Australians at War Film Archive

Well in a long and varied life I can name without any difficulty the most totally unexpected and surprising turn that ever occurred to me. In early in September in 1950 I was sitting in my house on the rural edge of Melbourne when the

telephone rang and a gravelly voice said, “Colonel Spry, Director General of Security, I would like to have a talk with you, do you think you could come in and see me?” I had never heard not only of Colonel Spry, but I didn’t know that there was such a thing as ASIO [Australian Security Intelligence Organization] at that moment but I must say I was intrigued and so I in due course went in to see him

and up the stairs to his temporary office where it was revealed to me that he was inviting me to join his outfit, ASIO, which he had recently been appointed to head. I asked him first of all how, why he thought a person like myself who had considered himself

basically a man of letters, I’d been at Oxford [University] doing a history course and was going on to English Literature when the war came along and I joined the navy and I had six years at sea. I’ve just written about that but that’s by the way. But after six years at sea I went back for another year at Oxford and I got an appointment as a lecturer in English Literature at Melbourne University

and all my dreams seemed to be fulfilled in that sort of work, it just absolutely appealed to me. So when, after the three year appointment came to an end and feeling that myself as a Rhodes scholar and generally respected citizen had a good chance of having my appointment renewed, it was a considerable shock to find that that was not to happen. That’s a story that’s not so unusual today. Anyway to cut a long story short I, we’d bought a house,

we had three children and a fourth was due, so I was interested in providing for my wife and family but I didn’t feel panic stricken. I did some isolated journalism. I was writing for, I used to write regularly for the Melbourne Age, but still the bank balance continued to dwindle and I was wondering what came next. So when this came out of the blue

I had to think, is this a trap or is it the next step … Well I said to Spry … I said, “Why did you think of me?” And he said, “Oh well, I know quite a lot about you,” he said, “people who know you well have told me a lot about you and I have discovered that you were six years in the navy.

I understand from my friend Sir Edmund Hilary who was a lieutenant governor that he would support you.” I said, “Well.” And then he said, “The reason is that I’ve just been appointed to a most important job of which very few people know anything about but the country, the situation in the country is extremely acute. We are aware of

a real threat to Australia on grounds of espionage and sabotage or particularly subversion and this organisation has been set up by Robert Menzies to put security matters on a new footing.” So I said, “Well that’s fine but why do you think a person with my background

and interests would be any use at this job?” He said, “Well, I’ve told you, I know a lot about you. I think you could do a very good job. Most of our work of course has to be routine, study, a lot of hard work. A lot of it is humdrum but we need imagination. Now you write poetry don’t you?” I said, “Yes.” “Well,” he said, “we need that and I think you could, I feel you could do a very good job.” So I said, “Well

I don’t know quite what to say at this point.” He said, “Well look, I don’t want to rush you but why don’t you see, make up your mind and then come and see how you feel and if after a while you find it’s not the kind of job that suits you, well that’s perfectly all right with me.” So I went back to my wife and a few close friends and told them this astonishing story and they were, they had mixed reactions. Some of them were a bit puzzled,

some were extremely enthusiastic and the more we thought about it the more it seemed the next step.

Well Melbourne University, my old university surprised me in the degree to which Communist influence was accepted and ideas which I thought were out of date seemed to be flourishing. For example,

there was a very vigorous student movement … Communist in the student world and the student representative council was largely dominated by Communists and they, the paper was published by the Communist press and it was, to a considerable degree in my opinion, a news sheet for the world campaign of Communism. It didn’t worry me very much

but some of my friends who were students said this was a misuse of student funds and they got to work and they got on to the student representative council and they campaigned and they were highly successful in wresting this paper Virago away from the Communist domination which it had held. I thought I was glad of that. But it was also a case that in some of the senior levels of the university there seemed to be an

unrealistic attitude and I think that may not be so surprising when I mention that one of the lecturers, senior lecturer in political science who I think had just left the university when I got there, Ian Milner, turned out to be the Australian version of Burgess or McLean [English traitors] and the most effective agent

in our Department of Foreign Affairs as it later turned out. He was a Rhodes Scholar from my own college in Oxford. He went down just as I was, just as I arrived there in ‘78, in ’58, Ian Milner his name was and he was a New Zealander,

