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Wednesday, 31 October 1956


Mr WARD (East Sydney) .- This is a most important bill. It will afford an opportunity to the members of the Opposition to press for replies to many questions that they have directed to the Prime Minister (Mr. Menzies) with respect to the activities of the Australian Security Intelligence Organization during the last few years. Up till now, the Prime Minister has adopted the attitude of refusing to give any information about the activities of the security service, even on such matters as the salaries paid to the Director-General and the Assistant Director-General which could have no bearing on security. In this debate, we shall be able to raise a number of the matters that we believe have not been dealt with satisfactorily by the Government.

Before I proceed with my general remarks, 1 want to make one or two references to the second-reading speech delivered by the Prime Minister. He tried to make out that this was a simple little piece of legislation, designed merely to establish the security service as a statutory body, so that in the future it will not be dependent, as it is now, on action by the Executive. But the bill is much more important than that. The Prime Minister indicated during his speech that one of the reasons why the Government decided to introduce the measure was that attacks had been made, to use the Prime Minister's words, " on our own security service in the course of the Royal Commission on Espionage ". The Prime Minister said also -

The bill does not make any changes in the constitution, organization, or functions of the Australian Security Intelligence Organization. lt is true that the bill will not make any changes in the existing organization, but what the Prime Minister was trying to convey to the Australian public by those words was that there had been no changes of the constitution or organization of the security service since it was established by the ChifleyLabour Government a few years ago, although, as a matter of fact, everybody knows that there have been material changes. The Prime Minister himself admits that some changes have been made because he used the words, " With only minor changes . . made by myself ".

One of the changes which he regards as minor was to take the control of the security service from a civilian and to hand it to an ex-military officer. We believe that that was an important change, because almost everybody in the community knows that when the late Mr. Chifley selected Mr. Justice Reed, a justice of the Supreme Court of South Australia, as the head of the security service, he did so with the deliberate intention that the service would be in the charge of a man renowned in a civil profession, because such a man would have more regard for civil liberties than would a man brought up in a military atmosphere, among people who have little regard for the liberties of the people. So a material change was made.

Then the Prime Minister said in his speech that the organization has no police function. He would like the Australian public to believe that that is so. If that argument is put forward seriously, I ask the Prime Minister, before the debate concludes, to explain to the House and to the Australian people the meaning of clause IS, which states -

The Director-General and officers and employees of the Organization shall be deemed to be Commonwealth officers for the purposes of the Crimes Act 1914-1955.

Does not that clause indicate that, despite what the Prime Minister suggested in his speech, the security service will have functions other than the function of gathering intelligence information? The first question that arises in considering this measure is: Should the security service be continued, having regard to our experience of its operations up to this time? Nobody in the country would object - certainly the Chifley Labour Government did not object to it - to an organization controlled by men who were able to keep themselves free of party political entanglements and whose aim was to gather intelligence information to ensure the security of the country. But has that been the sole purpose of the security service? As I develop my argument, 1 shall show that the security service has not been controlled and operated as the Labour government which established it intended. It has developed into a sort of secret police organization - carrying out work for the anti-Labour government of the country and endangering the civil liberties of the people. It is completely the opposite of what we would expect a security service to be in a democratic country.

We have to ask ourselves: Is this an efficient organization from the security viewpoint? We can judge whether it is an efficient organization only by the results it has achieved - how many spies it has caught and how many cases of espionage in the country it has discovered. The Royal Commission on Espionage stated that espionage had occurred in this country. Let us see whether that knowledge came to the notice of the Government as a result of the efficiency of the security service or by mere chance. On 25th October, 1955, the Prime Minister, speaking in this House, said -

Honest Australians will be more easy in their minds to learn from this royal commission report that our security organization has been so effective.

Later in that speech, he said -

It must be obvious to honorable members that, but for the disclosures by Petrov ... it is reasonable to assume that people like O'Sullivan and Grundeman would still be with the right honorable gentleman-

He was referring to the Leader of the Opposition (Dr. Evatt) - in this building and . . . that the espionage of the Soviet Embassy would be both operating and, to a large extent, unknown.

If we had an efficient security organization, does the Government suggest that espionage could have been carried on to the extent that the royal commission declared it had been carried on? Unless the Petrovs had disclosed it, according to the Prime Minister's own statement, despite our so-called efficient security service, we should not have known anything about it at all, and it would have continued. Let us examine further what the Prime Minister had to say during this memorable debate on the royal commission's report on the question of how successful the security service was in capturing spies. Referring to the evidence of

Miss Bernie, who had been a junior typist on the staff of the Leader of the Opposition, the Prime Minister said -

.   . it was her evidence that showed that Clayton, the king-pin in the Communist party, whom they-

Meaning the Australian Labour party - are now so anxious to defend, was the spy . . .

