Reflections on ASIO and the End of the Cold War

The end of the Cold War, marked initially by the fall of the Berlin Wall in November 1989 and then confirmed by the collapse of the Soviet Union in 1991, caught intelligence analysts by surprise. Not only inside ASIO, but around the world, the perception remained right until the death knell that the Soviet monolith would endure ad infinitum. Yet in hindsight it is easier to detect the signs of desperation within a crumbling Soviet order.

Some questions bring the matter into stark relief. During the leaderships of Mikhail Gorbachev and Boris Yeltsin, the Soviet Union was going through a fundamental political and economic crisis, while remaining a potent military superpower. Why had it not been more obvious to countries in the West such as Australia that as the revolutionary zeal of the communists faded, Soviet rhetoric was increasingly far removed from the hollow reality of Soviet economic, if not military, prowess? What kind of a bankrupt regime was the West dealing with in the Soviet Union? Why was it not obvious that the Soviet obsession with espionage betrayed an internal insecurity, intrinsic unsustainability and intellectual vacuousness? It did not occur to the intelligence community to ask these questions until after the fact. Indeed, these remain issues for intelligence analysts today, as the collapse of the Soviet Union did not end the threat of espionage.

In hindsight, these questions may appear merely of academic interest, but they have enduring resonance for an Australian intelligence community seeking to peer into the fog of the future. Certainly, there is much truth in the saying that history never repeats, but there are strong suggestions that it rhymes, and as we contemplate the history of ASIO during the Cold War it is well worth reflecting on events that occurred decades ago for their resonance today. In so doing, it is important to remember what actually transpired before comparing those events with circumstances faced early in the 21st century.

The period covered here in Volume III of the history of ASIO, the Fraser and Hawke years from 1975 to 1989, involved a remarkable series of changes from the ASIO of previous decades covered in the first two volumes of this history. The first volume saw ASIO established to grapple with the threat of espionage presented by a group of communist sympathisers working inside government circles. The high point of the volume was marked by the defection of Vladimir and Evdokia Petrov and ended with the expulsion of Ivan Skripov in February 1963. ASIO during this period was what could be described as a cottage industry, where everybody knew each other. It was a trusted circle of confidants. Volume II explored the pains ASIO experienced as it grew, reaching adolescence and facing a dramatic shift in Australian society associated with the rise of the baby boomer generation (those born after the Second World War and before 1960), student protests and the Vietnam War. The momentum arising from these societal shifts led to the electoral victory of Gough Whitlam and his team, followed by three years of a ‘crash through or crash’ approach to government. The whirlwind ride as part of the Whitlam experiment saw ASIO confronted with the need to reform.

The pursuit of those reform measures is a central theme of Volume III. Significant legislative changes with the ASIO Act 1979, the Telecommunications (Interception) Act 1979, the Freedom of Information Act 1982 and the Archives Act 1983; and the establishment of the Security Appeals Tribunal, the Protective Security Coordination Centre and the office of the Inspector-General of Intelligence and Security, among other initiatives, all emerged as a result of the reforms triggered during Whitlam’s term in office and deliberated over by Justice Hope. These transformed the way ASIO conducted its business. The checks and balances introduced through Hope’s recommended reforms are essentially the same ones in place in the middle of the second decade of the 21st century.

The end of the Cold War meant that ASIO faced new and complex challenges in its work at a time of immense global and organisational change. Throughout the fourteen years between the election of the Fraser Government and the fall of the Berlin Wall in November 1989, ASIO had five directors-general: Frank Mahony (1975–76), Edward Woodward (1976–81), Harvey Barnett (1981–85), Alan Wrigley (1985–88) and John Moten (1988–92). These five men, each with their own unique (and at times contentious) approaches and leadership styles, worked to restructure, modernise and professionalise ASIO in accordance with Hope’s recommendations. It was clear that both Hope and the Government expected ASIO to reform. This had the effect of moving ASIO closer, both in attitude and location, to the wider public service. This involved working under revised legislation, improving cooperation with other Australian security and intelligence agencies and moving the headquarters from Melbourne to Canberra.

