Venona and the banning of the Communist Party of Australia


Dr Frank Cain

Paper presented at the conference ‘The Communist Party Dissolution Bill – 60 Years On

Held at the Australian National University, Canberra 8 May 2010

 Early Cold War Setting

1. Cooperative US/UK wartime alliance dismantled. American ended exchange of military technology with Britain.

2. United States jealously defended possession of the nuclear bomb. McMahon Act denied information exchange.

3. Truman introduced Universal Military Training.  Soviet atomic bomb tested August 1949.

4. Britain developed its own nuclear bomb and guided missile technology Joint Project launched with Australia to build missile testing range at Woomera in 1947.

5. US sees UK as a competitor in sale of military aircraft and weapons in post-war years.

6. Expansion of wartime intelligence agencies. Central Intelligence Agency established with passing of Defense Security Act in 1947

7. Australia regarded suspiciously in Washington: encouraged by reports from US ambassador, Myron M. Cowan and Naval Attaché, Commander Jurilka jnr who are influenced by Liberal Party supporters. Dr Evatt particular focus of attacks

8. CIA published booklet on Communist Influence in Australia material from Cowan and Jurilka. Selective treatment for Australia?

Venona, its History

 1. US army’s Signal Security Agency collected Soviet diplomatic traffic since 1939. During WW ii collection expanded using agencies in countries such as the army in Australia. Highly secret. Truman excluded from secret for 3 years.

2. In 1947 the US released only the decodes of the Australian material. No other nation so treated eg. Canada, UK.

3. Anger and suspicion of Robert Menzies aroused. Confirms his thinking, USSR was the foe before WW II and returned to be the foe in the future through subversion and military challenge.

Venona, Chifley and Menzies

1. Chifley first informed when head of MI5, Sillitoe, flew to Canberra to reveal leaks in External Affairs.

2. Vague details of missing file, names of officers, Milner, Hill and Throssel.  Dr Evatt’s office staff, Frances Burney.

3. Inquiries made: files accounted for, nothing incriminating.  Chifley was cynical. Therefore, UK gets US permission to indoctrinate Chifley, Dedman & Evatt into Venona secrets. (Andrew, 2009, p.370).

4. US Defense Dept embargoes transfer of classified information to Australia on 20 May 1948

5. UK assists by helping establish new counter espionage body on MI5 lines

6. ASIO established by Chifley 16 March 1949

7. Menzies informed of embargo probably via British sources.  British PM’s office concerned over this leak. No source identified.

8. Menzies announces that the “US lacked confidence in Chifley’s government”.

9. United States’ suspicions of Australia. Labor government, missile range security

10. Truman invites Australia to send Shedden to Washington for discussions on the banning from 7 March 1949.

11. Menzies fears that Chifley will use visit to demonstrate friendly relations with the US administration.  US embassy directs Chifley to not thus exploit Shedden visit.

12. Cowan flies back to Washington to intercede against Australia during Shedden visit

13. Shedden’s visit unsuccessful. No explanation for embargo nor is it lifted

Menzies and his Anti-Communist Programme; Some Reactions

1. Menzies wins general elections 10 December 1949.  Date unknown of his indoctrination into the Venona secret.

2. Shedden’s & ASIO’s briefing of him on Venona would have revealed American concern over spying in Australia.

3. On 14 March 1950 US administration authorises limited technical information to be provided to the British for use in Australia.  Menzies wrongly interprets this as renewal of US confidence in Australia

4. Menzies shocked by Shedden’s report of the detrimental comments about the Chifley government obtained from the British and Americans as follows:-

Comment by Captain Hylant US Naval Intelligence circa March 1949:-

The individual primarily responsible for the unsatisfactory conditions now existing is Dr Evatt who holds the positions of Deputy Prime Minister, Minister of External Affairs and Attorney-General, is not a communist but being a complete political opportunist he hews to the Communist party line whenever it suits his political interests. U.S. Ambassador to Australia Cowan has officially characterized him ‘completely unscrupulous and untrustworthy egomaniac’.

Shedden’s report of comments from MI5 head, Sir Percy Sillitoe:-

Sir Percy said on 26 August [1949], when he had discussed the Australian security position with SNACC Committee [State, Navy, Army and Air force Coordinating Committee] in Washington some time ago, Rear Admiral Inglis (whom he described as an Anglophobe) and some of the other members said that there could be no settlement while Australian Labour [sic] government was in power as they considered the members pro-communist, and they looked to its replacement at the next election.

Shedden’s report of comment made by Sir Archibald Rowlands, Permanent Under-Secretary of the Ministry of Supply 18 July 1949:-

Sir Archibald Rowlands stated, in regard to the restrictions of classified information, that the main difficulty from the American viewpoint was Dr Evatt and Australian External Affairs Policy, which was so often in alignment with Soviet policy.  The Americans feared, in view of this, that there was contact somewhere with the Russians and that classified information might be disclosed to them.

 5. Venona confirmed for Menzies the harmful nature of the Evatt foreign policy. He would have pondered on the means of dislodging him from political office.

6. Menzies’ warnings about the infiltration of government offices by communists were corroborated by the Venona secrets.

7. Menzies demonstrated to the American administration through this banning legislation that the new government would be supportive of American policy and firmly anti-communist.

8. Menzies would have long contemplated exposing and prosecuting the Venona spies.

9. The banning of the CPA was among the early legislative measures of Menzies. Australia’s anti-communist credentials demonstrated by quick enrolment in the Korean War in June 1950. The refusal of the Americans to allow the Venona secret to be exposed would have long frustrated Menzies in finding the means to punish the spies and undermine Dr Evatt’s career. The Petrov affair presented him with that opportunity.