May 7th 2005

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Articles from this issue:

COVER STORY: SECRET INTELLIGENCE: New evidence of Soviet espionage in Australia

EDITORIAL: Australia and China: supping with the devil

CANBERRA OBSERVED: Australia's impending economic slump

SCHOOLS: Give academic excellence a sporting chance

NATIONAL COMPETITION POLICY: Review whitewashes National Competition Policy

TRADE: EU and US try to force China to cut textile exports

DRUGS: Howard Government's drugs campaign falters

REGIONAL VICTORIA: Radical activists' campaign of sabotage

STRAWS IN THE WIND: Labor Agonistes / Blankety Blank / Gentlemen versus players / EU Light Opera

RUSSIA: Baltic States to boycott Moscow's World War II memorial

1955 LABOR PARTY SPLIT: Conference marks 50th anniversary of Split

1955 LABOR PARTY SPLIT: The Great Labor Split remembered

CONSTITUTION: Dangers in Howard's new centralism

RELIGIOUS VILIFICATION LAWS: "Witch" sues over Christian Bible study

How to tackle abortion and pornography (letter)

John Paul II's greatest achievements (letter)

East Timor and West Papua resistance (letter)


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SECRET INTELLIGENCE: New evidence of Soviet espionage in Australia

by John Miller

News Weekly, May 7, 2005
How far did secret agents working for the former Soviet Union succeed in penetrating Australia's intelligence agencies during the Cold War?

This was the question put by ABC Television's Four Corners in a documentary broadcast on November 1 last year.

The program, entitled Trust and Betrayal, failed to provide much new information on this question. But News Weekly, in the course of its own independent inquiries, has reached some disturbing conclusions about the extent of Soviet espionage in Australia.

When the Australian Federal Police conducted a high-level investigation of ASIO some years back, they discovered a disturbing number of suspected moles.

When ABC television's flagship current-affairs program Four Corners broadcast its much anticipated documentary Trust and Betrayal last year, it was expected to reveal massive Soviet espionage in Australia during the Cold War. However, if viewers expected dramatic new claims, they were to be disappointed.

Four Corners focussed on the part that Australian Security Intelligence Organisation (ASIO) played in the struggle between the West and the Soviet Union, and supposedly followed a three-month investigation by the ABC's Investigative Unit, but it clearly failed to reveal any new information.

Instead, it focussed on a bungled prosecution of a former ASIO translator, George Sadil, punctuated by tantalisingly interesting claims from two former senior KGB defectors and a former secretary of the Commonwealth Attorney-General's Department, and culminating in a portentous defence of Sadil by a former senior ASIO officer and members of Sadil's family.

News Weekly has attempted to assess the various claims made and, where possible, to seek the assistance of serving and retired intelligence officers and public servants. It has been difficult to find anybody willing to go on the record about the program. This suggests that either there is nothing to the story or, alternatively, attempts have been made to cover up the full facts. However, News Weekly staff, reviewing the program on its own terms, have come to some disturbing conclusions.

At the commencement of the program, former KGB Major-General Oleg Kalugin confessed that "Australia was so interesting because it did share with the United States, the UK and Canada; and these countries - the closest allies - they would share information with Australia."

Soviet spies' success

The program's presenter, Andrew Fowler, claimed there was evidence that Soviet spies had succeeded in Australia to the extent that they would reveal how the United States had to pull the plug on intelligence-sharing with ASIO. This bald statement was confirmed by Alan Rose, secretary of the Attorney-General's Department (1989-94), who stated: "We weren't being taken fully into the Americans' confidence. We weren't being trusted in a way which ought to exist between organisations with a common goal." This was a fairly dramatic statement from a senior public servant who without doubt was in a position to know.

The program then proceeded to launch into the background of George Sadil and his wife Jenny, and their interrogation by a detective who accused them of being in possession of classified documents, which were "scattered everywhere".

There followed a curious bifurcation of the story. One track followed an important and potentially dangerous line. That is that ASIO had been penetrated to the extent that the CIA had cut back its supply of information to ASIO in the early 1980s on the grounds of information received from defecting KGB officers. A couple of senior ASIO officers, who declined to be named or quoted directly, stated that they had detected this reduced input and concluded independently that the Americans had information which made ASIO untrustworthy. The turning off of the tap was confirmed by an external source, Alan Rose, as mentioned above.

Certainly, ASIO had considerable problems internally when extra allowances and benefits granted to officers moving to the new Canberra headquarters were cut-off by a new Director-General Alan Wrigley in 1985. Wrigley's assertion that ASIO officers were only public servants was a slap in the face to those who had served their country for patriotic reasons and understood what the Cold War was really about.

The information provided by Oleg Kalugin in the Four Corners program far transcends that given in his book, The First Directorate: My 32 Years in Intelligence and Espionage Against the West (1994).

In his book, he mentioned that an ASIO officer had thrown top-secret papers with US and other foreign content in them, into the Soviet Embassy compound in Canberra and asked for money in return. It appears that, after assessing the situation, the KGB paid up and for a number of years received considerable value for their money, although Kalugin stated that the local KGB never attempted to identify the person providing the information.

On the television documentary, however, Kalugin went further and stated that they moved the method of paying the agent away from the post office and into various spots around Canberra, using the tried and trusted dead letterbox (DLB) system. This provides for maximum security and it appears that the transactions took place impersonally within the ACT. Interestingly, Kalugin went on to talk about moles (in the plural) in ASIO and the Australian government. It is to the credit of the ABC that they were prepared to pay money for such an authentic account from a former senior and highly respected KGB officer who had the background knowledge to make such statements.

