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Coup D'etat in Australia:

20 Years of Cover-Up

 
 
By Steve & Adelaide Gerlach

BEGIN AT PART ONE

The security crisis reached its peak in early November 1975. In October, various Labor staff members, including those at the Prime Minister's department, began to look into foreign intelligence involvement in Australia, including the U.S. bases.

They received a tip about Richard Stallings, the head of Pine Gap between 1966 and 1968, during the base's construction. Whitlam heard that he was a CIA employee working under the cover of the U.S. Defense Department. In order to authenticate the information, the Prime Minister's Department asked the Foreign Affairs Department for its list of all CIA agents in Australia. Stallings' name was not on it. However, it came to Whitlam's attention that the Australian Defence Department kept a more comprehensive list. Richard Stallings appeared on that list.

Sir Arthur Tange, permanent head of the Defense Department, warned Whitlam that he (Tange) had a duty to inform the CIA that Whitlam knew the identity of one of its deep cover agents. Apparently Whitlam did not object. The CIA now knew what Whitlam was up to.

In an almost campaign-style speech to an ALP rally in Alice Springs on November 2nd, 1975, Whitlam made a spur-of-the-moment remark: "Every week, he [Malcolm Fraser] gets more and more desperate in his abuse of me. I have had no association with CIA money in Australia as Mr. Anthony has," he said, referring to National Country Party Leader, Doug Anthony, deputy leader of the Opposition. Anthony and Stallings had been friends for quite some time, after Stallings and his family had rented Anthony's Canberra home.

Whitlam did not actually name Stallings. The next day, an article in the Australian Financial Review took up Whitlam's accusation, and named Richard Stallings as the CIA employee, and Pine Gap as a CIA-run installation.

Anthony was compelled to defend himself. He retorted that he was not aware that his friend Stallings was a CIA man. He demanded that Whitlam provide evidence. In a speech two days later, Whitlam stated that he knew of at least two instances in which the CIA had funded the Opposition parties, but he did not provide any proof.

At this point, the Australian Foreign Affairs and Defence Departments, via the U.S. embassy in Canberra, made it clear to the U.S. State Department and President Ford that they "would welcome formal U.S. government statements denying any CIA financial involvement in Australian political parties." (Mother Jones, p. 44). The U.S. State Department obliged, and categorically denied that Stallings was a CIA employee. The U.S. embassy and the head of the CIA, William Colby, also denied CIA involvement in Australian politics.

Sir Arthur Tange, was extremely concerned about the Stallings matter. Tange had extensive contacts with the intelligence community and realised how angry the Americans were about Whitlam and the press revealing CIA operatives and installations. He made frantic efforts to diffuse the situation. He asked Bill Morrison, the Defence Minister, to speak to Doug Anthony and convince him to drop the matter for the sake of "national security". But it was too late. Anthony wanted to clear his name and refused to drop it. Instead, he put a question on the Parliamentary notice paper for Whitlam to provide proof of his accusations.

Whitlam's answer was scheduled to be read on November 11, the very day Whitlam and his government would be dismissed from office in Australia's only coup d'etat.

"NATIONAL SECURITY"

A draft copy of Whitlam's answer was circulated, and a copy given to Sir Arthur Tange. The answer stated that Whitlam had obtained his information from the Defence Department, which in turn obtained its information from the U.S. Defence Department. Tange tried desperately to get Whitlam to modify his answer. He was concerned that because the U.S. government had categorically denied that Stallings was a CIA employee, Whitlam would be calling members of the U.S. government liars. But Whitlam refused to change his answer, as he believed that not to reveal his sources would be to mislead Parliament. On the day Whitlam was to read his answer in Parliament, Tange told a Whitlam staffer that "This is the gravest risk to the nation's security there has ever been." (The Nation Review, May 7-13, 1976, p.733).

The crisis inspired the now infamous cable from Ted Shackley via ASIO's Washington office to ASIO headquarters in Australia. It is reprinted here in full:

FOLLOWING MESSAGE RECEIVED FROM ASIO LIAISON OFFICER WASHINGTON: BEGINS: ON NOVEMBER 8 SHACKLEY CHIEF EAST ASIA DIVISION CIA REQUESTED ME TO PASS THE FOLLOWING MESSAGE TO DG [DIRECTOR GENERAL].