There was no equivocation about it. The Prime Minister declared that Clayton was the king-pin of the Australian Communist party and that he was the spy. He said also - . . the commission has found that for many years the Government of the Union of Soviet Socialist Republics . . . had been using its embassy at Canberra as a cloak under which to control and operate espionage organizations in Australia ... the royal commission found that the only Australians who knowingly assisted in this espionage were Communists.

I am glad to know that from the report of the royal commission. That means that the royal commission had discovered, according to its report, that espionage was being directed from the Russian embassy, and that it was being undertaken solely by Communists, of whom Clayton was the king-pin. He was the spy. Yet not one prosecution was launched as a result of the royal commission's findings or deliberations! Why did the Government not take action? If the Prime Minister was satisfied that Clayton, who, according to the right honorable gentleman, was the king-pin of the Communist party, was the spy, why was a prosecution not launched? The Prime Minister said in reference to prosecutions -

The commission made some particular findings about individuals, though it found that the evidence stopped short of justifying a prosecution under the existing Australian law.

Everybody knows that it was not the law that was deficient. There is any amount of law available to protect this country against espionage. What was lacking was evidence before the royal commission to prove the guilt of any person who appeared before it by establishing that any such person had actually been engaged in espionage. The Government lacked evidence. It knew that if it took legal proceedings in the courts in the normal way it would have to permit cross-examination of its witnesses, because the proceedings would have to be conducted according to the normal and established practices. But it was not prepared to allow its witnesses to be examined in the normal way. Every one knows how the Petrovs were protected before the royal commission,, and how, every time counsel began to elicit damaging disclosures from them about the part in the conspiracy played by the Government, they were protected by the gentlemen who presided over the royal commission. In the ordinary courts of law they would not have received such protection, and the Government was afraid to submit them to proper interrogation in an ordinary court of law.

Let us examine a little further the part played by the Prime Minister in this matter. 1 remember directing attention in this House during the proceedings before the royal commission to a discrepancy between a statement that had been made by the Prime Minister in this chamber and sworn evidence given by the two senior officers of the security service, who are now to be confirmed in their positions by this bill. If they are1 to be confirmed in their positions, is it not logical to assume that the Government accepts them both as being truthful and honorable men? If it did not do so it would not wish to confirm their appointments. If they are truthful and Honorable men, the Prime Minister must have been lying. What happened? On 13th April, 1954, the Prime Minister, speaking in this chamber, said -

The name of Petrov became known to me for the first time on Sunday, the 11th April.

He went on to say in another statement -

Early in February, 1954, I now learn that the Solicitor-General and the secretary of the Department of External Affairs as individuals were warned of the possibility of a defection.

This warning was given orally by the DirectorGeneral and was given to no other people except the Attorney-General and the Minister for External Affairs.

That is a contradictory statement. The right honorable gentleman said first that the Solictor-General and the Secretary of the Department of External Affairs had been advised. He proceeded -

I was myself told that there was the possibility of a defection, but the identity of the subject was not divulged, nor did I ask for it.

What reasonable person would believe that the Prime Minister spoke the truth? One would imagine that it was quite a common occurrence for a member of the staff of a foreign embassy to defect and to offer to this country what was said to be valuable information. If the Prime Minister were advised that: a. defection was likely would he not immediately want to know who was. likely to defect, and would the DirectorGeneral of Security not tell- him?

Let us have a look at the evidence given before the royal commission by Brigadier Spry, who was at the time only a colonel, and Mr. Richards, the Deputy DirectorGeneral of Security. I remind the House that the Prime Minister had said that he had not heard the name of Petrov until 11th April, 1954. But the senior officers of the security service said that they saw the Prime Minister at the Prime Minister's Lodge on 4th April, 1954, at 5 p.m., by appointment, to report on the defection of Petrov, and were with the right honorable gentleman from 5 p.m. until 6.40 p.m. and that Brigadier Spry produced the Petrov documents, which the Prime Minister studied. But according to the Prime Minister, although they were discussing the defection of Vladimir Petrov, no mention was made of the payment of £5,000 to Petrov by the security service. The right honorable gentleman said that he heard of it for the first time on 9th May, 1954, during the federal general election campaign. Is it not evident to any sensible and intelligent person that the Prime Minister suppressed information which had been made available to him, waiting for a favorable opportunity to use it, either just before or during a general election campaign? If the security service, which was supposed to keep the Leader of the Opposition fully informed on security matters, was a non-political . organization, why did it not advise the Leader of the Opposition of what was being done in regard to espionage? The. security service withheld the information from the Leader of the Opposition. I do not say that it. did- so of its own volition, lt may have been directed by the Prime Minister to do so. But is it not quite obvious that any security service that claims to be nonpolitical should have refused to accept such a direction?

