Canberra Communists?

D. M. Horner, Inside the War Cabinet

168 INSIDE THE WAR CABINET

In October and November 1944 evidence was starting to mount from Allied radio intercept organisations that information in the Australian Military Forces Weekly Intelligence Review which had a wide distribution, was reaching Tokyo.

170 INSIDE THE WAR CABINET

So far Blamey had tried to obtain action merely by stating, without evidence, that it was a matter of grave national security. He had no wish to explain the source of his information, nor widen the circle of people who might be aware of the leakage. However, to gain the action he considered necessary, he decided to enlist the help of Sir Frederick Shedden, and on 2 January 1945 explained the problem to the influential Secretary of the War Cabinet. Shedden recommended that Blamey write a more detailed letter to the Acting Minister for the Army, 'in view of the fact that he is the Minister primarily concerned with action to correct the leakages, if they are occurring on a Ministerial level or in another Department'.10 [Shedden to Blamey] This was a key sentence, because it indicates that the problem was not just a matter of information being obtained by the Chinese liaison officer, but

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that it was from a more serious source. It also explains Blamey's strong reaction to the Postmaster-General's Department consulting with the Department of External Affairs.



Blamey's letter to Senator Fraser, of 6 January 1945, must be seen in the light of this preceding correspondence. It read as follows: 15 [Blamey letter 3DRL 6643, 2/59]



As you know, the Allied Intelligence Organisation is now world wide and operates through many various channels, some of which are so secret that as little as possible in regard to them is set out on paper. One of its functions is to counter, as far as possible, the collection of Intelligence by the enemy. In the course of this service it has been definitely proved that there are leakages of information from Australia which have their origin apparently in Canberra.

Who told the Japs? Part Two
A cast of characters can be assembled but the plot is not clear.
Much speculation follows.
David Horner, Breaking the Codes excerpts
On 1 February 1943 the U.S. Army’s Signal Intelligence Service, a forerunner of the National Security Agency, began a small, very secret program, later codenamed VENONA. The original object of the VENONA program was to examine, and possibly exploit, encrypted Soviet diplomatic communications.
Victor Zaitsev 16 March 1943 came from USSR his identity only known later otherwise his travel may not have been allowed. Walter Clayton came from NZ in 1943, Clayton did not have a passport.
From 1943 to 1945 Russia was Australia's wartime ally.
There is speculation that Zaitsev recruited an agent in the Australian Government.
Herbert V. Evatt and his staff saw the reports that later reached Japan.
About 50 percent, of the 1943 GRU USSR Army Intelligence from Washington to Moscow and Moscow to Washington messages, were read but none from any other year.
In Australia Herbert V. Evatt was contemptuous of security.
And John Burton’s attitude is hard to fathom. Particularly as Burton was advised concealed microphone 25 [page 398 note 25 [59 DAFP Vol 12 Deschamps to Burton 20 March 1947]
229 Deschamps to Burton
Cablegram 59 MOSCOW, 20 March 1947, 5.45 p.m.
TOP SECRET
To be deciphered only under instructions from the Secretary.
PERSONAL for Burton.
Reference your Top Secret memorandum P1 46/11/7/5 of 29th
November, 1946.
Search by expert has revealed a microphone behind the skirting
board in the Minister's office and there is reason to suspect the
existence of others and the possibility that the whole of the
legation may be wired. The search is continuing and nothing is
being disturbed until the installation has been located, when,
with your approval, it is proposed to remove the whole apparatus.
Your instructions are urgently awaited. Please treat the matter
with the greatest reserve as other establishments here are also
affected and we are in consequence not altogether free agents. The
utmost secrecy is being maintained here. [1]
1 Burton himself drafted a reply in his own hand on his copy of
the cable. It read: 'Your 59. By all means remove apparatus. Utmost security must be maintained but you should immediately communicate warn personally Heads of Missions of NZ, UK and USA. We are meanwhile considering how protest should be made. Assume NZ Head of Mission is aware of discovery'. He subsequently crossed out that part of the second sentence from 'but' to 'USA'.
[SFU : EVATT PAPERS: CABLES-MOSCOW-1943-49]