ON 2 NOVEMBER THE PM OF AUSTRALIA MADE A STATEMENT AT ALICE SPRINGS TO THE EFFECT THAT THE CIA HAD BEEN FUNDING ANTHONY'S NATIONAL COUNTRY PARTY IN AUSTRALIA. ON 4 NOVEMBER THE U.S. EMBASSY IN AUSTRALIA APPROACHED AUSTRALIAN GOVERNMENT AT THE HIGHEST LEVEL AND CATEGORICALLY DENIED THAT CIA HAD GIVEN OR PASSED FUNDS TO AN ORGANISATION OR CANDIDATE FOR POLITICAL OFFICE IN AUSTRALIA AND TO THIS EFFECT WAS DELIVERED TO ROLAND AT DFA [DEPARTMENT OF FOREIGN AFFAIRS] CANBERRA ON 5 NOVEMBER. ON 6 NOVEMBER ASST SECRETARY EDWARDS OF U.S. STATE DEPARTMENT VISITING DCM [DEPUTY CHIEF OF MISSION] AT THE AUSTRALIAN EMBASSY IN WASHINGTON AND PASSED SAME MESSAGE THAT THE CIA HAD NOT FUNDED AN AUSTRALIAN POLITICAL PARTY. IT WAS REQUESTED THAT THIS MESSAGE BE SENT TO CANBERRA. AT THIS STAGE CIA WAS DEALING ONLY WITH THE STALLINGS INCIDENT AND WAS ADOPTING A NO COMMENT ATTITUDE IN THE HOPE THAT THE MATTER WOULD BE GIVEN LITTLE OR NO PUBLICITY. STALLINGS IS A RETIRED CIA EMPLOYEE [Author's emphasis].

ON NOVEMBER 6 THE PRIME MINISTER PUBLICLY REPEATED THE ALLEGATION THAT HE KNEW OF TWO INSTANCES IN WHICH CIA MONEY HAD BEEN USED TO INFLUENCE DOMESTIC AUSTRALIAN POLITICS. SIMULTANEOUSLY PRESS COVERAGE IN AUSTRALIA WAS SUCH THAT A NUMBER OF CIA MEMBERS SERVING IN AUSTRALIA HAVE BEEN IDENTIFIED -WALKER UNDER STATE DEPARTMENT COVER AND FITZWATER AND BONIN UNDER DEFENCE COVER. NOW THAT THESE FOUR PERSONS HAVE BEEN PUBLICISED IT IS NOT POSSIBLE FOR THE CIA TO CONTINUE TO DEAL WITH THE MATTER ON A NO COMMENT BASIS. THEY NOW HAVE TO CONFER WITH THE COVER AGENCIES WHICH HAVE BEEN SAYING THAT THE PERSONS CONCERNED ARE IN FACT WHAT THEY SAY THERE ARE, E.G. DEFENCE DEPARTMENT SAYING THAT STALLINGS IS A RETIRED DEFENCE DEPARTMENT EMPLOYEE.

ON NOVEMBER 7 FIFTEEN NEWSPAPER OR WIRE SERVICE REPS CALLED THE PENTAGON SEEKING INFORMATION ON THE ALLEGATIONS MADE IN AUSTRALIA. CIA IS PERPLEXED AT THIS POINT AS TO WHAT ALL THIS MEANS. DOES THIS SIGNIFY SOME CHANGE IN OUR BILATERAL INTELLIGENCE SECURITY RELATED FIELDS? CIA CANNOT SEE HOW THIS DIALOGUE WITH CONTINUED REFERENCE TO CIA CAN DO OTHER THAN BLOW THE LID OFF THOSE INSTALLATIONS WHERE THE PERSONS CONCERNED HAVE BEEN WORKING AND WHICH ARE VITAL TO BOTH OF OUR SERVICES AND COUNTRIES, PARTICULARLY THE INSTALLATIONS AT ALICE SPRINGS.

ON NOVEMBER 7, AT A PRESS CONFERENCE, COLBY WAS ASKED WHETHER THE ALLEGATIONS MADE IN AUSTRALIA WERE TRUE. HE CATEGORICALLY DENIED THEM.

CONGRESSMAN OTIS PIKE CHAIRMAN OF THE CONGRESSIONAL COMMITTEE INQUIRING INTO THE CIA, HAS BEGUN TO MAKE ENQUIRIES ON THE ISSUE AND HAS ASKED WHETHER THE CIA HAS BEEN FUNDING AUSTRALIAN POLITICAL PARTIES. THIS HAS BEEN DENIED BY THE CIA REP IN CANBERRA IN PUTTING THE CIA POSITION TO RELEVANT PERSONS THERE.

HOWEVER, CIA FEELS IT NECESSARY TO SPEAK ALSO DIRECTLY TO ASIO BECAUSE OF THE COMPLEXITY OF THE PROBLEM. HAS ASIO HQ BEEN CONTACTED OR INVOLVED? CIA CAN UNDERSTAND A STATEMENT MADE IN POLITICAL DEBATE BUT CONSTANT FURTHER UNRAVELING WORRIES THEM. IS THERE A CHANGE IN THE PRIME MINISTER'S ATTITUDE IN AUSTRALIAN POLICY IN THIS FIELD? THIS MESSAGE SHOULD BE REGARDED AS AN OFFICIAL DEMARCHE ON A SERVICE TO SERVICE LINK. IT IS A FRANK EXPLANATION OF A PROBLEM SEEKING COUNSEL ON THAT PROBLEM. CIA FEELS THAT EVERYTHING POSSIBLE HAS BEEN DONE ON A DIPLOMATIC BASIS AND NOW ON AN INTELLIGENCE LIAISON LINK THEY FEEL THAT IF THIS PROBLEM CANNOT BE SOLVED THEY DO NOT SEE HOW OUR MUTUALLY BENEFICIAL RELATIONSHIPS ARE GOING TO CONTINUE [authors' emphasis].

