6

TERRORISM FROM OVERSEAS

ASIO’s Counterterrorism Targets, 1975–1983

The Ananda Marga clearly stole the limelight following the Hilton Hotel bombing, but it was not the only group generating concerns about terrorist plots. This chapter examines ASIO’s work more broadly in the field of counterterrorism from 1975 to 1983. During these years, counterterrorism was a domestic concern, as ASIO’s coverage of the Ananda Marga proves, but it was also associated with a range of fringe groups that operated within migrant communities with links to Europe and the Middle East. They are the focus of this chapter, along with the mechanisms established within ASIO, and in collaboration with other agencies, to deal with the challenges these groups and international terrorism posed to Australia.

Terrorism and the Middle East

Palestinian-related terrorist incidents had been of concern to ASIO since 1972, when more than a dozen letter bombs were sent to Israeli diplomats and members of the Jewish community in Australia, and 1973, when Abdulhamid Abdulla Azzam, a member of the military arm of Al Fatah, a faction of the Palestinian Liberation Organisation (PLO), visited Australia and was arrested in possession of a suitcase with an imprint of a weapon and hand grenades. He was subsequently deported, but not before arousing significant concern regarding the importation of international terrorism to Australia, as Volume II of this history explains.1 In 1974, ASIO reported that members of another PLO faction, the People’s Front for the Liberation of Palestine, had visited Australia, possibly to help establish several cells within the migrant community.2 ASIO sources provided information on developments within Al Fatah, which at the time was considered the principal Palestinian terrorist group, in Australia.3 While Al Fatah would later come to be seen as having moved away from violence and evolved into a political party to lead peaceful Palestinian engagement, in the mid- to late 1970s, they were not seen in such a benign light.

Routine reporting from these sources continued, and in 1976 ASIO recorded a number of visits from the People’s Front for the Liberation of Palestine and Al Fatah activists, which raised concerns about their intentions and the clandestine cells that they had reportedly established in Australia. Hamid Meziani, a nom de guerre for an Al Fatah operations officer, was reportedly involved in terrorist operations in 1973. ASIO received intelligence from foreign sources that he was to visit Australia, and he arrived in March 1976. It appears he came to assess the position of Al Fatah in Australia and to develop infrastructure to support his organisation in carrying out possible terrorist attacks. ASIO consulted the Department of Immigration and Ethnic Affairs and the CPF, after which a proposal was submitted to the Minister for Immigration and Ethnic Affairs that Meziani be arrested and deported. The CPF detained him on 11 July and interviewed him. ASIO, with cooperation from the CPF, recorded the interview and gathered other information on his activities in Australia.4 In the interview, Meziani was confronted with documentary evidence that he had come to Australia on instructions from Al Fatah. He claimed he had never participated personally in a terrorist operation, but there was circumstantial evidence to indicate he was lying.5 He was deported under escort to Algeria on 13 July 1976.6

Meziani had been accompanied on his visit to Australia by a naturalised Australian from Palestine who had migrated in 1970, Ali Kazak. Kazak had been interviewed twice and assessed as ‘a trusted Al Fatah cadre’. Conscious of Kazak’s significance in Al Fatah, ASIO placed a listening device that enabled them to monitor his conversations in order to supplement the information obtained by other means.7 Together, these sources indicated that in 1972 Kazak had advocated using violence at demonstrations—information that validated ASIO’s interest in him.8 Kazak remained of interest to ASIO for some years. To determine whether he received foreign funding, ASIO sought access to Kazak’s financial records. These revealed that he had no regular income, but that significant periodic funds were transferred to him from the PLO.9 Kazak was an astute operative and was circumspect in his actions; ASIO later assessed that his role and activities were not of significant security interest and, because of his security consciousness, did not envisage that interception or technical operations would be productive.10 Kazak later established the Palestine Information Office in Australia, which was officially recognised by the Australian Government as the General Palestinian Delegation to Australia in 1989, and he was recognised as the official representative of the PLO in Australia.11

Before then, however, in August 1977, Ahmed Abdul-Rahman Al Ahmed, the general secretary of the Iraqi-backed Arab Liberation Front and a member of the PLO, visited Australia to speak about ‘rejectionist’ policies to the local pro-Palestinian community. In light of the spate of terrorist-related incidents elsewhere, ASIO became increasingly concerned about what might happen as a result of these visits. In the end, there was little to show for their concerns. The migration screening system, which had picked up on Ahmed, was credited by ASIO with bringing to the notice of security and immigration authorities the names of visa applicants with questionable backgrounds, and with enabling several others to be detected and prevented from visiting Australia.12 ASIO, Customs and Immigration officials were making considerable headway in coordinating their efforts.

