Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Tuesday, 6 December 1983
Page: 3250


Mr HAWKE (Prime Minister) —by leave-The Royal Commission on Australia's Security and Intelligence Agencies has reported on that part of its terms of reference which called for it to inquire into the circumstances surrounding the expulsion from Australia of Mr Valeriy Ivanov, First Secretary, Embassy of the Union of Soviet Socialist Republics, Mr David Combe's involvement in those circumstances and the actions of the Government in the matter. Mr Justice Hope was required, under the Commission that was issued to him on 17 May 1983, to report on these matters in advance of his more general report on the activities of Australia's security and intelligence agencies.

Major Findings

The findings of the Royal Commissioner are extensive, balanced and detailed. They amount to a complete endorsement of the actions my Government has taken since we first became aware of the matter on 20 April this year. Among His Honour's central findings are the following:

Valeriy Ivanov was a KGB officer, and the Government was justified in expelling him as it did on 22 April;

David Combe's relationship with Ivanov was such as to have serious implications for national security;

the surveillance of Mr Combe authorised on 21 April was appropriate, and was terminated as soon as it reasonably should have been;

it was proper for the National and International Security Committee-NISC-and the Prime Minister (Mr Hawke), acting on national security grounds, to have secured a decision from Cabinet and the Ministry that Ministers should not have professional dealings with Mr Combe; and

the Government acted properly in its dealings with Mr Combe on 11 May, and was not obliged to give him an opportunity to state his case at any earlier time.

A full summary of the 24 issues addressed by His Honour and the answers given to them, is set out in chapter 9 of the report, and I seek leave to have them incorporated in Hansard.


Mr SPEAKER —I understand that this goes somewhat beyond the guidelines we have issued before; but, in view of the importance of the report and the way in which it is to be handled, I think it would be quite fair to incorporate the document.

Leave granted.

The document read as follows-

Chapter 9

ANSWERS TO ISSUES AND RECOMMENDATIONS

ISSUES

1. In the light of the evidence and my findings and conclusions, I give the following answers to the Issues:

Issue 1 On the evidence available to ASIO on 20 April 1983, was ASIO's assessment of Ivanov as a Soviet intelligence officer-

(a) correct; or

(b) reasonably open to it?

Answer 1 (a) Yes.

Issue 2 On the evidence which was available to ASIO on 20th April 1983, was ASIO 's conclusion that Ivanov's relationship with Combe was such as to have serious implications for national security-

(a) correct; or

(b) reasonably open to it?

Answer 2 (a) Yes.

Issue 2A Was Combe's relationship with Ivanov in fact such as to give rise to serious implications for national security as at 20th April 1983?

Answer 2A Yes.

Issue 3 If yes to 2 (a) or 2 (b), what were the implications for national security?

Answer (i) Mr Ivanov might have succeeded in recruiting Mr Combe clandestinely to obtain and to hand over confidential information or confidential documents of value to the Soviet Government to the detriment of Australian interests.

(ii) Mr Ivanov might have succeeded in recruiting Mr Combe to act clandestinely as an agent of influence to try to persuade members of the ALP, including Ministers, to adopt policies or to act in a way favourable to the Soviet Government.

(iii) the relationship between Mr Ivanov and Mr Combe was about to become clandestine and ASIO would no longer be in a position to monitor it, either effectively or at all.

Issue 4 If Yes to 2 (a) or 2 (b), should ASIO have attempted to acquaint Combe with its conclusion before communicating with the Prime Minister?

Answer No.

Issue 5 Did the Director-General of ASIO act properly in communicating with the Prime Minister?

Answer Yes-although it would have been appropriate, because of the delay involved in securing an appointment with the Prime Minister, for the Director- General to have communicated earlier with the Attorney-General.

Issue 6 Did the Prime Minister act properly in convening the meetings of the National and International Security Committee which were held on 20th and 21st April 1983?

Answer Yes.

Issue 7 Did the NIS Committee decide, and was it reasonably open to the NIS Committee to decide:

(a) to request the Soviet Ambassador to make arrangements for Ivanov to leave Australia within seven days?

(b) that the Prime Minister should inform other Ministers that they should not make use of the consultancy services provided by Combe?

(c) that the Leader of the Opposition should be briefed on the expulsion of Ivanov and the background thereto?

(d) that the Chief Minister of the Northern Territory should be advised of the relationship between Combe and Ivanov and of the activities of Combe?

(e) that the Director-General of ASIO arrange for immediate surveillance of Combe by all appropriate means?

Answer (a) Yes

(b) Yes

(c) Yes

(d) Yes

(e) Yes

Issue 8 If Yes to 7 (a), was it proper for the Government to notify and announce the expulsion of Ivanov in the manner which it chose?

Answer Yes.

Issue 9 If Yes to 7 (b), should Combe have been afforded an opportunity to be heard by the Government:

(a) before the NIS Committee decided that the Prime Minister should inform other Ministers;

(b) at any and what time after the decision of the NIS Committee, not being a time fixed by or by reference to the making of any statement in either House of the Parliament.

Answer (a) No

(b) Although not required by law, it would have been appropriate for the Government to have provided such an opportunity after 4 May. The occasion of providing such an opportunity no longer existed after 12 May. (Steps to provide such an opportunity began on 2 May).

Issue 10 If Yes to 7 (b), were the reasons of the NIS Committee in deciding that the Prime Minister should so inform other Ministers wholly or partly-

(a) the Committee's perception of the activities of lobbyists in general?

(b) Combe's position as a lobbyist having regard to the official position formerly occupied by him within the Australian Labor Party?

(c) the implications for national security of the relationship between Combe and Ivanov?

Answer (a) No

(b) No-although the matter was discussed

(c) Yes

Issue 11 If Yes to 7 (c), was the briefing of the Leader of the Opposition properly carried out?

Answer Yes.

Issue 12 If Yes to 7 (d), was the briefing of the Chief Minister of the Northern Territory properly carried out?

Answer Yes.

Issue 13 Was it proper for the NIS Committee, if it decided that the Prime Minister should inform other Ministers that they should not make use of the consultancy services provided by Combe, to require that such information be given without comment on the relationship between Combe and Ivanov?

Answer Yes.

Issue 14

Was the surveillance of Combe: (a) duly authorised?

(b) carried out by all appropriate means?

(c) terminated as soon as it reasonably should have been in all the circumstances?

Answer (a) Yes.

(b) Yes.

(c) Yes.

Issue 15

Did the Prime Minister inform, and if so was it proper for him to inform, other Ministers that they should not make use of the consultancy services provided by Combe: (a) by raising the matter at a Cabinet meeting on 26th April?

(b) by raising the matter at a Ministry meeting on 2nd May?

(c) without informing Ministers of the relationship between Combe and Ivanov?

Answer (a) Yes.

(b) Yes.

(c) Yes.

Issue 16

Was there any unauthorised or improper disclosure by any and what Minister of the decision to expel Ivanov before it was publicly announced?

Answer (i) As part of the disclosure referred to in the answer to Issue 17, Mr Young made an unauthorised and improper disclosure on 21 April 1983;

(ii) Mr Young made two unauthorised disclosures which were not improper on 22 April 1983.

Issue 17

Was there any unauthorised or improper disclosure by any and what Minister of the information made available to the NIS Committee concerning the relationship between Combe and Ivanov before 11th May?

Answer Mr Young made an unauthorised and improper disclosure on 21 April 1983.

Issue 18

Was there any unauthorised or improper disclosure by and and what Minister of: (a) the decision of the NIS Committee that Ministers should not make use of the consultancy services provided by Combe?

(b) the decision (if any) taken by Cabinet on 26th April in respect of Combe?

(c) the decision (if any) taken by the Ministry on 2nd May in respect of Combe?

Answer (a) No.

(b) No.

(c) No.

Issue 19

Was it proper for the Government to acquaint Combe on 11th May with the information which had been presented to the NIS Committee and to receive a statement from him of his version of his association with Soviet officials?

Answer Yes.

Issue 20 If Yes to (19), was Combe, on 11th May:

(a) properly acquainted with the information which had been presented to the NIS Committee;

(b) given a proper opportunity to present his version of his association with Soviet officials?

Answer (a) Yes-to the extent that it was appropriate to do so.

(b) Yes.

Issue 21 Was any and what agreement or arrangement concluded on 11th May between Combe and the Attorney-General or any other member or members of the Government as to subsequent disclosure of or comment upon Combe's connexion with Ivanov and the Government's actions in respect thereof.

Answer Yes. An agreement that the Prime Minister would make an agreed statement to the House of Representatives on 11 may 1983 and that neither the Government nor Mr Combe would make any public comment on the statement or its subject matter except that a statement (to be approved by the Attorney-General) might be made by Mr Combe, about his proposed defamation action in respect of an article published in the Daily Mirror.

Issue 22 If Yes to 21, did:

(a) the Government (otherwise than by action or statement in Parliament);

(b) Combe;

(c) any other relevant person;

resile in any and what way from such agreement or understanding?

Answer (a) No.

(b) Yes-by making public statements on the matter.

(c) No.

Issue 23 Should any of the answers to 7 (a), (b), (c), (d) or (e) have been different, and if so, in what way, if all the facts relevant to that answer or to those answers had been available to the NIS Committee on 20th and 21st April, 1983?

Answer No.

Issue 24 If Yes to 2A, are there now any and if so what national security considerations which should be taken into account in deciding whether Combe's access to Ministers should be limited in any way?

Answer The national security considerations which led NISC to make the decision referred to in Issue 7 (b) no longer apply and are not now relevant to Mr Combe' s access to Ministers.


Mr SPEAKER —I ask the Prime Minister whether there was also a suggestion that when various paragraphs were dealt with he would seek their incorporation.


Mr HAWKE —Yes, Mr Speaker.


Mr SPEAKER —Perhaps he will proceed with that request.


Mr HAWKE —Before I do so, I express my gratitude to the Leader of the Opposition (Mr Peacock) for his co-operation in allowing the incorporation of that matter in Hansard. I am indebted to him. I have mentioned to you, Mr Speaker, and to the Leader of the Opposition that in my prepared address to the House, where I make assertions as to what is contained in the report I have indicated the paragraph sustaining those observations. It would be a matter of convenience if, as I go through the address, I not refer to those paragraphs but have them incorporated in Hansard. Again, I am indebted to the Leader of the Opposition.


Mr SPEAKER —I think, in the circumstances of this report and the debate, that is a commonsense procedure to follow. I will allow the paragraphs to be incorporated in Hansard.


Mr HAWKE —Thank you, Mr Speaker.

David Combe and National Security Implications

The decisions taken by NISC on 21 April were premised upon the view that the relationship between Mr Combe and Mr Ivanov was such as to give rise to serious security concern. That was made plain in my statement to Parliament of 11 May 1983. The correctness of the view formed by NISC is confirmed beyond any doubt by Mr Justice Hope's report. The Commission has now had the benefit of much more extensive evidence that was available to the NIS Committee. While some of the material before the NIS Committee has been shown to be incomplete or erroneous, His Honour found that these errors were of no more than peripheral significance to the issues before and the decisions of the Committee. The evidence before the Commission confirmed and reinforced the case that Mr Combe was a security risk.

Mr Justice Hope concludes in fact that the case against Mr Combe emerging from the additional evidence before the Commission was stronger than the case presented to NISC by ASIO on 21 April (4.110).

Paragraph 4.110 reads-

4.110 I have concluded that evidence adduced before the Commission made a stronger case for action by NISC than the case presented on 21 April. The facts disclosed by the evidence would certainly have left it no less open to NISC to make the decisions which it did, and, in some respects, would have compelled it to make those decisions. The mistakes which ASIO made in presenting the case to NISC should not have been made, but they did not touch the main thrust of the case and were not matters which NISC members relied on either at all, or to any significant extent. I shall deal in turn with each of the specific errors which was made, or which was claimed on behalf of Mr Combe to have been made, by ASIO in presenting the case to the Prime Minister and to NISC. I shall also consider whether any of the decisions which NISC made on 21 April should have been different had the facts established by the evidence been put before the Committee.