a brilliant student. He got first class honours in political science. But he was a true believer as far as Communism was concerned. This was not publicly known but it had a considerable influence and after he left the Department of Political Science he was posted to our Department of Foreign Affairs where he at one stage was temporary,

temporarily in charge of the post-hostilities section. And as it turned out later when I got to the, into ASIO we were, I was one of the few who were allowed to see the decrypts which consisted of the signals sent between the head of, the KGB [Soviet spy agency] office in Moscow

and its posts outside including the post in Canberra and Milner’s name was among those who were explicitly mentioned, with others.

I had one experience to confirm the

effectiveness of Communist influence and propaganda. I went down to the Australia Soviet Friendship Society, a meeting there and there was a discussion on Soviet education and I’d just read a book which drew the parallel between Nazi and the right wing, extreme right wing ideas on education

and the syllabus in Soviet schools. So after having heard a talk by someone who had just been visiting I think, one of the so called people’s democracies, I got up and asked a question as to whether there was not a strong stress on military preparations in policy of Soviet education. There was a most unfavourable hush occurred and as I walked out

from - I never got a proper answer - and as I walked out a very meaningful lady came up to me and said, “So, you were the snake in the grass were you?” This didn’t worry me particularly because I didn’t feel there was any immediate threat except, what happened of course was that the Communists gained a great and growing influence in the trade union movement in Australia and that came out later of course in the

miners’ strike in 1946, ‘49 … when [Prime Minister] Ben Chifley had to take an action which no Liberal/Country Party government has ever taken in putting, in putting soldiers into the mines because

five-hundred thousand miners had gone on strike and the whole country was paralysed. I can still remember the difficulties in getting heating, coal supplies. These are things that come into my mind but they were not dominating my mind. I just felt well this is a situation which has got to be dealt with somehow but I didn’t particularly expect that I would have any direct method. I was curious though because I had a number of left wing friends who were doing their very best to represent

the Soviet Union as a kind of people’s democracy from which we could learn a lot. Now if that was the case, my ideas were far off the mark and I thought when I get into this secret organisation which specialises in this I shall perhaps have an answer to my question.

Well I was appointed by Spry to head up the counter espionage branch. He had branches which dealt with espionage, sabotage, subversion, other matters, but this was the particular thing that he wanted me for. He wanted me because he had a lot of people; he had people who had police experience, with Ron Richards for example, very outstanding detective.

He had a number of people from the armed services but he needed to build up his research aspect of things and he thought I suppose as a Rhodes Scholar I might have some clues on that. So to my astonishment I found myself, I worked hard with Ray Whitrod who had been already in the service and gave me, he was my kind of my kindly nurse to indoctrinate me a bit and give me background which I very much needed. But

Ray Whitrod took me a certain way and then Ray left to become head of the first Commonwealth Police, when the Commonwealth Police was set up he left to be the head of that. But soon after that I was one of two or three people in Australia who were allowed and required

to study what has lately become known as Venona [secret collaboration between intelligence agencies of the United States and United Kingdom involving cryptanalysis of messages sent by several intelligence agencies of the Soviet Union]. I never heard the word Venona then. What I did discover was that the British and the Americans together, and particularly the NSA [National Security Agency] in America, had through a very able cryptographer, Meredith Gardner, had been

able to crack the codes of the KGB communications between the Moscow centre and many of its outlying posts including a large slab of Australian communications. And so that’s how from 1970 … from 1950 to at least I, there was no question to me there was an extremely active

and a successful Soviet espionage ring which had operated in Australia with the leadership of a leading Communist, Walter Clayton, and with officers in the Department of Foreign Affairs or External Affairs as it was then called who were bringing out documents and we … that was the positive as far as a few of us were

allowed to see this raw material. Other people knew absolutely nothing about it for the simple reason that the security was so vitally important that we were not allowed to use it without authority from our British and American masters in that respect or our helpers too. So what we had to do was to set to work and with the clues they had given us try and build up

collateral information. Now we had varied …

The task that I had accepted was counter espionage

as it applied to Australia. We were aware by this time that there was an extremely active and effective espionage …

