Inside Story

Unravelling “Australia’s own McCarthy era”

For years the Labor Party clung to the belief that the defection of Vladimir Petrov was orchestrated by the Menzies government to influence the 1954 election. But what really happened during those remarkable months?

Jack Waterford 30 May 2014 8866 words

Russian diplomat Vladimir Petrov and his wife Evdokia at the safe house in which they were held following their defection. National Archives of Australia

It was Saturday, 3 April 1954. Vladimir Mikhailovitch Petrov, a third secretary to the Soviet embassy in Australia, shortly due to complete his posting and return to the Soviet Union, had arrived in Sydney from Canberra the day before. So far as his embassy was concerned, his task was to meet some incoming Soviet diplomats, including Evgenii Kovalenko, the man who had been nominated to replace him. He met their ship, steered them through the formalities, and then took them to Mascot where he put them on an aircraft for Canberra. Having seen them through the gate, he walked back through the airport passenger lounge, out into the car park and stepped into a waiting car. He was discreetly photographed doing so. Inside the car was Ron Richards, deputy director of the Australian Security and Intelligence Organisation, Leo Carter – another ASIO man whom Petrov had not met before – and a female ASIO officer.

The night before, Petrov had signed a document requesting political asylum in Australia, a document he had first seen thirty-four days before, when he’d had the first of twelve separate contacts with Ron Richards – all of which had been tape-recorded by Richards. But this moment, very close to noon on 3 April, has to be considered the formal moment of the defection.

Or it ought to have been. As the four drove through the city on the way to a specially prepared ASIO safehouse at Gladesville, Petrov suddenly remembered unfinished business. There was another Soviet diplomat in town, bound for New Zealand, and Petrov was carrying his air tickets and expenses. The diplomat was staying at the Kirketon Hotel in King’s Cross. Petrov thought it would only take ten minutes. He would go there by taxi. When he came out of the hotel, he would walk down Victoria Road towards the Piccadilly Hotel and Richards and company could trail him and pick him up there.

Petrov caught his cab, went to the hotel, gave the diplomat his ticket and £10, and took a receipt. He put the receipt, £3.10 in embassy expenses he had not yet spent, and his own used air ticket of the day before in an envelope and posted it to the embassy, which liked to have its accounts in order. His ten minutes up, he didn’t go outside. Instead he went into the public bar and ordered a whisky.

Outside the hotel, Ron Richards sweated and began to worry: Petrov was now half an hour late. The master plan, which had been drawn up on 17 February before Richards had even met Petrov, had been quite explicit: if Petrov wanted to back out at any time, even after taking highly compromising steps, “he will not be forcibly restrained from so doing.” Finally, however, Petrov arrived, got into the car, and they headed, via Pyrmont, to Gladesville. At the safe house, Richards introduced Petrov to a fourth ASIO man – an interpreter – and then handed him £5000 in small notes together with the key to a safe. Petrov handed Richards an envelope of documents, wrapped in a copy of Pravda, the Soviet daily, already slightly rumpled since Petrov had slept with it under his pillow the night before.

So began one of the most momentous affairs in Australia’s postwar history, and a landmark episode in Australian political mythology. The defection of Petrov, and the dramatic decision of his wife, Evdokia, seventeen days later, to join him, changed the face of Australian politics for a generation. It may have been the factor that cost Labor the election in May that year – an election Labor had been expected to win (and where it won an absolute majority of votes, in fact, but not of seats). At the time of Petrov’s defection, the communist-baiting Senator Joseph McCarthy had been condemned by the US Senate, and overt McCarthyism was in decline in the United States. In Australia, the potency of communist can-kicking had been beginning to fade: had Petrov not defected, the 1954 election would have been fought primarily on economic issues. But the Petrov affair gave the official denunciation of communists new impetus and the political tactic a central role in Australian elections for at least another decade.

As the drama unfolded, there were further repercussions for Labor. The handling of the affair by its leader, Dr H.V. Evatt, destroyed his political credibility. It was a key background factor when a long-festering division between left and right within the Labor Party burst into open warfare, resulting in the split that kept Labor from office until 1972. “What if?” speculation is largely sterile, but it seems fair to argue that had Petrov not defected, or, as I would argue, had Evatt not responded to that defection in the way he did (dragging most of his party, most of them unwillingly, with him) the split of 1955 might not have occurred, or at least could have been more contained. And, had the split not occurred, it seems likely that Labor would not have spent so long in the wilderness, making its return to a partial power in 1972 so painful.

Even now, a generation after the defection, Petrov haunts Labor. An image that had been created in the late 1940s but was beginning to fade by 1954, that Labor was not sound on national security matters, took hold again and still dogs the party. It still makes Labor leaders act as if they have a guilty conscience whenever they are called on to make security decisions. That image, and the distrust of ASIO that the Petrov affair brought, was as much responsible as good old-fashioned incompetence for a series of ASIO–Labor catastrophes in 1972–75 and from 1983.

The formation of a conspiracy theory

As with all such Labor traumas, the affair has become shrouded in myth, which has acquired a life of its own. What people believe happened at the time has become more important than what actually did happen; the roles of various actors, as imagined by others, have become, in effect, the roles actually played.