On the evidence before him Mr Justice Hope was satisfied that Ivanov intended, if possible, to use Mr Combe to obtain and to hand over to him information and documents illegitimately, and in the interests of the Soviet union, and to act, wittingly or unwittingly, as an agent of influence (4.103).

Paragraph 4.103 reads-

4.103 I have concluded that one of the purposes of Mr Ivanov's cultivation of Mr Combe was illicit, and that to draw this inference from the evidence is not mere speculation. No doubt Mr Ivanov intended to use Mr Combe as well for legitimate purposes, as, for example, in the overt promotion of Soviet/Australian trade. However, he also intended, if possible, to use Mr Combe to obtain and to hand over to him information and documents illegitimately, and in the interests of the Soviet Union, and to act, wittingly or unwittingly, as an agent of influence . I reject the view that Mr Combe's access to Ministers and their staffs was so limited that he could not achieve any of these objectives even if he were so minded. It is common human experience that many people who possess confidential information can be induced to disclose it to others whom they know and trust. Events over the last decade in Australia demonstrate, if demonstration be necessary, that although confidential documents are not, or at least should not be, left lying about for a casual visitor to read or to take, they, or copies of them, can be obtained by somebody with the right connections and information. Mr Combe's claim to be a 'has-been' without influence cannot stand with the evidence. In particular, it is inconsistent with his recommendation in the CBA report that he be used (assuming that he told the ALP the whole story) as an overt agent of influence, to 'upscale' relations between the ALP and the CPSU. The view that Australia has no secrets that the KGB would wish to acquire, and that the KGB would not seek to influence those in this country who would reject an overt approach by its officers, can hardly stand with the continuous KGB presence and activity in Australia. To Mr Ivanov, it must have seemed that the purposes which I have described could be achieved through Mr Combe. I do not mean by this that Mr Ivanov would have thought that Mr Combe would meet every request. I mean only that he would have thought that if Mr Combe were willing, he could try, and was in a reasonably good position to succeed. Moreover, Mr Ivanov must have thought that, taken carefully, Mr Combe might be persuaded to try. Mr Combe's conversations in Moscow, and his discussion with Mr Ivanov on 4 March, would obviously have encouraged the KGB in this view. Even without the events of 3 April, it would have been clear that the KGB officer had an illicit purpose, but the disinformation given by Mr Ivanov to Mr Combe on that day, and the suggestion as to future contact, satisfy me on that matter. The disinformation was another significant step in the process of cultivation, and the obvious purpose of the suggestion as to contact was to convert the relationship between Mr Ivanov and Mr Combe from one that was relatively open to one that was concealed. Such concealment was to advance, not Mr Combe's interests, but those of the KGB. Counsel for Mr Combe suggested a number of equally possible explanations of a move to clandestinity, ranging from a desire for privacy to a desire to terminate the relationship. I reject the alternative explanations as being untenable. Mr Ivanov was obviously concerned that the relationship should become clandestine. The proper inference from that concern is that the KGB intended in the course of covert contacts, to attempt to effect an illicit purpose.

One of the central features in His Honour's conclusions was the finding that the relationship between Ivanov and Mr Combe was about to become clandestine and ASIO would no longer be in a position to monitor it, either effectively or at all. The implications for national security flowing from these matters were real and serious (4.109).

Paragraph 4.109 reads-

4.109 The danger to national security involved in Mr Combe's relationship with Mr Ivanov appears clearly enough from what I have already said in this Chapter and elsewhere. It was, to adopt an expression used in evidence, that Mr Combe might be 'sucked in'. If he were, he would be in a position to do considerable damage. Mr Ivanov, whether by a long and gradual cultivation, or by some shorter process culminating in an entrapment, might have succeeded in recruiting Mr Combe to obtain and hand over confidential information or documents of value to the Soviet Government, to the detriment of Australia's interests, or to act as an agent of influence to try to persuade members of the ALP, and in particular Ministers, to adopt policies, or to act in a way, favourable to the Soviet Government. Counsel for Mr Combe has trenchantly challenged the notion of ' agents of influence' but I adhere to what was said in the Fourth Report of the Royal Commission on Intelligence and Security at paragraphs 44 to 49. This accords with what was said in the Second Report of the Commission of Inquiry Concerning Certain Activities of the Royal Canadian Mounted Police, page 39 (23 January 1981) that it is 'the indisputable duty of the State to protect its secrets from espionage, its information from unauthorised disclosure, its institutions from subversion and its policies from clandestine influence'. The same notion underlies the definition of 'active measures of foreign intervention ' in s. 4 of the Australian Security and Intelligence Organisation Act 1979, as 'clandestine or deceptive action taken by or on behalf of a foreign power, to promote the interests of that power'. 'Security' is also defined in s. 4 of the Act to mean 'protection of, and of the people of, the Commonwealth and the several States and Territories, from' inter alia, 'active measures of foreign intervention' which are earlier defined, and which, as I have indicated, comprehend activities of agents of influence. A similar definition was given to the expression 'foreign interference' in Recommendation 2 (b) of the Canadian Commission of Inquiry in its Second Report, p. 1067. I have already pointed out that Mr Combe recommended in the CBA Report that he should act, in effect, as an overt agent of influence, assuming that he revealed to the ALP the source of his activities. Moreover, since the relationship between Mr Combe and Mr Ivanov might have become, and, as I have found, was about to become, clandestine, ASIO would no longer be in a position to monitor it, either effectively or, possibly, at all. The implications for national security flowing from these possibilities were real and serious.

The key elements in the report which, when pieced together, justify His Honour' s conclusions that Mr Combe, however unwittingly or unintentionally, was a security risk may be summarised as follows:

Mr Combe had access to Ministers, and his potential access to Ministers was very considerable (4.95).

Ivanov was a KGB officer; at the least, Mr Combe believed that he probably was; and his assertion that he believed no more than that Ivanov, like any other Soviet diplomat, might be KGB was not genuine (2.41, 4.94).

Mr Combe's visit to the USSR in November-December 1982 was significant: He had been selected by Ivanov; he was given access to unusually high level officials in the USSR; and following his return made recommendations which, if implemented , would have involved his client, the Commercial Bureau of Australia, CBA, in political or propagandist activities of benefit to the Soviet Union (4.45).

Ivanov was cultivating Mr Combe for, inter alia, illicit purposes; in the course of that cultivation, and on written instructions from the highest levels in the Soviet Union, Ivanov-though not himself having any responsibility for trade matters-proposed to Mr Combe that he should work in trade on behalf of the Soviet Government (4.70).

Mr Combe suspected that Ivanov might have had some ulterior illicit purpose (4. 108).

Mr Combe's assertion that he soon lost all interest in the Moscow trade proposal was deliberately false (4.93). Evidence of this included his conversation on 16 March with Mr Alparslan, a NSW Government trade official, that he had been appointed as a representative of the Soviet Central Committee and was liaising with a political officer of the Soviet Embassy: Mr Combe's denial that he had made this statement was deliberately false (4.76).

Mr Combe would be capable, on the evidence of his disclosure to Ivanov of the matter relating to the CBA report, of betraying a confidence either unwittingly or quite deliberately (4.20).

Mr Combe's statements in evidence about the deterioration in his relationship with Mr Ivanov-that during March he came to regard him as a ''creep''-were deliberately untrue (4.92).

On 3 April Mr Ivanov told Combe that his house was bugged, his phone was tapped and that he had been under surveillance since he arrived back from the USSR; further, that he should not get in touch with Ivanov, should maintain a low profile, and that Ivanov would contact him by other means (4.81), 4.85): On his own admission, Mr Combe in fact accepted Ivanov's proposal that their relationship should henceforth be conducted in a clandestine fashion (4.106).

Mr Combe's failure to report Ivanov's warning points to an appreciation by him that he might be seen to have been compromised by Ivanov (4.107).

While in April 1983 Mr Combe would have rejected any request to spy for the Soviet Union, there is a doubt whether he could have withstood a long and subtle process of cultivation and whether he appreciated the dangers inherent in his relationship with Ivanov (4.107).

Mr Combe allowed his ambition to override his judgment and to be led into a position where his loyalty could become suspect: The consequent danger was certainly apparent and probably real (4.108).

Paragraph 4.95 reads-

4.95 Mr Combe denied that he had the degree of access to Ministers and their staffs which ASIO assumed he had. In support of this denial he provided evidence of what he claimed to be the limited access which he had enjoyed up to 20 April. It must be remembered, however, that the Ministers had been appointed less than six weeks before, on 11 March, and that the Economic Summit had taken place between that date and 20 April. Mr Combe does not appear to have had any difficulty in contacting Ministers or members of their staffs during that period , except when he tried to raise Mr Matheson's affairs with Mr Bowen. Thus, when, on 6 April at Peaches Restaurant, the question arose as to what the new Government would do about the sanctions, Mr Combe immediately rang Mr Evans, the Prime Minister's Principal Private Secretary, to find out. Conversations which Mr Combe had after 21 April, including one with Mrs J. Taggart on 28 April, show the extent of his access and what he could arrange. It is true having regard to what is now known of the attitude of certain Ministers to lobbyists, he may have encountered difficulty in seeing those Ministers, but this was not known to him, much less Mr Ivanov, at the time. Mr Ivanov must have seen Mr Combe as having greater potential access than any other person with whom he was likely to become friendly. In fact, whatever particular limitations there might have been, Mr Combe's potential access was still very considerable. Indeed, Mr Combe complains that his access was of great value to him, and that the Government, in taking it away, has greatly diminished his earning capacity.

Paragraph 2.41 reads-

2.41 As will become apparent in later sections of my report, there were certain errors and misconceptions contained in some of the information provided by Mr Barnett to the Prime Minister at their meeting in the afternoon of 20 April. The nature and significance of those errors and misconceptions will be examined later. Before turning to the response of the Government to ASIO's case, I make the following observations of ASIO's handling of the matter up to and including Mr Barnett's meeting with the Prime Minister on 20 April-

(i) ASIO's detection and identification of Mr Ivanov as a KGB officer less than 12 months after he arrived in Australia was achieved through a process of careful and professional analysis. Its identification of Mr Ivanov was correct and was confirmed to be so in early 1983.

(ii) When ASIO formed its opinion as to Mr Ivanov's intentions in regard to Mr Combe, it adopted a cautious and objective attitude to Mr Combe's relationship with Mr Ivanov. It was conscious of Mr Combe's position both in political circles and the community generally, and avoided taking any precipitate action which might have unfairly affected Mr Combe. An example of this occurred on 3 February 1983 when the Director-General of Security deliberately refrained from mentioning Mr Combe's name in a routine briefing of the former Attorney-General, Senator the Honourable P. Durack, during which the activities of Mr Ivanov were outlined.

(iii) There is no evidence that, before 21 April 1983, Mr Combe was the target of any surveillance by ASIO. To the extent to which ASIO made observations of Mr Combe's movements and activities, they were entirely incidental to its surveillance of Mr Ivanov and other Soviet officials.

(iv) The Director-General of Security acted responsibly and within the provisions of sub-s.17 (1) of the Australian Security and Intelligence Organisation Act 1979 in deciding, on 5 April, to notify the Prime Minister of his concern. However, after he was advised that the Prime Minister would be unable to see him for almost two weeks it would have been proper for him to have sought an appointment with the Attorney-General, who was the Minister responsible for the administration of the Act. It is now clear that no damage to the national security occurred as a result of the delay in briefing the Prime Minister. However, this judgment is made with hindsight. The potential damage to national security from delay was serious.

(v) On the material available to ASIO on 20 April there is no doubt that its conclusion that Mr Ivanov's relationship with Mr Combe was such as to have serious implications for national security was correct. Those implications are discussed in Chapters 3 and 4.