The appointment of Justice Woodward, after a brief interregnum by Mahony, was perhaps the most significant of the period. Woodward’s appointment reflected the Whitlam Government’s desire to make ASIO more legally accountable and answerable to government. Whitlam specifically favoured appointing a judge, as he felt the Organisation had a proclivity for acting outside the law and a judge was best placed to ensure this did not continue. Woodward had the unenviable task of attempting to implement the plethora of reform initiatives recommended by Hope. What is interesting is that while this was a Whitlam Government agenda item, it was faithfully carried forward under Prime Minister Fraser’s direction by Woodward and his team.

The Whitlam Government had a profound effect on the Organisation and left it reeling. Initially, the appointment of Woodward appeared to deepen that sense of crisis, but in the event Woodward gained the trust of the Organisation and proved remarkably effective and sagacious in his management of ASIO during a turbulent and difficult period of reform. Woodward masterfully directed ASIO to accept and embrace the Hope recommendations. As a result, the Organisation underwent a transformation.

The transformation Hope had called for was consolidated with the relocation of Headquarters ASIO from Melbourne to the new Central Office of ASIO in the Russell precinct of Canberra. Across its principal domains, including protective security, counterespionage, counterterrorism and politically motivated violence, ASIO would be required to make significant adjustments in light of changing circumstances.

Protective security adjusted to the decriminalisation of homosexuality, the emergence of computers, the dramatic expansion in the Australian Public Service and the concomitant increase in demand for security clearances. Liaison officers initially posted around the globe to screen migrants were brought home to Australia as that mandate changed and responsibility for managing migrant processing and security screening shifted to the Department of Immigration and Ethnic Affairs. Despite handing over responsibility for migrant screening, ASIO continued to provide advice to other Australian Government departments on vetting procedures and practices.

Countering subversion, long a principal task for ASIO officers stationed around Australia, slowly faded in relative significance. Maintaining large numbers of agents and contacts among increasingly marginal and impotent political bodies such as the CPA slowly became unacceptable. The Security Appeals Tribunal’s ruling on the Rix case in 1983 meant that membership of the CPA was no longer a bar to employment in government or sufficient grounds alone to deny someone a security clearance. While ASIO had already been moving away from focusing resources on such threats, that decision accelerated the final stages of change in this area.

As countering subversion declined in significance, other forms of politically motivated violence emerged to take its place as a high priority for ASIO. The large influx of migrants from around Europe, the Middle East, Asia and elsewhere created an increasingly cosmopolitan Australian society that presented ample opportunity for extremist elements to hide, thrive and endure. Terrorism had made a very public entry onto the world stage at the 1972 Olympics in Munich, Germany. Indeed, it was not just the grievances of Palestinians that would concern ASIO as time passed. Other extremist groups emerged among the Armenian and Lebanese communities, and among followers of an Indian sect, the Ananda Marga, in addition to the threat of state-sponsored terrorism emanating from the Libyans, Iranians and Iraqis. Bombings of Yugoslav diplomatic and commercial premises, as well as of Jewish clubs and Israeli diplomatic premises brought home the gravity of the threat posed. The bomb that exploded in front of the Hilton Hotel in downtown Sydney in February 1978 served as a rude shock to the Government. It triggered significant additional reforms focused on ensuring robust mechanisms and institutions were in place within ASIO and other instrumentalities to counter the apparent threat. Exercises also increased in frequency, to make sure ASIO worked better with the Protective Security Coordination Centre and the AFP, as well as the state police forces.