An election had already been announced at the time the defection of Petrov was revealed. A royal commission was approved by both political parties and parliament rose for the campaign. Soon after, in a welter of publicity, Mrs Petrov made her decision to stay. The prime minister, R.G. Menzies, artfully promised that the defections would not be an election issue, but his lieutenants, particularly the deputy prime minister, Arthur Fadden, got maximum mileage out of it, asking particularly whether Labor, said to be soft on communism, could be trusted to follow up the royal commission’s findings.

Shortly before the polling date, the royal commission conducted preliminary hearings at which a somewhat sanitised version of Petrov’s defection, making no reference to either the role of various ASIO agents or the fact of payments made to Petrov, was given. It was said that the commission would establish that Australians had spied for the Soviet Union during and immediately after the war, and a general outline of the materials produced by Petrov was provided.

Among these materials were letters of instruction from Petrov’s spy-masters in Moscow; much more sensational, however, were two separate documents, labelled H and J by the royal commission. The first consisted of pen-profiles of journalists working at the federal parliamentary press gallery, and had been supplied by an Australian journalist to a Soviet journalist who, it emerged, had been an espionage agent; the second, a free-ranging and extraordinary document of thirty-seven pages – described by counsel assisting the royal commission, Victor Windeyer, as “a farrago of fact, falsity and filth” – contained sections discussing connections between leading Australians and the Japanese before Japan entered the second world war, US penetration of Australia, and what was then called “some local political matters.”

Evatt correctly saw that the affair was the major factor that cost him the election. His mood was even less sanguine when his press secretary, Fergan O’Sullivan, confessed that he, as a Sydney Morning Herald journalist before he joined Dr Evatt’s staff, had composed Document H; he was quickly sacked by Evatt. In the meantime, communist journalist Rupert Lockwood recognised in the description of Document J something he had written. He wrote a pamphlet describing its contents in great detail, but was an extremely difficult witness under cross-examination by the commission.

At this stage, nothing damaging to Labor had been revealed. But then the royal commissioners, in violation of the principle they had announced – that names would not be mentioned publicly until those involved were confronted with the evidence and given a chance to contest it – let drop the fact that Document J mentioned two other Evatt staffers as informants. There was massive publicity, and Dr Evatt, perceiving that the underlying smear was aimed at himself, announced he would appear for the two men involved.

As Menzies later commented, any halfway competent counsel could have cleared the two staffers in half a day. Evatt, however, set his sights higher – at discrediting the document, the Petrovs, and the conduct of the commission itself. Although the allegations he made in the course of a tortuous cross-examination varied from day to day, it was clear, by the end, that he was suggesting that Document J had been forged, and with ASIO connivance. He was aided by the fact that Lockwood, when ultimately shown Document J, denounced it as being based, at best, on material supplied by him but with other material “rung in.” Evatt made little headway in cross-examination but made some points, partly because of the rudeness of the royal commissioners and partly from their refusal to allow his forensic witnesses to examine the documents. Then Evatt made a public statement, as leader of the parliamentary opposition, criticising the royal commission over its release of material associated with Petrov’s dealings with a French diplomat, Rose Marie Ollier. The commission withdrew his leave to appear for his two clients. It later refused him leave to appear for himself.

The commission issued an interim report rejecting Dr Evatt’s charges about the authenticity of the materials and giving him a massive serve. It went back to its earlier tack of identifying and examining every person referred to in the documents provided by Petrov. In August 1955, it issued its final report, concluding that the Soviet Union had been conducting espionage operations in Australia, that it had had some success in relation to the Department of External Affairs at least until 1948, though little since, and that, while such operations had been assisted by a number of Australians, deficiencies in the law meant that they could not be successfully prosecuted.

The commission’s findings were bitterly contested in parliament by Evatt, who adhered to his conspiracy theory. His case, such as it was, lost any public credibility once he announced he had written to Moscow and obtained its denial of the authenticity of the documents.

The Evatt version, however, failed to die. For one thing, his opponents, both within and without his party, made such successful use of Evatt’s misjudgements in the affair that those minded to support Evatt in other struggles were more or less forced to defend his view. And, periodically, accounts of the affair, generally unsympathetic to the official version, appeared; these have kept the issue in the public mind and in Labor consciousness for over a generation.

From September 1984, when the papers of the Royal Commission into Espionage and of the Prime Minister’s Department relating to the Petrov Affair were released under the Archives Act, and perhaps more significantly from January 1985 when ASIO began quietly depositing some of its Petrov materials with the National Archives of Australia, a new look at the entire episode has become possible.

Soviet espionage in Australia 1943–54

In the light of the new documentary material, what can be said of Soviet espionage in Australia up to 1954, and of Australian participation in it?

There can be no serious doubt that the Soviet Union was carrying out espionage operations in Australia between 1943 and 1954, as even the most cursory study of the documents, particularly the Moscow letters Petrov brought with him, makes clear. One of the more common arguments against the idea that there is substantial foreign intelligence activity in Australia is the notion that Australia, a small drop in the international bucket, is simply not worth spying on. Neither in 1943, during the second world war, nor in the immediate postwar period, nor in the 1950s (nor now) was this true. The only respect in which it is even partly true is that one can assume that it was not Australia, as such, that was of great interest to the Soviet Union so much as the window Australia was capable of providing into great-power information and politics.