What are the methods of the security service? If we examine them perhaps we shall ascertain whether Government, supporters believe that this organization ought to be condemned. We know that it has agents in various places. There is any amount of evidence to show how it approaches prospective agents. It approached a Mr. Higgins, a lecturer at the University of Sydney, with a request that he should act as an agent, pimp on students and lecturing staff in the university, and supply information. It is on record in a journal called the " Inter-collegian ", which is the official journal of the Student Christian Movement in Australia, that the security service attempted to induce clergymen to report on members of their congregations. Can any one imagine anything more outrageous? If the Government cares to have a proper investigation made it will find that what I am saying is true. Mr. McGovern, who is Commonwealth Commissioner of Taxation, was approached by the security service and asked to permit an officer of the service to be stationed in each State office of the Taxation Branch. We know that the security service has agents in the Department of Immigration, and that people have been refused naturalization because it was discovered that they had voted as democrats in their own countries before coming to Australia. Because they had been, not conservatives, but had been merely pale-pinks, as the term might be used in the realm of politics, they were declared by the security service to be security risks. We know that the service has had its pimps and its spies placed in the trade unions, and in the Government departments, and that it is, in fact, a secret police force.

Let us examine one other interesting development. For some time the common practice was for the United States Federal Bureau of Investigation to make contact in Australia, on any matters of common interest, with the Commissioner of Police in New South Wales. But, since Brigadier Spry paid a visit to the United States, it has been arranged that he, the chief of the security service, shall be the sole contact with the Federal Bureau of Investigation. So the police are now brushed aside.

Every member of this Parliament knows that there has been telephone tapping in this country. The honorable member for Hindmarsh (Mr. Clyde Cameron) and I challenged the Minister one evening in the Parliament to proceed with us to the headquarters of the security service, here in Canberra, where we would show him the actual machinery being used for the purpose of tapping telephone conversations in this parliamentary building.


Mr CLYDE CAMERON (HINDMARSH, SOUTH AUSTRALIA) - We challenged the Government to refer it to 'the Committee of Privileges.


Mr WARD - That is quite true. As the honorable member for Hindmarsh reminds me, we challenged the Government to send the matter to the Committee of Privileges of this Parliament for proper investigation, and the records of the Parliament will show that it was as a result of the use of the Government's majority in this chamber that no proper investigation was made, because the Government dared not have an investigation. There are many former members of the Public Service who worked around this House, and have now retired, who could have told any committee of investigation that there were certain telephones in Parliament House that they deliberately refrained from using, because they were satisfied that conversations over those telephones were being tapped. One honorable member rang a constituent of his, a trade union delegate in Adelaide, and, although the conversation was of a confidential nature, the following morning security officers called on the trade union official and questioned him about what had transpired in his conversation with the member of Parliament.

So we know what is happening. Take the case of a trade union official in the maritime industry who had a telephone conversation with an executive of a shipping company to whom he was friendly disposed. The executive was later quizzed by his own colleagues, in conversation, regarding the conversation that he had had with the trade union official. That shows clearly that somebody had been listening to the conversation, and that somebody had conveyed knowledge of it to the colleagues of that executive in the shipping company.

The security service has dossiers prepared. I would venture the opinion that there is not an honorable member on the Opposition side of this Parliament on whom the security service has not got what is called a secret dossier. I was informed recently that the security service was engaged in the pastime - if it may be so termed - of preparing a list of likely internees in the event of an emergency in this country, and that the list included a number of trade union officials. How can we trust this organization to exercise such great powers in this country when we know full well that the deputy chief of the security service to-day was the person on whose advice and information, largely, the socalled Australia First supporters were interned during World War II. - an action that aroused so much protest from members of the parties now in office. That shows conclusively that the security service cannot be trusted to exercise ' those great powers.

The Prime Minister and the Minister for Labour and National Service (Mr. Harold Holt) have both declared that the security service has no executive powers, that it could not prompt the head of a department in regard to the setting up of any particular security measures in his department, or prevent the appointment of any person to the Public Service, or prevent the promotion of persons in the Public Service. What a ridiculous statement to make! Every member of this Parliament knows full well that there is not a Minister sitting on the Government side who would disregard a security report or a security recommendation in regard to an appointment or a promotion. As a result, while the security service is able to have its agents, its pimps, acting on extracts taken from telephone conversations - scraps of conversation taken out of their context - and on that type of information, it is prejudicing many good Australian citizens in respect of normal promotion in employment, or in respect of appointment to the Public Service.