Still, concerns were growing about extremist views being fomented within migrant communities in Australia. Local supporters of the PLO were thought unlikely to engage in terrorist acts in Australia, ‘but they might give support to others entering the country for that purpose’. An ASIO report recorded that late in 1977 about 450 PLO supporters resident in Australia travelled to Libya to participate in a military training camp organised by the People’s Front for the Liberation of Palestine. Most had returned to Australia by mid-1978. Of that 450, 40 were assessed by ASIO as advocates for the use of violence to achieve the anti-Zionist aims of either the ‘Rejectionist Front’13 or the PLO.14 ASIO assessed that the threats to domestic security emerging from among Middle Eastern migrant communities were on the increase. The PLO and rejectionist groups presented ASIO with additional resource and access challenges, particularly in the areas of language skills, an understanding of Middle Eastern politics and culture, and the dynamics of the Sunni–Shia divide in Islam. In time these issues would grow in size and complexity, the challenge made greater by the opening of new diplomatic missions that in themselves represented an emerging threat—of state-sponsored terrorism.

The Iraqi Consulate-General

The establishment of an Iraqi Consulate-General in Sydney in July 1978 prompted ASIO to pay attention to the threats posed to Australia from Iraqi-sponsored terrorism. ASIO identified the Consul-General, Riyadh Ali Sabah Al-Azzawi, as a career officer with the Iraqi Directorate-General of Intelligence, although it noted that the exact nature and extent of Iraq’s intelligence interest in Australia ‘remains to be seen’.15 Fortunately, ASIO had good coverage of Al-Azzawi’s actions.16 Woodward later recalled that not only was Al-Azzawi a career intelligence service officer but he had become actively involved with pro-Palestinian groups and individuals immediately after his arrival in Australia. Woodward observed that the arrival of the Iraqis widened the support for the People’s Front for the Liberation of Palestine or Al Fatah groups in Australia.17

Prominent ALP member and political activist Bill Hartley was thought to have received financial support from Iraq and from Libya and, according to Woodward, had set himself up as the unofficial ambassador for both governments in Australia.18 Early in 1976, this possibility was investigated by the CPF, which shared its findings with ASIO and the Attorney-General. They indicated that Iraqi money was being used to fund various Middle Eastern newspapers and ‘left wing unions and any revolutionary activity’.19 Woodward reported to Attorney-General Durack that the Socialist Labour League also had sought financial support from Al-Azzawi, but pointed out that Al-Azzawi ‘dislikes and mistrusts Trotskyists whom he sees as trouble-makers out for financial gain’.20 Woodward advised Opposition Leader Bill Hayden in 1979 that there was evidence the Iraqis and Libyans were disenchanted with Bill Hartley’s performance and his influence was waning.21

The Syrian Social Nationalist Party and the Aboud Aboud case

Another group to emerge in the late 1970s in Australia was the Syrian Social Nationalist Party, originally founded in Beirut in 1932 and spearheaded in Australia by a Jordanian migrant, Haydar Mohammed Issa Haj Ismail, known as Aboud Aboud, or simply Aboud. His reported belligerence was the catalyst for several violent incidents in Sydney, Melbourne and Adelaide in 1978–79. This led several community spokespeople to call on the ‘authorities’ to take action.22 With so much concern expressed by the community, ASIO started to pay attention to the workings of groups such as the Syrian Social Nationalist Party.

As the government sought to deport him, Aboud faced the Federal Court in Sydney in October 1982. For its part, ASIO argued that he was ‘a nasty man who should not be granted residence in Australia’.23 The legal argument revolved around whether ASIO documents should be presented to the court, and the suggestion was made that a deportation order could not be obtained unless the ASIO information was made available.