During the second world war, for example, and later during the Korean war, Australians were often aware, in detail, of British and American military plans, appreciations, strategies and difficulties. Thus information from senior levels of the defence and foreign affairs establishment could provide a very useful pipeline into Western defence and foreign-policy thinking. The Soviet Union was, of course, an ally during the second world war – indeed, for most of the war, it carried the greatest burden – but that didn’t mean it ordinarily received detailed information out of Australia, for if the Allies were united in some of their war aims they were sharply disunited in others.

After the war, Australia became a significant partner in a number of agreements involving the sharing of intelligence (particularly signals intelligence) and of information on new technology and atomic energy. Australia’s role in some of these agreements was significant not so much because of Australian importance in the postwar world but because of its geographical position as a listening window on Asia. Not all such agreements and operations were directed against the Soviets. But most were, and any information gained about them by the Soviet Union gave it a picture of what was known or expected of it, what was planned against it, and where gaps on either side might exist.

The Soviet Union could also have been expected to be very interested in details of military and atomic trials in Australia, in details of any weapons systems or industrial techniques being developed or used in Australia, and in Australia’s own contingency plans for military operations, given that they were designed to blend into larger allied units, and could thus give a picture of general allied strategies. This might be thought particularly the case during the Korean war, as it was in fact during the early days of Indonesian independence and in the developing Indo-Chinese conflicts.

Australian information was useful to the Soviet Union for another reason. As any study of Australian defence or cabinet documents of the period up to 1954 shows, it is simply not true to describe Australian defence and foreign policies as being some mere extension of British or US policies. While ultimate interests were certainly seen to coincide, Australia had its own unique view of its strategic situation, and of the way in which that position might be secured. Some of the more important documents in which that position is canvassed – in relation, for example, to British military planning to secure the Middle East from Soviet attack, to watching developments in Indo-China, or to discussions about how the Korean war ought to be conducted – show not only marked divergence from British and American positions, but also candid discussions of the private (as opposed to public) positions of the leading British and American actors.

Obtaining access to such information thus would have given the Soviet Union the benefit not only of Australian “insider” thinking on issues of as much interest to it as to Australia, but also of the thinking of decision-makers in London and Washington. The importance of some of this information is evident from the fact that some of it became available within Australia only on a highly restricted basis. Australia’s own politicians were not allowed to see it, but some senior military people were. This fact is the basis of allegations made during the Petrov royal commission by the former secretary of the Department of Foreign Affairs, Dr John Burton, about “the gnomes of Melbourne” – a coterie of defence and intelligence insiders swapping top-secret information which they had sworn not to give to their political masters. There is at least one such example within the Australian archives: a British war cabinet memorandum of 1944 dealing with defence cooperation between Britain and its colonies and dominions was circulated to senior Australian defence figures with the following note: “We circulate the memorandum (which the Service Departments agree should not be made available either to Dominion Prime Ministers or their officials) as background, in case the subjects covered by it should be raised.”

The Petrov documents tell us little about the nature and extent of Soviet military intelligence operations in Australia, but a good deal more on Soviet political intelligence in this country. Their usefulness for the one but not the other is a product of the compartmentalisation of Soviet intelligence operations over the eleven-year period. There were three separate Soviet intelligence networks in Australia between 1943 and 1954. One was focused on military intelligence, one on counterintelligence operations and work among former Soviet citizens, and one on political intelligence.

The network devoted to obtaining access to military and defence information in Australia was controlled by the Chief Intelligence Directorate of the Ministry for the Armed Forces, or GRU. On one occasion, Petrov had been instructed by his own masters to brief the GRU “legal” resident on Australian counter-intelligence. But Petrov believed that as well as the “legal” network (that is, one operated by a Soviet diplomat with diplomatic privilege) there would have been an “illegal” network, operated by a person without diplomatic protection and, presumably, without any intersection with the legal network. Petrov, though, had almost no information about GRU activities; with compartmentalisation, he simply was not told.

The second area of Soviet espionage was what was called SK (Soviet Colony) and EM (émigré) work. SK work was essentially counterintelligence, watching Soviet officials in Australia for possible deviations from the correct line and, of course, for potential defectors. EM work consisted of the investigation of émigrés and their associations, the tracing of émigrés who, for one reason or another, were regarded as traitors by the Soviet Union, the penetration of émigré associations, and the recruitment and use of émigrés as Soviet agents, whether to pursue further EM work or for other forms of espionage. Up to 1948, SK and EM work was controlled by the Committee of Information. Then it came under the control of the Ministry of State Security, of which Petrov was a member. Finally it was merged, together with other security functions, into the Ministry of Internal Affairs, or MVD. Petrov’s disclosures of EM work in which he was involved included the recruitment of an agent to find two Latvians regarded by the Soviet Union as traitors, investigating people who wrote to relatives in the Soviet Union, and looking for émigrés who, unwittingly, might sponsor and accept “relatives” who were in fact Soviet espionage agents.