(vi) The evidence satisfies me that it was reasonably open for ASIO to conclude that there were grave dangers in attempting to acquaint Mr Combe with any of the relevant material before communicating with the Government. Not only were the opinions about Mr Combe's likely reaction to such an approach overwhelmingly against making it, but the information which ASIO gleaned from his conversation of 4 March with Mr Ivanov entitled it to conclude that Mr Combe would probably be hostile to an approach from ASIO. ASIO's view was confirmed by the Prime Minister who rejected the notion of counselling Mr Combe on security grounds amongst other reasons.

(vii) with the qualifications indicated in 4.110 to 4.113 and Appendix V Mr Barnett's presentation to the Prime Minister was adequate, objective and fair. He was aware of the delicacy required in putting to a Prime Minister that a close political colleague had become involved with a Soviet spy. He showed an appreciation of the sensitivity of the whole matter and did not fail to declare the interest of ASIO in achieving the public expulsion of Mr Ivanov with concomitant publicity and kudos for ASIO.

Paragraph 4.94 reads-

4.94 The third statement, that Mr Combe believed that Mr Ivanov was no more likely to be a KGB officer than any other Soviet diplomat, was staunchly adhered to by him. Thus, he said that his response, 'one has always assumed that' when Mr David Barnett said to him on the telephone on 26 April, 'you've known he was KGB since you first met him', was no more than an expression of this belief. After that remark to Mr Barnett, Mr Combe went on to say that 'anyone who thinks that there's something revelatory about the fact the KGB operates in Australia believes in fucking Easter bunnies'. I do not accept Mr Combe's assertion that this statement as to Mr Ivanov's position was his genuine belief. The matter has to be looked at in the light of Mr Combe's extensive political experience, his considerable political perception, and his wide knowledge and experience of the Soviet Union and its diplomats. In this light, he would have seen Mr Ivanov, although only a First Secretary, as having qualities which marked him out from other Soviet diplomats, and as having many of the characteristics which might be expected of a KGB officer. Mr Ivanov's access to information, his ability to get things done, his readiness to become involved outside his ostensible area of responsibility in matters of trade, and his relative flexibility in discussing Soviet affairs, all of which led Mr Combe to think that he was 'more than he appeared to be', must have caused Mr Combe to consider whether he was a KGB officer. Finally, when Mr Ivanov told him that he might be (or was likely to be) expelled as Soviet diplomats in other countries had been expelled, Mr Combe, knowing that those diplomats had been expelled because of their intelligence activities, made no enquiry as to why he should be a candidate for expulsion. I do not accept that it did not cross his mind that a possible reason for Mr Ivanov's expulsion, if it were to happen, would be that he was a KGB officer. I have concluded that, at the least, Mr Combe believed that Mr Ivanov was probably a KGB officer.

Paragraph 4.45 reads-

4.45 If implemented, the first four recommendations would have involved CBA in political or propagandist activities of benefit to the Soviet Union which Mr Combe 'regarded as matters the Soviets wanted to achieve'. None of the suggested activities had been indicated by any of the Soviet officials with whom Mr Combe spoke in Moscow, to be something in which CBA should become involved. The only comment from which any such suggestion could be inferred was that of Mr Parasteyev about the lack of CBA participation in the USSR-Australia Friendship Society in Moscow. Mr Parasteyev had nothing to do with trade, and Mr Smeliakov, who did, made no such suggestion. However Mr Combe held the view that all important decisions were made within the Central Committee and were politically motivated. He formed the opinion that CBA's position would be maintained and enhanced if it were to become involved in these activities.

Paragraph 4.70 reads-

4.70 It seems clear that Mr Ivanov displayed greater interest in Mr Combe between 7 January 1983 and 4 March 1983. Before the latter date, officials in Moscow had taken the opportunity to observe Mr Combe closely. Presumably they made some assessment of him in the light of what he said to them, coupled with any previous knowledge of him and his activities. Then, on 3 February, the Australian election was called, and, in the course of the month, it appeared highly probable that the ALP would take over the government. At some time before 4 March Mr Ivanov received written instructions, initiated at the highest level in the Soviet Union, to ask Mr Combe to work for the Soviet Union. In the light of the conversation of 4 March the KGB undoubtedly would have regarded Mr Combe as a very good person to cultivate with a view to his ultimate recruitment as an agent. Whether the process would be successful would have to be determined in the future, but nothing would be lost by trying, and the benefits from a successful cultivation would be great. Pursuant to his instructions, Mr Ivanov, with whom Mr Combe had not discussed CBA or its trade problems before 4 March, took a significant step in the cultivation.

Paragraph 4.108 reads-

4.108 On the whole of the evidence, I am satisfied that Mr Combe suspected that Mr Ivanov might have had some ulterior illicit purpose, but was confident that he would recognise, and could handle, any danger or trap, and reject any inducement. He was extremely anxious to become involved in Soviet/Australian trade which he saw as potentially lucrative, and which would involve him closely in Soviet/Australian relations. His preference was to work directly for the Soviet Government, but, until that could be arranged, he was prepared to achieve that end by working for CBA. He saw the use of Mr Ivanov and a political approach as the most effective way to ensure his own participation. He saw an opportunity, and went for it. His ambition overriding his judgment, he allowed himself to be led into a position where his loyalty could become suspect. The consequent danger was certainly apparent, and probably real. The extent of the danger turned on his ability to perceive it and extricate himself before it was too late. Mr Combe may well have done this, but there was a reasonable chance, obviously perceived by the KGB, that he might not. I add that if Mr Combe did not suspect that Mr Ivanov might have had an illicit purpose-a state of mind which I consider would show great naivety on Mr Combe's part-the risk of his becoming compromised was as great as, if not greater than, I believe it to have been.

Paragraph 4.93 reads-

4.93 The second statement, that about his lack of interest in Mr Ivanov's Moscow proposal, is likewise contrary to the evidence. Mr Combe said in evidence that he showed enthusiasm for the proposal on 4 March, and that he was looking forward to it coming to fruition. On 4 March, Mr Combe sought Mr Ivanov's assent to him, Combe, concluding a contract with CBA on 6 March. This was a positive indication of Mr Combe's continuing interest in the Moscow proposal. Further, Mr Combe's contract with CBA was one which he could determine after three months if he wished, a delay which would not be likely to affect Mr Combe's ability to enter into an agreement with the Soviet Union. At no time during March or April did Mr Combe tell Mr Ivanov he was no longer interested, even though his evidence is that Mr Ivanov reported progress with the matter to him on 21 March. Moreover, it was again suggested by Mr Ivanov on 3 April, that Mr Combe should meet the representative of GKES. When Mr Combe told Mr Alparslan on 16 March that he was the representative of the Central Committee, he must have had in mind a proposal in which he was still interested. Mr Ivanov's statement to Mr Combe on 6 March about the Soviet Government's preference for government to government trading, together with the new Australian Government's preference for trading arrangements of that kind, would have indicated to Mr Combe that his proposed retainer from CBA might be shortlived, and that any arrangement which he might make with the Soviet Union would have better long-term prospects. There was thus every inducement for Mr Combe to remain interested, quite apart from his fervent desire to improve Soviet/Australian relations, which he hoped his work for the Soviet Union would do. Furthermore, on 29 April, he had a discussion with Mr Toohey about the Ivanov affair and his own connection with it . He gave Mr Toohey further information on 12 May. Mr Combe agreed that the relevant parts of the article written by Mr Toohey which appeared in the ' National Times', for the week 13 to 19 May, were based on what he had told Mr Toohey. In that article, it was reported that Mr Combe had 'discussed doing work for the Russians of a trade representation nature', and that 'no specific figure was mentioned and no final arrangement was ever entered into. Nor was it clear just what Soviet trade company Combe would be representing'. Mr Combe is also reported as saying that 'it might have been possible for the Americans to have picked up some draft document in which he was to have been paid for working for some Soviet trade organisation' and that 'he was not aware that any such document existed, but would not be responsible for whatever boasts Ivanov might be making about progress in boosting trade or in getting along well with Combe on a more general basis'. There is no hint in any part of the article that Mr Combe had lost interest in the proposal. I do not believe Mr Combe's statement that he had lost interest in it, and I believe that his evidence to that effect was deliberately false.

Paragraph 4.76 reads-

4.76 On the following day, 16 March, Mr Combe had a conversation with Mr J. Alparslan, who was then a trade and investment adviser to the New South Wales Minister for Industrial Development and Decentralisation, the Honourable D. Day. In this capacity, Mr Alparslan had contact from time to time with Mr Fasham and officers of Pactra. The conversation between Mr Combe and Mr Alparslan was directed mainly to the reasons for what Mr Combe claimed was the preference shown by the New South Wales Government to Mr Fasham and Pactra. Mr Combe told Mr Alparslan that the Soviet officials 'were not really all that interested in Pactra or in the Commercial Bureau by virtue of what they considered to be the financial weaknesses of these companies' and 'they were looking for much financially stronger companies', such as Elders or BHP. Mr Alparslan said that he told Mr Combe that he apparently had not been given the full information about the matters and had only one side of the story. Mr Combe replied:

No, I have the entire story. I have been appointed as a representative of the Soviet Central Committee and I am liaising with the political officer of the USSR Embassy here in Australia.

In cross-examination, Mr Alparslan agreed that he did not distinctly remember the word 'appointed', but asserted that he distinctly remembered the word ' representative' or 'representation'. Mr Alparslan impressed me as a witness of truth and as reliable, and I have no doubt that he was correct in his evidence. However, I do not conclude from Mr Combe's statement to Mr Alparslan that he had , in fact, already been appointed as a representative of any Soviet organisation . The statement is relevant to a determination of how Mr Combe viewed, at about 16 March, Mr Ivanov's Moscow proposal, but I think that Mr Alparslan was right in his view that Mr Combe was simply trying to impress him. I consider that Mr Combe's denial of Mr Alparslan's evidence was deliberately false.

Paragraph 4.20 reads-

4.20 I needed no evidence of friends or acquaintenances to accept that Mr Combe is an expansive person, who talks well, wittily and, frequently, at length, particularly about political matters. It is understandable that it was said of him that he 'was not noted for his social reticence'. There were several views of his ability to keep confidences. While some witnesses said that he could keep them, Mr Cameron said that although he revealed confidences to other people, 'he may well have been doing that as part of his job'. However, it was his experience that he would 'tell people certain things that perhaps he should not' . Mr P. N. Gill, the owner of Peaches Restaurant, said that Mr Combe had told him things 'that should have been privy to his business', and that he did not hesitate to disclose to Mr Gill details of his business dealings. More importantly, the evidence established what I regard as a gross breach of confidence.

Mr Combe's report to CBA contained descriptions of, and comments on, conversations which he had in Moscow with Soviet officials. Some of the comments being critical, and recommendations were made for action by CBA, for the most part of a political or propagandist nature. In his letter, headed 'Private and Confidential', forwarding the report to Mr Matheson, he wrote that the report ' was prepared exclusively for you and which I would hope would not be copied or made available to anybody else because of the sensitivity of many of the observations made in it and the possible consequences of that material passing back to Moscow'. The report itself is headed 'Private and Confidential'. In his conversation with Mr Ivanov of 4 March 1983, Mr Combe told Mr Ivanov not only of the general effect of his recommendations but also of his client's adverse reaction to them. The disclosure to Mr Ivanov of the recommendations was a breach of confidence, but Mr Combe may have felt that it was in his client's interests to make the disclosure. Nevertheless, it was quite unnecessary, and a gross breach of confidence, which could have had an adverse effect upon his client, to tell Mr Ivanov of Mr Matheson's reaction to the recommendations. On the evidence before me, I conclude that Mr Combe may betray a confidence, either unthinkingly in the course of expansive talking, or quite deliberately if he thinks it to be in his own or his client's interests.

