Jim Stokes – A brief history of the Royal Commission on Intelligence and Security

Australian security and intelligence agencies

The position of the Australian security and intelligence agencies in the mid-1970s was significantly different from that of today. The only agency of which most Australians were aware was the Australian Security Intelligence Organisation (ASIO), which had been established by the Chifley Australian Labor Party (ALP) government in 1949 in response to British and US concerns about the leakage of classified information from Australia to the former Soviet Union. ASIO was responsible to the Attorney-General for the investigation of subversion and espionage within Australia and for providing advice on protective security issues. It achieved considerable prominence in the 1950s with the defection of Soviet spies Vladimir and Evdokia Petrov and the subsequent Royal Commission on Espionage in 1954 to '55. ASIO’s functions were defined in legislation in 1956. ASIO’s main targets were the Communist Party and organisations and individuals believed to have communist links. Its relationship with sections of the ALP was at best uneasy.

The other three intelligence agencies were almost unknown to the general public and had no individual statutory basis. Two of them – the Joint Intelligence Organisation (JIO) and the Defence Signals Division (DSD) – were located within the Defence Department, which at the time of the Royal Commission on Intelligence and Security was presided over by its formidable Secretary, Sir Arthur Tange. JIO drew together information from both published and covert sources to produce detailed assessments of regions and issues relevant to Australian defence and foreign relations. DSD was responsible for the interception and deciphering of foreign electronic communications from a network of intercept stations operated by the armed forces. It worked closely with similar organisations in the United Kingdom, the United States, Canada and New Zealand. DSD was also responsible for electronic communications security in Australian Government departments. DSD’s functions were still not acknowledged officially, although its existence had come to public notice over the loss of its Singapore intercept station when the Australian troops who operated it were withdrawn in 1973.

Lastly, there was the Australian Secret Intelligence Service (ASIS), the existence of which was not officially acknowledged until 1977, although it too had attracted media speculation in the early 1970s. ASIS was established in 1952 to undertake covert intelligence gathering outside Australia. ASIS was responsible to the Minister for Foreign Affairs.

Establishment of the Royal Commission on Intelligence and Security

After 23 years in Opposition the ALP returned to government in December 1972 under Prime Minister Gough Whitlam. ALP policy included a commitment to review the operation of the security and intelligence agencies. This commitment was focused particularly on ASIO, which some ALP members wanted to abolish. Relations between the government and the intelligence community were further strained by the so-called ‘Murphy Raid’ on ASIO offices in Canberra and Melbourne in March 1973. The Attorney-General, Lionel Murphy, preceded in Melbourne by Commonwealth Police officers, visited both offices in search of information that he believed ASIO held in relation to Croatian terrorist activities. The visits attracted wide publicity and serious concern within the allied intelligence community. There was further controversy in 1974 over the provision of ASIO political briefing material to selected journalists. There was also some government unease about the role of the Australian Secret Intelligence Service.

Nevertheless, the Royal Commission on Intelligence and Security was not solely a product of tensions between the Whitlam Government and the security and intelligence agencies. As Royal Commissioner Mr Justice Robert Marsden Hope found, there were significant long-term issues regarding the structure, priorities and funding of the agencies that any government would have had to face sooner or later. In the case of ASIO, there were immediate issues about morale and security. Above all, there was a long history of ministerial ignorance of, and indifference to, security and intelligence issues. There were also examples of the improper use of security intelligence information for political purposes.

Once the double dissolution election of 18 May 1974 was over, the Government moved quickly to establish the Royal Commission on Intelligence and Security. The Governor-General’s speech at the opening of Parliament on 9 July announced that there would be a judicial inquiry into the security services; Mr Justice Hope was appointed as sole Commissioner on 21 August. Hope, who was 55 years old, was a judge of the NSW Supreme Court and Court of Appeal, and had been President of the Australian Council for Civil Liberties between 1967 and 1969. He had recently completed an inquiry into the National Estate, which paved the way for Commonwealth heritage legislation.

Terms of reference

Hope’s terms of reference required him firstly to report on the history of the Australian security and intelligence agencies, with particular reference to their purpose, functions, administration and staffing, control and coordination, and the use made of the information that they provided.