Harvey Barnett told the Acting Attorney-General, Neil Brown, that sensitive source material had been provided for the security assessment in this case and that if it were to be revealed in court, the life of ASIO’s agent would be at risk.24 Barnett was concerned that any release of ASIO intelligence on the matter would be apparent immediately to Aboud Aboud and the end result would be ‘the certain death’ of ASIO’s agent. ASIO had the ‘strongest moral obligation’, Barnett argued, ‘to protect absolutely the life of its faithful and long-serving agent’.25

The knock-on effect of the agent’s exposure in court, he claimed, would be that ASIO’s ability to continue its work would be destroyed as all other agents would not wish to work for an organisation likely to ‘splatter their names through a Court’. Barnett was concerned that a precedent would be set whereby ASIO could not in the future protect its sensitive intelligence sources. In Barnett’s view the case presented a real challenge to the Government, which had to decide whether it wanted a viable security service or not. If it did, he argued, then it must protect the service and its covert agents, or else ‘the whole security system would crumble with dire results for Australia’.26 The court heeded ASIO’s advice.

Mail interception

With a burgeoning requirement to monitor what was happening with a number of target groups and individuals across Australia, ASIO looked for new ways to collect information.

On 25 June 1980, telephone interception commenced on Youssef Abu Jaber, the leader of Al Fatah in Australia and National President of the United Palestine Workers, considered a front for Al Fatah. ASIO recorded an incoming call from Mahmoud Saadeh. After migrating to Australia in 1966 and being naturalised in 1969, Saadeh became a founding member and the original leader of Al Fatah in Australia from 1974 to 1980. He then left Australia in 1980 to work at Al Fatah Headquarters in Damascus. During the telephone conversation, Saadeh told Jaber that he had posted assignment details he would not discuss over the phone.27 ASIO reacted quickly. Suspecting that the correspondence from Saadeh could contain details of Al Fatah’s strategy, reorganisation and ‘armed struggle’, the next day, 26 June, ASIO’s Victorian office asked that ASIO headquarters give ‘urgent consideration’ to the interception of this mail.28 The head of S Branch supported the proposal. If successful, he noted, ‘our information on the present and future activities of Al Fatah in Australia, and probably overseas, should be considerably enhanced’.29

ASIO got to work drafting a warrant request for the first mail interception warrant under the ASIO Act 1979. In addition to providing information of Al Fatah’s activities, ASIO hoped that mail interception would provide forewarning of any intended violence in Australia.30 The request was presented to the Attorney-General, Peter Durack, who signed it on 29 June to cover incoming mail for 30 days.31 ASIO intercepted, opened and read each piece of mail during that period to assess its significance.32 As it was the first operation of its kind, and ASIO had no proforma for writing up its reports, the Organisation had to devise an ad hoc reporting system, modifying slightly that used for reporting on telephone interception, that both conveyed the intelligence and protected the nature of the source.33

In the end, this operation did not provide the significant intelligence ASIO had hoped for, but it did give a better understanding of the personalities within Al Fatah and the dynamics of its interactions with other groups. It also helped ASIO assess the information provided by other sources targeted against these groups, and, most importantly, it altered ASIO’s plans for future coverage. The Attorney-General was advised of the outcome of the operation, and with little else to be gained ASIO decided not to request a renewal.34 It had other avenues to pursue regarding Al Fatah.

Technical operations

Eager to identify additional indicators of Al Fatah’s intentions, ASIO decided to mount a technical operation against key members of the organisation living in Sydney. This revealed the activities and structure of Al Fatah in Australia, and provided forewarning of possible violence.35

ASIO technicians entered the flats of certain Al Fatah members and installed a microphone in each.36 The operation ran for three months, after which the microphones were switched off.37 While it did not produce any evidence of terrorist plans, it did indicate that Al Fatah was considering an approach to the Department of Foreign Affairs about establishing a PLO Information Office in Australia, which allowed ASIO to warn the Department of Foreign Affairs in advance. It also provided the names and functions of other key members unknown by ASIO until that time.38

In mid-1982, following the Israeli invasion of Lebanon, an ASIO source revealed that United Palestine Workers members had gathered and were using a particular residence as PLO headquarters. Information indicated they were advocating violence, and suggested that they believed it was no longer necessary for them to keep a low profile in Australia. ASIO’s NSW office proposed a technical operation, based on the realisation that regular reporting was taxing and potentially dangerous for ASIO’s sources.39 But Headquarters ASIO—which had a better appreciation of ASIO’s wider coverage and resource allocation—said that as attractive as the proposal was, urgent operational requirements elsewhere had to take priority. Source coverage would have to do.40 And it did—ASIO received regular updates on the situation.41 This did not mean, however, that ASIO was fully across the increasing range of other threats.