Paragraph 4.92 reads-

4.92 The first statement is contrary to the evidence of what was said and done by Mr Combe, including what he said about his relationship with Mr Ivanov after the announcement of the expulsion on 22 April. Mr Combe said that he was getting 'pretty cranky' about what he saw to be the failure of Soviet officials to do the right thing by his client. He also said that he was feeling under a bit of pressure from Mr Ivanov to meet him and that, having regard to the limited time he had with his family, he found Mr Ivanov's visits, and his insistence on making them, intrusive. Then he claimed that he was getting a bit sick of Mr Ivanov. The evidence is that Mr Ivanov rang Mr Combe at 5.48 p.m. on the evening of 15 March, and asked him what he was doing. Mr Combe replied that he was going to watch 'The Dismissal' at 8.30 p.m., but that if Mr Ivanov wanted to come at 7 .30 for a talk, he was quite welcome. This does not suggest that Mr Combe was objecting to what he regarded as an intrusion by Mr Ivanov. Their next meeting was on 21 March. Mr Ivanov rang Mr Combe at 6.48 p.m., and Mr Combe said that he and his family were about to have dinner, and he would call Mr Ivanov at work the next day. On the following day, Mr Combe rang Mr Ivanov at about midday and arranged to have lunch with him at the Lakeside Hotel. This conduct of Mr Combe, does not suggest any resentment by him of continuing contact with Mr Ivanov. It was Mr Combe who, on 1 April, rang Mr Ivanov, and when he was unable to speak to him, went to his house, unannounced, on 3 April. Apart from his own statement about his feelings, there is nothing in the evidence to suggest that the relationship between Mr Combe and Mr Ivanov, whom Mr Combe had called his 'good friend' on 4 March, had deteriorated. The evidence discloses that, after Mr Ivanov's expulsion was announced, Mr Combe asserted more than once his continuing friendship with Mr Ivanov. Thus, on both 22 April and 2 May, in discussing Mr Ivanov's expulsion, he told Mr R. M. Cameron that he knew Mr Ivanov quite well, and spoke of the closeness of their friendship. On 25 April, he told Mr Wright that he had found Mr Ivanov 'quite a reasonable bloke to have dealt with'. On 26 April, he told Mr Drysdale that he had known Mr Ivanov ' extremely well', and on the same day informed Mr Hartung that Mr Ivanov was a ' mate' of his, and indicated to Mr David Barnett that he was 'a nice man'. It appears that he even considered inviting Mr Ivanov to a party on 26 April, but changed his mind because 'we don't want to appear implicated', 'we don't want to have any more lies go forward than is absolutely essential', and 'we are reluctant to contact him'. On 15 May, Mr Combe told Mr M. Walsh, on a television programme, that Mr Ivanov was a thoroughly charming man. It may be that Mr Combe was disappointed that Mr Ivanov had not been able to achieve what Mr Combe wanted in relation to CBA, but, as will appear, I have no doubt that Mr Combe was still very interested in the Moscow proposal. I have concluded that the statements made by Mr Combe about the deterioration of his relationship with Mr Ivanov were untrue, and deliberately so. Those statements, unlike other parts of his evidence, cannot be explained by lapses or imperfections of memory.

Paragraph 4.81 reads-

4.81 On 6 April, Mr Combe told Mr Matheson of the warning. According to Mr Matheson, Mr Combe told him about it on two occasions. He said that on the first occasion, Mr Combe in Mr Woods' presence, told him 'that Mr Ivanov had told him that his, Mr Combe's, house was bugged, his phone was tapped and that he was under surveillance and had been since he arrived back from the USSR'. Mr Matheson responded lightly, saying 'Join the club. Anyone that has anything to do with the Soviet Union must expect that sort of thing. I have no doubt mine has been bugged for some time.' Later, outside the house, and in the absence of Mr Woods, Mr Combe referred to the matter again. According to Mr Matheson:

He repeated what had been said inside but also added that Mr Ivanov had told him that he, Mr Ivanov, was also under surveillance, that there was an operation on to compromise Mr Ivanov and have him expelled, and that Combe was a part of this and that it would follow operations which had been carried out in other countries and I think he mentioned Britain, France and Italy. He also said that he, Mr Ivanov, had told him not to get in touch with him, to maintain a low profile and that Mr Ivanov would contact him by other means.

Mr Matheson said that this was said in a serious tone. Mr Matheson was closely cross-examined about his account of the conversation of 6 April. It was also suggested that his recollection of what was said on that date was impaired by liquor which he consumed at Peaches Restaurant (see 4.88). There is no doubt and , indeed, it is Mr Combe's evidence, that what Mr Combe told Mr Matheson included what Mr Ivanov had said about any future meetings. Although there were inconsistencies in his evidence of the sequence of events on 6 April, Mr Matheson was not shaken on his recollection of what Mr Combe has said. Nor do I find that he was so affected by liquor as to make his recollection unreliable.

Paragraph 4.85 reads-

4.85 I am satisfied that Mr Ivanov's proposal as to how he and Mr Combe should meet after 3 April was substantially as recounted by Mr Matheson. Moreover, I have no doubt that the evidence given by Mr Barnett and Senator Evans of what was said by them to Mr Combe on 11 May, and of Mr Combe's response to it, was correct. I reject Mr Combe's contradiction of that evidence.

Paragraph 4.106 reads-

4.106 This evidence is an admission that Mr Combe was prepared to accede to a suggestion by a Soviet diplomat, who, he thought, might be a KGB officer, that their future contacts should be so arranged as to limit the opportunity for surveillance. On the facts as I have found them, Mr Combe was leaving it to a person who, he believed, was probably a KGB officer, and for this reason was likely to be expelled, to arrange their future meetings in such a way as to avoid surveillance. It may be, as was submitted to the Commission, that it matters little whether or not Mr Combe's version of the warning is accepted. On his own statement, Mr Combe proposed to accede to Mr Ivanov's suggestion as to future contact.

Paragraph 4.107 reads-

4.107 Mr Combe told Mr Matheson about Mr Ivanov's warning a few days later on 6 April. It was submitted that this was inconsistent with Mr Combe detecting anything improper in the warning. This submission has some weight. However, Mr Combe had to explain to Mr Matheson why he would be unable to initiate, or would have only limited, contact with Mr Ivanov. Although he told Mr Matheson about Mr Ivanov's warning, he did not tell Mr Cameron or Mr Farmer about it. Nor did he recount the warning to the many people to whom he spoke on the telephone on or after 22 April, although he did recite Mr Ivanov's claim that he, Combe, was under surveillance and his prediction about expulsion. He did not refer in the written statement which he gave to the Government on 11 May to the warning. This does not establish a feeling of guilt on his part, but it does justify the inference that he thought that the revelation of Mr Ivanov's warning would not assist his cause. Again, Mr Combe's claims that he no longer regarded Mr Ivanov as a friend, but regarded hin as a 'creep', and that he had lost interest in the Moscow proposal, both of which claims I regard as false, justify an inference that he was trying to distance himself from Mr Ivanov in giving evidence to the Commission because of a fear that the closeness of the relationship would damage his case. Finally, his outrage after he came to believe that his telephone had been intercepted is hard to reconcile with his failure to complain about the warning which Mr Ivanov gave him. His explanations for this failure were quite unsatisfactory. He said, for example, that after a few days he ceased to take seriously what Mr Ivanov had said, and that his feeling of deference to Ministers inhibited him in approaching them. The first claim does not stand with the evidence of his own reaction, and of the reactions in his household, after Mr Ivanov's warning. Mr Combe said that at the time Mr Ivanov spoke in a way which showed no urgency or emotion, but, on 26 April, he told Mr Hartung that Mr Ivanov had been 'quite emphatic'. At the same time as he said that it did not occur to him to report the conversation, Mr Combe said that it seemed to him inconceivable that a Labor Government would initiate or continue interception of a senior party colleague, and that if ASIO had instigated an interception it might well have been unauthorised by the Government. He further said that he thought ASIO was as likely to decive the Government, as to maintain an unauthorised interception. This reasoning, it might be thought, would have led Mr Combe to have reported the matter rather than not to complain. The second claim based on deference to Ministers, is inconsistent with his ready contact with Ministers or members of their staffs when it suited him. In my opinion, the failure to report Mr Ivanov's warning points to an appreciation by him that he might be seen to have been compromised by Mr Ivanov. I have no doubt that if, in April 1983, Mr Ivanov had asked Mr Combe to spy for the Soviet Union, Mr Combe would have roundly rejected the request. However, considerations to which I have referred in this paragraph preserve a doubt whether Mr Combe could have withstood a long and subtle process of cultivation, and whether he appreciated the dangers inherent in his relationship with Mr Ivanov.

Propriety of the Government's Actions

The Royal Commissioner has considered and set out his conclusions on the propriety of the Government's actions. Eight major matters are dealt with in this respect. First, His Honour concluded that the Ministers constituting the National and International Security Committee were thorough and demanding in their consideration of the material which the Director-General had provided to them (3.9); they vigorously cross-examined the ASIO officers who were brought in , at the Committee's request, to provide more information (3.11).

Paragraph 3.9 reads-

3.9 It was apparent that, up to this point, the NISC Ministers had been thorough and demanding in their examination of the material which ASIO, through its Director-General, had provided to them. Although Mr Barnett, at the invitation of the Prime Minister, had expressed his views on the courses of action available in respect of Mr Ivanov, the Ministers were unwilling to accept those views without questioning and analysis of all the available material. Further, when it became apparent that Ministers required more information than Mr Barnett was then able to provide, they had no hesitation in adjourning the meeting and postponing the making of decisions until the information could be made available .

Paragraph 3.11 reads-

3.11 The meeting was marked by rigorous cross-examination of the ASIO officers by the Ministers about the evidence which had been collected by ASIO. Much of the questioning concerned the matters of national security referred to in Appendix III. Other subjects dealt with included the extent to which trade matters, as distinct from political matters, were discussed by Mr Ivanov and Mr Combe, whether Mr Ivanov's instructions to deal with Mr Combe would have originated in the Foreign Ministry, KGB or Central Committee of the CPSU, and which of those bodies was likely to be the final destination of information which Mr Combe may provide to Mr Ivanov, the clandestinity proposal and its significance, the conversation of 4 March including by reference to the transcript, an examination of the major themes which emerged from it, the proposition that Mr Combe should enter into a financial relationship with the Soviet Government, Mr Combe's belief that Mr Ivanov was probably a KGB officer and the danger to national security which was seen to arise from the relationship.

Second, His Honour finds that there was ample justification for the decision to expel Ivanov (3.23), and that the expulsion was properly carried out. Once the decision was taken, it was open to the Cabinet Committee to allow Ivanov seven days in which to leave the country, and it was reasonable and proper to announce at a Press conference the Government's decision and the reasons for it as far as they could be made known at that time (3.25).

Paragraph 3.23 reads-

3.23 I turn now to consider each of the decisions made by NISC as recorded in Decision No. 321 (NIS). By late afternoon on 21 April, no member of NISC could have been in doubt that ASIO's identification of Mr Ivanov as a KGB intelligence officer was correct. The observations which ASIO had made of Mr Ivanov's behaviour and activities since his arrival in Australia coupled with the confirmation of his status to which I have already referred admit of only one conclusion. However, there does not seem to be a generally accepted view as to the action which a government should take when its security service advises it of the presence in the country of an intelligence officer from a hostile foreign power. In 1978, the Department of Foreign Affairs expressed the view that 'any Soviet official who can be proven to have engaged in illegal subversion or intelligence collection on Australian territory should be subject to an immediate request to the Soviet Embassy for his withdrawal.' This prompted the then Director-General of Security to urge that 'at times there may be a need to extend the principle to cover Soviet officials who are identified as intelligence officers and who can be shown to be operating outside their ostensible duties, even though further proof cannot be obtained of their involvement in illegal activity.' I find the 1978 view of the Department of Foreign Affairs somewhat restrictive. Had that view prevailed in the present matter, Mr Ivanov might not have been expelled. In fact, the Department of Foreign Affairs officers concluded that expulsion of Mr Ivanov was an appropriate course. Ample justification for the approach advocated by the Director-General of Security in 1978 (which, incidentally, is supported not only by the present Government but also by the Leader of the Opposition, Mr Peacock- see 3.18) is proved by the conduct and activities of Mr Ivanov. Although he was not proved to have engaged in illegal subversion (as defined in s. 5 of the Australian Security Intelligence Organization Act 1979) or intelligence collection in Australia, he had been identified as an intelligence officer and was shown to be operating outside his obstensible duties. On this approach, the identification of Mr Ivanov as a KGB officer without more, warranted his expulsion.

