On 4 November 2010, the lavishly produced docudrama I, Spry: The Rise and Fall of a Master Spy was screened nationally on ABC television. Considerable controversy swirled around the program.

In the Sydney Morning Herald, Gerard Henderson rejected as ‘mere hyperbole’ the insinuation that Sir Charles Spry, ASIO’s director-general from 1950 to 1970, used ‘the weapons of the communists against Australian citizens’.¹ Henderson argued that, far from being ‘a bumbling group of amateur spies’ in the 1950s, as one reviewer of I, Spry alleged,² ASIO successfully uncovered the Soviet spy ring in Australia led by Wally Clayton and oversaw the defection of Vladimir and Evdokia Petrov. While ASIO ‘made errors’, its general Cold War record was one of ‘success’, for it ‘protected Australia against espionage directed by the nation’s enemies’. Although I, Spry confirmed the existence of communist espionage and its centrality to ASIO’s formation, the program was, Henderson continued, ‘littered with exaggerations and howlers’. He called upon the managing director of the ABC to exercise more editorial control over such ‘leftist’ programs.

The filmmaker, Peter Butt, who has produced and directed a string of excellent documentaries – including several with Cold War themes, such as Silent Storm, Fortress Australia, Who Killed Dr Bogle & Mrs Chandler? and Lies, Spies and Olympics – defended his research. It was based, he wrote, on evidence given to the Hope Royal Commission, including Spry’s own testimony; on numerous interviews with former ASIO officers (all of whom confirmed Spry’s alleged alcoholism); and on advice from Des Ball and David McKnight, academic experts on ASIO and espionage, both of whom appear in the program.³ Butt and McKnight also replied to a seventeen-point article by an anonymous retired ASIO officer, who accused the filmmaker of a ‘distasteful trashing’ of his former boss, Spry.⁴ An additional criticism has been that Butt’s imputation of a less-than-professional relationship between Spry and the Russian nurse Lydia Mokros (who, remarkably, appears in the film) was groundless. But that real or alleged relationship is not the issue at stake here.⁵

A third response, from Mark Aarons, was encapsulated in its by-line: ‘admirers and detractors alike have a blinkered opinion of Charles Spry’.⁶ Aarons, son of the veteran Communist Party leader Laurie Aarons, argued, on the one hand, that Spry’s ASIO engaged in ‘unprofessional, even odious operations’, but, on the other, that the Left was wrong to deny there was ever a Soviet spy ring in Australia, since that was precisely what was uncovered by ASIO in ‘a largely professional job’ on which Spry’s ‘place in the historical record stands’. This argument is consistent with Aarons’ recent family memoir, The Family File, which has been cited approvingly by many opponents of the Communist Party, including Gerard Henderson.⁷

Several important questions emerge from this debate over I, Spry. How successful was ASIO in uncovering espionage? What were some of ASIO’s other activities in the years following its formation? How should we judge these activities? And are there implications for today’s ASIO? What follows, therefore, is not another analysis of I, Spry, but an examination of the issues raised by the program and the controversy around it – most importantly, the role of ASIO in the early Cold War.

Venona

In 1948, the year before ASIO was established, a small group of cryptographers in Washington cracked previously unbreakable ultra-secret cables sent between Moscow and its embassies in Washington, Canberra and elsewhere. A stunning crypto-analytic breakthrough, this highly classified project, known as Venona, revealed extensive Soviet espionage networks in the West, including the successful penetration of America’s most closely guarded wartime secret: the Manhattan Project at Los Alamos, which produced the atomic bomb in 1945. The cables were instrumental in identifying key Soviet spies, pointing directly to espionage activity by Julius Rosenberg, and obliquely to Alger Hiss. In Australia, the ‘spymaster’ identified by Venona and pursued by ASIO was Clayton, codenamed ‘Klod’ by the KGB. Altogether, some 2900 Soviet intelligence cables were intercepted and, to varying degrees, deciphered from 1943. It wasn’t until 1995 that materials from Venona were declassified and details of the project publicly disclosed. While some cables were conclusive, others must be treated with caution and circumspection. Venona is fragmentary, raw and ‘one-way’ intelligence data. The cable-senders could exaggerate and the cable-breakers could misinterpret. And until Soviet archives are fully opened, we don’t know the judgements made by the cable-receivers in Moscow.

