4

The Show and ASIO

ASIO’s refusal to engage in two-way intelligence-sharing with The Movement did not terminate the relationship, but it did truncate it considerably. Spry’s rejection of the proposition caused a great deal of sulking at Show headquarters for many months, and the quality of its information was affected accordingly. But when ASIO had its own proposition that The Movement should assist it in a concrete way, the depth of the sulking became only too apparent.

In October 1953 — twelve months after the official rebuff — Spry and Richards found themselves enmeshed in an even more serious probe into improper conduct by intelligence officers in their dealings with The Show. This time, the terms of reference ominously included ‘leakage of security information’, implying that The Movement had successfully penetrated ASIO. Richards immediately dispatched to headquarters copies of a new report by the senior section officer in Sydney responsible for handling agents.1

This focussed particular attention on the fact that the Movement liaison agent who had been described as ‘unscrupulous’ and whose intelligence had sometimes been unreliable had been allowed to use ASIO’s Edgecliff office to write his own reports. Furthermore, this agent had actually stored his files at the Edgecliff office. The officer reported that he had discovered an extensive cache of his files while ‘tidying up an “S” cabinet and destroying a lot of junk’.2

‘I believe that it can be strongly suspected from the attached material’, the officer wrote, ‘that not only did [the agent] visit the Edgecliffe [sic] Office for the purpose of preparing reports on information he supplied to ASIO, but that he actually used the Edgecliffe Office for the purpose of doing Catholic Action organisational work.’ He was deeply concerned by this revelation, as ‘it left ASIO open to grave repercussions’ if this state of affairs became known to ASIO’s critics, concluding that, ‘Such persons could imply that ASIO and Catholic Action were “hand in glove”, and working in common to the point of sharing the same office.’

Eerily, exactly this allegation publicly emerged two years later in the aftermath of the royal commission examining Soviet espionage.

Even more disturbing was the suspicion that the officer running the Movement liaison agent had breached ASIO’s most fundamental protocol and had passed official intelligence to him; at the very least, the agent ‘could have picked up all sorts of information by overhearing discussions when he was in the Edgecliffe Office’. In support of his concerns, the ASIO officer recorded that at least one report supplied by the Movement agent contained intelligence which was ‘identical with that on record in our file. It would therefore appear that [the agent] had been supplied by some member of Security with exact copies of the official security reports.’ There were indications that this was not an isolated incident.

For ASIO, this was an unwelcome conclusion, and not only because it suggested that some ex-CIS officer — or even officers — now employed by ASIO had leaked official intelligence to an entirely private civilian organisation. Late 1953 — when this investigation of high-level security breaches was underway — coincided with a mini-crisis for ASIO’s operations to penetrate the CPA. As the officer in charge of S section in Sydney noted in a memo to the field officer responsible for direct, day-to-day liaison with agents, ‘In view of recent failures in [censored] operations, and tiredness of sources of long standing, we badly need to develop replacements and understudies.’3

Apparently, some recent operations inside the CPA had been unsuccessful, and this was attributed to fatigue among ASIO’s penetration agents in carrying out the delicate and often dangerous tasks set by their handlers. The officer drew his subordinate’s attention to the fact that ‘There is no doubt that the people [whom The Movement’s liaison agent] control, would include a large number of persons who would readily agree to carry out a penetration’ of the CPA. So he directed him to ‘casually enquire why members of his organisation have not joined the Party’. 4

The field officer wasted no time. Three days later, he reported the response, using the Movement liaison agent’s exact words:

Our leaders have ruled that our people cannot infiltrate the Party because it would be spiritually and morally wrong to do so. You know, we have had, and continue to have, plenty of opportunities to get people who are in really excellent positions to join the Party, to do so. Some have been very keen and have pestered us to allow them to join. At one stage we became so inundated with requests of this nature that our leaders had to send out specific instructions that all such requests were to be refused. Some people who cannot join are very well placed to do so. Anyone of these people, acting as an individual, may decide to do so, which would be a matter for himself and would depend, I would think, upon the advice given by his spiritual adviser.5

In Reverend Ryan’s world, it was apparently morally acceptable to use dirty tricks against the communists (for example, by distributing false ballot papers in union elections, and stacking union and student meetings with fake members), but it was wrong to infiltrate the CPA. As a consequence of this logic, he insisted he was protecting the moral and spiritual well-being of the flock he looked after as chaplain to the Sydney Show. But as the field officer noted in his report, the last sentence seemed to be something of a let-out clause, suggesting ‘that if we could learn the identities of these persons and then approach them directly, we may recruit from their ranks a few agents’.