The third area involved ordinary political espionage. It was originally organised through the Committee of Information, then in 1951 fell under the control of the Ministry of State Security, and later came into the MVD portfolio. Like many countries, the Soviet Union tended to distrust information that could be obtained openly, including information openly gathered by its diplomats, for example. It did gather openly available information and analyse it, and encouraged the reporting of possibly indiscreet but in no way secret conversations by those who had access to the decision-making systems. But the information that was regarded as being much more likely to be authentic was secret information, obtained clandestinely. The MVD essentially wanted information – military, governmental, diplomatic, economic, even cultural – of the sort that Australia and other nations did not want the Soviet Union to have. It wanted detailed information about political conditions in Australia, about its politicians, bureaucrats, scientists, and leading citizens, and about groups disposed for and against the Soviet Union. Its strongest focus was on Australian diplomatic secrets (and the secrets of any foreign diplomats working within Australia); United Nations politics; what could be gleaned of British and American attitudes and intentions; and any form of anti-Soviet activity, political or military. It was especially interested in penetrating diplomatic and other codes, and in the activities of Australian, American and British intelligence and counter-intelligence operations.

But the MVD was ill-equipped to carry out these tasks. Administrative changes back at Moscow had left a particularly inexperienced Canberra MVD staff. Petrov himself took the residency more by consequence of a bureaucratic rearrangement in Moscow than on merit. He had come to Australia to do SK and EM work for the Ministry of State Security, but once the latter was merged with the MVD, found himself unexpectedly in charge of political espionage as well. Unlike his predecessors and his own nominated successor, Petrov had thus not been briefed by Moscow about Soviet political espionage operations in Australia. Indeed, because the previous resident, Sadovnikov, who expected to return to Australia, had left matters in the hands of a junior (not Petrov), there was not even any informal information exchange on the changeover. Sadovnikov did, however, leave some sealed notes about his operations (some of which Petrov abstracted) and some of the instructions that Petrov received from Moscow provided information about political espionage operations during the period before his own involvement.

The question of Australian involvement in Soviet intelligence operations

From 1952 onwards, Moscow became seriously interested in establishing an illegal network run independently of the embassy and its diplomatic privilege, and of continuing “legal” espionage. Most of the Moscow letters focus on this, and on the exasperation of Moscow at the ineptitude of its Canberra operation in recruiting agents for it. Moscow had long before placed at least a “sleeper” in Australia and considered that other émigrés well-known to it had agent potential; unhappily for it, the sleeper had already reported to Australian security. In June 1952, Moscow told Petrov:

The aggravation of the international situation and the pressing necessity for the timely exposure and prevention of cunning designs of the enemy call imperatively for a radical reorganisation of all of our intelligence work and the urgent creation of an illegal apparatus in Australia, which could function uninterruptedly and effectively under any conditions…

For the purpose of collecting intelligence, the MVD “studied” people in a position to have access, directly or indirectly, to information. Some information could be gleaned innocently – the subject being unaware that he or she was being used, or that information given was destined for Moscow; other people were selected for deeper study, with a view to recruitment. Among those of particular interest were staff in the Department of External Affairs, diplomats of foreign missions, members of parliament, journalists, scientists, ordinary public servants with some access, people engaged in business or commerce of interest to the Soviet Union, and people suspected of having links with counter-intelligence operations. In considering recruitment, the MVD looked particularly for any evidence of a disposition towards the Soviet Union or dissatisfaction with Australian government policies, and for people in financial difficulties or with traits such as alcoholism or any penchant for sexual indiscretion. On a number of occasions, Moscow issued instructions forbidding the recruitment of people known to be associated with the Communist Party of Australia. Thus, for example, in January 1952, it advised that, taking into account the fact that a named Sydney doctor “is a prominent member of the Communist Party, he cannot be used in our work. Discontinue the study of him.” And, in June 1952, on recruiting for the illegal apparatus:

In the first place it is essential to avoid the recruitment of persons whose progressive activity is known to the counter-intelligence, and to concentrate attention on the study and recruitment of persons engaged on secret work of the government and occupying leading posts in political parties and organisations, capable of supplying us with valuable information.

The study and development of potential witting or unwitting agents was a process closely supervised by Moscow, which would give detailed instructions about how far, for the moment, matters were to be taken, the sorts of baits and inducements that could be used, and the way in which people were to be manoeuvred into clandestine relationships. It would critically review each step in the process, ordering alternative strategies where previous ones had failed, and, as commonly under the regime of Petrov, reprimanding strongly for failing to follow instructions. If the object was recruitment, the “small hook” technique was followed: in the first instance, potential agents would be asked for minor, unimportant and, for the moment, uncompromising favours or trivial information; gradually they would be asked to do tasks that did compromise them or involved compromising technique – particularly some element of clandestinity, or some breach of rule or regulations (for example, about public servants accepting money or presents). Progressively, the intention would be severely to compromise them with a view to making them conscious agents, using whatever leverage – ranging from ideological sympathy to financial need, or perhaps straight blackmail – was available. Thus, instructions were given to provide expensive presents to Mme Ollier; plans were made to exert pressure on an Israeli diplomat who had accepted, in Moscow, a commission to write a newspaper article; and an émigré worker was paid fees.