In late 1980, for instance, an ASIO report stated that there was ‘considerable violence in the Middle Eastern community in Sydney and Melbourne’. This was largely criminal in nature, but with a view to weighing up the security implications, ASIO held a conference in Melbourne in November. In attendance were representatives of ASIO, the special branches of the NSW, Victorian and South Australian police forces and the AFP. A range of Syrian, Lebanese, Turkish, Armenian and Libyan groups was discussed.42

The assassination of the Turkish Consul-General

On the morning of 17 December 1980, the Turkish Consul-General in Sydney, Sarik Ariyak, was shot dead, as was his Turkish bodyguard.43 The two men were killed in front of Ariyak’s home by a pair on a 500cc motorcycle. The assassins pulled up alongside the security vehicle and fired a number of pistol shots into the car, fatally wounding the bodyguard before moving to Ariyak’s car and firing shots into the driver’s window, killing him instantly.44

Responsibility for the incident was claimed by a group calling itself the Justice Commandos of the Armenian Genocide, (described in more detail in Chapter 16) which declared it would strike again.45 This group sought revenge against Turkey for past atrocities, in particular the mass deportation of Armenians to Syria and Mesopotamia during the First World War—a move that reportedly resulted in the death of 1.5 million Armenians. The Armenian groups that emerged in the late 1970s and 1980s demanded that the Turkish authorities acknowledge their responsibility for mass killings.

A voice analysis of a recording of the call in which responsibility was claimed established that the caller was an Armenian woman who had learnt English in Australia. In gathering the information it had, ASIO realised that almost every Armenian felt sympathy for the assassins, as their actions were seen as an attack on their arch-enemy, Turkey.46

In response to the assassinations, a Special Incidents Task Force on Turkish/Armenian Violence was set up under the auspices of the SIDC-PAV. It met for the first time on 3 February 1981.47 ASIO devoted some attention to the question of Armenian terrorism, providing background material to the NSW Police and relevant government departments, initiating inquiries with overseas liaison services, and working with NSW Police in managing inquiries from within the Armenian, Turkish and Greek Cypriot communities.48 The assassins had still not been identified, and ASIO had little information with which to work. ASIO prepared a paper and detailed a report on Armenian terrorism by late 1982,49 which it shared with counterpart agencies overseas. The assassination affected countries around the world, and ASIO found itself calling on its relationships with counterpart agencies to better understand the international links and their implications for developments in Australia.50 Despite these efforts, the assassins were never identified and no charges were laid.

It appears that what actually happened was that a two-man assassination team flew into Australia either that day or the day before from an unknown location. They were provided with logistical support from the local Armenian community, including the motorcycles, carried out the assassination in a highly professional manner and, with the continued support of the local Armenian community, in all probability flew out of Australia that day.51

Increased attention to Palestinian and other groups

In light of the growing number of targets, the apparent risk and the increased attention on countering terrorism, ASIO decided in 1981 to ‘commence enquiries into the likelihood of Muslim-oriented violence in Australia’. To do so, Woodward sought assistance from the respective police commissioners in Adelaide, Melbourne and Sydney.52 ASIO worked to penetrate a range of Palestinian and other violence-orientated groups, to ascertain whether they had violent and subversive intentions. One group, for instance, the Al Fatah-linked General Union of Palestinian Workers, was closely examined. ASIO sources reported that members of this group had made a detailed reconnaissance of the Israeli Consulate in Sydney and the Israeli Embassy in Canberra, but that they lacked the money, means, knowledge and expertise necessary for a successful act of violence on such a formidable target as the Israelis. Conscious of this, ASIO officers considered it far more likely that the PLO would use Australia as a stopover or hideaway for its members.53 Subsequent events exposed this view as overly optimistic.