Yet John Burton still wanted ‘open diplomacy’
The USA mistrusted the Labor Party in general and Evatt in particular.
Later we read:
360 Shedden to Burton
Letter, CANBERRA, 7 April 1948
TOP SECRET AND PERSONAL
CONTROL OF DOCUMENTS RECEIVED FROM THE UNITED KINGDOM GOVERNMENT
Sir Percy Sillitoe, Head of M.I.5 of the War Office, recently came to Australia on the direction of the Prime Minister of the United Kingdom, to acquaint the Prime Minister with information, which had come to the knowledge of the United Kingdom Authorities, that a copy of United Kingdom Post-Hostilities Planning Paper PHP(45)6(0) Final - Security in the Western Mediterranean and the Eastern Atlantic, had come into the possession of the U.S.S.R. It was alleged that the copy had been obtained from an agent in Australia.
2. As the Defence Department was the recipient of this document, the matter was referred to me initially for investigation and report on the system of control, circulation, and custody of secret United Kingdom Staff and Planning Papers in the Defence Department, and on the reliability of officers who handle these documents. This has been done, and an examination of our records shows: -
(i) That none of the copies of this document are missing.
(ii) That it was circulated to the three Service Members of the Joint Planning Committee and the Secretary to the Committee.
(iii) That it was also furnished to Mr. Milner, who was apparently the External Affairs Representative on the Post Hostilities Planning Committee at the time, in accordance with a request of 6th November 1945 from him (copy attached).
Mr. Milner had the document from 15th November 1945 to 19th February 1946, and a copy of United Kingdom Paper PHP(45)15(0) Final - Security of India and the Indian Ocean - was forwarded to him at the same time.
Mr. Milner later obtained Paper PHP(45)6(0) again, and had it from 6th March 1946 to 28th March 1946.
3. Dr. Evatt suggested, at a Conference with the Prime Minister this morning, that I should communicate the above to you in order that you could look into the matter in so far as your Department is concerned, and submit a report to your Minister. I also enclose Copy No. 109 of Paper PHP(45)6(0) Final, and shall be glad if you will return it in due course.[1]
[1] Burton sent an interim reply on 9 April asking 'what has occurred recently to raise the matter of a leakage which took place some years ago? In what form did the leakage take place?'.
[AA : A6691, AS3/1, SECTION 6]
Horner, Breaking the Codes excerpt
The full story can never be told.
With the culture then existing in External Affairs in the period 1943-1945 and with later events in External Affairs regarding security in 1945-1946, we are left with more speculation.
So who told the Japs? We can only speculate that it was someone in External Affairs who was recruited by Victor Zaitsev who then passed the information to Walter Clayton who forwarded it to Moscow.

Other things to consider:
Monday, Sep. 15, 1952
Last November Australia's Communist newspaper The Tribune had a scoop: the details of a draft treaty of friendship, commerce and navigation between the U.S. and Australia. The treaty, which has been in the works for five years, contained no vital secrets, but the affair was nevertheless alarming: it suggested that a high government official with access to the classified treaty had given the information to the Reds.
(Although Casey denied the connection, members' questions pointed to one John Burton, a former top official under Casey's Laborite predecessor, Herbert V. Evatt. Burton last spring led a delegation of fellow travelers to Red China's 'Pacific Peace Conference.')

In introducing Burton as a guest on Radio National, Phillip Adams said; 'John Burton was probably the most controversial and visionary public servant of the 20th Century. Branded a pink eminence of the Labor Party by conservative critics, he was clearly one of the most important intellectuals and policy-makers associated with the Curtin Labor Government of the 1940's. As a close associate of 'Doc' Evatt and head of the department of External Affairs (now Foreign Affairs) he did more to shape Australian foreign policy towards Asia and the Pacific than any other person before or since.'

Burton recently died. ASIO's bounty of red herrings under the bed