Nevertheless, the importance of the Venona decrypts to historians of espionage is undeniable. So was their impact at the time: without them, the edifice for McCarthyism would have been more flimsy (J Edgar Hoover, pivotal to McCarthyism, was privy to Venona); without them, the massive scale of Soviet espionage in the West during the Second World War would have been grossly underestimated; without them, it is improbable that Richard Nixon, egged on by Hoover, would have been so relentless in his pursuit of Hiss; and without them, ASIO would not have been formed.⁸

That is, the establishment of ASIO in March 1949 was not because of concerns about the political or industrial strength of the Communist Party of Australia (CPA), which by that time was already declining in influence, prestige and membership. Rather, the Chifley Labor government, under pressure from American and British intelligence services, reluctantly agreed to a new security organisation modelled on MI5. The raison d’être of this new organisation was ‘The Case’: the identification of the nature, extent and source of the leaks of classified information provided by the British, pilfered by Australians and transmitted to the Russians.

ASIO, in short, was formed to hunt spies. And that was where Venona came in. Partially deciphered cables (the veracity of which has never been disputed) reveal that the head of Soviet Foreign Intelligence, ‘Viktor’ (Lieutenant-General Pavel Fitin), had obtained from Klod copies of two top-secret documents prepared for the British War Cabinet by the Post-Hostilities Planning Staff. Consternation was intense, and the quest to identify, locate and interrogate Klod was central to The Case.

I, Spry focuses initially on The Case. It establishes, correctly, that ASIO was effective in neutralising the Klod ‘spy ring’ (more an informal network of about a dozen informants than a tight, coherent ‘ring’ in the style of Rosenberg’s New York group). No arrests were made – for that might have compromised the secrecy of Venona – but ASIO’s identification of the group and its espionage activities was amply confirmed by Vladimir Petrov’s evidence after his defection in 1954. This celebrated event marked the high point in ASIO’s existence – there were spies and they did pass secrets.

Beyond espionage?

The problem was that ASIO went much, much further. It made little meaningful distinction between the small handful of ‘non-legal’ or covert communists who engaged in espionage (such as Frances Bernie, Jim Hill or Ian Milner) and the thousands of CPA members and ‘fellow travellers’ who immersed themselves in daily struggles within trade unions, on local councils and through ‘front’ organisations; who campaigned for better working conditions and greater social justice; and who sided with the underprivileged and the dispossessed.

Three examples, not included in I, Spry, will illuminate the human costs of ASIO’s monitoring of domestic dissenters⁹ and remind us of what happened when Spry’s ASIO crossed the Rubicon from being a professional agency that collected, evaluated and transmitted intelligence, to a sometimes disreputable, often politicised and always shadowy presence, not just monitoring communists but also peace activists, scientists, writers and, surprisingly, even judges, many of whom were not members of the CPA.¹⁰

The carpenter

Our first case is that of Demetrios ‘Jimmy’ Anastassiou, a Greek Cypriot who arrived in Australia in July 1949. He had joined the British Navy in 1943, and was deeply affected by the civil war that ravaged Greece from 1946 to 1949. After completing a technical course, he became a carpenter at the Yallourn power station. In 1950, he led a small demonstration in Yallourn over a reduction in bus services; though scarcely a threat to national security, this proved his downfall.

Why? Although an initial charge of offensive behaviour was later quashed on appeal, the retrial attracted the attention of one Yallourn resident. He wrote to his federal member advising that Anastassiou was ‘disloyal and a menace to the country of his adoption’.¹¹ The MP forwarded the message directly to the minister of immigration, Harold Holt, who then sent it to Spry. Thus began Anastassiou’s security file. That file, like so many compiled by ASIO, was prompted by the ubiquitous functionary of the security services: the informant. And it blighted Anastassiou’s life for at least another decade.

When Anastassiou travelled overseas in 1951, it was ASIO’s intention to obstruct his return, with Spry arguing he would ‘constitute a security risk if re-admitted to this country’.¹² After Anastassiou slipped through the net, attention shifted from keeping him out to getting him out. A case for his deportation was assembled by the Department of Immigration after a briefing by ASIO. Again Spry was personally involved: because Anastassiou was ‘adversely recorded’, Spry wrote, ‘I consider that a strong security objection exists to his remaining in the Commonwealth’. The anodyne phrase ‘adversely recorded’ that punctuated so many leftists’ files assumed dire implications.