THE CIA FEELS GRAVE CONCERNS AS TO WHERE THIS TYPE OF PUBLIC DISCUSSION MAY LEAD. THE DG SHOULD BE ASSURED THAT CIA DOES NOT LIGHTLY ADOPT THIS ATTITUDE. YOUR URGENT ADVICE WOULD BE APPRECIATED AS TO THE REPLY WHICH SHOULD BE MADE TO CIA.

AMBASSADOR IS FULLY INFORMED OF THIS MESSAGE.

When Shackley was interviewed years later, he said that his cable had authorisation from above. Although he did not name names, the implication was that Kissinger had given the OK. (Book of Leaks, p. 97).

The implications of the message were firstly that the CIA was bypassing the Australian government and virtually demanding that ASIO intervene and pressure the government, and that ASIO has an obligation of loyalty to the CIA to do so. The message was not meant to be passed on to Whitlam. However, the acting head of ASIO was a Whitlam appointee who saw the seriousness of the matter. He handed the cable to Whitlam. The cable was made public several years later.

The cable also made it clear that the CIA had been deceiving Australian government about Richard Stallings and Pine Gap. What else were they deceiving the Australian government about?

The cable also implied that the CIA would threaten to cut off the flow of intelligence information to the Australian services, and perhaps take even more strenuous action.

As Shackley's cable indicated, there were several other CIA men working under cover in Australia. Their identities had not been revealed by Whitlam, but by the media. Nevertheless, there was no way for Shackley and the CIA to know how much Whitlam knew, and how much he would reveal to the public, especially about Pine Gap, but also about other CIA activities in Australia. Shackley may have already known that Whitlam had begun to look into CIA matters in Australia.

By revealing what he knew already, Whitlam had telegraphed his intentions. He had to be stopped.

Whitlam did not have the opportunity to present the proof he had about CIA involvement in Australian politics to Parliament on November 11. He was dismissed by Governor-General Sir John Kerr at 1:10 p.m. that day.

What may be nearly as unfortunate as the Dismissal of an elected government is the timing of Whitlam's revelations about the CIA and Anthony. Labor Minister Clyde Cameron, wrote in his diaries, "Once his allegations hit the headlines, the sources dried up immediately." (The Cameron Diaries, p. 499). Whitlam had moved too soon.

CIA IN CRISIS

Even in November 1975, speculation about CIA involvement in the Dismissal was rife. Since that day, speculation has not dampened.

Yet from the time allegations about Richard Stallings and Pine Gap hit the papers, the CIA and the American government denied any involvement in Australia.

This is understandable, considering that while the events of the dismissal unfolded, several Congressional committees were investigating the CIA's activities all over the world. The CIA were facing pressures never before encountered. On November 2, 1975, the same day Whitlam made his accusations about the National Country Party being funded by the CIA, Henry Kissinger fired CIA director William Colby for being too honest with Congress. The CIA was in trouble.

If Whitlam had stood up in Parliament on November 11 and revealed that Pine Gap was a CIA-run installation and that the CIA were funding political parties in Australia, the U.S. Congress may have initiated an investigation into CIA activities in Australia. It is bad enough to undermine a third world government, but to undermine an ally is worse. The CIA would have been condemned and swiftly re-organised or worse, possibly shut down completely.

Therefore they continued to deny any involvement in the political events in Australia, and hoped the matter would fade away.

STRAIGHT FROM THE HORSE'S MOUTH

Despite CIA denials, a picture has formed of their dirty tricks in Australia. And much of the evidence comes straight from the mouths of CIA employees.

Former CIA deputy director of intelligence, Ray Cline, denies that there was any "formal" CIA covert action program against the Whitlam government during Cline's time in office (Cline left the CIA in 1973). "I'm sure we never had a political action program, although some people around the office were beginning to think we should." He explains that the U.S. and Australia had a very healthy relationship in the area of intelligence exchange. "But when the Whitlam government came to power, there was a period or turbulence to do with Alice Springs [Pine Gap]." He went on to say, "the whole Whitlam episode was very painful. He had a very hostile attitude."

Cline denied direct CIA interference, but outlined a scenario he saw as acceptable U.S. intelligence behavior. "You couldn't possibly throw in a covert action program to a country like Australia, but the CIA would go so far as to provide information to people who would bring it to the surface in Australia..." for example a Whitlam error "which they were willing to pump into the system so it might be to his damage." Such actions do not, in Cline's opinion, amount to a "political operation."

The method as outlined by Cline would be for the CIA to supply damaging information which the Australian security services would use against the government, presumably via other people, such as the media and the Opposition parties. This scenario fits well with what others have said. A U.S. diplomat stationed in Australia at the time, tells how CIA station chief in Australia, John Walker would "blow in the ear" of National Country Party members, and not long afterwards, the Whitlam government would be asked embarrassing questions in Parliament (The National Times, March 21-27, 1982).