As the royal commissioners noted, there were many people studied who plainly did nothing, wittingly or unwittingly, to assist the Soviet Union but who, because of their position, because of some innocent remark, because they had expressed polite interest in the Soviet Union, or because some remarks they had made had been commented on by others, were thought to be “of interest.” Thus some people found themselves on lists because they were mentioned in the press gallery profiles prepared by Fergan O’Sullivan (Document H), some merely as being worth avoiding. A polite series of questions of a Soviet diplomat, politician or even the governor-general, Sir William McKell, could result in a report and instructions for deeper study, whether for potential recruitment or for the possibility of obtaining “in the dark” information. Given some of the names forwarded to Moscow, and the circumstances that sent them there, it is difficult to avoid the conclusion that Our Man in Havana did not in fact work within the MVD in Canberra.

A few comments about Petrov, as a spy, and his apparatus are in order. Though he had had a long career in intelligence, he had had little experience or operational training in the active espionage field. His primary specialty was in cipher work, but he had performed SK duties in Sweden. His wife was in much the same position, although in Sweden she’d performed administrative duties in connection with an active espionage network. While Petrov may have been well trained and knew, theoretically, the techniques of his trade (which is more than can be said of all of his juniors), and also had a good knowledge of the bureaucratic politics of Moscow, he was an uncommonly inept spy in action. To be sure, as the royal commissioners note, the times were not in his favour, by comparison with the supposed golden days of the war and immediate postwar period: Russia had ceased to be an ally, communist parties had fallen into considerable public disfavour, and Australian counter-espionage operations had increased.

In June 1952, Moscow pointed out to Petrov that intelligence work in Australia in 1951–52 was actually at a standstill and had not produced any noticeable results. It could not, by Petrov’s own account of events, have said anything more encouraging about activities in 1953 or early 1954. The operation did have some success in getting Fergan O’Sullivan on to the “small hook,” but did not develop its initiative; it failed to develop its contact with the French diplomat, Mme Ollier; it failed to follow up specific, and insistently repeated, Moscow instructions about other promising leads. This is not to say that the MVD would have succeeded, whether with O’Sullivan, Ollier or any of the others, had it followed up more aggressively; the point is that its local operatives scarcely bothered even to try. The MVD had some minor success with the recruitment of a man in EM work, but that was of limited espionage significance. Petrov had gone no distance in establishing an illegal network, and the people whom he had identified as agents to Moscow were in all cases either working for the counter-intelligence or not actually recruited. He often sent trivial information, and built up the most casual, and innocent, conversations to pad out reports – as Moscow complained. Petrov was continually reproached by Moscow for his poor performance, but failed to measure up. The fact that he was contemplating defection for a significant period of his residence is not the reason; indeed, the evidence suggests that Petrov, playing both ends against the middle lest he not be able to escape, performed his intelligence functions conscientiously right up to the moment of his escape.

Leaving aside for the moment Documents H and J, the information sent to the Soviet Union was of only very limited intelligence value, even where, as was uncommon, it was not directly cribbed from newspapers or official government information. Even Documents H and J had had no intelligence value as such; their real value lay elsewhere. They were of value in identifying people to “study” and in suggesting how they might be approached. Document H, in particular, was actually used for this purpose. Moreover, the fact that they were provided was in some respects compromising to their authors, and may have rendered them more susceptible of being assigned further intelligence tasks. Even there, however, the fact that Rupert Lockwood, the author of Document J – of which fact there can be little remaining doubt – was a prominent communist rendered him less, not more, susceptible of such compromise.

In the hands of a more ruthless spymaster, there were one or two, particularly O’Sullivan, who might have been said to have put themselves, wittingly or unwittingly, into a situation where they were compromisable. But Petrov invariably failed to follow up any gains he had made. O’Sullivan was highly foolish and naive in preparing, as he believed it, a set of profiles to assist a journalist from the Soviet news agency Tass, who was having difficulty making contacts among the press gallery. But he cannot be said to have crossed any unwritten line by doing so: if he was to have become an actual agent, further work would have had to be done on him – and there is, of course, no certainty that he would have succumbed.

When Petrov defected, the real gem he believed would impress ASIO – he first disclosed to it on 20 March, fourteen days before he formally went over – was that (in his words) “during the war and after the war there was a very serious situation for Australia in official circles. There was a group bringing out official documents [from] the Department of External Affairs.” Yet Petrov’s information about what had actually occurred was very sketchy. At no stage had he been briefed on what had happened. A man sent from Moscow to assist him had had a sketchy briefing, in which one name – that of diplomat Ric Throssell – had been mentioned. Sadovnikov (who had not himself been responsible for whatever espionage triumphs were involved, these being in the time of his predecessor Makarov) appeared to know and had left some documents – chiefly in the form of mnemonics – in a sealed envelope when he left, for what he thought was merely a holiday, for Moscow. His temporary successor, Pakhomov, knew little and told Petrov less, but he handed the Sadovnikov documents over to Petrov when Petrov took over in late 1951. Pakhomov said to Petrov that he believed Throssell, who was then in Brazil on an External Affairs posting, had been an agent. Later, the MVD officer who had received an MVD briefing in Moscow noted from a newspaper report that Throssell was back in Australia, and this information was sent to Moscow, which replied that Throssell had, during the war, given important information to an agent code-named Klod, but without knowing that the information was destined for the Soviet Union. Petrov and that agent made a number of attempts to contact Throssell but failed.