Well it had become very clear to any thinking person who took an interest in world events that the Soviet Union already had a most extremely well organised active and capable espionage service operating in many countries. You’d had for example Klaus Fuchs in Britain, the atom spy, Harry Gold in America the same. You had, and then just as I joined ASIO or soon afterwards,

there was a stunning revelation which knocked most people sideways and that was the defection of Burgess and McLean, two highly educated and distinguished British diplomats disappeared and it was pretty obvious that there was something at work there. Our job then, I now knew that Australia was subject to the

same threat but how on earth were we to find who was doing it. Well we knew that normally the Soviet Union operated through residents, resident intelligence officers, that is to say people who were diplomats and had diplomatic protection. That was their first base. There was another type of agent who was a non-resident, who therefore wouldn’t have diplomatic protection but

our first and obvious starting point was the Soviet Embassy in Canberra. Therefore we had to find out how and who was doing it and we began immediately to study the personnel of the Soviet Embassy there. We carried out surveillance. We made records of what particular diplomats were doing and we made a certain amount of progress

but we didn’t seem to be getting anywhere and we just had to hope for a lucky break. As to the actual defection of the Petrovs, which was the sensation which we got, a very interesting thing happened. An American Rhode scholar again, Professor …

…. I used to know it quite well …

Well at the time the Petrovs arrived in Australia, an American professor who was head of the Russian research service, Russian research department at Harvard University visited us and I happened to see his name in the paper. I didn’t know him but I got in touch with him and I got him to come in and talk to Spry and a few of us and he stressed

the extraordinary value that a defector could be in counter intelligence and in intelligence. So that gave us a starting point. Now we also began to think who were the men who, who was most likely to be carrying out this function in Australia and Petrov as the Consul and Third Secretary did a lot of travelling. That was one point. Another point was that we had an agent from,

before my time but operating called Michael Bialoguski in the, who operated in Sydney in the Russian Social Club among the pro-Soviets, Russians and Poles. And I directed our branch in Sydney to target Bialoguski particularly towards Petrov which he did with very great success and whenever Petrov went to Sydney he used to visit this man and visit the

Russian Social Club and we began to get slight indications, not positive, that Petrov was very interested in staying in Australia. Now I used to come back every night to the, not every night, I used to come back three nights a week to our office in Queens Road when everyone else had gone and carefully read over the reports which came from this man Bialoguski

to see what, how much we could credit them and how much they were dangerous. The whole thing went on for about two years and what we didn’t know of course is what was going on inside the embassy, but we had I would say, we did a lot of hard work and we did a lot of study

and we had a lucky break because Petrov, unknown to us, had become disillusioned through a visit in Sweden where he felt that he’d been told a lot of lies about the difference between the democratic and the Communist country. He had lost his fervour, his Communist fervour completely. He recognised the brutality of it but he

also had a good job. He was no hero and he had to weigh very carefully the pros and cons and the thing that deterred him most was that his wife, whom we knew very little of, we’d seen photographs and she was an outstandingly charming woman in the Soviet Embassy hierarchy. But we didn’t know very much about her but he knew that she had a mother, father, brother and sister to whom she was devoted left

behind so he had to face the fact that she would probably not come. And this is one of the major factors which we had to work on and I frankly, I said to Spry within, up to within a few weeks of Petrov’s actual defection, “I don’t think he’s going to come.” but another factor had come in on our

side and that was that the atmosphere in the Soviet Embassy was poisoned by jealousy between the Ambassador Levanov and the KGB group – Petrov, his wife, one or two others - whom Levanov feared would be reporting on him separately. They had a separate line to Moscow and first of all Stalin died and after Stalin the

head of the KGB was …Beria. After Stalin’s death there was a move against Beria who had concentrated a lot of power on his own. He was toppled and executed and when that happened

Levanov, the ambassador in Canberra started, he accused Petrov and his wife of forming a Beria group in the embassy and of course this will be sudden death if it was believed in Moscow and this really put the breeze up Petrov and he began then to cast about. Well I took an action myself which was aimed to check up on

exactly what the situation was. Petrov was having treatment to his eyes in Sydney by a doctor called Doctor Beckett in Macquarie Street and I got surprise agreement to approach Beckett and I went and saw him and I said, “We have some clues that this man Petrov may want to stay here, now when you see him next could you just gently sound him out and see what his attitude is?”