Former Deputy Prime Minister Jim Cairns concurred that the methods used by the CIA would be as simple as that. When asked if he thought the CIA were capable of interfering with Australian politics, Cairns told the authors, "The CIA is capable, no doubt." By interfering, Cairns means gossip, influencing people by words. He also said it was not a "conspiracy" as such, but that these people are like that anyway. That is, the CIA would seek out like-minded people: "They think the same way, act the same way - it's not a conspiracy as such, just the way they think and act. And it's still going on today."

The loans affairs are perfect examples where "gossip" could have been used to good effect - and was.

WAS CAIRNS SET-UP?

The evidence that Cairns was set up is compelling. The motives may have been not only to discredit and damage the Whitlam government, but also to get him out of the way. Cairns was already one of the most popular Labor ministers for his leadership of the anti-Vietnam war movement. His popularity rose over Christmas 1974, when as Acting Prime Minister he flew to Darwin to view the destruction caused by Hurricane Tracy. As Deputy Prime Minister, he would be the next in line to take on the leadership of the Labor Party. But as he was even more left-wing and anti-American than Whitlam, the prospect of Cairns being the next Prime Minister frightened the CIA. Even early on attempts were made to discredit Cairns. For example, ASIO leaked their dossier on him to the Bulletin (June 1974). It indicated that ASIO's main concern about Cairn's was the "terrorist" potential of his part in the anti-Vietnam war protests.

Far more startling are the facts concerning George Harris and the loans affair. The letter Harris showed Cairns was from Commerce International, an arms dealing company based in Belgium, and with widespread links with the CIA. Commerce International is a highly classified topic at the CIA.

It does not seem completely clear how the Opposition obtained knowledge of the letter with Cairns signature on it. However, Harris was seen with Phillip Lynch, Deputy Leader of the Liberal Party, a few days before Cairns was asked in Parliament about the letter. If Harris was legitimate, why would he leak the information to the Opposition?

Further evidence of a set-up was provided by Leslie Nagy, an intermediary at the meeting between Cairns and Harris. According to Nagy, Cairns had left the meeting, refusing to sign his name to a letter making a commitment to a brokerage fee. Yet minutes later, to Nagy's surprise, Harris produced a letter with Cairns' signature agreeing to the 2.5% brokerage fee. While Harris denies that he set Cairns up, Cairns still does not acknowledge that he signed the incriminating letter.

Lastly, the CIA themselves provided an interesting hint that there was some sleight-of-hand in the loans affair. The National Intelligence Daily, the CIA's intelligence gathering arm's top secret briefing document for the President reported on July 3, 1975 that Dr. Cairns had been sacked, "even though some of the evidence had been fabricated." An ASIO officer writing for the Bulletin in June 1976 concurred. He said he believed that "some of the documents which helped discredit the Labor Government in the last year in office were forgeries planted by the CIA."

CREEPY KHEMLANI

Khemlani was a suspicious character from the word go. Why Connor chose to deal through him in the first place, and why he continued to deal with him, is a mystery.

Khemlani's behavior during the 11 months of the loans affair was certainly peculiar. The heads of the Treasury Department and the Reserve Bank had various lengthy discussions about him. They asked the very pertinent question of why Khemlani had volunteered in the first place, and why he continued to say he could get the $4 billion loan. After all, Khemlani spent a great deal of time, and presumably a great deal of money, yet the Australian government had never promised him anything in return and had never paid him a cent. In fact, the arrangement was that Khemlani was to be paid by whomever provided the loan, rather than by the Australian government. So where was Khemlani getting his money? Why was he so patient, and why did he continue to search for the money when he was promised nothing in return?

Khemlani's connections, and his activities after the Dismissal shed some light on the loans affair.

Khemlani heard about the Australian loan from Thomas Yu, a Hong Kong businessman. Both Yu and Khemlani's friend Theo Crannendonk had entered into a joint venture with Commerce International's Gerhard Whiffen, CI's Singapore representative, in a proposal to ship arms to the CIA backed rebels in Angola. The joint venture also included Chris Brading and Don Booth. Booth was a former CIA employee. Brading was a pilot for Air America, a CIA airline which operated extensively during the Vietnam war all over South East Asia.

It is highly possible that Yu sent Khemlani to Australia to conduct dirty tricks for the CIA.

Interestingly, the CIA says it does not have any files on Khemlani. However, they told journalists Brian Toohey and Marian Wilkinson that the NSA did have information on Khemlani. The National Security Agency (NSA) is the U.S. intelligence organisation which intercepts communications overseas to pass on to other intelligence agencies. It is not surprising that they would have intelligence on Khemlani, as he was firing off telexes all over the Middle East. The NSA was very active in monitoring communications in the area, especially in the mid 1970s.

Several years after the loans affair, Khemlani was still up to his old tricks, defrauding people of their money. In 1980, Khemlani financially ruined an American businessman by the name of Charles Murphy. He left behind in Murphy's home suitcases full of documents detailing many of his activities over the last couple of years, including his connection with the Nugan Hand Bank of Sydney.