His superior mulled over this intelligence during the Christmas–New Year break, and in early January 1954 put the case to Richards. He drew a stark picture, observing that while ASIO’s ‘coverage’ of the CPA ‘at present is satisfactory … the tiredness of long standing agents is quite evident. I think that after a certain number of years of service they will be difficult to hold. We could have an alarming situation on our hands at a later date if we were to suffer casualties without being able to replace them, and we now need alternative recruiting measures.’ He recommended that Richards should refer the matter to ASIO headquarters for its input.6

Richards acted swiftly, discussing the matter personally with the controller of S section, who agreed to the proposition that the Movement liaison agent should be asked to ‘nominate a group of his contacts whom he feels are prepared to make an attempt to penetrate the Communist Party … We will then make a selection of one or two of these and target them into the Party using [censored] as cut-out for the operation.’7

The meeting to put this proposition to The Movement occurred in early February 1954. In the meantime, a sweetener had been added to entice a positive response. Remembering the iciness that followed the refusal to conduct a two-way intelligence-sharing relationship, the field officer was instructed to offer The Movement access to the intelligence gathered by those it nominated to penetrate the CPA. When he next met the liaison agent, he said: ‘If we made the approach and thereafter did the contacting, we would be prepared to give you a copy of the information received. Under these circumstances would you be prepared to supply to me the names and addresses of suitable persons? You know, we just need to know who to see and where to find them.’8

The Movement liaison agent cautiously replied that he thought ‘favourable consideration’ might be given to the proposal, except that ‘the question of the reciprocal exchange of information between the two organisations will be remembered, and will influence a decision on your proposal’. The agent stressed that The Show wanted to achieve ‘mutual trust, understanding, and co-operation, with a resultant reciprocal exchange of information’, also emphasising that ill-feeling still prevailed from his side who would remember that, ‘in the past, you have refused to supply us with information. It has been one-way traffic as far as we are concerned … This one-way traffic has not made for the necessary feeling of good faith which I think must prevail before we agree to your proposal.’9

The answer from The Movement’s leaders followed swiftly: a resounding no, based on the same reasoning as before — it was ‘spiritually wrong for [The Show] to put agents inside the Communist Party’.10

At ASIO headquarters, the controller of the Special Services Section was perplexed by this response. On Richards’ memo conveying the news, the controller scrawled a note to one of his officers (‘Mr A’), directing him: ‘Find out how Victorian office went about it.’11 This is the only explicit mention in the ASIO files of the Victorian Movement’s assent to the placement of some of its members at ASIO’s disposal to penetrate the CPA, although a later report demonstrates that this arrangement was definitely put in place in that state.

There are a number of aspects to this apparently innocuous scrawl. First, it seems the spirituality and morality of The Movement’s members south of the Murray were not as delicate as in NSW. Second, it has sometimes been argued that NSW was the centre of The Show’s relationship with ASIO, implying that Santamaria’s Victorian stronghold did not approve of supplying ASIO with intelligence and did not co-operate with its operations to penetrate the CPA. Indeed, in 1971, Santamaria stated unequivocally that ‘There was no contact at all with A.S.I.O.’12 As one historian has noted, however, ‘rumours’ of The Movement’s ‘informal links’ with ASIO were consistently ‘denied’, but were ‘unlikely to be entirely unfounded’.13 This judgement was made in 1970, two decades before ASIO’s files on The Show started to be released under the Archives Act.

The fundamental question arising from this handwritten note is: What happened to the files relating to ASIO’s successful operations utilising Victorian Movement members as penetration agents inside the CPA? All inquiries to unearth them have been fruitless, and it must be assumed that either they were lost or destroyed before the Archives Act came into force in 1983.

Stories have circulated for over forty years suggesting that files documenting ASIO’s direct relationship with Santamaria were maliciously destroyed to pre-empt the Whitlam government learning of ASIO’s ‘hand in glove’ operations with the ALP’s deadly political opponent, which had helped keep Labor out of office for seventeen years. The destruction of such records was variously said to have occurred either in 1973 — when then attorney-general Lionel Murphy seized official ASIO records contradicting successive Liberal governments’ denials about the activities of Croatian terrorists, and it was feared his next move would be to seize the Santamaria dossier — or, alternatively, when Whitlam established the royal commission into Australian intelligence the following year, and it was feared that the dossier would emerge during its deliberations.