Beckett seemed to be very honest and he said, yes, he’d be quite happy to do this. So he started to talk to Petrov about this and Petrov stiffened immediately. He knew what it was all about and Beckett said, “You know, you could settle down very well … there’s that man from Czechoslovakia, he settled down well, if you get a good job, you’ve got freedom, much better situation …” Petrov said, “It’s my duty to go back.”

And Beckett, when I went to see him said, “Look it’s a dead duck, he’s got no, he won’t move an inch.” Petrov told me later on in conversation he understood exactly what it was. He hadn’t made his mind up. He wasn’t going to take a chance but he actually did realise at that point that there was, there were people, Australians in authority who could open the way if he decided to defect. Well it was the …

between hope and hope … a new ambassador arrived called … and Petrov said, “Well perhaps he will be a more reasonable sort of man.” but he turned about worse, turned to be worse even and [UNCLEAR] carried out a raid on Petrov’s safe and found there a document which shouldn’t have been there which again was a mark up against him. Then Petrov’s relief

arrived from Moscow. So he had to decide, will he go or would he stay, and when he met this man who was coming to take his job he said, “I have a message for you from Moscow. You’ve got nothing to worry about.” Now Petrov had been on the SK line, he had been responsible for covering possible defectors in embassies overseas and when he heard this that was, that was it. He knew he was in

danger and he decided at that point that he would join us. When Prime Minister Menzies told parliament on 13th April 1954 that the Third

Secretary of the Soviet Embassy had left his post and sought refuge in Australia and that a Royal Commission would be set off, set up, it was absolutely stunning news to ninety-nine point nine percent of Australians. To ninety-nine percent or ninety percent of us in ASIO, of course only a few of us knew, and we’re absolutely certain that it was a total surprise to the Russians themselves and they panicked.

They immediately demanded that Mrs Petrov, they had a separate house, should come in to live in the Embassy so she was actually held a prisoner in the Soviet Embassy in Canberra and this was world news. It rocketed around the world and in Australia there was a wave of human sympathy. I suppose you could compare it a bit to what happened about East Timor but much more. Here was a charming,

oppressed victim of world Communism going to be sent back to any fate in Russia against her will. Well she had no, not allowed to communicate with anybody but she was held for a number of days and crowds would gather outside the embassy. The ambassador was so, he sent photographers out to take photographs of the Australian crowd. He thought that will frighten them but of course it only encouraged them more. They cheered and waved because

of course in Moscow, if you go and have your photograph taken you scoot because you think it’s the security service. So anyway they arranged that she should be sent back accompanied by another, another of the KGB officers, Kislitsonand two diplomatic couriers who had come out and they were to escort Mrs Petrov back to Moscow. She was not to get …

So Mrs Petrov was packed into the great black ‘Zim’ [car] and she with her escort were driven up to Sydney fairly fast to Mascot to board the plane to take her to Darwin and onwards to Russia. And when they got to Mascot there was a

seething, roaring crowd around the plane because the word had got around and all the Balts and migrants who hated the Russians had gathered to prevent this woman being forced on board the plane. Mrs Petrov herself, she told me the story later in leisure and in detail, she said, “I was terrified. I didn’t know whether my husband had been, had been kidnapped or what and when I saw this crowd I thought they want to tear me limb from limb

because I’ve been spying against Australia so I wanted to get aboard that plane.” The picture you get of her being forced aboard, she said, “I had Sanko, that was the driver and I had one of the couriers and they helped me up. They nearly pulled me off the gangway but eventually I got aboard and I sank into my seat and I was just utterly exhausted.” Then of course the plane took off and the fact that it was a

Constellation which took seven and a half hours to fly from Mascot to Darwin may have saved her life. Because in that time a very valuable operation occurred which I don’t boast about, I was not doing it, my boss Spry was in Canberra with the Prime Minister and we had others of our staff helping and they got in communication by radio with the plane and they said, “Can you find out, perhaps through the air hostess, three

questions. Mrs Petrov, is she afraid of her guards, are they armed? Does she want to stay in Australia?” I don’t know … three things. Is she afraid? Yes. Are her guards armed? Does she want to stay in Australia? So the hostess went and spoke to Mrs Petrov in the toilet. Mrs Petrov said, “They are armed, I am afraid.”