In 1978, Khemlani entered into a relationship with the Nugan Hand Bank's Cayman Island's branch. The Nugan Hand Bank was based in Sydney from 1970. It collapsed in 1980 when one of its co-founders, Frank Nugan, was found dead in his car, with ex-CIA chief William Colby's business card in his pocket. Nugan Hand Bank has since been found to have extensive links to arms and drug dealing, and the CIA. Its list of employees reads like a who's who of the CIA and U.S. military circles. The other co-founder of Nugan Hand, Michael Hand, disappeared after the bank's collapse. Hand was employed by the CIA for covert operations in South East Asia during the Vietnam War. Other Nugan Hand managers included General Edwin Black (Commander of U.S. forces in Thailand), Rear-Admiral Earl Yates (former Chief of Staff for Policy and Plans of the U.S. Pacific Command and a counter-insurgency specialist), Patry Loomis (CIA employee), and William Colby, head of the CIA.

It is not known if Khemlani's ties with Nugan Hand predated their relationship in 1978. But in September of that year, he contacted them with a proposal to have Nugan Hand act as a trustee for several of Khemlani's projects.

The papers held by Murphy also show that after his loan-raising activities with Australia, he went on to pull similar stunts in several third world countries, including Haiti, Sierra Leone, and Ghana.

In 1979, Khemlani was arrested by the FBI for stealing $1 million worth of bonds from the Citizens National Bank in Chicago. He was given a suspended 3 year sentence for turning state's evidence and fingering the Mafia people he was working for. U.S. authorities informed ASIO of Khemlani's arrest. Why they told ASIO is not known, as there were no Australian warrants out for his arrest.

Other evidence corroborates Khemlani's possible CIA connections:

  • Former CIA employee Ralph McGehee came out with his own tell-all book on the CIA, Deadly Deceits, following the example of Victor Marchetti and Phillip Agee, who in the early 1970s released their own books about the CIA's nefarious activities. McGehee says that the CIA played a major part in the downfall of Connor and Cairns by releasing forged documents. The documents were tabled in Parliament to discredit and damage the Whitlam government. The documents provided by Khemlani were among the forgeries.
  • On November 11, 1975, Whitlam received a letter, along with a draft of a telex, which shows the CIA involvement with Khemlani. The draft was found in a hotel room in Hawaii, and was posted anonymously to Whitlam.

The draft reads:

DRAFT COPY ONLY
1. DO NOT TRANSMIT VIA PHONE OR LETTER. ENCIPHER BEFORE TRANSMITTING BY TELEX CONTACT 'LM' AT 536 6009 FOR ASSISTANCE.
REFERENCE YOUR CORRESPONDENCE ON 11 OCT, 1975.
ON 16 OCT., MR. T. KHEMLANI WILL BE DEPARTING FOR SINGAPORE TO ARRANGE MATTERS IN CASE GOVERNMENT CAPITULATION SEEMS NEAR.
IF NOT MR. KHEMLANI WILL RETURN TO AUSTRALIA ON OR ABOUT 26 OCT 75 TO CREATE FURTHER CHAOS.
NEWSPAPERS' EDITORIALS MUST CONTINUE TO PUT PRESSURE ON THE LABOR GOVERNMENT IF CAPITULATION IS TO SUCCEED.
IF NECESSARY OFFER....
IF CAPITULATION DOES NOT SUCCEED BY 14 NOVEMBER 75, SUPPORT FROM OVERSEAS WILL CEASE UNTIL MID 76. (Author's emphasis).

The draft telex appeared in the Sun newspaper in May 1977. The reporter said that the CIA denied they had anyone with the initials 'LM' working in Hawaii.

But when a National Times newspaper reporter rang the number given in the draft, they were connected to CIA headquarters in Hawaii.

WAS NUGAN HAND INVOLVED?

In 1981, a CIA contract employee, Joseph Flynn, claimed that he had been paid to forge some documents relating to the loans affair, and also to bug Whitlam's hotel room. The person who paid him was Michael Hand, co-founder of the Nugan Hand Bank. (The National Times, Jan. 4-10, 1981).

THE BOYCE TRIAL

In 1977, more confirmation and details about the CIA's involvement in Australian politics emerged when Christopher Boyce and Andrew Dalton Lee were arrested in the United States for selling secrets to the Soviet Union.

Boyce started work in 1974 with TRW Incorporated, a Californian aerospace company which did contract work for the CIA. Boyce's job was as a cipher clerk in the "black vault", a code room where top-secret messages from American bases and satellites were received and deciphered. Among the bases sending messages via TRW was Pine Gap.

Boyce and Lee were both disillusioned by the state of America. One day, whilst discussing the Watergate scandal and the CIA inspired coup in Chile, Boyce said to Lee, "You think that's bad? You should hear what the CIA is doing to the Australians." He then told Lee about the deceptions practiced by the U.S. on the Australian government.

