The establishment of ASIO
When Prime Minister Ben Chifley established ASIO by charter in 1949, Australia and other Western nations had emerged from the Second World War and were grappling with a different kind of threat—Soviet interference.
These were the early days of the Cold War. A series of decoded Soviet cables—known as the Venona intercepts—confirmed Soviet spies were active in Australia, prompting the United States (US) and the United Kingdom (UK) to suspend the sharing of intelligence with us. Great Britain sought Australia’s commitment to establish a more rigorous internal security intelligence regime.
David Horner, author of The Spy Catchers: the Official History of ASIO 1949–1963 explains:
American and British cryptanalysts deciphered the encrypted cabled messages between the headquarters of the Soviet intelligence service, the KGB, and its resident intelligence officers in embassies around the world. This Venona intelligence, as it was known, revealed the existence of a Soviet spy ring in Australia, and ASIO was then set up to try to catch the spies. The Venona programme was extremely secret and over the succeeding years ASIO spent much effort in trying to protect knowledge of its existence.
The Australian Government was urged to establish a security service modelled on the UK’s MI5, and so Australian military intelligence chiefs and the senior politicians of the day worked to establish ASIO.
Prime Minister Ben Chifley appointed Justice Geoffrey Reed, a Supreme Court judge from South Australia, to establish the service, and in early 1949 oversaw the drafting of a charter to specify the role and functions of the Organisation. ASIO’s Charter empowered this new organisation to undertake intelligence activities for the protection of the Commonwealth against espionage, sabotage and subversion.
The first ASIO officers—only 15 in July 1949—set about investigating a number of people suspected of spying for the Soviets.
The Venona intercepts
Venona was a US Army Signals Intelligence Service program which began during the Second World War to examine and possibly exploit encrypted Soviet diplomatic communications. Intelligence gleaned from Venona established that the origin of leaks of sensitive information originated in Australia and that this information was being passed via diplomatic cable traffic to the Soviet Union.
Identification and investigation of members of the spy ring allegedly operating in Australia was the primary focus of ASIO in the early years and became known as ‘the Case’. Much of this work was done inside ASIO’s first headquarters—a four-storey building in Sydney’s Potts Point known as Agincourt.
Director-General of Security Justice Reed chose to serve in the role for 16 months, during which time he was to establish the functions of the service, recruit staff and establish a suite of appropriate administrative processes, and resolve the immediate threat posed by espionage at the time—identifying the members of the Soviet spy ring revealed in the Venona operation.
The first security intelligence officers were hand-selected by Justice Reed and drawn from the trusted ranks of the legal fraternity, ex-military intelligence officers, and the Commonwealth and state police forces. Many were recruited on the basis of being known to someone within the Organisation.