Paragraph 3.25 reads-

3.25 It is impossible, given the presentation by ASIO to NISC and the Ministers' own perceptions of Mr Combe's access to the Ministry, to conclude that the decision to expel Mr Ivanov was not reasonably open to NISC. Once it had made that decision, it was open to the Committee, acting upon the advice of senior officers of the Department of Foreign Affairs, to allow Mr Ivanov seven days in which to leave the country. Likewise, it was reasonable and proper to announce, at a press conference, the Government's decision and the reasons for it as far as they could be made known in the circumstances.

Third, Mr Justice Hope concludes that the placing of Mr Combe under surveillance , which was done on the advice of the Director-General of Security, was a prudent and appropriate course to take (3.29). That surveillance was duly authorised, carried out by appropriate means, and was properly terminated on 4 May (5.43).

Paragraph 3.29 reads-

3.29 The final decision of NISC is that which directed the Director-General of Security to arrange for the immediate surveillance of Mr Combe by all appropriate means. It is important to bear in mind that, when this decision was made, Mr Ivanov was still in Australia and likely to remain here for up to seven days after the formal announcement of his expulsion. Further, ASIO had candidly admitted to NISC that it did not know the full extent of the relationship between Mr Ivanov and Mr Combe. Accordingly, it did not know whether in the period before Mr Ivanov left the country he would contact or attempt to contact Mr Combe. Nor could it be predicted with certainty that in the days immediately after the announcement no attempt would be made by other Soviet officials to contact Mr Combe or by Mr Combe to contact them. From an intelligence point of view, there might have been benefits to be gained from monitoring Soviet activity in relation to Mr Combe bearing in mind the interest which the KGB presumably had in recruiting him. From a national security point of view, surveillance of Mr Combe might have indicated more fully the extent to which he was involved with Mr Ivanov, thereby enabling decisions which had already been made concerning Mr Combe to be reassessed and, if appropriate, varied. In deciding to place Mr Combe under surveillance, NISC acted upon the advice of the Director-General of Security. In my view, that was, in the circumstances, a prudent and appropriate course to take.

Paragraph 5.43 reads-

5.43 I have already indicated, at least by implication, in 5.2 to 5.4, my conclusion that the surveillance of Mr Combe was duly authorised and was carried out by all appropriate means. It was not argued by any Counsel who appeared before me that the surveillance should have been terminated any earlier than it was on 4 May. Counsel for Mr Combe, of course, did not concede that it was reasonable to impose surveillance on their client in the first place. Bearing in mind that Mr Ivanov did not leave Australia until 28 April and, that surveillance of Mr Combe was actually undertaken for a total of only about 12 days, I do not believe that such surveillance could reasonably have ended earlier than 4 May. I have, moreover, considered whether the decision to end it on 4 May might have owed more to the Prime Minsiter's understandable irritation by the erroneous ASIO report on Mr Hogg than to a dispassionate evaluation of the factors properly bearing on such a decision. However, in the light of the evidence of the circumstances as they appeared and the professed concern of the Government and the Prime Minister that Mr Combe's civil liberties should be infringed no more than absolutely necessary, I have concluded that the decision to terminate surveillance on 4 May was properly made.

Fourth, the report states that it was undoubtedly open for the Cabinet Committee to regard further professional dealings between Ministers and Mr Combe as undesirable. This was on the basis that it was reasonable for the Cabinet Committee to conclude that the relationship between Ivanov and Mr Combe had serious implications for national security (3.26). The decision that I should inform other Ministers that they should not make use of the consultancy services by Mr Combe is thereby supported.

Mr Justice Hope finds that any use by Ministers of Mr Combe's consultancy services, at least until the full extent of his involvement with Mr Ivanov could be determined as a result of further surveillance, would have been unwise and, during the period of surveillance, imprudent (3.26).

Paragraph 3.26 reads-

3.26 NISC decided that the Prime Minister should inform other Ministers that they should not make use of the consultancy services provided by Mr Combe but without comment on his relationship with Mr Ivanov. If it was reasonable for NISC to conclude that the relationship was such as to have serious implications for national security, then it was undoubtedly open to regard further professional dealings between Ministers and Mr Combe as undesirable. In presenting its material to NISC, ASIO indicated that it did not know whether Mr Combe had accepted Mr Ivanov's proposal that the relationship should become clandestine, or how deeply involved Mr Combe was with Mr Ivanov. Given that uncertainty, any use by Ministers of Mr Combe's consultancy services, at least until the full extent of his involvement with Mr Ivanov could be determined, would have been unwise. Furthermore, in the light of NISC's decision to direct ASIO to impose surveillance upon Mr Combe (see 3.29), it would have been imprudent for Ministers to have continued to deal with Mr Combe during the period of the surveillance. This was apparently accepted by some of the Ministers who participated in making the decision. Although some Ministers made reference to Mr Combe's activities as a lobbyist against the background of his former official position in the ALP, the decision in paragraph (c) was made essentially upon national security grounds.

The Royal Commissioner accepts that it was the desire not to damage unnecessarily either Mr Combe's reputation or his business which motivated the decision that I should not comment upon the relationship with Ivanov when informing other Ministers that they should not deal with Mr Combe in his professional capacity (3.27).

Paragraph 3.27 reads-

3.27 The Prime Minister was enjoined to inform other Ministers of the NISC decision concerning the use of Mr Combe's services 'without comment on the relationship between him and Mr Ivanov'. The Government was alert to the possible repercussions on Mr Combe of publicity or gossip about his relationship with Mr Ivanov. I am prepared to accept that it was the desire not to damage unnecessarily either Mr Combe's reputation or his business which motivated the Committee to ask the Prime Minister not to comment upon the relationship when implementing that part of the decision. I can find no fault with that request. I have considered the submission that this desire to protect Mr Combe might have been defeated by speculation in any event, but I do not think that, in the circumstances, that possibility should have led NISC to take some other course.

He finds that it was proper for me, without mentioning the national security aspect of the matter, to inform other Ministers at a Cabinet meeting on 26 April and at a Ministry meeting on 2 May, that they should not deal with Mr Combe in his professional capacity (page 215).

The relevant part of page 215 reads-

Issue 15 Did the Prime Minister inform, and if so was it proper for him to inform, other Ministers that they should not make use of the consultancy services provided by Combe:

(a) by raising the matter at a Cabinet meeting on 26th April?

(b) by raising the matter at a Ministry meeting on 2nd May?

(c) without informing Ministers of the relationship between Combe and Ivanov?

Answer (a) Yes.

(b) Yes.

(c) Yes.

The fifth matter related to the conduct of certain briefings by the Government. Mr Justice Hope states that the Cabinet Committee's decision to brief the Leader of the Opposition (Mr Peacock), on the Government's conclusion about Mr Ivanov's activities was entirely proper and appropriate (3.19).

Paragraph 3.19 reads-

3.19 Section 21 of the Australian Security Intelligence Organisation Act 1979 contemplates that the Leader of the Opposition should receive regular briefings from the Director-General of Security 'for the purpose of keeping him informed on matters relating to security'. If any statutory justification for informing Mr Peacock of the details of the Ivanov-Combe matter were needed, it is to be found in that section. However, it is my view, that irrespective of any statutory provisions about consultation with the Leader of the Opposition, it was entirely proper and appropriate for Mr Peacock to have been informed of the Government's concern about Mr Ivanov's activities. Matters of national security ought to transcend party political considerations and should seldom be allowed to become subjects for partisan controversy.

He further finds that the Committee's request to the Attorney-General (Senator Gareth Evans) to brief the Chief Minister of the Northern Territory on the matter was also appropriate (3.28), and that both briefings were properly carried out (page 214 and 5.20).

Paragraph 3.28 reads-

3.28 I have dealt in 3.18 and 3.19 with the NISC decision to request the Prime Minister to brief the Leader of the Opposition. It will be noted that NISC decided to request the Attorney-General to advise the Chief Minister of the Northern Territory of the relationship between Mr Combe and Mr Ivanov and the activities of Mr Combe. The briefing took place in Adelaide on 26 April and is dealt with in 5.16 to 5.20. NISC's decision to inform Mr Everingham of the matter was prompted by the knowledge that Mr Combe had been retained as a consultant by the Government of the Northern Territory. Given the dangers to national security which NISC believed to flow from Mr Combe's relationship with Mr Ivanov, and its resultant decision to request the Prime Minister to inform other Ministers that they should not make use of Mr Combe's consultancy services , NISC was almost obliged to alert Mr Everingham to Mr Combe's involvement with Mr Ivanov. That followed from the fact that the Chief Minister was in all relevant respects equivalent to a State Premier, and was known to be using Mr Combe's professional services. If NISC felt that it was unwise for Federal Ministers to continue to deal professionally with Mr Combe because of the possible implications for national security, it was proper to advise Mr Everingham of the problem which had arisen so that he could make an informed decision on whether Mr Combe's retainer should continue, and, if so, on what terms. In addition, the Government was concerned that if Mr Combe continued to act, as before, on behalf of the Northern Territory Government he might be brought into direct contact with Federal Ministers, thereby negating the effect of paragraph (c) of Decision 321 (NIS) which I have dealt with in 3.26. On this basis, as well, in my opinion it was appropriate for NISC to request the Attorney to brief Mr Everingham on the matter.

The relevant part of page 214 reads-

Issue 11 If Yes to 7 (c), was the briefing of the Leader of the Opposition properly carried out?

AnswerYes.

Issue 12 If Yes to 7 (d), was the briefing of the Chief Minister of the Northern Territory properly carried out?

AnswerYes.

Paragraph 5.20 reads-

5.20 The evidence of Mr Everingham diverged to some extent from that of Senator Evans and Mr Barnett about who had initiated that suggestion as to the course to be followed by the Northern Territory Government. It is understandable, where there has been discussion of a number of options or alternative courses of action before unanimity is reached as to what should be done, that participants in the discussion may have less than perfect recall as to which of them sponsored one or other alternative. The divergence in the evidence to which I have referred is inconsequential and unnecessary for me to resolve in determining whether the briefing of the Chief Minister of the Northern Territory was properly carried out. I have already considered in 3.28 whether it was reasonably open to NISC to decide that Mr Everingham should be advised of the relationship between Mr Combe and Mr Ivanov, and of the activities of Mr Combe. Having regard to the views which I there expressed, I consider that it was appropriate to provide Mr Everingham with as much of the information in the possession of ASIO, and as much indication of the actions which the Federal Government had decided to take in respect of Mr Combe, as would enable the Northern Territory Government to make an informed reappraisal of its own relationship with Mr Combe and the use, if any, which it could properly make of his services in the future. Mr Everingham was pemitted to bring to the briefing the Solicitor-General to his own Government, and there was no suggestion that anything relevant was concealed from him either by Senator Evans or Mr Barnett. There could be no suggestion that Mr Everingham was denied an opportunity for full enquiry or explanation of the matters raised at the meeting, since the evidence is that it was terminated at his instigation when he indicated that he had another engagement to keep. Accordingly, I find that the briefing of the Chief Minister of the Northern Territory was fully and properly carried out.

On the sixth matter, the report canvasses in detail the question whether Mr Combe should have been given the opportunity to be heard. The Royal Commissioner conclues that the NIS Committee was not required by law to give a hearing to Mr Combe, either before it made its decisions or at any time thereafter (6.13). He goes on, however, to consider broader requirements of fairness. He canvasses the arguments for and against giving Mr Combe a hearing, and expresses the view that there were a number of considerations justifying a conclusion that Mr Combe should not have been heard (6.33).