Boyce and Lee decided that the best way to change things was to sell the secrets Boyce learned in the black vault to the Soviets. Boyce would photograph documents, and Lee sold them to the Soviet embassy in Mexico City. While Boyce's motivation was his idealism, Lee, a drug-addict, was in it for the money.

They were caught in 1977. Lee was arrested for loitering outside the Soviet embassy in Mexico City, and was brought back to the United States to face trial.

At his trial, part of Boyce's defence was that he was opposed to American and CIA activities overseas, particularly in Australia. Boyce told of his initial briefing at TRW, when he was informed that most of the communication received in the black vault came from Pine Gap, and that despite an agreement between the U.S. and Australian governments to share the information obtained at Pine Gap, the U.S. was not honoring the agreement. "Certain information" was being withheld from Australia.

Boyce also told that Pine Gap was being used to monitor international telephone calls and telexes to and from Australia, especially those of a political and business nature. In addition, he said he had come across cables from the Canberra bureau chief to Langley inferring that the CIA had worked to subvert Australian unions, especially in the transport industry, and had funded the Opposition parties during Whitlam's term. The CIA had been very concerned about an airport strike which would have delayed transportation of new equipment to Pine Gap. According to Boyce, the cable he saw said "don't worry about that, send the stuff, we'll take care of the strike the way we always do." (Sunday Press, 23 May, 1982). He also told reporter William Pinwill that the CIA had a deep distrust for the Whitlam government, and had a great interest in the "monetary crisis" of 1975.

The fact that communications between Pine Gap and the U.S. were handled by a private company was also news to Australia (The Sun, 27 May, 1977).

Boyce's lawyers had wanted to introduce evidence supporting Boyce's claims about CIA activity in Australia. However, the judge complied with a CIA request not to allow it, because of concerns about revealing secret government information.

Both Lee and Boyce were found guilty of selling secrets to the Soviets. Lee was immediately given a life sentence. However, Boyce was sent for 90 days of psychiatric evaluation, which indicated that he might get a light sentence, probably if he kept quiet about the allegations concerning Australia. Boyce made it clear he was "outraged" about the treatment of Australia, and was subsequently given a 40 year sentence. He is kept in solitary confinement.

In 1980, Boyce escaped from prison, and led the Federal Marshalls on an 18-month chase before he was caught again. The total sentence he now has to serve is 68 years. The circumstances surrounding his escape are very suspicious.

OTHERS SPEAK:

RICHARD STALLINGS

Despite repeated denials that Stallings was a CIA employee, Ted Shackley admitted Stallings' affiliations in his cable to ASIO on the 8th of November, 1975.

Stallings went into early retirement in 1975 after suffering an injury in a car crash.

However, during his tenure as head of Pine Gap, Stallings complained bitterly about CIA activities in Australia. According to Victor Marchetti, who knew Stallings well, Stallings was "copping a lot of static from the clandestine guys operating out of Canberra. Stallings didn't approve of the stuff at the time; he figured his information-gathering operation at Pine Gap was being put at risk by the station chief's men, who were interfering in Australia's political parties and labor unions." (Mother Jones, p. 20)

JAMES JESUS ANGLETON

In June 1977, during the furore caused by the Boyce trial, Angleton was interviewed on ABC radio's Broadband program, after complaints from ABC's top brass that the ABC had run too many programs slamming the CIA. For "balance", they asked Angleton to come on and give the Agency's point-of-view. Angleton had "retired" in 1974, but had devoted several years to attempting to restore the CIA's battered image. Angleton discussed many aspects of the "security crisis" which was the Whitlam government (in his opinion), including Murphy's raid on ASIO, Pine Gap, and whether the CIA funded political parties in Australia. When asked "If there was any funding by the CIA in Australian politics or unions, would it have had to come through your office in the time that you were there?" Angleton answered somewhat cryptically, "I will put it this way very bluntly - no one in the agency would ever believe that I would subscribe to any activity that was not co-ordinated with the chief of the Australian internal security." (Freney, The CIA's Australian Connection, p. 29) . He did not deny CIA funding, nor would he clarify his statement. He simply inferred that if the CIA were involved in Australian politics and unions, ASIO would know about it.

VICTOR MARCHETTI

In an interview with the Sydney Sun, the former CIA agent related what Richard Stallings had told him. He said that Stallings had told him that the CIA station chief in Canberra had channeled money directly to the conservative political parties (Liberals and the National Country Party). Marchetti said that money was used to undermine the Labor Party, since at least 1967. He also said that there were about six to eight "upfront" CIA agents in Canberra, and up to 30 clandestine operatives throughout Australia.

ANONYMOUS SOURCE

Robert Lindsay, who wrote two books about the Boyce trial, interviewed a CIA agent who wished to remain anonymous. The agent confirmed Boyce's allegations, but said that the CIA involvement in Australia was more complicated than Boyce realised. The agent said that CIA money was given to the Coalition and would probably have been sent through ASIO (Flight of the Falcon).