Anti-Jewish bombings, December 1982

On 23 December 1982, a couple of incidents significantly escalated concerns. At about 2 p.m. a bomb exploded at the Westfield Towers in Sydney—a property owned by the Jewish-Australian entrepreneur Frank Lowy. The bomb exploded in the stairwell of the seventh floor of the building, which was occupied by the Israeli Consulate, damaging three floors and injuring one person. Later that day, at 6.45 p.m., another bomb exploded, this time in the boot of a white Chrysler Valiant sedan on the second level of the car park of the (Jewish) Hakoah Club in Bondi. The two incidents were handled by the NSW Police, but supporting agencies, including ASIO, became involved. A Special Incident Task Force was established that day and met at 5 p.m., chaired by the Protective Security Coordination Centre. Its head, Brigadier Mike Jeffery, wrote a telex afterwards raising the level of counterterrorism alert to ‘Special CT Risk’ and partially activating a Crisis Policy Centre, operated by Protective Security Coordination Centre staff. The activation also drew in the SIDC-PAV.54

The Israeli Consulate advised that someone had phoned to say the bombings were the work of the PLO, but there was little evidence to confirm this. Moreover, the PLO issued a denial on the news that evening.55 In addition, overseas reporting indicated the possibility that other groups were involved.56 Prime Minister Fraser asked ASIO to prepare a paper for him by the next day with a full briefing on likely organisations involved and a list of all known ‘agents in Australia of Iran, Iraq, Libya and the Palestine Liberation Organisation’.57 Numerous well-publicised searches and interviews were conducted by the NSW Police.58 As it turned out, several of the residences searched by the police had been under ASIO interception warrants.59

International counterpart liaison services were also very interested in details of the bombs used, because of similarities to a bomb that exploded on a Pan Am flight from Tokyo to Honolulu in August 1982 and to an unexploded bomb found on another Pan Am flight.60 ASIO provided the technical details as requested.

ASIO readily passed the information gleaned from its sources to the NSW Police Special Branch to assist in its investigations.61 It included apparently compelling circumstantial evidence of a strong motive and intent by certain terrorist groups to attack in retaliation for the June 1982 Israeli invasion of southern Lebanon and the massacres at the Shatila and Sabra refugee camps.62 ASIO’s information helped ensure that one man, Mohamed Ali Beydoun, was charged with ‘setting an explosive device in premises’ at the Hakoah Club,63 but the NSW Attorney-General granted a ‘no bill’, declaring there was no evidence of motive and no evidence to tie Beydoun to any organisation that might bear a grudge against the Hakoah Club.64 Successful identification of culprits with evidence that could be used in court was proving exceedingly difficult, and this added impetus for greater monitoring.

On 28 January 1983, the Acting Director-General, Blair Nienaber, spoke to Attorney-General Peter Durack,65 handing him a request for telephone interception for one month on a person of interest related to the incident. Durack signed the warrant on the spot.66 The interception commenced that day, and throughout the month provided information about contact between Hassan Ali Mourtada, a member of the Sydney branch of Al Fatah, and the Australian branch of the Syrian Social Nationalist Party. But the bombing was not mentioned. ASIO believed that Mourtada may have been cautious ‘to avoid implicating himself in the bombings’, so it recommended a renewal of the warrant,67 which Durack approved on 25 February.68 In March, ASIO’s NSW office recommended that the ‘interception be allowed to lapse as it has not been of significant operational value’, and because Mourtada was about to move to Adelaide. Again, the intercepts revealed no mention of the bombings.69 When Mourtada moved to Adelaide in April, the line was disconnected, and Headquarters ASIO was keen to recommence interception once it knew where he was living in Adelaide.70 But he was hard to track down, and he was not found until November 1984.71 As ASIO considered what to do next, Mourtada moved back to Sydney.72

In January 1985, while it was considering another technical operation against Mourtada, ASIO submitted a new warrant to the Attorney-General, Lionel Bowen, who signed it on 23 January.73 At 11.15 a.m. on 5 February, however, ASIO realised that it had the wrong number and had tapped the wrong line. The interception was disconnected at 11.35 a.m.74 The warrant was amended and approved by Lionel Bowen on 13 February and connected two days later.75 In June, the NSW office again recommended that the line be allowed to lapse.76 While it had provided an insight into a prominent sector of the Muslim community in Sydney, and support for Hezbollah, it had not yielded any information about the bombing in December 1982. Headquarters agreed and allowed the interception to lapse.77

In the end, the police were unable to gather sufficient evidence that would be presentable in court, and the mystery of the Hakoah and Israeli Consulate bombings continues decades later.78