When the Sydney branch of The Show turned down ASIO’s request to supply penetration agents in 1954, Spry was underwhelmed, recommending the cessation of contact with the liaison agent.14 The view from Sydney was rather different; Richards appealed Spry’s directive on the grounds that the ‘Source is productive’ and the ‘organisation is a vast one’:

[It] can assist us not only by supplying intelligence, but its contacts can be usefully employed in various ways from time to time … Liaison with the organisation requires careful handling to ensure that we are not “milked” and for various other reasons … An established routine is operating for proper liaison and it is considered that this is the best means of continuing the association.15

Spry, as he invariably did with the recommendations of the highly regarded Richards, quickly approved the suggestion that ‘friendly relations should be maintained’.16

ASIO’s files demonstrate that such ‘friendly relations’ persisted in NSW for many years, and there are hints in highly censored intelligence reports that ASIO may have eventually recruited some Sydney Movement members as penetration agents inside the CPA, perhaps with the assistance of a Catholic priest.17 It is well known that, for several decades after the Labor Split of the mid-1950s, ASIO maintained close relations with former members of The Show who had remained loyal to the NSW ALP, as well as with The Movement and other right-wing Catholics.18

In addition to the handwritten note indicating that The Movement had co-operated in providing agents to penetrate the CPA in Victoria, there is another document dealing with that state in the publicly available ASIO files. It is a memo written by Spry in November 1957, reminding his Victorian regional director of an allegation arising from the royal commission on Soviet espionage, established in 1954 following the defection of Soviet diplomats Vladimir and Evdokia Petrov. Spry was responding to the Victorian’s report that Dr Gerald Caine — The Show’s Ballarat leader — was being used to talent-spot potential agents for recruitment by ASIO. In particular, Caine had recommended the recruitment of a non-Movement member for ASIO operations. Spry’s response was revealing:

You will recall allegations made after the Royal Commission on Espionage that A.S.I.O. was working hand in glove with Mr. SANTAMARIA and the Movement and we have gone to great lengths to ensure that no such undertaking existed, although some Catholic Action [Movement] contacts have passed to us information of Security interest as and when they considered necessary … we do not desire to have an arrangement where a Catholic Actionist is a talent spotter for A.S.I.O. agent running operations. This could be said to be working hand in glove with Catholic Action and it is this situation we wish to avoid … You are requested to gradually ease out subject from a talent spotting role although it will be obviously necessary to see him from time to time as a courtesy and you could take any information of Security interest he cares to give. [Emphasis added.]19

This memo clearly establishes that ASIO’s Victorian branch had utilised The Show to recruit agents. It would be extraordinary if Santamaria was not aware of these activities, both as the authoritarian and controlling national leader and because of his total domination of The Movement’s Victorian operations. On the other hand, these documents indicate that ASIO’s head, Spry, adopted contradictory attitudes towards utilising The Show to recruit agents to infiltrate the CPA. When the NSW branch refused to co-operate with ASIO’s proposal in 1954, he was antagonistic to the point of ordering the cessation of the relationship; when he discovered in 1957 that the Ballarat branch was co-operating in just such an enterprise, he ordered it to stop. His reasoning in 1957 does not hold water in light of the evidence of his own direct relationship with Santamaria.

SO WHAT CAN be concluded about the persistent claims of Santamaria’s alleged close personal relationship with ASIO and, especially, with its long-time head, Brigadier Spry?

One historian has written that much of the information in The Movement’s ‘Capacious dossiers’ was handed to ASIO. According to this account, a senior journalist with The Australian — the late David Hirst — had ‘taped interviews with Santamaria’ revealing ‘how he used his information network to supply ASIO with information on suspected communists between 1945 and 1973’. (ASIO was formed in 1949.)20

I had a warm professional relationship with Hirst in the 1980s, and knew firsthand that he had extremely good contacts inside the right wing of Australian politics, including with the NCC generally and Santamaria personally. However, if he possessed such ‘taped interviews’, the question arises as to why this sensational information was never published before Hirst’s untimely death in 2013. It would certainly have laid to rest both the fact and nature of the relationship. In the absence of the tapes, this claim must be taken with a large grain of salt.