Paragraph 6.13 reads-

6.13 Applying these principles to the decision of NISC concerning the use of Mr Combe's services, I have concluded that the Committee was not required by law to give a hearing to Mr Combe, either before it made its decision, or at any time thereafter. The power that the Committee was exercising was neither a statutory power nor a prerogative power. It was a decision which could be made by any group of citizens whether they would allow a person who was a consultant and lobbyist to deal with them in that capacity. The fact that the decision was made for reasons of national security does not change its essential nature. Indeed, presuming that the principles of natural justice were otherwise applicable, the presence of considerations of national security might have rendered them inapplicable to this decision. Likewise, again presuming that the principles were applicable, the decision that Mr Combe should be placed under surveillance by ASIO, of itself, apart from any other consideration, might have absolved NISC from any legal obligation to hear Mr Combe before that surveillance was terminated and its results known. However, quite apart from these national security considerations, the decision of NISC was of a kind that does not attract the application of the principles of natural justice.

Paragraph 6.33 reads-

6.33 There were however, many countervailing considerations justifying a conclusion that Mr Combe should not have been heard before that decision was taken. The Director-General of Security had put before the Committee material which justified the conclusions that Mr Combe's relationship with Mr Ivanov might be about to become clandestine, and that there was a serious risk to national security. It was unknown where Mr Combe stood in the matter. Mr Ivanov' s actions had not been taken on his own initiative. The important acts were done on directions from Moscow. The Director-General did not make any recommendations about Mr Combe's access to Ministers, but when asked by the Prime Minister what action should be taken in respect of Mr Combe, he recommended surveillance to see whether there would be any further approaches from members of the Soviet Embassy to Mr Combe, or from Mr Combe to members of the Soviet Embassy. This recommendation by the Director-General and its acceptance by NISC were, in my opinion, entirely justified. Obviously such a recommendation could not have been made or accepted after Mr Combe had been given a hearing. If it was not possible to give Mr Combe a hearing on the question of surveillance, it was not possible to give him a hearing on any decision as to his access to Ministers. In the circumstances, NISC could have made no decision at all, could have made an interim decision to be reviewed later in the light of subsequent events, or could have made the decision which it did, leaving open the possibility of the matter being reviewed if and when circumstances made it possible to give Mr Combe a hearing.

Mr Justice Hope says that, with hindsight, an appropriate course for the Cabinet Committee may have been to make an interim decision on access to Ministers, reserving further consideration of the possibility of Mr Combe being given a hearing, until more was known-following a period of surveillance-of Mr Combe's status as a security risk (6.34).

Paragraph 6.34 reads-

6.34 Quite apart from any political consideration, in my opinion, it would be entirely inappropriate, on national security grounds, for Ministers to have allowed continued access to themselves in their position as Ministers by a person whom the Cabinet national security committee, and the Attorney-General, had decided should be placed under surveillance by ASIO. Furthermore, when NISC made its decision, Mr Ivanov was still in the country, and he did not leave until 28 April. It could not be known what Mr Combe's reaction to ASIO's allegations would be, and it was a real possibility that he might reveal to the public anything disclosed to him in the course of a hearing. NISC could have made an interim decision, expressly reserving reconsideration of it until Mr Ivanov had left the country and the results of the surveillance were known. If consideration were then to be given to whether the decision should continue in force, Mr Combe could have been given an opportunity to be heard. With hindsight , it seems to me that this may have been an appropriate course for NISC to have taken. The decision which it did take was not expressed to be limited in the time for which it was to operate, but it was associated with a decision as to surveillance, which, in due course, would lead to a report of the result of that surveillance. Putting to one side the decisions of Cabinet and the Ministry on 26 April and 2 May respectively, it was open to NISC to reconsider the matter which was its province to decide, that is whether, the surveillance having come to an end, there remained any national security reasons for continuing in force the NISC decision affecting Mr Combe. NISC could have decided that there were no such national security considerations without hearing Mr Combe or, if some doubts remained, have given Mr Combe a hearing, and then have decided what course should be taken.

He finds, however, that appropriate steps were in fact in train after the termination of surveillance on 4 May to give Mr Combe a hearing (6.39). The reference here is to action that was taken, following discussion between me and a member of my staff, Mr Hogg, to suggest that Mr Combe prepare a written statment (6.37). While these steps were overtaken by events-the public speculation and allegations that led in the end to the Royal Commission-the report said there is nothing in the evidence to show that Mr Combe would not, in the event, have been heard in a way that satisfied the requirements of ordinary fairness (6.39).

Paragraph 6.39 reads-

6.39 It has been submitted for Mr Combe that the Government could have taken swifter action after 4 May to give him a hearing. It was further submitted that the failure to provide him with any particulars of the case against him meant that what took place was, in no sense, any part of a hearing. Although it is no final answer, Mr Combe's written statement shows that he knew the essence of the case. It would have been unfair if the course which had been initiated had come to an end without Mr Combe being given more particulars about the case. However, if, as I have found, what occurred was the first step in a hearing, it follows that appropriate steps were in train after the termination of surveillance to give Mr Combe a hearing. There is nothing in the evidence to show that if, after Mr Combe had provided his statement to the Government, other events had not intervened, the hearing would not have continued in a way that satisfied the requirements of ordinary fairness.

Paragraph 6.37 reads-

6.37 After the NISC decision had been taken and conveyed to the Cabinet and the Ministry, there were discussions between the Prime Minister and Mr Hogg. Mr Hogg then asked Mr Cameron to suggest to Mr Combe that he provide the Government with a written statement, setting out in full a description of his relationship with Soviet officials and, in particular, with Mr Ivanov. No particulars of any allegations against Mr Combe were given to him, but, in his statement, he dealt with most of the essence of the case that ASIO had put. Obviously, if nothing more had happened, it would have been appropriate as a matter of fairness for someone on behalf of NISC, probably the Attorney-General, to call in Mr Combe, ask him questions about what he had written, and put to him some particular matters which formed part of ASIO's case. It would not have been possible to put to Mr Combe all the matters raised by ASIO before NISC, but it would have been possible to put the main thrust of the case, and to have received and considered Mr Combe's side of the story.

I should mention that this question of a hearing, and the inadequacies of existing legislation in regard to a procedure for dealing with a case of this kind, weighed heavily with me and the Government at the time. It is the height of hypocrisy for the Opposition to purport, as it has on this issue, to be concerned about civil liberties generally, and those of Mr Combe in particular. Mr Justice Hope's report indicates that, despite the difficult circumstances in which the Government found itself, it did what it could to provide a hearing to Mr Combe in order to overcome the limitations of the existing legislation.

When in opposition the Australian Labor Party attempted to address the very problems that have been now highlighted by this affair. For example, in a debate in the Senate on 9 May 1979 the now Attorney-General (Senator Gareth Evans) argued for an extension of 'the principle of allowing an appeal where persons are prejudiced by adverse assessments or communications in the nature of assessments'. But the ALP's attempt to broaden the provisions for notification of the existence of an adverse security assessment was defeated in both Houses by votes along party lines.

The Government, therefore, welcomes the fact that Mr Justice Hope, in response to an issue that we expressly included in his terms of reference, will be making recommendations in his general report on the need for the establishment of a statutory procedure enabling an independent body to decide, in appropriate cases , whether, and if so how, an individual should be provided with an opportunity to be heard when a report of ASIO may result in action adverse to his interests (page 218, paragraph 2).

The paragraph reads-

2. The evidence reveals a need for legislative or other action in respect of several matters. However, it is not appropriate that I make recommendations for such action in my report on Term of Reference (c). I shall make recommendations on these matters in my report on Terms of Reference (a) and (b). They include:

(a) The need for ASIO to review its practices and procedures in order to reduce the possibility of error and to reveal, when reporting in the exercise of its functions, the existence of any such possibility.

(b) The need for ASIO to review its practices and procedures when reporting matters to Ministers, and particularly when a report will or may result in action by Ministers.

(c) The need for the establishment of a statutory procedure enabling an independent body to decide, in appropriate cases, whether, and, if so, how an Australian citizen or resident should be provided with an opportunity to be heard when a report by ASIO may result in action adverse to the interests of that citizen or resident.

The seventh matter concerns the events surrounding the statement I made in this Parliament on 11 May. His Honour finds that the discussions between the Attorney -General and Mr Combe on 11 May were understood by both sides to be intended to arrive at an agreed basis for taking the affair once and for all out of the area of public speculation and political controversy (5.65). He concludes that the Government's action in acquainting Mr Combe, as it did on that day, with the information provided to the NIS Committee by ASIO was appropriate (5.65), and that Mr Combe was given an effective opportunity to present his version (5.67).

Paragraph 5.65 reads-

5.65 I will indicate in 6.38 my conclusion that any desire on the part of the Government to afford to Mr Combe some sort of opportunity to be heard was overtaken by the events of 9 and 10 May, and that the discussions between the Attorney-General and Mr Combe on 11 May were understood by both sides to be intended to arrive at an agreed basis for taking the affair once and for all out of the area of public speculation and political controversy. Seen against that background, I conclude that the action of the Government in acquainting Mr Combe , as it did, with the information provided to NISC by ASIO was appropriate. The atmosphere of the interviews between Mr Combe and the Attorney-General and between Mr Combe and Mr Barnett, and of the afternoon meeting between the Attorney-General, Mr Combe and Mr Higgins were as free from tension and pressure as they reasonably could have been having regard to the circumstances and the time constraints under which the parties were required to act. Indeed, Mr Combe accepted that any statement which might be made on 11 May had to be finalised on that day, and, as he said, he 'saw the Attorney as acting in good faith and I hoped that it would be possible, which would end the agony for me and at the same time minimise the damage to the Government.' Nor did he have any complaint of Mr Barnett's presentation to him, conceding that they parted on amicable terms and accepting that Mr Barnett had been 'seeking to inform me to the best of his brief of what it was that I was supposed to have done.'

Paragraph 5.67 reads-

5.67 It follows from what I have set out in 5.65 and 5.66 that Mr Combe was properly acquainted with the information which had been presented to NISC. I also consider that he was given a proper opportunity, in the circumstances, to present his version, both by means of the written statement and orally, of his association with Soviet officials. That is not to say that some further opportunity to supplement that material should not have been given to him had the meetings and interviews of 11 May been intended to afford him an opportunity to be heard. However, as I have already concluded, the combination of external pressures meant that the process which occurred on 11 May was not seen by either side as forming part of any sort of a hearing. The opportunity given to Mr Combe to present his version has to be assessed against the change in the use to which that version was intended to be put. That use was to enable him to put everything which might lead to the agreed statement reflecting his own position in a light which was as favourable to him as he could reasonably expect. I consider that the opportunity given to him was adequate to achieve that purpose.

Mr Justice Hope found that the preparation by the Attorney-General and Mr Combe of the agreed statement on 11 May proceeded on the basis that once such a statement had been made by me there would be no further public comment by way of justification, gloss or supplement, by either the Government or Mr Combe (5.60).

Paragraph 5.60 reads-

5.60 The process of settling the form of the agreed statement proceeded on the basis that once such a statement had been made by the Prime Minister there would be no further public comment by way of qualification, gloss or supplement, by either the Government or Mr Combe, on the matters covered by the statement, except that Mr Combe could make a public announcement, in a form to be approved first by the Attorney-General, of his intention to sue for libel in respect of the 'Daily Mirror' article.

He concludes further that Mr Combe's participation in the agreement was made after a full assessment of its advantages and disadvantages for himself, without the application of any undue pressure or the offer of any improper inducement by the Government (5.62).