Croatians

As was demonstrated in Volume II of this history, Croatian extremists had generated security concerns since the early 1960s. In 1978, ASIO provided an assessment to the SIDC-PAV that indicated the existence of a number of Croatian extremist organisations in Australia with ‘a philosophy of violence and demonstrated ability to plan and execute acts of violence’. ASIO assessed that approximately 50 Croats resident in Australia were prepared to engage in acts of violence, and that a further 200–300 Croats would be sympathetic to the aim and prepared to assist.79

Srecko Rover, for instance, who had featured prominently in ASIO’s surveillance and reporting in the 1960s and early 1970s, had his telephone services intercepted well into the Fraser years. These intelligence sources confirmed that Rover admitted to the continued existence of the Croatian Revolutionary Brotherhood (HRB), which ASIO had hitherto thought defunct. He also provided financial assistance to widows of Croatian terrorists killed in the HRB’s incursion into Yugoslavia at Bugonja. This was not much of a revelation, ASIO reporting officers admitted, but monitoring Rover was seen to be of enduring utility given his track record of association with violent incidents.80 Monitoring his calls presented, from time to time, ‘operational opportunities assisting in the development of an overall knowledge’ of Rover’s activities and the organisations with which he was involved.81 In time, however, maintaining coverage would be complicated by the shortage of Serbo–Croat translators within ASIO.82

Another person of interest involved in Croatian extremist groups was Stipe (or ‘Stefan’) Brbic. A long-time target of ASIO, he had previously been charged for causing grievous bodily harm to a Yugoslav immigrant. To obtain additional information about the Croatian National Resistance, of which Brbic was a member, and about any possible intended acts of violence with international ramifications, ASIO placed him under telephone interception.83 Brbic suspected he was being monitored and cautioned callers not to discuss Croatian separatist affairs over the phone. Instead, they should call him at work.84 The warrant was revoked a few months later due to some technical impracticalities of the interception.85 Other intercepts and agent reports, however, provided details on changes to Brbic’s tactics and of his active role in Croatian separatist matters.86

Conscious of the mindset and apparent intentions of people such as Brbic, the Yugoslav Embassy continued to apply pressure on the Australian Government over protection afforded Yugoslav diplomatic staff and premises. Threats were made of damaging effects on bilateral relations should any diplomats be killed by protest action. The Department of Foreign Affairs kept ASIO informed of these representations, and they appear to have contributed to the level of attention ASIO maintained on the Croatian targets as a precaution.87

On 29 November 1977, a Croatian ‘Embassy’ was established in Canberra by Croatian Australian Mario Despoja. It became a rallying point for Croatian nationalism, a focal point for registering grievances from Croat émigrés. It was also a public protest against President Tito’s Socialist Republic of Yugoslavia. Despoja declared himself to be ‘Chargé d’Affaires’ and appealed to Croatians to continue their support for his embassy indefinitely. But with Croatians split between the Croatian Liberation Movement and the larger Croatian National Council, Despoja’s influence was always limited. ASIO remained concerned, however, about potential extremist links and activities that could be associated with the embassy, and therefore watched the situation closely. Srecko Rover initially lauded the creation of the embassy, but he appears to have withdrawn his support early in 1979 over differences with Despoja.88

Events on the weekend of 26–27 November 1977 seemed to vindicate the Yugoslav Embassy’s concerns. Violent protests were held outside the Yugoslav Consulate-General in Sydney. Then on 3 December the office of the Yugoslav airline, JAT, was bombed in Melbourne. The Foreign Minister, Andrew Peacock, deplored the violence and said it would not be tolerated.89 In addition to complaints about these two events, the Australian Embassy in Belgrade was given a long list of incidents of harassment, intimidation or assault at sporting and cultural events and at a number of sites in cities around Australia. Yugoslav authorities were clear that they expected the Australian Government to ‘take all measures necessary to cut off at the root the activity of fascist-terrorist groups’ in Australia.90 The Acting Secretary of the Department of Foreign Affairs, Peter Henderson, advised Woodward that ‘This Department is coming to the view that a firmer stance against Croatian extremists is now required in Australia’, and he sought ASIO’s ‘views on what further action could be taken in the field of Croatian extremism’.91 Responding, ASIO renewed its efforts, mainly through surveillance, to identify the intentions of the Croatian extremists. This included occasional use of surveillance teams in Sydney.92

This was a catch-22 situation for ASIO, which knew that Yugoslav authorities were monitoring, penetrating and harassing Croatian groups. Mindful of this, ASIO identified that the struggle for influence between the more militant Croats and the Yugoslav Intelligence Service (YIS) was ‘a potential source of embarrassment to the Australian Government. It could also lead to violence.’ Of the 60 Yugoslav officials and commercial representatives in Australia in 1978, ASIO assessed that about one-third had ‘intelligence connections’.93 They would eventually be linked to an extraordinary tale of bomb threats against Sydney’s water supply.