WHITLAM'S EVIDENCE

When the authors contacted former Prime Minister Gough Whitlam, he politely declined to answer questions regarding CIA involvement in Australian politics. He did however, suggest that we read what he had said and written in the past.

While Whitlam was not able on November 11, 1975, to give his evidence to Parliament regarding the CIA and Richard Stallings, he did raise the matter in Parliament on May 4, 1977, because of the allegations of CIA activity brought up by the Boyce trial and by Victor Marchetti, a former CIA employee. Whitlam began by saying, "There is increasing and profoundly disturbing evidence that foreign espionage and intelligence activities are being practiced in Australia on a wide scale."

He went to speak about the Boyce trial, and said that he had suggested to Prime Minister Fraser that he bring the matter to the attention to Justice Hope (who was still conducting the Hope Royal Commission into intelligence organisations in Australia).

Whitlam then spoke about the cable sent to ASIO headquarters by Ted Shackley. He commented that "In plain terms, the cable revealed that the CIA had deceived the Australian Government and was still seeking to continue its deception. It confirmed that Mr. Stallings had been employed by the CIA. The cable made it clear that the CIA was making what was described, in the jargon of the trade, as an 'official demarche on a service to service link' - in other words, without informing the elected Government of Australia. Implicit in the CIA's approach to ASIO for information on events in Australia was an understanding that the Australian organisation had obligations of loyalty to the CIA itself before its obligations to the Australian Government. The tone and content of the CIA message were offensive; its implications were sinister. Here was a foreign intelligence service telling Australia's domestic security service to keep information from the Australian Government."

Whitlam also read out the statement he had prepared in response to Doug Anthony's question on notice for 11 November, 1975: "I did not disclose that Mr. Stallings was a CIA agent. The Right Honorable gentleman [Anthony] did that. I was informed that Mr. Stallings worked for the CIA, not by the head of the Australian Foreign Affairs Department, or the United States State Department, but by the head of another of our Departments which in turn was informed by a Department in the United States other than the State Department."

Whitlam then said, "The coup on 11 November prevented that answer being given." (Hansard, May 4, 1977)

Whitlam also briefly discusses (for less than two pages) CIA involvement in the "security crisis" in his book, The Whitlam Government, 1972-1975. He comments that the newspaper stories disclosing the identity of Stallings and other CIA agents "greatly agitated" both Australian and U.S. security services. "The CIA sent a cable to ASIO which must have been founded on the assumption that ASIO would put its links with the CIA ahead of its obligations to the Australian Government." He went on to say, "The episode lent colour to allegations that the CIA had been eavesdropping on me and my Ministers and had influenced the Governor-General, Sir John Kerr, to sack us."

However, Whitlam seems unwilling to say more than that. As he said in Parliament in 1977, "The difficulty which any head of government faces in responding to these matters - or any former head of government...is that he is bound by obligations of secrecy in the national interest. He cannot disclose what he knows. I readily acknowledge my own obligation." (Hansard, 4 May, 1977, p. 1522). He will not reveal the confidences given to him by, or information about, the American installations in Australia.

While Whitlam seems to accept that at the very least Australia should investigate whether the CIA has interfered with Australian politics, he is not so sure of Sir John Kerr's role in relation to the security crisis.

In The Whitlam Government, he says, "It is a fact that any country with the technical resources of the U.S. can eavesdrop on anyone in the world if it feels the effort worthwhile....It is not a fact, however, that Kerr, fascinated as he had long been with intelligence matters, needed any encouragement from the CIA." (pp. 51-52)

"OUR MAN KERR"

Among Christopher Boyce's allegations is that the CIA chief at TRW had referred to Australia's Governor-General as "Our man Kerr."

One of the most contentious questions about the dismissal was whether Kerr acted on his own in dismissing Whitlam, or whether he was working to further someone else's goals. The question has come up in relation to the Liberal-National Party Coalition, and to the CIA and the intelligence community.

Kerr consulted with High Court Chief Justice Sir Garfield Barwick before making the decision about the Senate deadlock. Garfield was a former Liberal minister. Perhaps more serious than that are the allegations that Kerr was informed of the CIA and the intelligence community's concerns about Whitlam.

Kerr had a long association with the intelligence community, particularly military intelligence. During World War Two, he worked for the Directorate of Research and Civil Affairs, part of military intelligence. Whilst in Washington, he was seconded to the Office of Strategic Services (the OSS, precursor to the CIA). Kerr continued to work in intelligence after the war in the School of Civil Affairs (later renamed the School of Pacific Administration).

Later he became involved with the Association for Cultural Freedom, which is said to be closely affiliated with the activities of the CIA and U.S. State Department. He was also the founding president of the Law Association for Asia and the Western Pacific (LawAsia). Kerr went to the U.S. to obtain funds for LawAsia from the Asia Foundation. The Asia Foundation was discovered in 1967 to be backed by the CIA. According to CIA man Victor Marchetti, the Asia Foundation "often served as a cover for clandestine operations [and] its main purpose was to promote the spread of ideas which were anti-communist and pro-American." (CIA and the Cult of Intelligence, p. 178-79) Despite this (or because of it?), Kerr again went to the Asia Foundation to obtain funds for LawAsia.