Although ASIO officers, devising urgent tasks to do as soon as the debriefing of Petrov began, marked down Throssell as an “agent,” it is clear that even Petrov’s account provided no justification for believing that Throssell had been a witting spy for the Soviet Union. It is also clear that the same could be said of all of the other External Affairs persons whose names emerged. Of Throssell, ultimately, the royal commission concluded:

There are only remote hearsay allegations that, without his knowledge, information said to have come from Throssell reached the Soviets. There are no particulars of the nature of the information, except that Moscow regarded it as important or valuable, and there is nothing to show why the Centre so regarded it. It is true that it was said to have been given to Klod, but whether directly or indirectly or unwittingly is left in the air. There are no particulars as to when it is said to have been given, except that it was during the war. Having regard to the inadequacy of the probative force of these indefinite hearsay allegations, and in the face of Throssell’s denial. it would be wrong to hold that he had been a member of Klod’s group or that he had wittingly given any information.

Throssell was thus thoroughly cleared, though he did not altogether escape royal commission censure:

It is quite possible that in the circle in which Throssell lived in Canberra he may have let drop information which he himself did not regard as important and may not even have been conscious of giving but which was regarded as important by a communist group which included Klod and through him was passed to Moscow. There can be no doubt that the Moscow was interested in Throssell, that they thought he had been a source of valuable information, and that they wanted him to be cultivated by Petrov and Kislytsin.

If the evidence of what the supposed members of the Klod group actually did, or what was passed on, via Klod, to Moscow is similarly unconvincing in suggesting witting participation in a Soviet espionage ring, the evidence is convincing that there was a Klod, that he did collect information, particularly from External Affairs officers, and that some of this information did pass to the Soviet Union. At least some of those involved consciously passed on information to Klod.

Despite the doubts of some, the royal commission transcripts establish beyond any reasonable doubt that Klod was Walter Seddon Clayton, who had been a member of the Control Commission of the Communist Party of Australia during and after the war. Information from Klod reached the Soviet Union via Fedor Nosov, whose cover position was as Tass correspondent.

It is one thing, of course, to conclude, as the royal commissioners did, that Clayton did pass on information to the Soviet Union. It is quite another to suggest that his activities were primarily focused on achieving that end, or that his informants had any idea that they were doing anything more than passing on interesting information to their own party, where they were conscious even of doing that. Clayton’s role within the Communist Party during that time is still wrapped in shadow. According to the party’s constitution, the Control Commission was “the organ of the Central Committee to check on the fulfilment of decisions, to help safeguard the correctness of decisions in practice, to safeguard the security and unity of the party, and to uphold the discipline and democracy of the party.” Clayton had been in charge of party “illegal work” during 1939–41. Then, and later, he was particularly concerned with the continual preparations the party was making to maintain an “illegal” party should it be again proscribed (by maintaining secret printeries, membership lists, undercover members and so on) and to develop efficient, national, alternative means of communication, safe houses and so on. Clayton was also heavily involved in party discipline matters, in links with party members not formally attached to branches, and in identifying and isolating people infiltrated into the party by bodies such as the police special branches, military security units and the security service. In every sense of the word, Clayton was the party’s intelligence chief, collecting, often deviously, information for the party’s own purposes.

Did the party embrace serving the interests of the Soviet Union? The answer must be a qualified “yes.” The party did have its own domestic reasons for running intelligence operations, and would have conducted them in any event: thus the Clayton operation was probably not designed simply to provide the Soviet Union with information that was useful to it. Most ordinary members of the party, including those willing to chat with Clayton, might not themselves have been willing to pass information directly to the Soviet Union, or to people they knew as its functionaries. But there can be little serious doubt that people within the party leadership, including Clayton, saw the defence of the Soviet Union, and the advancement of its interests, as being among the prime purposes of the Communist Party of Australia. In its foreign policy positions during the period, the party took its lead entirely from the Soviet Union. Space does not permit a traversing of how the party during this period followed exactly the twistings and turnings of Soviet policy, and did so, for that matter, quite openly. Identification with the Soviet Union was, in effect, identity with it.

Throughout the relevant period, the Communist Party had been heavily penetrated by the security services, though little, apart from lists of names, had been gathered that went beyond the public knowledge of the time. Clayton, in particular, had come under heavy security scrutiny from 1948, soon after British counter-intelligence intercepted and decoded a message from a Soviet diplomat at the United Nations which made reference to information said to have come from an officer in the Department of External Affairs. The Australian investigations that followed (which were the backdrop for the establishment of ASIO) demonstrated that Clayton had had a circle of informants within the Department of External Affairs. Two women in Clayton’s circle admitted an involvement; some others who were interviewed spoke of having been approached by Clayton for information. But there was still little information about what, if anything, had been leaked.

The continuing security investigations between 1949 and 1953 were known to many people, including Dr John Burton, who had been secretary of External Affairs, and a number of officers interviewed. Some fresh information in 1953 led to fresh rounds of interviews. It was the fact of such an investigation, well before Petrov defected, that led to suggestions, particularly by Burton, that Petrov’s material was not new – that it merely rehashed names that had emerged before. But though Petrov was able to tell ASIO little that it didn’t already know or surmise, he did provide both important confirmation and some narrowing of the list of those suspected of having, wittingly or unwittingly, passed on information.