Some aspects of Santamaria’s relationship with ASIO, however, are on the public record. Puzzlingly, the three volumes of the official history of ASIO cast virtually no light on the issue. In volume one, historian David Horner records that, sometime in the early 1950s, Richard Casey, the external affairs minister in the Menzies government, introduced Santamaria to Spry. Horner concludes, however, that ‘there is no evidence that their relationship was close’.21 He does not explain what evidence he reviewed in reaching this judgement. Volume two, by historian John Blaxland, not only contains minor historical errors on the subject of The Movement, but has no meaningful references to Santamaria, while volume three has none at all.22

On the other hand, an unpublished volume of the report of the royal commission into Australian intelligence — established by the Whitlam government in 1974 — reportedly ‘expressed concern at the closeness of senior ASIO officers with NCC [Movement] figures’. Royal commissioner Justice Robert Hope ‘believed ASIO uncritically accepted NCC dossiers and information’.23

The NCC (National Civic Council) came into existence in December 1957 as a direct reaction to the Vatican’s decree that The Movement could not be an official church organisation because of its overtly political character. So the Catholic Social Studies Movement, officially born at the 1945 bishops’ conference, simply changed its name and became a strictly lay organisation — at first publicly known as the Catholic Social Movement, and then as the National Civic Council, but still called The Movement or The Show by its members.

For four decades, The Movement denied its special relationship with ASIO. The declassified files prove that this was a lie. It would be extraordinary if Santamaria was entirely unaware of this relationship, especially as it persisted for so long. Nor is it plausible that Father Lalor, who was in Santamaria’s inner circle as head of the Institute for Social Order in Melbourne, would not have informed him of his own connections with the Security Service in Perth — that is, if Santamaria did not approve, or even direct, Lalor’s approach to Ron Richards. Furthermore, Lalor was appointed as the chaplain to the Sydney Movement in 1953 as Santamaria’s ‘eyes and ears’ to spy on Ryan’s independent-minded operation. He would have quickly become aware of Ryan’s relationship with ASIO, and informed Santamaria; that is, in the improbable event that he had been ignorant of it prior to that date. Again, it is highly implausible that Santamaria was unaware of ASIO’s recruitment of Victorian Movement members as agents to penetrate the CPA.

Santamaria’s own version of his relationship with ASIO casts a fascinating light on this shady issue. In 1990, he admitted what he had explicitly denied for so long.

During a lengthy interview with journalist John Lyons for a profile published in the Fairfax magazine Good Weekend, Santamaria stated that ASIO head Spry visited him in the early 1960s and ‘asked whether he would be prepared to hand over the names of union members he believed were communists or “fellow travellers” ’. As a consequence, Santamaria admitted to Lyons that he co-operated with ASIO for four years, providing information ‘about suspected communists and “fellow travellers” in the trade union movement’.24

No explanation was given as to why he had previously denied ever having such a relationship, or why it suddenly ended after four years. But Santamaria did indicate his bitterness towards ASIO for handing ‘to the Hope Royal Commission files which included what he had told them about suspected communists in the union movement’, breaching ‘what he had understood as a commitment of confidentiality’.25 Apparently, Santamaria believed that ASIO was above the law when it came to his relationship with Spry, and that it had a duty to defy the royal commission’s draconian powers to compel the production of documents.

Interestingly, a search of the royal commission’s indices held by the national archives in Canberra does not readily disclose the material to which Santamaria referred. This does not mean that it does not exist in a form not easily discernible from studying the indices. Much of the commission’s documentation is still highly classified and therefore is unavailable to public researchers, making a final determination of this matter impossible at this time.

In the publicly available sections of his report, Hope did make some pertinent comments and a specific recommendation about ASIO’s relations with ‘private intelligence organisations’ that were tailored to The Show, although Hope was undoubtedly also referring to others, including the Returned Services’ League.26 Hope stressed that such organisations should not be used ‘as collection agencies for ASIO’, especially as they were often well known to the public and were ‘generally known to have some particular political affiliation or leaning’, deriving from their focus on ‘allegedly subversive activities by extremists of the political left’. Hope’s words, while carefully chosen, readily fit the description of The Movement.27

Hope’s recommendation on this question was even more revealing: ‘That ASIO ensure that it is in no way beholden to, or develops any kind of special relationship with, private intelligence organizations.’28 Again, his words were carefully chosen, but one can infer from them that ASIO had previously had a ‘special relationship’ with such organisations. The files publicly released under the Archives Act unequivocally demonstrate that this was the case with The Movement.

Assuming that Santamaria’s account to Lyons in 1990 was accurate — and given the subject matter, there is no reason to question it, at least as far as it goes — the obvious question that arises is why those documents he handed to ASIO over a four-year period, beginning in the early 1960s, are not in ASIO’s files and publicly available in the national archives?

Santamaria does not even appear in ASIO’s indices. He and the files he handed to ASIO in response to Spry’s personal request either were never entered into ASIO’s scrupulously compiled filing indices, or were subsequently expunged and no longer form part of the official record. Yet Santamaria was adamant that they had been retained and, to his disgust, handed to the Hope royal commission.