In November 1952, Anastassiou was arrested, given a dictation test in Italian (which he did not speak) and declared an illegal immigrant, though a Cabinet meeting in February 1953 saved him from deportation. The meeting decided that, unless subversion, sabotage or ‘similar anti-social conduct’ were involved, migrants who had arrived legally (as Anastassiou had) should not be deported. Spry’s correspondence with the secretary of the Department of Immigration reveals his pique and disappointment: he resented the ‘security information supplied by me’ being overridden.¹³ Had Anastassiou returned to Greece, as Spry desired, he would have faced imprisonment, and possibly death, at the hands of the military junta that he stoutly opposed.

When Anastassiou applied for citizenship in October 1960, Spry’s views prevailed over those of the more lenient Department of Immigration: the director-general personally reviewed the case and recommended that a security clearance be withheld, citizenship be denied and Anastassiou remain an ‘alien’.

Far from being a politically neutral intelligence hunter-gatherer, ASIO – and especially Spry himself – held a sword over certain individuals with contrary political beliefs, even if they had committed no offence against the law and even if, as in Anastassiou’s case, their migration to Australia had been legal.

The scientist

On 27 July 1949, three weeks after Anastassiou arrived in Australia, a young Australian scientist in London protested against the Chifley government’s strikebreaking during the coal strike that year. Thomas R Kaiser had just completed his doctorate at Oxford University under the aegis of the CSIRO. His life was changed, utterly and irrevocably, by the ineffectual protest on the Strand that July afternoon. Normally, such an insignificant demonstration would not have created a ripple: it was small in scale, none of the six young demonstrators was well known, there was no violence or obstruction, the police were not involved and it was all over by five o’clock.

Yet the incident not only made front-page news, it led to an official inquiry by the Australian High Commissioner, heated parliamentary exchanges and a flurry of top-secret cables at the highest levels between London, Canberra and Washington. Why? Because an MI5 informant discovered that Kaiser was one of the protestors. He was dubbed an ‘atom bomb spy’ by the press, even though his research was actually in radar physics.

Archival files have revealed that MI5 and ASIO exchanged information about Kaiser.¹⁴ Before he left Australia in 1947, Kaiser was already the subject of a security file, and MI5 would have learnt, for example, that he was ‘adversely recorded’ because of his attendance at an Australian Association of Scientific Workers (AASW) conference on ‘Atomic Power and the International Co-operation of Scientists’; his participation in a protest meeting against the sentence imposed upon the British physicist Alan Nunn May; and his contribution to an AASW symposium on the Woomera rocket range.¹⁵

After the head of the CSIRO Liaison Office in London, JE Cummins, was visited by ‘one of the senior security people’, Kaiser was sacked from the CSIRO, with whom he anticipated continuing employment upon his return to Australia.¹⁶ He was, understandably, mystified. In 1997, when I spoke with him (shortly before his death), he was still mystified. The real reason for the decision – the US embargo on the transmission of classified information to Australia (which also underlies the establishment of ASIO) – is beyond the scope of this article.

Kaiser returned to Melbourne to confront the CSIRO and pursue his case of wrongful dismissal. He wrote a stream of letters throughout January and February 1950; the final one, seeking permission to attend a meeting of the CSIRO Executive to discuss in person the reasons for his dismissal, received a peremptory reply: ‘After due consideration, the Executive decided that it cannot accede to your request’.¹⁷ There was no more correspondence. Kaiser was blacklisted and, as his ASIO file demonstrates, under constant surveillance.¹⁸