The focus then turned to Oleg Gordievsky who defected from the KGB in the early 1980s and was for a while chief of the KGB station in London. Returning to Moscow, he found himself under suspicion, was probably drugged and interrogated, but managed to be spirited away to Britain by the United Kingdom Security Intelligence Service (UKSIS), more popularly known as MI6.

Gordievsky was a valuable source of information and published a book KGB: The Inside Story of Its Foreign Operations from Lenin to Gorbachev in conjunction with Cambridge academic Dr Christopher Andrew in 1992. He then published his autobiography Next Stop Execution in 1995.

However, a number of former ASIO and other Australian intelligence officers have advanced a hypothesis that these books were very carefully sanitised by UKSIS, and that information relating to ASIO, and Australia generally, was omitted. In his interview with Four Corners, Gordievsky was certainly slightly more forthcoming. He mentioned that he had met Kalugin several times and the latter had more or less confirmed that Kalugin's branch of the KGB had "sources" in ASIO. Although Kalugin and Gordievsky crossed tracks, they were in different departments of the KGB's foreign service and, given the tight compartment-alisation of the KGB, such confirmation is usually imprecise. Another KGB defector not mentioned in the program apparently made the same claim but lacked precise details.

It may sound semantic but there is a considerable difference between a source and a mole. Kalugin gave the following account: "He had a good access. Everything about Australia, the United States, mutual cooperation, political plans, agents planted in the Soviet Embassy, surveillance squads, I mean, everything." He also said that this mole was paid in "thousands of dollars" over a 15-year period. The so-called recruiting officer in Australia was given a medal for his efforts.

Considering the number of ASIO officers who have spoken in public about various matters and obviously provided considerable information to Australian author, David McKnight, for his book Australia's Spies and Their Secrets (1994), it is hard to say why so few were prepared to go public on this suspected penetration or to elaborate on a story that made the press on a couple of occasions and then vanished without a trace.

This story revealed that ASIO, and then the Australian Federal Police, had conducted high-level counter-intelligence operations within ASIO, looking for moles. While some ASIO officers have described their internal operation "Jabaroo" as a farce, the story is different when pressed on the AFP investigation.

News Weekly has learned that the AFP operation used miniature cameras and sound equipment throughout the ASIO headquarters, in offices, washrooms and every conceivable gathering place. In any other country, this would be a big story - the federal police force conducting an inquiry into the security service.

But the story sank with barely a trace. What is known is that the number of suspects was narrowed down to about 20 (an astonishing number in itself) and from there somewhere between five and 10 officers were encouraged to leave ASIO with full pay and benefits to walk the streets, presumably having signed a confidentiality agreement.

Intriguingly, Four Corners was unable to pursue the AFP operation further, possibly because there were legal constraints or AFP security is of a higher grade than that which existed within ASIO. There the real story of high-level and numerically strong penetration of ASIO and government fizzles out.

This is where the Sadil case comes in - the second track of the story. In itself, it is a fairly pathetic tale of a man who had special clothing made in order to smuggle out A4-sized documents inside his jacket. The range of documents known to have been taken included material on liaison with the CIA, US intelligence and cooperation with ASIO and, of all peculiar documents, a 1971 internal telephone directory. Reading between the lines, it appears that George Sadil was a "patsy" for the real spies because his position was too junior to have secured the type of information described by General Kalugin.

Sadil and his sister (also employed as a translator by ASIO) were given fairly sympathetic treatment by Four Corners. His self-appointed defender, Michael Boyle, a former senior ASIO officer, gave a plausible, friendly and vigorous defence of his activities. However this was the same Michael Boyle who, during the Combe/Ivanov Royal Commission, had openly conversed with David Combe's legal team and had revealed the name of the middle-ranking counter-espionage specialist from ASIO headquarters who was present to explain details to the commission.

This appears to have been a clear breach of section 92 of the Australian Security Intelligence Organisation Act, yet no action was taken against Boyle internally and attempts to have him prosecuted by the officer concerned were vetoed by senior ASIO management - an action that does them no credit at all.

A key point in the Sadil case is that, for a number of years in the early 1980s, ASIO conducted surveillance of a senior KGB officer from Melbourne to Sydney where he engaged in extensive counter-surveillance manoeuvres before turning up in a shopping centre and visiting a gentlemen's outfitters, which by chance was close to the real estate office of George Sadil's brother. From the outside, it would appear that the Sadil case was a smokescreen, designed to give the impression that Australia was cracking down on treason within the ranks of its security service. No mention was made, of course, of agents in other government departments.

No doubt the ABC invested a great deal of time and effort, and possibly money, in what should have been an important and widely discussed program. For all its flaws, the matters raised in Trust and Betrayal deserve more of a critical evaluation and perhaps, in the fullness of time, a more formal public inquiry.

Interestingly, the memoirs of a former KGB officer who served in Australia, Viktor Cherkashin, have just appeared on the bookshelves. His references to Australia are slight but sufficient to confirm that he was a counter-intelligence officer, one of Kalugin's subordinates. He graduated to run the notorious American traitors Aldrich Ames (CIA) and Robert Hanssen (FBI) and the book is more obviously intended for the American market. However, one ASIO old-timer remembers surveillance conducted on him that showed he was clearly a KGB officer of great skill, combined with a certain amount of brazenness.

Later this year, the second volume of Vasili Mitrokhin's archives will be released and it is understood that some mention will be made of Australian cases. Mitrokhin himself unfortunately is dead and the British appear to control the writings of Christopher Andrew who has collaborated with Soviet defectors Gordievsky and Mitrokhin.

We owe it to the security and intelligence arms of the Australian government, as well as to a number of disillusioned officers and the wider Australian public, to ensure that the full extent of treason in this country during the Cold War is exposed completely.

  • John Miller is a former senior intelligence officer.

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