Paragraph 5.62 reads-

5.62 There were very few discrepancies between the evidence of Senator Evans, Mr Combe and Mr Higgins on the substance of the agreement pursuant to which the Prime Minister's statement was made. Accordingly, I have no hesitation in concluding that the substance of the agreement was as set out in 5.60. I also conclude that Mr Combe's participation in the agreement was made after a full assessment of its advantages and disadvantages for himself, without the application of any undue pressure or the offer of any improper inducement by the Government. Of course, Senator Evans was aware from the discussions of the previous evening that the alternative for the Government, if an agreement was not reached, was to table in Parliament all the documentary material which it possessed including the transcripts of 4 March and 3 April. It is clear that he fully and forcibly urged on Mr Combe the detrimental consequences which such a course could have for him, but, I am unable to conclude that anything which Senator Evans did was calculated to, or did, overbear Mr Combe's will when he came to conclude the agreement.

He says he is not able to conclude that Mr Combe did not fully and freely enter into the agreement, which was reached with his own lawyer's advice and assistance (5.64).

Paragraph 5.64 reads-

5.64 It is true that Mr Combe claimed that he was 'totally devoid of fight' on the afternoon of 11 May, and that he was in a state of acute trauma, profoundly affected by a sense of separation from his family. Distressing as the circumstances undoubtedly were for him, I am not able to conclude that he did not fully and freely enter into the agreement which was reached with Mr Higgins' advice and assistance. It was, I consider, his perceptions of the benefits of the agreement in ensuring that 'honour was preserved for both sides' and in other ways for himself, which led him to telephone his wife 'with some sense of profound relief and absurd belief that the matter could be resolved.' It was only after the Prime Minister made the agreed statement that Mr Combe came to question the view that the agreement, on balance, was in his own best interests.

Mr Justice Hope says it is clear that Mr Combe, during the evening of 11 May, did comment on the matters covered by the statement that I had by then made to the Parliament, in circumstances which made it highly likely that his comments could be widely published (5.68).

Paragraph 5.68 reads-

5.68 It is clear that Mr Combe, during the evening of 11 May, did comment on the matters covered by the Prime Minister's statement in circumstances which made it highly likely that his comments would be widely published. Mr Combe acknowledged that, after reaching the agreement with the Attorney-General, he had conversations with his wife and some journalists, and as a result of statements made to him during those conversations he became dissatisfied with the agreement . He claimed that between 7.30 p.m. and 8.00 p.m. on that night 'I became aware of the fact that I believed the agreement had been breached'. He also agreed under cross-examination by Counsel for the Government, that on the night of 11 May he had a conversation with a group of journalists at 'Charlies Restaurant' which included Miss Michelle Grattan and Mr Ken Haley of the Melbourne 'Age' and Mr Richard Carleton of the ABC current affairs programme 'Nationwide'. Mr Combe further agreed that he had 'backgrounded' a number of journalists earlier that night at about 8.30 p.m. It is not clear which journalists received that ' backgrounding', but Mr Combe agreed, again under cross-examination by Counsel for the Government, that he gave his side of the background concerning his relationship with Mr Ivanov to Mr Richard Carleton at about midnight on 11 May. In the course of doing so, he told Mr Carleton that he had been a guest at Mr Ivanov's house, that conversations there had been recorded, and that earlier on 11 May he, Combe, had been confronted by the Government with parts of the Transcripts of those conversations. Mr Combe also gave interviews to television journalists, including Mr Laurie Oakes of Channel 10, as he went to his car on 12 May to travel to his week-end home on the south coast of New South Wales. Perhaps the clearest example of 'backgrounding' by Mr Combe was that which he afforded to Mr Gregory Hywood, a journalist employed by the 'Financial Review'. Mr Hywood's evidence was that Mr Combe made certain statements to him at about 7 .00 p.m. on 11 May, on the basis of which he wrote this passage in an article published in the 'Financial Review' of 12 May:

It is understood that Mr Combe's acceptane is based on information previously not know (sic) to him-on Mr Ivanov's KGB activities.

Sources close to Mr Combe said that while he accepts that Mr Ivanov might have been attempting to use him as a source, he was in no way compromised.

Mr Combe's 'backgrounding' of journalists, in breach of his part of the agreement reached that day between him and the Government, effectively frustrated the whole purpose of the agreement (5.72).

Paragraph 5.72 reads-

5.72 As indicated in 5.70, Mr Combe unequivocally accepted that the ' backgrounding' in which he engaged on the night of 11 May was a breach of his part of the agreement unless it had been excused by some earlier breach by the Government. I consider that no other view could be taken having regard to what I have found in 5.60 and 5.62 was the agreement, and to what was involved in ' backgrounding' in the second sense, described in 5.71, in which Mr Combe used and understood it. Furthermore, it is clear that the 'backgrounding', however it occurred, effectively frustrated the purpose of the agreement of 11 May which, as I have noted in 5.65, was to allow public speculation and controversy about Mr Combe's relationship with Mr Ivanov, and the Government's actions in respect of it, gradually to die down in the face of continued refusal by the major participants to comment after the Prime Minister had made the agreed statement. At some time between 8.30 a.m. and 9.00 p.m. on the evening of 11 May, Mr Richard Carleton was recorded as saying in that night's edition of 'Nationwide', after recounting certain parts of the agreed statement by the Prime Minister, ' Unfathomably Mr Combe has said he understands and accepts. Well maybe it is not unfathomable though. Mr Combe has told some of his friends here in Canberra tonight he has a wife and kids and he's got to live in this town.' Articles in the daily Press which appeared on the next morning, 12 May, including the ' Sydney Morning Herald' the Melbourne 'Age' and the 'Canberra Times' equally clearly purported to be based on information which could only have come directly or indirectly from Mr Combe.

His Honour finds that no statement was made or action taken by the Government, in breach of the agreement.

The final matter concerns the actual or alleged disclosure of various matters by certain individual Ministers. He has found that my conversations with Mr Butler and Mr Farmer in connection with their proposed partnership with Mr Combe were exactly as I described them in my evidence and were neither unauthorised nor improper (7.63).

Paragraph 7.63 reads-

7.63 The disclosures made by the Prime Minister were neither unauthorised or improper.

This will no doubt cause great distress to the Opposition which, in the course of its continuing attempts to vilify me and the Government in our handling of this whole affair suggested that I had somehow acted quite improperly in my communications with Mr Butler and Mr Farmer. I remind the Leader of the Opposition of his statements in this House on 22 September 1983 in which he accused the Government, and in particular me, of self-contradiction and public deception, and accused me of ringing cronies to tip them off. I await his apology.

The Royal Commissioner has found also that conversations on the part of the Deputy Prime Minister, the Hon. Lionel Bowen, involved no impropriety (7.64), and that a conversation by the Minister for Housing and Construction, the Hon. Chris Hurford, was not unauthorised or improper (7.67).

Paragraph 7.64 reads-

7.64 On 5 April 1983, Mr Bowen had a conversation with Mr Combe in King's Hall, Parliament House. This conversation antedated the matters into which I am required to inquire by paragraph (c) of the Terms of Reference and in no way impinges upon them. Mr Bowen had a further conversation with Mr E. Walsh at the Sydney Kingsford Smith Airport on 28 April 1983. These conversations are dealt with in Appendix VI. I have concluded that they involved no impropriety on the part of Mr Bowen.

Paragraph 7.67 reads-

7.67 The Prime Minister gave evidence that once a decision had been taken by the Cabinet, and, impliedly, later by the Ministry, he expected and would require that Ministers would start to give effect to those decisions. Mr Hurford's communication to Mr Farmer of the effect of the Ministry decision should be viewed in this light. I consider that it was merely part of the process of implementing the decision and not an unauthorised or improper disclosure.

Only in respect of one Minister, the then Special Minister of State, the Hon. Mick Young, is there an adverse finding to which I shall return.

Generally speaking, His Honour found that 'the Government was, at all times, sensitive to the implications for national security of some of the decisions it had made and which were embodied in Decision 321 (NIS). It also realised the need to prevent, as far as possible, damage to Mr Combe through the public linking of his name with Mr Ivanov' (3.30).

Paragraph 3.30 reads-

3.30 The Government was, at all times, sensitive to the implications for national security of some of the decisions it had made and which were embodied in Decision 321 (NIS). It also realised the need to prevent, as far as possible, damage to Mr Combe through the public linking of his name with Mr Ivanov. Accordingly, care was taken in drafting the decision to avoid the use of Mr Combe's name. Further, the Minute received very restricted circulation.

Future Action in Relation to Mr Combe

The Royal Commissioner has considered what action, if any, should now be taken by the Government in relation to Mr Combe by reference to national security considerations. He is of the view that all the circumstances associated with the expulsion of Ivanov, the establishment of the Royal Commission, and the attendant publicity, make it quite unlikely that any further attempt would be made to cultivate Mr Combe, and would also alert Mr Combe to the dangers of any apparent attempt at cultivation (8.5).

Paragraph 8.5 reads-

8.5 The matter which remains to be considered is whether any problem is likely to arise in the future giving rise to national security considerations relevant to Mr Combe's access to Ministers. The evidence of the Director-General and the other ASIO officers confirms my view that all the circumstances associated with the expulsion of Mr Ivanov, including the publicity given to that expulsion, and the establishment of this Royal Commission and the publicity given to it and to its hearings, make it quite unlikely that any further attempt would be made to cultivate Mr Combe, and would also alert Mr Combe to the dangers of any apparent attempt at cultivation. Mr Combe could not now be regarded as a potential asset by the KGB.

He concludes that the national security considerations which led the Cabinet Committee to decide that Ministers should not make use of Mr Combe's consultancy services no longer apply and do not now call for a limitation on his access to Ministers (8.7). He makes it clear that he is not expressing an opinion about any action by the Government in relation to its attitude to Mr Combe or any other person as a lobbyist (8.8).

Paragraphs 8.7 and 8.8 read-

8.7 I have accordingly concluded that the national security considerations which led NISC to decide that Ministers should not make use of Mr Combe's consultancy services no longer apply and do not now call for, or justify, a limitation on his access to Ministers.

8.8 The decision of NISC of 21 April in respect of Mr Combe's access based on national security grounds still stands and is publicly known. While it stands, it is a stigma on Mr Combe's reputation and an impediment to his livelihood. In a light of the evidence which has been adduced before this Commission and my findings on that evidence, it is my opinion that it would be appropriate for that stigma and that impediment to be removed. One way to remove them would be for NISC formally to make a declaration in terms of 8.7, but there may be other equally appropriate ways of achieving this end. I make it clear, if it is not clear enough already, that I am expressing no opinion whatsoever about any action by the Government in relation to its attitude to Mr Combe or any other person as a lobbyist, and, in particular, as to whether Ministers should or should not see Mr Combe in his capacity as a lobbyist or consultant.

The decisions that Ministers should not make use of the consultancy services provided by Mr Combe of course have had to be reconsidered in the light of subsequent developments, including the Royal Commission, and decisions of the Government, which are being announced separately, on dealings with lobbyists genrally.

The Government agrees and, as recommended by the Royal Commissioner, now affirms that the national security considerations which led to the decision that I should inform other Ministers that they should not make use of the consultancy services provided by Mr Combe no longer apply and are not now relevant to Mr Combe's access to Ministers. There is thus no present national security reason for a bar on dealings by Ministers with Mr Combe. Whether they do deal with him as a lobbyist is a matter for Ministers' discretion in the light of the events that have transpired, the findings of the Royal Commissioner in respect of Mr Combe and his evidence, and the Government's general policy in relation to lobbyists. For my own part, I have already made clear my policy to deal not with lobbyists but with principals. The guidelines for Ministers and officials in dealing with lobbyists, issued today, reflect this approach.

Mr Justice Hope has concluded that no occasion arises for the payment of compensation to Mr Combe. On his findings on the evidence, any loss Mr Combe suffered in his business and in his reputation did not flow from any wrongful act or failure by ASIO or the National and International Security Committee of Cabinet. Mr Justice Hope records that what the Government did in the present case was 'to act bona fide for valid national security reasons, and Mr Combe contributed to his own injury to a significant extent' (8.9).