But she would not answer the third question. ‘Where is my husband?’ ‘Where is my husband’ was all she would say. But we had discovered that by carrying arms without declaring them to the captain of a plane you’re breaking international air regulations. The result of this was that when they got to Darwin, Laden, the acting administrator had been warned about this and he had police and they got round the base of the plane which had to land in order to refuel and

these two couriers came down. One of them gave up his pistol. The other one fought against it and he was head locked by some hefty Darwin policemen making a picture of it has sort of gone round the world as well with this fellow has got a head lock on him. Anyway they were both disarmed. Laden spoke to Mrs Petrov and said, “Do you want to stay here?” She wouldn’t answer the question. She said, “Where is my husband. Where is my husband?” And he said, “I’m able to help you.” She said, “Where is my husband?”

And she walked back with the guards, with her escort and sat down in the lounge. She then went into, Mr Laden approached her again and said, “Can I help you?” She wouldn’t reply. Then we made another move which again was utterly crucial. We managed to get a telephone call through from Petrov in the safe house in Sydney

to the airport and Mrs Petrov was able to come and take the call. He said to her, “Ducia, you won’t see your family again because of what I’ve done. I ask you stay here with me in Australia.” She banged the phone down and said, “That’s not my husband!” and went and sat in the lounge again. When the moment came for them to board she got up and

said, “I want to see the administrator.” She knew of course that it was her husband who spoke and she decided to stay. She walked straight through. The guards and Kislitson had to go aboard the plane and they went back to Russia and she was taken to safety, looked after by us with her husband in the safe house.

Communism was a real threat and justly so at that moment of history for what anybody knew because the Communist bloc versus the free world constituted two mighty masses, both of them armed with nuclear weapons and it looked as though Russia and China were closely linked together. They’d shown their expansion, expansive tendencies in Europe, Asia, everywhere and there was a real fear that

a world war would break out and that the Russians were ahead in the space race. They’d got the first satellite into space. They appeared to have complete control of the countries they’d occupied. They pushed into, of course the Korean War is an example of this. North Korea, Communist supported by Russia and China pushing down. It looked like and it could easily have been a victory. That was one of the factors

which was real and it wasn’t just a great Communist bogey at all for most sensible people. They felt it deeply. And the next point was that from Australia’s point of view there was the, this threat to our intelligence, but since Britain and America knew that there was this leak, had been this desperate leak in our security,

the information which we depended on, highly classified information from our most important allies had been cut down to a minimum. In fact classified information was being cut off and one reason for ASIO’s creation was that if we didn’t do that we would never get into the grown up club at all. So when, when ASIO showed its efficiency and particularly I suppose most dramatically with the Petrov defection that changed

things a great deal and we got not only the friendliness but we got the respect of our allied countries. Well I don’t like the word round up at all and I was very glad that …

Well although the Communist threat was pretty widely understood and reckoned with and how you treated it was another matter altogether and I personally, looking back am glad that Menzies attempt to declare the Communist Party illegal was defeated. I don’t even remember what I voted myself at the time. He lost …he won

his referendum and both houses supported him but it was declared, it was thrown out by the High Court and I’m, we’ve often felt that it helped us a great deal. The Communists, our job was not to round them up or head them off so much as to know exactly what they were up to because they operated secretly. We had to have agents in the party. We had to know what Communist policy was and they gave us an

enormous amount of influence, they had a lot of able journalists and they used to publish The Tribune and other [news]papers with their plans and of course they were out to win recruits. So, and then of course you’d had very dramatically demonstrated in the miners strike the fact that Communists, Communists could paralyse our industry and even Chifley had been compelled to do, Chifley by the way was the man who created ASIO, but