In Klod, the royal commission had evidence of a senior party functionary passing on information to the Soviet Union. But the commission thought it unlikely that the Communist Party of Australia, as a party, had any real connection with Soviet espionage here. After the real or ostensible abolition of the Comintern, the Soviet Union was astute to hide its connection with communist parties in Western countries, and the use of a local communist party, as such, for espionage purposes would have been dangerous because exposure would seriously embarrass it and possibly lead to its abolition.

In its general conclusions, the royal commission said:

The evidence clearly shows that it was only among communists (in which term we include communist sympathisers) that the MVD could expect to find in Australia willing helpers. The only Australians who, so far as the evidence shows, knowingly assisted Soviet espionage, directly or indirectly, were communists…

The most that can be said of the Klod group is that Clayton himself may have knowingly passed information to the Soviet Union, that he got his information from people, some of whom knew he was a communist and that he would put their information to the use of the party. There is no evidence that anyone except Clayton was involved in the passage of information.

But Klod could not have operated except within his environment. The royal commissioners commented, not entirely unfairly, that there were within the Communist Party of Australia people whose minds

seem to work along the following lines: Communism is the ideal state of society. The ideal state is a communist state, the Soviet Union is a communist state; Australia is not. Therefore the Australian patriot should aid the Soviet not only by working for the establishment of Australia as a communist state, but in all other ways.

“People who hold such a view may be honest,” the commission added, “but they are nonetheless dangerous for Australia’s security.”

The work of the Klod group appears to have petered out by 1948, whether because of counter-intelligence operations, or because of the changed climate in External Affairs after Menzies was elected, or for other reasons. The Communist Party continued to carry out its own internal security work, and maintained its interest in getting access to government secrets. But the nature of this work, and its relationship with Soviet espionage purposes, appears on all of the evidence to have been quite different. Put simply, there is no evidence that any communist functionaries were secretly giving information to the Soviet Union during the 1950s.

There is certainly no doubting the access of some people to secret material dealing with foreign affairs. On the one hand, there was the leaking of a copy of the draft Treaty of Friendship, Commerce and Navigation between Australia and the United States to Rex Chiplin, a reporter with the communist newspaper Tribune, who promptly published a (not entirely accurate) commentary on it. A security service raid on the house of Tribune printer and party functionary Herbert Chandler, carried out because of that leak, found other documents – the most sensitive of which, by far, consisted of extracts from the diary maintained by external affairs minister Richard Casey, revealing in considerable detail highly confidential discussions with an array of foreign government and business figures. Access to the diary was highly restricted.

These examples, plus the evidence of a security plant, Mercia Masson, about the way in which the party maintained clandestine contacts with her, show that the party had access to sensitive materials. What is not shown – indeed, there is strong evidence to the contrary – is any clandestine passage of such information to the Soviet Union. Moscow in fact complained to Petrov that he had not sent a copy of the material Rex Chiplin had used to prepare his Tribune article; he had merely sent a copy of the article in Tribune – that is to say, public information. Chiplin certainly behaved in a conspiratorial manner with his contacts. But it may well have been nothing more than the behaviour of a highly unpopular journalist who knew himself to be the subject of close security scrutiny yet wished to maintain contacts with people who had access to information embarrassing to the government. Had Chiplin been anything of the spy that the royal commission report suggests, there would have been evidence of the background of his journalistic material passing to Petrov or to Petrov’s men.

Chiplin, however, did a number of things that made him a legitimate focus of interest for the royal commission and the security services. He was regarded by the MVD as a talent spotter – as someone who could advise MVD agents about the usefulness to the Soviet Union of others. It was he who nominated Fergan O’Sullivan to the Tass reporter/MVD agent Pakhomov as a useful contact. Chiplin, of course, did not necessarily know that he was assisting the MVD agents as MVD agents; as with O’Sullivan, his contacts are explainable (if nonetheless foolish) in terms of the overt functions of the various people involved. Until Moscow formally warned Pakhomov off, Chiplin was regarded as a source of information for the routine questionnaires on Australian political conditions sent to Canberra for completion, or for checking information obtained from others. The information in question, however, was essentially innocuous, and in no way obviously intelligence information.

If one was drawing an indictment of Chiplin, the most critical thing he could be said to have done was to tip off the Soviet embassy about Australian security interest in two Soviet embassy personnel. Whatever might be thought of his doing so, the circumstances of the tipping off, even on Petrov’s account, are simply not consistent with any role of Chiplin as spy, or even with his being so regarded by the MVD.

Another Communist Party functionary did give Soviet personnel information about two casual links into Australian counter-espionage operations. This might come closest to willingly giving information to the Soviet Union but, again, it does not make a spy ring.

It is not difficult to find evidence that there were people with a friendly disposition to the Soviet Union, willing to gossip generally about both Australian and Soviet affairs with people who happened, covertly, to be Soviet intelligence agents, willing, even, to say things to them that a prudent person would not say. The existence of such people is of great use to any intelligence operation, both in extracting “in the dark” information, and in conditioning and later compromising potential agents. Had the local Soviet intelligence agents been more competent, they might have had some success in recruiting local agents. But all of the evidence suggests that a degree of goodwill from some Australians, but no real conscious cooperation, was the most that was obtained.