Vitomir Misimovic (known by a host of other names, notably Vico Virkez) walked into the Lithgow Police Station, west of the Blue Mountains, on 8 February 1979. There he ‘confessed’ to his purported role in an alleged conspiracy to bomb various targets, including the Sydney water supply station, a concert by a group of Yugoslav singers, some Yugoslav travel agents and a Yugoslav club.94 What was not immediately apparent was that Virkez had acted as an informant on Croatian nationalist activities to someone ASIO suspected of being an intelligence official attached to the Yugoslav Consulate-General in Sydney.95 ASIO had, only a few hours earlier, intercepted a phone call from Virkez made to officials at the Yugoslav Consulate in Sydney claiming that three others, Vjekoslav Brajkovic, Maks (Maksimilijan) Bebic and Anton Zvirotic, intended to carry out the attacks.96

That night, NSW Police arrested nine Croatian nationalists associated with the intelligence from Virkez and ASIO’s telephone intercept. The police found more than a tonne of explosives and detonators in the raid at the homes of Bebic and another, Stipe Popic.97 Brajkovic was identified as the supposed organiser.98 In court, Virkez pleaded guilty and testified against the others. The proceedings were followed closely in the media, which gave prominence to Virkez’s story.99 The lawyer representing the accused issued a subpoena for all police documents associated with the charges. This happened to include ASIO-sourced documents—a point that generated considerable anxiety and a modification to procedures for release of documents to the police.100 The sentences were handed down on 17 February 1981.101 Virkez received a 26-month gaol sentence but was released in less than ten months and subsequently returned to Yugoslavia, a move that raised more questions than it answered. In contrast, the group that became known as the ‘Croatian Six’ were sentenced to fifteen years in prison.102

Journalist Chris Masters tracked down Virkez in Yugoslavia in August 1991 and on the ABC TV program Four Corners Virkez admitted he was a Serb named Vitomir Misimovic who had infiltrated the Croatian community in Australia and informed on its activities to Yugoslav diplomats.103 In a subsequent appeal it became apparent to the judge, Justice Samuels, that Virkez was indeed ‘a probable YIS source’ and that this ‘could have an effect on the credibility of Virkez’s testimony’.104 The Croatian Six were released after it became clear that Virkez had fabricated his story.105 Later revelations indicated that the conviction of the Croatian Six resulted from a deliberate YIS operation to portray the Croatian–Australian community as extremists and terrorists and increase public support for Yugoslavia. In this case, according to Sydney Morning Heraldcorrespondent Hamish McDonald, both the police and ASIO had failed to discern that agent provocateurs were employed, despite years of monitoring Croatians.106

Perhaps the difficulty lay at least in part in ASIO’s stovepiped management approach to counter-subversion, counterterrorism, and counterespionage. In this instance, Croatian extremists fell into the counterterrorism category for ASIO’s internal management purposes, whereas the YIS fell into the counterespionage category. While ASIO is not directly to blame for what happened, its failure to discern YIS actions and intentions within the Croatian community clearly contributed to this misjudgement. The Croatian and Yugoslav targets combined were exceedingly difficult for any domestic security service or police force in Australia or overseas to keep an eye on, especially given the YIS was running a subversive operation within Australia. To add to the confusion was increasing government pressure to come up with a solution. Unfortunately, the wrongful conviction of the Croatian Six was only one of a number of similar calls that in hindsight demonstrated a lack of insight.

ASIO did, however, have some apparent successes, particularly in targeting Yugoslav intelligence operations. One Yugoslav migrant was a useful contact for both ASIO and the AFP. He was good at identifying people in photographs and he refused to accept money in payment for his services. His ASIO case officer, Alan Turnbull, recalled, ‘We used to meet regularly at a nearby motel for debriefs.’ It later became evident that he had been a member of the Ustasha, the Croatian fascist party that had collaborated with German and Italian occupying forces during the Second World War.107 The fact that he was prepared to do this work pro bono and that he was associated with a right-wing extremist group should have raised some important questions about his motives. Finding someone prepared to talk, however, was extremely difficult and dangerous, and the temptation to accept people at face value was understandable if irregular.