Nobody in this country exercises powers of punishment against whose decision there is not some form of appeal. Why should the security service be in a different position? Why should it be able to damn people on false evidence, without giving them the right of any appeal whatsoever? Therefore, we say that, before the Government proceeds any further with any of its ideas in respect of the security service, it ought to have a proper examination into what has happened since the security service was established in Australia. I was amazed by some of the replies I received from the Prime Minister recently regarding the activities in which some of these security people are engaged. Everybody knows it is said that the Petrovs wrote a book called " Empire of Fear ". But we discovered that it was not the Petrovs who wrote that book - that it was written by a member of the security service by the name of Mr. Michael Thwaites. That name was not supplied to me by the Prime Minister, but I am able to say that Mr. Michael Thwaites was the " ghost " writer of that book. Does the Government take responsibility for what appears in the book? The Government washes its hands of it completely. It says that the book is the 'responsibility of the Petrovs themselves. But who gains financially from the publication of the book? According to the Prime Minister, it is not the department, or the officer whose salary the people and the Government of this country were paying while he was engaged in that particular type of activity. This gentleman came to Canberra on one occasion. I was informed that the purpose of his visit was to attend a conference of members of the Moral Rearmament Movement. When I questioned the Prime Minister about this, he said that it was not a conference that the gentleman had come here to attend, but a film evening. I think that film evening was conducted during the visit to this country of Dr. Buchman. Therefore, we naturally ask what type of security service we have in this country.

Let me deal briefly with some of the security service's agents. I think that honorable members will recollect that they have heard me repeatedly request, in this Parliament, a thorough investigation into the allegations that one of the security officers, by the name of Mr. George Marue. in conjunction with Dr. Bialoguski and Vladimir Petrov, was actually engaged in trafficking in liquor which was wrongly obtained through the Soviet Legation. Has any honorable member ever heard the Prime Minister, or any Minister of this Government, ever declare that Marue was not a security agent? Therefore, we have to accept that he was a security agent. What work does he say he was engaged on, because we have his own sworn evidence in a New South Wales court? He claims that, after having interviewed me in respect of this matter, and after having visited a couple of Sydney newspapers with the idea of having his story published, he was visited by two security officers, who told him that they knew he had been in touch with a federal member, and also that he had submitted his story for publication to two Sydney newspapers. They told him that he would have to be very sure of his facts, otherwise he could get into trouble. They were trying to intimidate him! But, Mr. Marue still wants an investigation. It is amusing to note that, according to Mr. Marue, of the security service, he supplied the liquor to the service for its Christmas party in 1953. The subject of trafficking in liquor was mentioned before the Royal Commission on Espionage in Australia, but it was never properly investigated.

Now, I want to turn to what Mr. Marue said about the security service itself. Listen to what he thinks of it - and he worked with it. He was one of its agents. He said -

I agreed to help and co-operate with the Australian security organization, and I accepted Fred as liaison-

Fred was the security officer who was sent to interview him. He said -

I knew one man, one phone number and one G.P.O. box number I could send my reports to, that we would not have to meet very often and that we would not have to be seen together. I was very satisfied with that arrangement, but Fred had many problems to solve and he was coming to my office, or meeting me in the city, or at the Cross very often, at least three times a week. I did not like it, because too many people saw us together, as Fred looked like a detective, which he was for many years, and those who saw us together believed that I was working for the Police Department. I regarded our meetings as very careless of Fred and I decided that I must make sure that Fred is :i smart man and if I had to work with him, to make sure that I could depend on him and regard him as an experienced intelligence officer. During one of our conversations I found that there were some matters Fred did not like to speak about or to answer my questions. I understood that I was not supposed to know about these matters and that was for me the best opportunity of finding out if Fred understood keeping secrets and how smart he was in preventing me from finding out about some confidential matters like, for instance: Location of the security office in Sydney and Fred's private address; names of the other security officers working in Sydney; who else from New Australians co-operated with security; where they interviewed people, &c.

I realized that I should not know all the abovementioned matters and nobody should be able to find out any of these particulars if Fred was a really smart man. However, I was very surprised that it was not hard for me to find an answer to every question and I became worried that, one day, I would get in trouble because my friend Fred was, although very friendly, but a very careless man.

He went on -

I was able to photograph him in bis car and his office and he did not take any notice that he was followed. After a few days I knew what duty cars security officers were using, where the> parked their cars, where they met their informers, and many other important things which I and nobody else should be able to find out. The socalled " secret organization " seemed to me to be a party of a few very nice boys but, unfortunately, without any imagination as to what they should do, how they should behave, and how they should serve their country as security officers.

That is the opinion of one of their agents.

Let me refer to what Mr. Alan Reid, the correspondent of the " Sunday Telegraph ". said in regard to his own experience. He said -

In Canberra, Security is remarkably discreet. Ii stays out of sight and out of the way, probably aware that it might easily step on very important toes. Once this savoured somewhat of comic opera. Apparently, security does not like person? visiting its office head-quarters. Rendezvous are arranged discreetly in remote places.







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