing of ministers. Another time he failed to offer the government different options in normal public service fashion. Barnett, explain the authors, “had extensive intelligence experience [but] it was not in a security intelligence service and this possibly led to a number of poor operational decisions taken with regard to Combe. From this initial point of misjudgement the situation would deteriorate further.” In a supportive official history, such phrases are damning.

Today, counterterrorism is ASIO’s core business. It is presently investigating hundreds of Australians fighting in Syria or Iraq or supporting jihadist extremism. ASIO’s surveillance of terrorists began after 1963 when a group of Australian-based Croatian extremists landed in Yugoslavia intent on mayhem. ASIO’s subsequent coverage of the issue, both overseas and domestically, was deeply flawed. The view of former spy chief Charles Spry, that Croatians were good anti-communists, was pervasive. An ASIO officer recruited a Croatian source in Australia who seemed as much involved in violence as informing against it. And the bombs kept exploding. On at least 16 occasions in the 1960s and 1970s there were violent attacks in Australia, often targeting Yugoslav consular or travel offices. ASIO was sceptical of the view that Croatian anti-communist nationalists were always responsible. It suspected that the Yugoslav government intelligence service (YIS) was detonating some of the bombs as acts of provocation against the local Croatian community. This view was widely thought to be an excuse for ASIO inaction or worse. However, the later case of the “Croatian Six”, as outlined in the official history, made this scepticism seem plausible. The Secret Cold War confirms that the YIS planted an agent, Vico Virkez, among a group of Croatians who allegedly threatened to blow up Sydney’s water supply in 1979. Before this could happen, Virkez walked into Lithgow police station and confessed. The police then raided a number of homes, finding more than a tonne of explosives. After this, the Croatian Six were sentenced to 15 years in prison while Virkez received a light sentence. Later he admitted to reporting their activities to Yugoslav diplomats. So perhaps some bombings were acts of provocation, the book suggests.

A number of other terrorist attacks occurred in the 1970s and 1980s. In December 1980 in Sydney, masked motorcycle riders killed a Turkish diplomat and his bodyguard. In 1982, also in Sydney, both the Israeli Consulate and the Hakoah Club were bombed on the same day. But the most controversial was the February 1978 bomb outside the Sydney Hilton, which killed two council workers and a police officer. Both before and after the Hilton bombing, members of the fanatical religious sect Ananda Marga were implicated in a spate of attacks in Australia and overseas. ASIO and the police strongly believed that individuals in Ananda Marga committed the Hilton bombing. Indeed, all the evidence still points in that direction, as Rachel Landers’ recent book Who Bombed the Hilton? skilfully shows. But this is the kind of evidence that one uses to form an opinion, not the sort that would stand up in court. The need to gather the latter is crucial to shaping present-day ASIO, and is a world away from collecting gossip on the hopes and dreams of non-violent leftists.

On this score, the official history records the little-known obituary of ASIO’s spying on non-violent leftists, and a gem like this makes The Secret Cold War a valuable book. In 1982, in what became known as the “Rix case”, ASIO denied a security clearance to Stephen Rix, an applicant for a public service position, because he was a member of the Communist Party of Australia (CPA). ASIO argued that the CPA was a subversive organisation committed to the violent overthrow of the government. Rix took his case to the new Security Appeals Tribunal, which examined the CPA’s publication Towards Socialism in Australia. While the language of the document employed “fertile ambiguity”, the tribunal said, it ruled that CPA membership alone was not sufficient to deny clearance to Rix. The vindication of Rix was shattering for ASIO. Blaxland and Crawley say that it undermined the core reason for the agency’s wall-to-wall surveillance of the CPA, and forced a “fundamental rethink of ASIO’s work”. Fundamentally rethinking the nature of security is not a catchy line (for spy books, most people prefer dead drops and honeypots) but it has been the key theme for this series of official histories.

David McKnight

David McKnight is an associate professor at the University of New South Wales. He wrote the first detailed account of ASIO and the cold war, Australia’s Spies and their Secrets, and recently co-authored Big Coal: Australia’s dirtiest habit

Surveillance of David Combe (at centre). Supplied by ASIO

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