Secondly, Hope was asked to make recommendations about the future of the agencies to enable them to serve Australia in the most efficient and effective way. In doing this he was to consider the scale of their operations, the number of separate organisations involved, the scope of their intelligence gathering, the coordination, evaluation and distribution of their product, their relations with law enforcement agencies, the degree of secrecy that should attach to them and their work, and the proper safeguarding of intelligence material and sources.

Thirdly, Hope was asked to recommend procedures for the review of administrative decisions affecting Australian citizens, migrants and visitors where these decisions may have been impacted by adverse security reports.

Finally, Hope was asked to make recommendations about the machinery for ministerial control, direction and coordination of the security and intelligence services. In doing this he was to ensure that there were clear lines of responsibility and proper arrangements for the accountability of funds.

Staffing and operations

Hope was supported by a team of about 20 staff and consultants, mainly recruited from Australian Government departments. Senior members of the team included George Brownbill, who was Secretary to the Royal Commission on Intelligence and Security and also acted as counsel assisting Hope. Brownbill was a senior officer in the Department of the Prime Minister and Cabinet. He took a major role in gathering evidence and drafting reports. Ian Cunliffe was Senior Legal Officer. Leslie McBride was Assistant Secretary until he was promoted to another organisation in May 1976, after which Cunliffe took over the role. Robert Dunkeld, who had worked with Hope on the National Estate inquiry, was Executive Officer.

The Royal Commission on Intelligence and Security was housed with the Prime Minister’s Department in West Block offices, close to Parliament House in Canberra, although its only publicly identified contact points were a telephone number and a post box at the nearby Queen Victoria Terrace post office (the current home of the National Archives of Australia). Hope was intrigued that the security vault provided for Royal Commission on Intelligence and Security use in West Block still contained the records of the 1954–55 Royal Commission on Espionage.

In November 1974, the Royal Commission on Intelligence and Security placed advertisements inviting submissions. Those making submissions were asked if they also wished to appear before the Royal Commission in person. They were cautioned that anyone who wished to refer to secret information in their submission must inform the Secretary in advance and that anyone who did not wish to have their information referred to relevant agencies should make this clear. The advertisements produced more than 200 contacts or submissions from organisations and individuals. Many came from people who worked, or had worked, for the security and intelligence agencies or who had a professional or academic interest in them. There were also submissions from people and organisations with a range of concerns about the agencies, including some who felt that their lives had been seriously affected by security decisions. The Royal Commission on Intelligence and Security itself approached former ministers and public servants to provide information from their experience.

Early in 1975 the Royal Commission approached Australian Government agencies for submissions and also sent out a detailed questionnaire to departments about their security procedures. In addition, agencies volunteered or provided on request information or copies of documents about many aspects of their operations. Written material was supplemented by extensive conversations between Royal Commission and agency staff. Royal Commission staff also undertook an extensive search of original agency records in particular those of ASIO.

Between March and September 1975, and again in February and March 1976, the Royal Commission on Intelligence and Security held a large number of hearings in Canberra and the mainland state capitals. Some hearings were public, but many of them were held behind closed doors because of the nature of the matters being discussed. Hearings were recorded on tape and later transcribed. There was a final hearing on 29 September 1976 to allow senior Defence officials to put their views on the draft Third Report.

Hope and members of his staff also undertook three overseas trips between June 1975 and April 1976. They visited New Zealand, East and South-East Asia, western Europe, the United States and Canada. Their object was to gather information about Australian security and intelligence links with other countries and how those countries managed their own security and intelligence services.

Reports and recommendations

Hope recognised that information about many of the matters that he was investigating could not be released publicly, at least for many years. However, he was concerned that where possible his findings should be set out in a way that would enable them to be released immediately. Accordingly, he divided some of his reports into publishable and non-publishable portions, or provided a publishable summary of the report. Hope also recognised that the sheer scale of his investigations meant that he would need to issue a series of reports progressively rather than a single final report.