Paragraph 8.9 reads-

8.9 Counsel for Mr Combe submitted that I should recommend to the Government that it pay compensation to Mr Combe in respect of any loss which he may have suffered as a result of othe decision of NISC. I have concluded that I should not recommend the payment of compensation. I have no doubt that Mr Combe suffered loss, both in his business and in his reputation. However, on my findings on the evidence, that loss did not flow from any wrongful act by ASIO or NISC, from any failure by NISC to hear Mr Combe when it should have heard him , or from any breach by the Government of the agreement that was reached between Mr Combe and the Government on 11 May because:

(a) NISC was justified in making the decision it did concerning Mr Combe's access to Ministers;

(b) Although there was no legal requirement to give Mr Combe an opportunity to be heard, steps had been put in train on 2 May to hear Mr Combe's side of the case; and

(c) Events having overtaken the process of that hearing and the agreement having been reached on 11 May, the breaking down of that agreement is to be attributed to Mr Combe.

The suffering of injury by individuals as a consequence of action by the Government, or a government authority, taken in the national interest, is often an unhappy result. However, what the Government did in the present case was to act bona fide for valid national security reasons, and Mr Combe contributed to his own injury to a significant extent. In my opinion, no occasion for compensation arises.

The Government accepts the Royal Commission's conclusion in this respect and will not compensate Mr Combe other than for the legal costs he has incurred. The Government has already met, or has been in the process of meeting, the reasonable legal costs incurred by Mr Combe in the Royal Commission. Payments in respect of his counsel have been on the same basis as those for the Commonwealth 's own counsel.

The Role of ASIO

The actions and performance of ASIO in the affair have come under very close scrutiny. It should be stated that in most relevant respects ASIO's conduct has not found to be wanting. It has been shown to have acted reasonably and responsibly in following Ivanov's activities and in raising with the Government its concern at the developing relationship between Ivanov and Mr Combe.

In particular, the Royal Commissioner observes (2.41) that:

ASIO's identification of Ivanov as a KGB officer was achieved through careful and professional analysis;

ASIO adopted a cautious and objective attitude to Mr Combe's relationship with Ivanov, as when the Director-General refrained from mentioning Mr Combe's name in a briefing of the then Attorney-General on 3 February 1983;

before 21 April 1983, Mr Combe was not the target of any surveillance by ASIO;

the Director-General acted responsibly in deciding on 5 April to notify me of his concern, although given the delay before I could see him it would have been proper for him to have sought an appointment with the Attorney-General;

there is no doubt that ASIO's conclusion that Mr Ivanov's relationship with Mr Combe was such as to have serious implications for national security was correct ;

with the qualifications indicated in the report, the Director-General's presentation to me was adequate, objective and fair.

Paragraph 2.41 reads-

2.41 As will become apparent in later sections of my report, there were certain errors and misconceptions contained in some of the information provided by Mr Barnett to the Prime Minister at their meeting in the afternoon of 20 April. The nature and significance of those errors and misconceptions will be examined later. Before turning to the response of the Government to ASIO's case, I make the following observations of ASIO's handling of the matter up to and including Mr Barnett's meeting with the Prime Minister on 20 April-

(i) ASIO's detection and identification of Mr Ivanov as a KGB officer less than 12 months after he arrived in Australia was achieved through a process of careful and professional analysis. Its identification of Mr Ivanov was correct and was confirmed to be so in early 1983.

(ii) When ASIO formed its opinion as to Mr Ivanov's intentions in regard to Mr Combe, it adopted a cautions and objective attitude to Mr Combe's relationship with Mr Ivanov. It was conscious of Mr Combe's position both in political circles and the community generally, and avoided taking any precipitate action which might have unfairly affected Mr Combe. An example of this occurred on 3 February 1983 when the Director-General of Security deliberately refrained from mentioning Mr Combe's name in a routine briefing of the former Attorney-General, Senator the Honourable P. Durack, during which the activities of Mr Ivanov were outlined.

(iii) There is no evidence that, before 21 April 1983, Mr Combe was the target of any surveillance by ASIO. To the extent to which ASIO made observations of Mr Combe's movements and activities, they were entirely incidental to its surveillance of Mr Ivanov and other Soviet officials.

(iv) The Director-General of Security acted responsibly and within the provisions of sub-s. 17 (1) of the Australian Security and Intelligence Organisation Act 1979 in deciding, on 5 April, to notify the Prime Minister of his concern. However, after he was advised that the Prime Minister would be unable to see him for almost two weeks it would have been proper for him to have sought an appointment with the Attorney-General, who was the Minister responsible for the administration of the Act. It is now clear that no damage to the national security occurred as a result of the delay in briefing the Prime Minister. However, this judgment is made with hindsight. The potential damage to national security from delay was serious.

(v) On the material available to ASIO on 20 April there is no doubt that its conclusion that Mr Ivanov's relationship with Mr Combe was such as to have serious implications for national security was correct. Those implications are discussed in Chapters 3 and 4.

(vi) The evidence satisfies me that it was reasonably open for ASIO to conclude that there were grave dangers in attempting to acquaint Mr Combe with any of the relevant material before communicating with the Government. Not only were the opinions about Mr Combe's likely reaction to such an approach overwhelmingly against making it, but the information which ASIO gleaned from his conversation of 4 March with Mr Ivanov entitled it to conclude that Mr Combe would probably be hostile to an approach from ASIO. ASIO's view as confirmed by the Prime Minister who rejected the notion of counselling Mr Combe on security grounds amongst other reasons.

(vii) with the qualifications indicated in 4.110 to 4.113 and Appendix V Mr Barnett's presentation to the Prime Minister was adequate, objective and fair. He was aware of the delicacy required in putting to a Prime Minister that a close political colleague had become involved with a Soviet spy. He showed an appreciation of the sensitivity of the whole matter and did not fail to declare the interest of ASIO in achieving the public expulsion of Mr Ivanov with concomitant publicity and kudos for ASIO.

The report records that a number of errors were made by ASIO in the presentation of its case to Ministers but says that, whether considered separately or together, they were of peripheral significance in its case (4.112) . Nonetheless, the report indicates that the greatest care must be exercised when ASIO takes a matter to the Government, particularly when its presentation may adversely affect a private citizen (4.113).

Paragraphs 4.112 and 4.113 read-

4.112 I have thus far dealt separately with each of the errors or alleged errors . The further question arises whether the whole of the evidence concerning what I have found were errors should have produced a different result. In my opinion, it should not have done so. None of the errors went to what the Prime Minister called the main thrust of ASIO's case. Whether considered separately or together , they were of peripheral significance in the case that ASIO presented, and on which I am satisfied that NISC acted.

4.113 The greatest care must be exercised when ASIO takes a matter to a responsible Minister or Cabinet Committee, particularly when its presentation may adversely affect a private citizen. Undoubtedly, intelligence officers have to draw inferences and make assessments on the basis of primary facts which, ideally, should first be fully verified. Where verification is necessarily incomplete, the areas of possible error should be kept as small as possible, and indentified in the course of the presentation to the Minister or Committee.

There are in this respect, and in one or two other areas noted in the report, lessons to be learned by ASIO from this whole episode. The Government expects, and will demand, nothing but the highest standards of performance.

Mr Justice Hope will have a further opportunity to comment on ASIO and its general performance in his wider report on the security and intelligence agencies. He indicates (page 218, paragraph 2) that he will be making recommendations in that report on:

the need for ASIO to review its practices and procedures in order to reduce the possibility of error and to reveal, when reporting in the exercise of its functions, the existence of any such possibility; and

the need for ASIO to review its practices and procedures when reporting matters to Ministers and particularly when a report will or may result in action by Ministers.

The paragraph reads-

2. The evidence reveals a need for legislative or other action in respect of several matters. However, it is not appropriate that I make recommendations for such action in my report on Term of Reference (c). I shall make recommendations on these matters in my report on Terms of Reference (a) and (b). They include:

(a) The need for ASIO to review its practices and procedures in order to reduce the possibility of error and to reveal, when reporting in the exercise of its functions, the existence of any such possibility.

(b) The need for ASIO to review its practices and procedures when reporting matters to Ministers, and particularly when a report will or may result in action by Ministers.

(c) The need for the establishment of a statutory procedure enabling an independent body to decide, in appropriate cases, whether, and, if so, how an Australian citizen or resident should be provided with an opportunity to be heard when a report by ASIO may result in action adverse to the interests of that citizen or resident.

Further matters relating to ASIO are dealt with in the seperate volume of appendices, for which the Royal Commissioner has recommended limited distribution. In accordance with Mr Justice Hope's recommendation, that volume has not been tabled. Consistent with the practice in these matters, the Government has made the confidential volume available to the Leader of the Opposition. On this occasion also, having regard to the nature of the report, directed as it is to the conduct of the Government, the confidential volume has been made available to the Leader of the National Party (Mr Anthony) and to the Leader of the Australian Democrats (Senator Chipp).

The Position of Mr Young

Mr Young's actions on 21 and 22 April were unauthorised and, as Mr Justice Hope has found in the case of the 21 April disclosure, improper. He recognised the seriousness of that breach of Cabinet confidentiality and his failure to inform me of the fact by tendering his resignation on 14 July. Thus the facts and the judgment on those facts are not in dispute. What is relevant now is the future position of Mr Young. Let me make a number of points quite clear.

First, it is clear now as it always was, that Mick Young never intended to place national security at risk, and the national security was not in fact damaged by his disclosures-although, of course, this in no way excuses those actions. It is clear that these were based on an error of personal judgment from which he has now learnt, and which I am sure will not be repeated.

Second, he made his comments to Mr Walsh on the basis that, as Mr Hope observed : 'He wanted to protect his friend'. Those of us who know him so well would clearly understand the value he has always placed on mateship. Let me emphasise that this does not excuse his actions, but I do suggest strongly it has relevance for the assessment to be made as to the penalty he should suffer. In other words, we are not dealing with an ill-intentioned man. We are dealing with a good man and, in my judgment, a very good man, who has made a mistake which he now regrets. Mr Young has already paid a high price for that mistake.

Third, I ask honourable members to contemplate what has been involved for him in his resignation from the Government. He has spent 30 years working in and for the Labor movement. So many of those latter years have been specifically directed at helping to achieve a Federal Labor government, with the totally legitimate expectation of being an important member of that Government. I say clearly and unequivocally that for no Minister in my Government could the events of 14 July, and the exclusion from that Ministry after only four months, have been more devastating than for Mick Young. I think no one in this place has been closer to him over the years than I have, but I do not suggest that even I can fully understand what he, and his family, have suffered.

Taking all these considerations into account I believe Mr Young should have the opportunity of returning to this Government by the time the Parliament resumes in 1984. Nominations for the ministerial vacancy will be called in the new year. I make it clear that not only should Mr Young be free to nominate for that vacancy, but also he will have my full support in such nomination. He would have served at least a six months penalty for a mistake which, as Justice Hope observes, was made after only six weeks in office. As I have said Mr Young is a very good man. He is also an extremely able man and I do not intend that this Government or this country should, for any longer than the period I have designated, be denied the value of his ministerial services.

Conclusion

The circumstances of this whole affair have brought no pleasure to the Government, and we recognise that in the unfolding of the affair, and its attendant publicity, individuals who have been involved or affected have been subjected to varying degrees of inconvenience intrusion and hurt. But the issues which arose and which the Government had to face-which because of the way events unfolded ultimately had to be exposed to full review-were of the utmost seriousness. The legitimate and strong public interest in the issues and in the Government's handling of them called in time for the most thorough examination in order to clear the air.

That has now been done by the Royal Commission. The Government accepts full responsibility for, and stands behind, the actions it took. It acknowledges the valuable public service the Royal Commission has performed in clarifying for the record the events in question and the way in which they were handled. The Royal Commission is proceeding with its broader inquiry into the role and activities of the intelligence community generally. I present the following paper:

Report of the Royal Commission on Australia's Security and Intelligence Agencies-Ministerial Statement, 6 December 1983.