Meanwhile, he remained unemployed. He applied for approximately forty scientific positions in Australia and New Zealand throughout the 1950s, all without success.¹⁹ One application, on which the blacklisters left their fingerprints, was for the chair of physics at the University of New England. McKnight has recorded the intervention by Spry in academic appointments throughout the 1950s and early 1960s, and there is no reason to doubt that such security vetting occurred here.²⁰ Along with two other applicants, Kaiser was shortlisted for the job on the basis of his outstanding academic record: a Master of Science, First Class, from the University of Melbourne (1946); a PhD from Oxford (1949), where his supervisor was Lord Cherwell, one of Britain’s top scientists; and thirteen publications on meteor physics, radar physics and radar astronomy. His referees, who were of international standing, commented on his ‘great ability’ as a scientist and his ‘very fine character’ as a person. The selection committee itself regarded Kaiser’s qualifications exemplary, noting that he had ‘the most brilliant future of any candidate’. But this unsurpassed shortlisted candidate became the political casualty of the blacklist. The final remark of the selection committee was cryptic but lethal: ‘Doubtful whether suitable in view of past political activities’.²¹

He was not employed.

The doctor

On 8 June 1961, an ASIO report noted that a certain Dr Paul James had recently joined the Australian Labor Party in order ‘to clear his name, as he has been branded as a Communist and … this stigma is now affecting his profession as a private medical practitioner’.²²

That ‘stigma’ originated eleven years earlier when James was sacked, with no right of appeal, from his position as a senior medical officer at the Repatriation General Hospital Heidelberg, where he specialised in the psychiatric disorders of Second World War veterans. Although he was assured that the action was taken on neither professional nor technical grounds, James was not given any reason for his dismissal. His files are missing so the case remains as perplexing for the historian as it was for the victim. But a clue lies in a top-secret memorandum from ASIO’s Victorian regional director to Spry: ‘In his existing capacity as a medical practitioner and Army [Reserve] Officer, the degree of employment risk attached to JAMES is negligible. However, in time of war or other national emergency, such risk would increase considerably were the subject person to be mobilised for full-time military service.’²³

As a doctor attached to the Reserve of Officers Command, James would almost certainly have been mobilised for active military service were a third global conflict to start. In 1950, this did not seem a fanciful possibility. Defence preparations initiated by the Menzies government involved, inter alia, placing the citizen military force on a new footing so that it could fight alongside the regular army against the communist foe.²⁴ A fear prevailed that undercover communists would enlist for military service and act, in the event of war, as a subversive ‘fifth column’ within the armed services.

Here we get closer to the reason for James’ dismissal on 29 May 1950. He was neither an open nor undercover communist, but ASIO believed that he was: ‘Subject is adversely recorded and regarded as a security risk’.²⁵ Central to this ‘adverse’ report was the following, which was taken as prima facie evidence of sympathy for the CPA: on the evening of 3 May 1950, James attended a meeting of the Hospital Employees’ Federation. He seconded a resolution, which was defeated, condemning the Communist Party Dissolution Bill introduced into federal parliament six days earlier. Subsequently, ASIO officers inspected the union’s minute book and ‘verified that Dr. James had seconded the motion referred to’.²⁶ This, together with his potential role as an army reserve officer, and the comment from an unidentified but high-ranking ASIO officer (‘Dr James is known to the Repatriation Dept. His name was mentioned during a recent visit I made there. I … will inform the Dept. of this latest material’²⁷) sealed his fate.

Consequently, the chairman of the Repatriation Department used a section of the Commonwealth Public Service Act to trigger James’ dismissal. He was encouraged to do so by the security services who, in turn, were fed information by a ‘plant’ within the hospital. James had, of course, broken no law. His work was important, his expertise highly valued and his medical record impeccable. Ultimately, therefore, he was sacked because of ASIO’s interference on the grounds of his political beliefs. And the stigma, as the ASIO report of 1961 noted, stuck. It was not until the 1960s that he was able to establish a medical practice in western Tasmania.

ASIO then and now

In each of these relatively obscure cases we can observe how lives were stymied or careers thwarted by ASIO. All three individuals engaged in political dissent, and therefore were ‘adversely recorded’. But none was a ‘national security’ threat, or remotely concerned with any espionage that could have justified ASIO’s compilation of dossiers, reliance on informants, and migration and job vetting.