The First and Second Reports

The first two reports were presented to the Governor-General on 24 March 1976. The First Report dealt briefly with Hope’s approach to procedural issues. The Second Report dealt with the security checking of Commonwealth employees. It found that on average 69,000 individuals had been checked in each of the past five years, of whom only about 70 did not receive favourable assessments. Hope and his staff examined hundreds of ASIO files relating to individuals who had received qualified or adverse assessments and found that in some cases the assessment may have been wrong. Hope recommended the establishment of a Security Appeals Tribunal to provide a right of review. The First and Second Reports were published in 1977, with the exception of three appendices in the Second Report.

The Third Report

The Third Report, dealing with intelligence coordination machinery, was presented to the Governor-General on 1 November 1976. Hope provided an abridged version of the findings and recommendations for public release. The report surveyed the status, control and performance of the intelligence function, in which Hope found many deficiencies. The agencies did not have an assured place in government and they received little interest or direction from ministers. Their position was complicated by an excess of secrecy and the fact that ASIO, ASIS and DSD were all based in Melbourne, which left them remote from the Australian Government administration and major client departments in Canberra. Above all, there was a lack of clear direction on targets and priorities for intelligence collection within and among agencies.

Hope’s major recommendations included the establishment of a Permanent Heads Committee on Intelligence and Security, which would include agency heads, secretaries of relevant departments and the Chief of the Defence Force Staff. This committee would set clear priorities for intelligence collection and report to the Prime Minister and a committee of relevant ministers. Hope was particularly concerned that the existing intelligence assessment process was dominated by the needs of the Defence and Foreign Affairs departments. This tended to discourage the economic departments from contributing to, and making full use of, economic intelligence. Hope recommended that much of JIO should be transferred to a new national assessment agency located within the Department of the Prime Minister and Cabinet – a proposal that was vigorously opposed by Defence.

The Fourth and Fifth Reports

The Fourth and Fifth Reports went to the Governor-General on 24 December 1976. The Fourth Report, dealing with ASIO, was in three parts, two of which were for public release. There was also a fourth part intended for very limited circulation. Hope’s criticisms of ASIO were scathing, although he noted that the situation had begun to improve since the appointment of Mr Justice Edward Woodward as Director General in March 1976. Hope’s relationship with ASIO began badly when it became apparent that some senior staff were deliberately withholding information from him and discouraging other staff from talking to him. Hope made it clear to ASIO management that he had the right and duty to talk to anyone and to inquire into anything, and he was satisfied with ASIO cooperation in the later stages of the inquiry.

Hope found fundamental problems with ASIO, many of them flowing from a lack of effective leadership. ASIO management was capricious, hierarchical and driven by the views and prejudices of senior staff. Some staff were too close to political groups. Morale, internal communication and recordkeeping were very poor, and gossip and cliques thrived. Staff conditions and pay were poor and arbitrarily administered, and there was evidence of victimisation, nepotism and favouritism. There were many capable junior and middle-ranking officers, but they were frustrated by their working environment and by the failings of those above them.

Operationally ASIO’s priorities were misdirected. Most of its resources were devoted to the counter-subversion function, targeting the various communist parties and other radical and protest groups to a point beyond what Hope believed was justified. Conversely, ASIO had devoted meagre and unsophisticated resources to the counter-espionage function, in particular to the strong and growing presence of Soviet bloc intelligence officers in Australia. ASIO’s effectiveness was also hindered by the long-standing animosity between ASIO and the Commonwealth Police, and by weaknesses in its own internal security.

The Fifth Report dealt with ASIS. It was presented in two volumes, neither of which was intended for public release. Hope endorsed the continuing need for an Australian secret intelligence service. While most of the information that Australia needed could be collected by diplomats and journalists or through signals interception, there were still ‘hard’ targets that could be approached only by clandestine human means. He recommended that ASIS expand its geographical cover, its collection of economic and resource intelligence, and its counter-intelligence function. He also recommended that ASIS retain a small special operations capability.

Hope found that ASIS was ‘a singularly well-run and well-managed agency’ with good internal morale and a high sense of professionalism. However, it suffered from the restrictions of the 1958 ministerial directive to ASIS, which imposed ‘a bizarre mixture of great and small constraints’. The directive had been intended to remedy a lack of knowledge of, and control over, ASIS’s operations in its early years, but the result had been to subject ASIS to the control of the Department of Foreign Affairs rather than its minister. In effect Foreign Affairs controlled ASIS’s budget and access to the minister. The problem was compounded by mutual antagonism and mistrust between ASIS and Foreign Affairs staff.