So there are two unexplained gaps in ASIO’s records on The Show: the Victorian files dealing with Movement agents used to penetrate the CPA; and Santamaria’s own dossiers naming suspected communists and ‘fellow travellers’.

An insight into this intriguing situation was provided in a direct communication that ASIO sent me in the 1990s. I had requested access to any files held by ASIO on either the National Civic Council or the Institute of Social Order, which Father Lalor had run in the 1950s. In response, I was provided with an extract from an appendix to part IV of an internal, unpublished history of ASIO. In their explanatory note to me, ASIO stated:

There is no record of the Institute of Social Order in ASIO indices and records identified on the National Civic Council do not reflect any exchange or communication with ASIO. From the information in the paragraph attached [from the unpublished history], such communication is stated to have occurred. In the absence of supporting records, it must be assumed that contact was regarded as informal and not subject to routine reporting procedures or that records of meetings/exchanges were destroyed, as not relevant to security, sometime prior to the enactment of archives legislation.29

The paragraph from the unpublished ASIO history reads:

Over the years contact with the Institute of Social Order has proceeded for a variety of reasons. By the activity of the National Civic Council in seeking to penetrate organizations which were targets of ASIO concern occasions arose where it became necessary to counter activities by NCC representatives tending to prejudice the success of ASIO agents in the same area. Moreover the political affiliations of the Council rendered it necessary to ensure that ASIO itself was not penetrated by its representatives. An exchange of information with the Institute of Social Order, at the level of the compilations of unclassified material, maintained that contact. Mr Santamaria was, himself, not a contact of ASIO and was not given any documents. The material supplied to the Institute of Social Order was not supplied for any broadcast by Mr Santamaria — nor did it appear that any was reflected in such broadcasts.30

Santamaria had directly and publicly contradicted the assertion that he was ‘not a contact of ASIO’, unashamedly proclaiming that he was a contact of its most senior officer, director-general Charles Spry, and that he personally supplied information to ASIO for four years. Did Spry not reveal that relationship to others in ASIO? Were Santamaria’s files not officially recorded? Did Spry intentionally protect Santamaria from his involvement with ASIO? If so, why then did Santamaria express such bitterness that he had been ‘blown’ as an ASIO contact when his files were handed to the Hope royal commission? Presumably, he did not invent that story, but must have received solid information from someone either inside ASIO or the royal commission.

Furthermore, whatever material Santamaria provided to ASIO can hardly have been considered ‘as not relevant to security’ and destroyed on that basis, as ASIO implied in its covering explanation to me. As will be discussed in chapter nine, one of Santamaria’s intelligence dossiers in another ASIO file demonstrates that he was a professional who could more than compete intellectually with the cream of ASIO’s analysts.31

The extract from the unpublished history does resolve the question of The Movement’s willingness to penetrate the CPA, notwithstanding supposed ‘moral’ and ‘spiritual’ quibbles. ASIO clearly understood from its own experiences the dangers that such Movement penetration agents posed to their own penetration operations, which is presumably why Richards desperately wanted to have control over any sent into the CPA.

The extract also reveals what has long been suspected: ASIO did pass information to The Movement. Even if all of it was, as claimed, ‘unclassified material’, it still sustains the case of ASIO’s critics that it was directly involved in assisting a significant player in Australian politics. That the material was passed to The Movement through the Institute of Social Order demonstrates just how thoroughly it had been under Santamaria’s control ever since Lalor was appointed as its first director.

On the other hand, there is no doubt that some ASIO officers did provide The Show with information — including highly classified material based on surveillance and telephone intercepts. Whether this was done informally or officially is not certain, although in at least one case it was so notorious that it would be unlikely that it did not come to the attention of ASIO’s senior echelons. This instance involved Jack Clowes, ASIO’s expert on trade union affairs. Clowes was a Catholic who, in the 1960s and 1970s, was ASIO’s liaison with the right wing of the NSW trade union movement. A former senior Movement official who had extensive dealings with Clowes stated that he regularly engaged in two-way intelligence exchanges with the organisation.32 It seems unlikely that he was the only officer to do so.

The final intriguing question is why The Show proved such an invaluable source of intelligence for ASIO, even prompting the director-general to appeal directly to Santamaria for assistance, notwithstanding his earlier scruples about ASIO not being seen to have a ‘hand in glove’ relationship with The Show’s undisputed leader.

There are tantalising fragments in the ASIO files that shed some light on this, but the relatively small amount of The Movement’s own operational files that are publicly available provides a reasonably comprehensive picture, both of its modus operandi and extensive capabilities as an intelligence agency.