How ASIO got it right during a time it got so much wrong

One night at his house in Washington, two of these colleagues came to dinner.

Discretion has never been my greatest virtue, and when, over the entree, one of these men happened to mention the name of Vladimir Petrov, I shot my mouth off about how disgraceful it was that there was still a D-Notice preventing anyone from publishing any information about his whereabouts, or those of his wife Evdokia.

Petrov was the Russian Third Secretary at the Soviet Embassy in Canberra, who had defected in 1954 in spectacular circumstances.

I had had a few drinks, enough not to know when to stop, and when these two MI6 men told me that Petrov and his wife were still at risk from a vengeful KGB, I expressed deep scepticism.

It was the belief of many people I knew in Sydney, I said, that Petrov had been small fry, and that the importance of his defection had been greatly exaggerated, probably in order to help Robert Menzies’ re-election.

This unleashed fury from both men. Petrov, they told me, was far from small fry.

He was one of the most important defectors in western intelligence history, and the information he and his wife had handed over had saved many lives for both MI6 and the CIA.

I retreated, forced to admit that I didn’t know enough to back up my own case, but still unsure. After all, I reasoned, to paraphrase Mandy Rice-Davies, “They would say that, wouldn’t they?”

I filed that incident away, though, and ever since I’ve been curious about the Petrov affair.

The Petrovs’ defection had a cataclysmic effect on Australian politics, because of the information they brought with them about a high-level spy ring within the Australian Government.

Among other things, it seems to have unhinged the Opposition Leader, Herbert Vere “Doc” Evatt. He became obsessed with the idea that the whole thing was a set-up, and that his friends and colleagues had been framed in a conspiracy against the ALP.

Evatt took the extraordinary step of writing to Moscow to ask if it was true that his party and the Public Service had been infiltrated - and the even more bizarre step of brandishing in Parliament – to widespread incredulity - a letter from the Soviet Foreign Minister, Stalin’s old colleague Vyacheslav Molotov, as proof that it was not true.

It was the Petrov affair, too, which caused what became know as The Split - in which the strongly anti-communist, Catholic DLP broke away from the ALP, effectively helping the Liberal-Country Party coalition stay in power for another seventeen years.

In 1991, I had a further tantalising, but ultimately frustrating, chance to find out more about the Petrov affair. The late Richard Hall, in researching his book ‘The Rhodes Scholar Spy’, had tracked down Ian Milner, one of the six men named as constituting the Canberra spy ring which had been passing documents to the KGB.

Milner was living in Prague, where he had been living since the early fifties. Given that he had never come back, it looked very much like a defection, but he continued to deny that he had been a spy.

I was working at Four Corners, and Hall approached us with the news that Milner was prepared to talk for the first time, on national television. It seemed like a chance worth taking, because even without a confession, his denials and evasions would still be illuminating, so we organised flights to Prague.

We were due to arrive on June 6th, and on May 31st I rang Milner’s flat in Prague to confirm details of our meeting. My question, “Is Ian there?”, was met with a sharp intake of breath and sobs. “Ian died this morning”, his wife told me. Another piece in the jigsaw of the Petrov affair was gone for ever.

Now, though, there’s very little doubt about the value of the Petrovs’ information in 1954.

The evidence comes in part from material dug out of the Moscow archives after the end of the Cold War, but also from material declassified in this country and in the USA.

What we know now is that the key reason that Ian Milner was known to be a spy was because he was named as such in cable intercepts between the KGB in Canberra and Moscow broken by the cryptologists of Project Venona.

These intercepts could not be acknowledged because the Intelligence services were desperate not to let Moscow know that its codes had been broken. But from the time of the Petrov Royal Commission (1954-1955), it was clear to Australia’s spy agencies that six men, Fergan O’Sullivan, Rupert Lockwood, Frances Bernie, Ian Milner, Jim Hill and Walter Clayton, were indeed members of a highly placed spy ring working for the Soviet Union.

Now we know even more about the Petrov Affair, and ASIO’s role in it, and a docudrama screening on the ABC next Thursday lays out a great deal of the new information.

It’s called ‘I, Spry’, and in it Tony Lllewellyn-Jones gives a masterful performance as Charles Spry, the founding director of ASIO.

Central to the performance are recreations of a series of interviews which Spry gave to the Hope Royal Commission in 1976.  There’s also remarkable surveillance footage from the time, when ASIO was going to extraordinary lengths to watch what suspected Communist sympathisers were doing.

It’s no longer possible to see the Petrov allegations as only being supported by the Right in politics: in fact the two academics interviewed, who confirm the accuracy of the claims, David McKnight and Des Ball, are both broadly of the Left themselves.

And indeed, Mark Aarons, born into Australian Communist royalty, this year brought out a book containing new information that Wally Clayton, the kingpin of the Canberra ring, had confessed his role before he died.

So my father’s MI6 colleagues were right; I was naïve and hopelessly wrong.

But does that mean that ‘I, Spry’ gives ASIO a completely clean bill of health? By no means. The film goes on to show how, perhaps flushed with the success of the Petrov operation, Spry went on to broaden out the organisation’s remit, to cover all kinds of “subversion”.

It made suspects and targets of anti-war activists, anti-apartheid campaigners, and homosexuals among many others.

The film-makers say they’ve discovered that even the wearing of a red tie by ABC employees was suspect – an assertion I might doubt if I hadn’t myself been asked in an internal ABC job interview why I was wearing a red tie. (I replied that it was red knitted silk, and I’d bought it on the Ponte Vecchio in Florence, an answer with enough Brideshead Revisited hauteur in it to turn away the question).

ASIO in the late sixties and seventies was clearly out of control, and what’s worse, the film-makers have found evidence in Spry’s Royal Commission testimony that he believed his own organisation had been penetrated, perhaps as early as the late Fifties, by the KGB.

Counter-intelligence work – the “wilderness of mirrors” as the CIA’s James Jesus Angleton called it – drove Spry to drink, but ASIO’s conviction of its own rightness in the wake of Petrov meant that there were few brakes on the organisation for the next two decades.

At a time when Intelligence is being beefed up mightily to deal with the threats of terrorism and cyber warfare, we’d better hope that the many counterbalances to that kind of absolute power brought in, especially since the second Hope Royal Commission, are strong and effective.