Such cases are a tiny part of a much bigger story of Cold War harassment in the 1950s. Organisations that had a pronounced left-wing bias – particular trade unions, community associations, university groups, Labor Party branches – were targeted and subjected to politicised surveillance. Ministers and the media were also compromised.²⁸ Assessing this period (and the 1960s), the Hope Royal Commission concluded that ‘until quite recently, ASIO could not be taken seriously as an efficient organisation, still less an effective security organisation’. In a judgement relevant to the I, Spry controversy, the commission noted an ‘insufficient understanding [within ASIO] of ASIO’s goals and purposes’. In reference, presumably, to the director-general, Justice Hope also noted ASIO’s ‘poor leadership’ and ‘very bad personnel management practices’ including ‘inadequate training, lack of professional standards, etc.’²⁹ – all of which confirms the thrust of Peter Butt’s I, Spry.

This history of partisan, unprofessional behaviour is in danger of being forgotten. In the post-September 11 era, ASIO has acquired a high degree of respectability and moral legitimacy. Since 2001, its staff numbers have trebled, its budget has grown by 535 per cent to $1.4 billion per annum, and its powers have expanded to such an extent that civil liberties are potentially imperilled.³⁰ Its massive new headquarters in Russell, ACT, which occupies the size of three city blocks and is nicknamed ‘Lubyanka by the Lake’, is currently being constructed at a staggering cost of $589 million.³¹ ASIO’s tawdry past – its improprieties, its smearing, its often dubious intelligence acquired from even more dubious informants, and its occasional unlawful actions – have all been sidestepped as the reputation of this, the most critical of Australia’s six intelligence agencies, is rehabilitated and transformed.

Yet the available information confirms the inherent immorality of much ASIO behaviour in the Cold War – the period during which Henderson judged ASIO to be a ‘success’.