Hope believed that unduly tight Foreign Affairs control had made ASIS too cautious and discouraged it from exploiting intelligence opportunities. He did not accept Foreign Affairs’ contention that it should have full knowledge of all ASIS activities, and he urged that the Director of ASIS should have the right, if necessary, to meet the Minister for Foreign Affairs without the secretary of the department necessarily being present. He also recommended that the government acknowledge the existence of ASIS and give it a statutory basis.

The Sixth, Seventh and Eighth Reports

The remaining reports went to the Governor-General on 21 April 1977, bringing the work of the Royal Commission on Intelligence and Security to an end. None of them were published. The Sixth Report, which dealt with DSD, was in three parts. Hope found that DSD was a very capably managed agency with a strong team spirit. He also found that DSD’s signals intelligence and communications security functions were valuable and that Australia benefited greatly from its close involvement in the five-nation signals intelligence community. However, he also identified some significant deficiencies. DSD was too subordinate to the overall Defence management structure, which left it open to arbitrary budget restraints and administrative interference. Hope recommended that DSD be acknowledged publicly, given a statutory charter and elevated to the status of an outrider organisation, becoming responsible directly to the Secretary of the Department of Defence. DSD also needed better guidance on targets and priorities, and a more adequate staff structure.

The Seventh Report, in two volumes, contained a history of the Australian security and intelligence services from 1900 to 1950 written for the Royal Commission on Intelligence and Security by Dr Jacqueline Templeton of Melbourne University.

The Eighth Report set out Hope’s concerns and expectations for the 20 shelf metres of records accumulated by the Royal Commission on Intelligence and Security. Commonwealth archival legislation was then being drafted, but it did not come into force until 1984. Hope recommended that the records, none of which should be destroyed, should be placed in the custody of the Department of the Prime Minister and Cabinet for appropriate descriptive work and official use. He also recommended that they should be co-located with the records of the 1954–55 Royal Commission on Espionage. Hope envisaged that the records would eventually be released for public access, probably after 30 years, although he accepted that a longer closure period might be necessary. He was concerned that there should not be a ‘strip tease’ release beginning with only the trivial material and extending over a long period of time.

Hope's legacy

It is a fortunate royal commission that sees its recommendations implemented fully, promptly and without controversy, especially in areas as contentious as security and intelligence. Hope’s reports were received with close attention both within and – to the extent that they were published – beyond the Commonwealth administration. Inevitably there were critics. Some suggested that Hope had been too susceptible to the charms and ambitions of the agencies. Some senior public servants felt that Hope had strayed too far from his civil libertarian field of expertise in recommending major structural changes to the intelligence agencies, notably the recommendations to move most of JIO to the Prime Minister’s portfolio and to establish ASIS on a statutory basis.

Nevertheless, the Australian security and intelligence community of today is very much a product of Hope’s vision in the Royal Commission on Intelligence and Security and in a second royal commission on the security and intelligence agencies that he undertook for the Hawke ALP government in 1983–84. The Fraser Government moved quite quickly to implement many of Hope’s recommendations, if in some cases in modified form. The Office of National Assessments was established in 1977 within the Prime Minister’s portfolio, although Defence was able to defeat Hope’s recommendation that the new agency should incorporate much of JIO. Legislation relating to ASIO and to telephone interception was amended in 1979 to set out ASIO’s powers and obligations more adequately. The Security Appeals Tribunal was established in 1980 to review adverse security assessments for Commonwealth employees.

Prime Minister Fraser officially acknowledged the existence of ASIS in 1977 and DSD was raised to the status of a directorate in 1978. ASIO, ASIS and DSD headquarters moved from Melbourne to Canberra between the mid-1980s and 1992. ASIS and DSD finally received statutory recognition with the passage of the Intelligence Services Act 2001. The Fraser Government improved auditing arrangements for the agencies and established a Permanent Heads committee and a Cabinet committee to coordinate and oversee their work. The office of Inspector-General of Intelligence and Security was established in 1987 and a parliamentary committee on ASIO in 1988. The scope of the latter was extended in 2002 and 2005 to include all the security and intelligence agencies.

Copyright National Archives of Australia 2017