It is not known if Whitlam was aware of Kerr's association with the intelligence community when he appointed him Governor-General. As Governor-General, Kerr was said to take an unusual interest in foreign policy and intelligence matters.

So much so that, according to Brian Toohey, on November 8, the day that ASIO received Ted Shackley's cable calling Whitlam a security threat, "a senior Australian defence official" was sent to brief Kerr "about allegations from the CIA that the then Prime Minister, Mr. Whitlam, was jeopardizing the security bases in Australia." (Financial Review, April 1977). The official is believed to be Dr. John Law Farrands, chief scientist at the Defence Department. He was probably sent by Tange. Farrands, Tange, Kerr all denied that Kerr was briefed about the CIA's concerns. Whether Kerr was influenced by the CIA's concerns is not known. But his timing of the dismissal is curious.

PLAUSIBLE DENIABILITY

As can be expected, there is no "smoking gun" which links the CIA to the demise of the Whitlam government. There is no substantial evidence that there was a carefully orchestrated plot against Whitlam. Nevertheless, there is a large body of evidence pointing to the CIA. As the Governor of Victoria, and a former judge, Richard McGarvie says, "sometimes the most reliable evidence is circumstantial evidence."

Subtle means were used to bring down the Labor government. All that was necessary was for the CIA to find like-minded people, and whisper in their ears information which could be used to discredit and destabilise their mutual enemy.

The evidence pointing to the CIA's dirty dealings includes:

  • Why did Sir John Kerr sack Whitlam on the same day that Whitlam was to provide proof to Parliament that the former head of Pine Gap was a CIA agent, thus proving that the U.S. had been misleading Australia about the bases?
  • Whitlam was dismissed just weeks before the crucial Pine Gap contract was to be reviewed.
  • The CIA knew, and informed the U.S. President, that documents used to discredit Jim Cairns were probably forgeries. How did they know? Did they provide them?
  • Questionable loans brokers with links to Commerce International, itself heavily linked to the CIA.
  • A draft cable, allegedly from the CIA, admitting that Khemlani was in Australia to cause chaos.
  • The Christopher Boyce allegations.
  • The words of several CIA employees.
  • The deep concern expressed by Ted Shackley's cable that Whitlam would reveal all about Pine Gap and the CIA in Australia.

All solid evidence of CIA involvement - albeit circumstantial.

The only piece of the puzzle missing is a solitary fact, even small, that points the finger at the CIA knowing and participating not only after the event, but before and during.

COUP DE GRACE

The CIA and the U.S. government have repeatedly denied CIA activity in Australia.

In July 1977, President Carter sent Assistant Secretary of State for Asia and the South Pacific, Warren Christopher, out of his way to meet Gough Whitlam at Sydney airport.

Christopher delivered the following message from Carter: "The U.S. State Department will never again interfere in the domestic political process of Australia." (The Whitlam Government, p. 53 - emphasis added).

Never again...

The Pine Gap treaty still stands.

The Reserve Powers of the Governor-General to dismiss a democratically elected Government have not been revoked.

The CIA continues operations in Australia.

The events of November 1975 can be repeated.

POSTSCRIPT

On December 26, 1995 The Australian newspaper ran a front page story, using newly unclassified documents dated July 1, 1974, dealing with President Nixon ordering a full review of the relationship with the Australian Whitlam Government in the "political-security area".

Nixon, through Henry Kissinger, set out six areas to be investigated, all dealing with the supposed security threat to the U.S. military bases from the Whitlam government.

Of most importance is that one of the six areas in this now-released memo has been blacked out for security reasons.

This document is of vital importance to understanding that the Whitlam government was indeed seen as a threat by those in power in Washington. The memo was addressed to the acting Secretary of State, Secretary of Defense, the Director of the CIA and also sent to the Joint Chiefs of Staff!

The censored area, taking up four lines of text, now seems to be the "smoking gun" in the case. After twenty years the American Government still deems these few lines of so vital importance that they are withheld from us completely. What the censored order says is open to conjecture. Could it be an order to contact friends or agents within the government or opposition parties? Could it be an order to destabilize the Whitlam Government?

Or could it be an order to re-activate Sir John Kerr as an agent for the CIA?

We will not know until the document is unclassified completely.

We have the key in the lock, one more twist and the door will be wide open.

Steve Gerlach is a Melbourne based researcher. He founded the Australian JFK Assassination Information Centre in 1992, and was its director from 1992 to 1995 and editor of the Centre's magazine "Probable Cause". He now works independently, and is employed as a researcher by a major Melbourne newspaper.

Adelaide Gerlach has spent eight years in Peru and eight years in the USA. She has a BA (Hons.) in Politics and is employed as a researcher in the Australian trustee industry.

The above article appeared in
New Dawn No. 39 (
November-December 1996)