1. Gerard Henderson, ‘Scott needs to take control to ensure ABC represents diverse views’, Sydney Morning Herald, 2 November 2010, , accessed 23 January 2011.
2. Graeme Blundell, ‘A rake’s progress’, Weekend Australian, 30 October 2010.
3. Peter Butt, ‘In defence of I, Spry’, The Drum Unleashed, 3 November 2010, , accessed 23 January 2011. There was a robust exchange between Henderson and Butt about the segment of the program dealing with ASIO’s surveillance of Gorton’s late-night visit to the US embassy with a young journalist, Geraldine Willesee; see also Geraldine Willesee, ‘Curious incident of a journalist and a PM at the embassy’, Sydney Morning Herald, 22 October 2010.
4. Anonymous former ASIO officer, ‘Aunty’s sneering aside, ASIO effectively kept communists in check’, Australian, 13 November 2010; Peter Butt and David McKnight, ‘Spry’s weakness’, Australian, 16 November 2010.
5. The role of Mokros has been discussed by Frank Cain in Terrorism and Intelligence in Australia: A History of ASIO and National Surveillance, Australian Scholarly Press, Melbourne, 2008, ch. 6 and, to a lesser extent, by David McKnight in Australia’s Spies and Their Secrets, Allen & Unwin, Sydney, 1993.
6. Mark Aarons, ‘Top spy was a man of extremes’, Australian, 6 November 2010.
7. Mark Aarons, The Family File, Black Inc., Melbourne, 2010. Henderson refers to Aarons’ book as ‘compelling’.
8. The international literature on Venona is extensive. The best is John Earl Haynes and Harvey Klehr, Venona: Decoding Soviet Espionage in America, Yale University Press, New Haven, 1999. For the Australian dimension, see Desmond Ball and David Horner, Breaking the Codes: Australia’s KGB Spy Network, 1944–1950, Allen & Unwin, Sydney, 1998; David McKnight, ‘The Moscow-Canberra cables: How Soviet intelligence obtained British secrets through the back door’, Intelligence and National Security, vol. 13, no. 2, 1998, pp. 159–70; Frank Cain, ‘Venona in Australia and its long-term ramifications’, Journal of Contemporary History, vol. 35, no. 2, 2000, pp. 231–48.
9. See the following articles by Phillip Deery: ‘“Dear Mr. Brown”: Migrants, security and the Cold War’, History Australia, vol. 2, no. 2, 2005, pp. 40–1; ‘Scientific freedom and post-war politics: Australia, 1945–1955’, Historical Records of Australian Science, vol. 13, no. 1, 2000, pp.1–19; ‘Science, security and the Cold War: An Australian dimension’, War and Society, vol. 17, no. 1, 1999, pp. 81–99; ‘“A dangerous trend towards authoritarianism”: Dr James, the Menzies government and Cold War Australia’, in Phil Griffiths and Rosemary Webb (eds), Work, Organisation, Struggle, Australian Society for the Study of Labour History, Canberra, 2001, pp. 120–6.
10. For the last-mentioned occupational group, see Mark Finnane, JV Barry: A Life, UNSW Press, Sydney, 2007. There are only snippets in a very limited literature about or by individuals experiencing the deleterious effects of ASIO’s dossiers, but see Judith Armstrong, The Christesen Romance, MUP, Melbourne, 1996, pp. 110–12; Stewart Cockburn and David Ellyard, Oliphant: The Life and Times of Sir Mark Oliphant, Axiom, Adelaide, 1981, pp. 187–92; Stuart Macintyre, ‘Max Crawford: A casualty of the Cold War’, Overland, no. 155, 1999, pp. 19–22; David McKnight, Australia’s Spies and Their Secrets, Allen & Unwin, Sydney, 1993; Bernice Morris, Between the Lines, Sybylla Co-operative Press, Melbourne, 1988; Michael Tubbs, ASIO: The Enemy Within, Boolarong Press, Croydon Park, 2008.
11. Correspondence, DN Smith to GW Brown, 9 March 1951, National Archives of Australia [henceforth NAA], A6119/79, item 891.
12. As above. The quotes that follow are taken from this same source: the first of two security files on Anastassiou.
13. Correspondence, Secret and Personal, Spry to Heyes, 5 May 1953, as above.
14. JE Cummins to WI Clunies Ross, 15 August 1949, NAA A8526/21, item PH/KAI/2.
15. See NAA A6119/79, item 1218; A6119/79, item 1219; A6119/XR1, item 48; A6119/84, item 1929.
16. JE Cummins to WI Clunies Ross, 28 July 1949, NAA A8526/21, item PH/KAI/2.
17. GA Cook, secretary CSIRO Executive, to Kaiser, 24 February 1950, NAA A8520/21, item PH/KAI/2c.
18. See, for example, ‘Observations of Thomas Kaiser on Friday, 21st July 1950’, NAA A6119/84, item 1929.
19. Interview with TR Kaiser, Sheffield, UK, 10 July 1997.
20. McKnight, Australia’s Spies and Their Secrets, pp. 146–55
21. Confidential file, selection committee, University of New England, CSIRO Archives (Canberra), series 1169, item 16.
22. NAA A6119/90, item 2551, folio 79.
23. NAA A6119/90, item 2551, folio 64.
24. See David Lee, ‘The national security planning and defence preparations of the Menzies government, 1950–53’, War and Society, vol. 10, no. 2, 1992, pp. 119–38.
25. NAA A6119/90, item 2551, folio 64.
26. ‘Personal and confidential’ memo, Senator Cooper, minister for repatriation, to Professor Bailey, solicitor-general, Attorney-General’s Department, 11 July 1950, NAA A6119/90, item 2551, folio 33.
27. NAA A6119/90, item 2551, folio 26. This was unlikely to be Spry, but as with our previous two cases, Spry was directly involved: a record of an interview with James, which is missing from his file, was ‘taken personally by the Director-General’. As above, folio 23.
28. See David McKnight, ‘Partisan improprieties: Ministerial control and Australia’s security agencies, 1962–72, Intelligence and National Security, vol. 23, no. 5, 2008, pp. 707–25; ‘“Not attributable to official sources”: Counter-propaganda and the mass media’, Media International Australia, no. 128, 2008, pp. 5–17.
29. Justice Hope, Royal Commission on Intelligence and Security, Supplement to Fourth Report, copy no. 2, pp. 3–4.
30. For an analysis of these potentially draconian powers introduced by the Howard government, see Jenny Hocking, Terror Laws: ASIO, Counter-Terrorism and the Threat to Democracy, UNSW Press, Sydney, 2003, ch. 12–13.
31. Sally Neighbour, ‘Hidden agendas: Our intelligence services’, The Monthly, November 2010, p. 28. As one political commentator noted, ‘the ASIO HQ is a tribute to the one of the truths of modern history: triumphant bureaucrats always crown their rise in concrete’, see Graeme Dobell, ‘The counter-terrorism edifice’, The Interpreter, 3 March 2010, , accessed 23 January 2011.