One can only conclude that Soviet espionage in Australia between 1943 and 1954 was probably not successful, either in recruiting useful local help or in gathering information of use to the Soviet Union.

The conspiracy theory evaluated

Dr Evatt formed the view that the entire Petrov affair was a conspiracy directed against him. His charge was never formulated with any real precision, and he shifted horses on a number of occasions. But it is safe to say that every leg on which his argument rested is either specifically rebutted by an analysis of the material now available (if it was not already by the public record of the commission) or can be taken no further in any direction. In particular, the suggestion that page 35 of Document J was forged – or that the whole document was – is plainly false.

In particular, the more recently released materials repudiate any suggestion of concoction of documents, or conspiracy, whether by the Petrovs alone, by the Petrovs in conjunction with ASIO, or by the Petrovs, ASIO and the Menzies government. Whatever else may be said of the affair, ASIO did play a cool and professional role in bringing to the point of defection a senior Soviet spy who was organising espionage activities within Australia. There is no evidence that their activities, or the timing of the defection itself, were organised for party-political purposes, or, indeed, that any of the substantial allegations made by the Petrovs were false.

Those who would maintain the conspiracy theory are forced to consider the archival material forged – not perhaps an impossible task, but certainly one that would have involved a rare skill exercised over some decades by scores of conspirators for a purpose that could never have been entirely clear, since the concept of an archival release of the form and extent which has now been the practice for some years was, for the first twenty of the thirty years at least, quite unimaginable. If the allegations made by Evatt, first at the royal commission and later in parliament, seem now even more bizarre and fantastic than they appeared to the royal commissioners and to Menzies, it is nonetheless plain that he, and Labor, do have something to complain of about the handling of the affair, particularly after the defection occurred. (These complaints, however, ought not found a thirty-year obsession.)

First, although there is no evidence that the timing of the defection was arranged by an election timetable – indeed the evidence to the contrary is most convincing – there is not the slightest doubt that Menzies made maximum political capital from the windfall that dropped into his lap. The process of making that capital – documented by Nicholas Whitlam and John Stubbs in their book Nest of Traitors, not otherwise a particularly accurate chronicle – was perhaps the more effective since Menzies, personally, affected not to be taking personal advantage. The innuendo circulated in the immediate aftermath of Petrov’s defection, particularly by the Country Party leader Fadden and by the rump of the Liberal Party led by W.C. Wentworth, was false and damaging to Labor. The impression was bad.

Accept all of this, however, and one does no more than convict Menzies of being a smart and devious politician. The second complaint arises from the conduct of the royal commissioners in hearing the evidence. If their final report is moderate in tone, and their findings generally quite defensible, the hearings themselves were often something else. In part, one can say that the adversarial style of the commission and the way in which the commissioners so quickly aligned themselves with the Petrovs and the security service was a reaction to the hostility and the obvious lying of so many of the witnesses. But it was the commissioners’ own actions that brought Evatt into the ring to support the reputation of two members of his staff. The paranoia Evatt then introduced came from between his own ears, but the discourtesy with which he was treated lent significant support, for many years, to his allegations.

Evatt was smeared. The smear was on his judgement. That Evatt produced so much evidence of that misjudgement in his handling of the affair does not refute the unfairness of the original innuendo; indeed, making all the appropriate allowances for the bucketing Evatt rightly copped after his intervention, it is still hard not to see him as the prime victim of the Petrov affair.

It is now fashionable to see the whole affair as simply a communist witch-hunt – the “paradigm of the use of security for political purposes,” as Richard Hall described it in his book, The Secret State or, as Whitlam and Stubbs alleged in Nest of Traitors, “Australia’s own McCarthy era… which sought out and publicised communists, and, equating communism with disloyalty to Australia, destroyed their reputations.” Such a judgement must, of course, suffer somewhat from a conclusion, rejected in part by each of these authors, that there was genuine fire in the Petrov smoke. It must suffer also from a distinction – which may, admittedly, be none too obvious to the victims – between being called before a public royal commission and, because of that appearance, being branded in the popular media. The commission did have a legitimate reason for calling many people before it; whether they liked it or not, their names were to be found in Soviet espionage documents. Most such names were there through no fault whatever of their owners, a fact that was readily demonstrated and, almost invariably, quickly acknowledged publicly by the commission. By and large, the commission itself acted quite fairly to those named by Petrov or his documents.

Yet a twofold problem remained. First, in the popular mind, merely being called before the commission, except in the most obvious cases, was enough to excite popular suspicion, whatever the actual evidence and whatever the commission said or did. Second, many who appeared were smeared not because any association with espionage was demonstrated but because, in the process of giving evidence, they conceded membership of, or friendly association with, the Communist Party of Australia. Again, in general, this was something more determined by the media and by professional anti-communists than by the commission itself and its processes.

There is no doubt, however, that the government, ASIO and, ultimately, the royal commission itself saw the whole Petrov exercise as an opportunity to deliver the public a lecture on the evils and menace of communism. The conservative parties’ motive for discovering this is obvious; ASIO saw it as an opportunity not only to justify its existence but also (more legitimately) to raise some consciousness of internal security issues. The commission might have adopted a more moderate tone, but was probably pushed by the violence of Labor’s official reaction to it. In the end, it was Labor, not the Communist Party, that was to be the main victim. •