Countering Soviet and Soviet bloc espionage had featured as central to ASIO’s raison d’être since its inception, but for a long time after the Skripov expulsion, there was little to show, it seemed, for the large proportion of ASIO’s resources and efforts focused on this task. To be sure, ASIO’s active and persistent surveillance of the diplomats and intelligence officers based in the Soviet Embassy in Canberra undoubtedly curtailed their freedom of action. But with so many Soviet bloc proxies at their disposal, few insiders doubt that the Soviets were able to achieve what they desired without too much discomfort or difficulty. This was galling given the earlier successes against the Petrovs, but times had changed. The Soviets had stopped treating ASIO lightly and sent some of their best to work around and subvert Australia’s protective measures.

In early 1983, with Ivanov being closely monitored, it looked like ASIO was about to make a significant counterespionage breakthrough. But no one inside ASIO would have wished for or predicted the surge in publicity associated with the Combe–Ivanov case or the media spectacle associated with the Royal Commission on Australia’s Security and Intelligence Agencies that followed. Still, the searing experience helped refine ASIO further, challenging procedures and approaches to make them more robust and resilient as well as accountable. Having said that, it still left ASIO with only a limited grasp at best of what the Soviets were doing directly or through their Soviet bloc proxies. Inconclusive and unsubstantiated stories kept emerging of illegals, agents of influence and Soviet bloc intelligence proxies busily conducting operations in Australia on behalf of the Soviets, yet with little realistic hope that ASIO could counter them effectively. Meanwhile, growing ties with China saw the rise of Chinese espionage, which for ASIO elicited a largely unsuccessful mixture of strategies that had been employed against Soviet bloc targets. China’s approach differed markedly from that of the Soviet Union, and it would take ASIO some time to understand this and to fathom the implications it would have for its own methods.

While during the period covered by Volume III ASIO was headed by five directors-general, its political oversight was handled by a succession of attorneys-general, namely Bob Ellicott, Peter Durack, Gareth Evans and Lionel Bowen. They in turn reported to only two prime ministers, Fraser and then Hawke. These public office-holders oversaw a remarkable new generation of ASIO officers emerge, replacing the Second World War generation, and an influx of university graduates and others who would continue to make intelligence their careers.

The challenges ASIO faced were exacerbated by being asked to do much more than the Organisation was resourced to do and against some very adept, professional and security-conscious targets. Justice Hope was quite upfront about the need to fund ASIO properly. In part, directors-general picked up on this recommendation and vigorously pursued additional resources from government. While reform measures were adopted and funding allocations increased, the increases had to be introduced gradually or the glut would undermine effectiveness. Already witnessing some growth as a result of the reform initiatives Hope recommended, successive directors-general were reluctant to approach their political masters, cap in hand, and ask for considerably more than had been allocated for their assigned tasks. This reluctance reflected Spry’s frugal can-do approach to tasking, which was informed by his generation’s wartime experience. This meant that for decades ASIO sought to make do and carry out its tasks to the best of its ability despite being significantly under-resourced given the magnitude of the task it faced. In part, this was because successive governments felt uncomfortable being too closely associated with the workings of ASIO. It was best left to the experts, so the reasoning went, but the experts did not have the temerity to spell out fully and clearly to government the extent of the security challenges and their resource implications. That was partially because ASIO was not an organisation with a high or particularly favourable public profile. In the absence of a major domestic security event to crystallise opinion, there were few votes to be gained in spending more on domestic security beyond what was considered politically expedient and absolutely necessary. In the face of competing priorities for an emerging nation already absorbing hundreds of thousands of new migrants, ASIO’s concerns and priorities, it seemed, had to be placed in the resource queue.