Another recent migrant demonstrated ASIO’s difficulty in confirming not only the identity but the motives and intentions of people with which it came into contact. This man appeared to be supportive of ASIO’s objectives, but through telephone interception ASIO became aware that he was in fact a former Yugoslav Army soldier sent to Australia by the YIS to assassinate Yugoslav dissidents.108

ASIO found out that that this man had travelled to South-East Asia in 1979, where some YIS officers briefed him on penetrating the Croatian separatist movement in Melbourne. ASIO reporting indicated that he maintained contact with his handlers in Yugoslavia via phone and mail.109 It was this information, as well as a telephone conversation, that led ASIO to believe that he and his YIS case officer were planning to assassinate Croatian separatists in Australia as had happened in West Germany and Canada. ASIO proposed intercepting his incoming and outgoing mail in the hope that it would provide early warning of any such assassination.110 In June, officers from the Victorian office met with senior officers from headquarters to discuss the case. They agreed that the aim of the operation was not to obtain intelligence but to help avert any possible assassinations orchestrated by the YIS. ASIO mobilised teams to place the man under surveillance in late June and early July.111 Telephone interception indicated that his instructions were to sell his house, resign from his job, fulfil his mission and return to Yugoslavia.112

Sensing a major problem, Headquarters ASIO liaised with the Victoria Police and sought a search warrant for a firearm. Two ASIO officers accompanied the Victoria Police team as they executed the warrant on the man’s house. They discovered a weapon and some money concealed in the premises—which seemed to indicate he had received payment for a planned assassination. They also discovered some letters with unusual markings and unusual ink. Upon later investigation, it became clear the material was used for secret writing and that the secret ink outlined instructions to proceed with the assassination and a promise of a farming property as a gift upon his return to Yugoslavia.113 The police seized the rifle, the money, the letter and ink, and his Yugoslav passport, and took the man to the Footscray Police Station. It appeared that ASIO had successfully prevented an assassination of a Croatian dissident. ‘We felt like we had actually achieved something—it was a successful spoiling [operation],’ ASIO officer Alan Turnbull recalled.114

Reflections

The revelations on Virkez were made known long after Judge Woodward had retired from ASIO. Reflecting on his experience at the time, Woodward told the National Press Club in 1981 that the failure to prevent the Hilton Hotel bombing and the assassination of Turkish diplomat Sarik Ariyak in Sydney were the two major events of his term of office that had caused him concern and that, he admitted, ‘represented a failure by the security service, perhaps with some responsibility in the police area also’. But he noted that most attacks of the nature of the hotel bombing were carried out perhaps by a group of four or five people. He noted that ‘unless you have an informant amongst them, or unless they are careless in the way they talk to others’, your chances of knowing about that event in advance were ‘fairly slim’. He added, ‘there may be others that we don’t know about, but we are working on it’.115 By July 1982, ASIO felt that its coverage of the Ananda Marga, Al Fatah and the People’s Front for the Liberation of Palestine was ‘good’ but dependent on very few human sources. The lack of depth in its coverage was perceived as leaving ASIO vulnerable.116There was plenty of work left to do.

By that stage ASIO had planned coverage of a wide range of groups potentially capable of politically motivated violence, and the list was markedly different from the communist-focused priorities of earlier years. ASIO monitored a wide range of targets that reflected the growing diversity of security challenges in the increasingly multicultural Australian landscape. It also indicated a far from diminishing workload for ASIO as it strove to monitor threats of terrorism from wherever they might arise. This diversity of possible threats also presented ASIO with heightened protective security concerns—which are the subject of Chapter 8.

Running and maintaining agent operations in this increasingly complex and diverse ethnic mix proved very difficult for the Organisation to manage. At times it was impossible to have a clear appreciation of the background and loyalties of recruited agents and contacts.

In the meantime, remnants of the Cold War’s principal domestic subversive groups would continue to occupy a considerable portion of ASIO’s attention. For ASIO, the Cold War appeared far from over, and the actions of the splintering, shrinking and multiplying groups associated with communism, socialism and Trotskyism presented a range of challenges.

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