he had had to put troops in and he’d made arrests. He’d done all sorts of things that could be considered drastic now but it was done by a Labor government. And then our job in ASIO was to keep a very close watch and provide intelligence. We were a security intelligence. We were not police. Anybody who we interviewed could get up and walk out and we had no powers whatever and didn’t, shouldn’t have because if we couldn’t win,

our aim was to win the mind and also to keep our government informed if they had to do a deal with really violent action. We had a few cases like, it came up later, things like the bombing by the Croatians. That had to be handled by police not by us. So security intelligence was our job, both of course in particularly, intelligence as to what espionage action

was being taken. And incidentally that was a stupendous result because I don’t know whether it’s fully realised now but the Soviet Embassy was so demoralised that they withdrew their whole embassy for four years and had to operate through, not Finland, through Sweden. The Swedes handled their business for four years before they had

an embassy again, which would cost them a lot and I think we sold our primary products in some roundabout way. That’s a really quite a funny story too because the man who came back to resume, open up things and say it’s all different, we’re friendly, we want to be on good terms with you was Screpov and he after two or three years was absolutely caught cold with a

planted agent who was photographed and recorded and he was packed off without any ceremony at all and this business of being friends and not carrying out illicit activity was exposed for what it was.

The Korean War had broken out before I joined ASIO and I was very much in favour of the firm action that had been taken by the Americans and by our participation. To me it looked like just a natural corollary of previous Communist expansionist plans and looking back on it I still feel the same. What happened really was that

North Korea was foaming and eager to invade the South and take it over, the South being the democratic part and they did to a large degree. They got Stalin’s approval, I gather people say that Stalin was a bit more cautious but he felt he had to give them his backing so they had, they had Soviet Russian backing in their push which very nearly won the whole of the peninsula.

Then of course later on the Chinese armies flowed in, in great numbers, and I can remember sitting in a train in Melbourne and reading a demurring editorial, I won’t name the paper, saying why are we involved in this, and I felt this was absolutely crazy. We are involved up to the hilt. If that move had succeeded you would have had, you would have had a Communist

Korea and you would have had a panic stricken Japan, which it would have rushed to make terms with the Communist powers. It would have been terrified with nothing to protect it, so of course when the Americans came in in force I felt that was absolutely right and I felt that we were right to put our shoulder to the wheel as well.

Venona is a name that I’ve only heard recently but I saw the results in 1952 as they applied to Australia. Since then of course several thousand of the decrypts applying to other countries have been revealed. They were a brilliant work by a cryptographer, Meredith Gardner in America, helped by British I think as well, and they were really at the bottom of the discovery of spies

like Fuchs and Burgess and McLean and many others as well including our own spies here, Milner and Hill who were literally named. You see … the Russians didn’t realise until about ‘48 or so when …

Well the world wide network of Soviet espionage was revealed very clearly in Klaus Fuchs in Britain. You had the … in

Britain …

The world wide network of Soviet espionage had shown itself unmistakably in various ways. You had Klaus Fuchs the

atom spy in Britain. You had the Rosenbergs in America. You had of course Kozenko who defected in Canada and revealed a number of spies in America and Canada. Then you had Burgess and McLean and what is now apparent is that a great number of these were actually found through the decryption of

Soviet cables which passed between their posts abroad and the headquarters and those are what I saw, as far as they related to Australia, when I first joined ASIO in 1952. I’d never heard the word Venona which has now been for some reason attached to it all because a great body of them have now been published by National Security Authority in America. It’s the most important and also the most secret, most reliable

and also the most secret, because countries detest revealing what they’re reading of other countries secret communications and it’s understandable why. …. Well the Venona decrypts which I saw documented beyond any question whatever, the

existence of a most effective espionage ring between ‘45 and ‘48 in Australia which included a policeman. It included two senior officers of the Department of Foreign Affairs, it was called External Affairs then, who were bringing documents out, giving them to a Communist leader, Clayton who took them to the

Soviet spy master in Canberra. He photographed them and handed them back and there’s a fascinating account of these two in which it simply says Hill and Milner gave these important documents, which included foreign, very important foreign material, to Makarov, he photographed them and gave them back. They are now in the archives of the department but we can get

them in a couple of weeks if you want to see them again.