Notwithstanding the resource constraints, the ASIO of 1989 was an organisation that had made major changes in how it recruited and trained its people, how it managed and evaluated its performance, and how it related to its elected political masters and the other arms of government. Yet just as the benefits of the reforms implemented by successive attorneys-general and directors-general from the mid-1970s to the late 1980s were coming to fruition, the whole rationale for the existence of the Organisation came into question with the end of the Cold War. Indeed, the question that was asked by the Opposition Leader and former Attorney-General Dr Herbert Vere (Doc) Evatt in the mid-1950s, and by others afterwards, of whether Australia even needed an organisation like ASIO resurfaced. If the Cold War had been won without ASIO having broken another spy ring or convinced another major Soviet intelligence official to defect, why was the Organisation still necessary? And what did ASIO really do that was so important to the defence of the nation? The need for an answer to these questions may not have been appreciated by many at the time, but with governments looking for a peace dividend from having ‘won’ the Cold War, ASIO became a prime and apparently ripe target. To be sure, many in the early 1990s saw ASIO as largely redundant. The Cold War was over. The Soviet bloc states, apparently, were no longer out to vacuum up all the secrets they could lay their hands on. The very rationale for the creation of ASIO, it seemed, had collapsed along with the Berlin Wall.

Yet there was much in the ASIO of 1989 that would echo throughout the Organisation for decades afterwards. Counterespionage certainly dropped off as the intelligence footprints of these former communist states withered. But as the Berlin Wall was about to come down, little did anyone realise what challenges lay ahead. Espionage, some would say, is the second oldest profession, and it continues today. In hindsight, there was little reason to believe that the collapse of the Soviet Union and its allies would see the end of espionage. Vigilance in countering espionage would remain a task of government and, more specifically, of ASIO. Defence of the Commonwealth depends on this function being fostered and retained. The rise of the internet and the security concerns related to cyberspace, as well as the rise of an inquisitive and persistent China would present a whole array of additional challenges.

While the collapse of the Soviet Union led to a questioning of the rationale of ASIO, it also had the unintended consequence of mitigating concerns about the presence of a mole or moles within the Organisation. The inconclusive investigations may have allowed possible moles to retire without being prosecuted. If no one was hurt physically by it all, why should anyone really care? Why not let bygones be bygones? These questions would gnaw away at many insiders for years afterwards.

In the meantime, the task of countering politically motivated violence, explored in this volume, would continue to grow and present increasingly complex challenges to ASIO—particularly as government expectations of the Organisation continued to grow. With finite resources, ASIO still was expected to know of events before they happened and to provide proactive intelligence advice. Yet as society become more complicated, technology proliferated and the social mix grew more difficult to understand let alone monitor, the challenge for ASIO to manage expectations in the face of constrained and declining budgets grew commensurately.

In the years immediately after the Cold War, ASIO’s budget was slashed following the 1992 review of the intelligence community conducted by senior public servant Dennis Richardson. ASIO in 1989 had 707 staff. By mid-1995 it would be down to 585 and by 2001 it would be 575.1Thereafter, ASIO would see a growth in staff numbers to 1795 by 2014.2 Despite the cutbacks, ASIO maintained a focus on politically motivated violence, a phenomenon that would endure and grow.

Developments overseas throughout the 1990s indicated that terrorism was a growing threat, morphing and adopting new tactics to circumvent the countermeasures developed in the 1970s and 1980s. Less than twelve years after the dramatic events of November 1989, the terrorist acts on 11 September 2001 in New York and Washington DC, and events in Indonesia, in 2002 and beyond, in Bali and Jakarta, would redefine for Australia the importance of vigilance against politically and ideologically motivated violent extremism. ASIO’s enduring activities in this domain would once again garner the attention of the Government and the nation. Indeed, it would become one of the Organisation’s principal foci.

Meanwhile, protective security challenges would remain, growing steadily as an increasingly networked bureaucracy expected more and more people to be given high-level security clearances to work in the national intelligence and security domains of government. Vetting personnel for access to highly sensitive national security information, and offering protective security advice to government institutions, VIPs and diplomats, would provide a never-ending source of demands for advice and support.

In the heady days of the end of the Cold War, however, it was difficult to discount the exuberance of the times and remain focused on delivering high-quality security advice to government to protect the nation. As ASIO looks into the future, there is enduring utility in reflecting on its experience during the Cold War, where the challenges of old bear an uncanny resemblance to those of today.

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