1 00:00:15,140 --> 00:00:16,460 (BIRD SQUAWKS) 2 00:00:21,420 --> 00:00:23,380 REPORTER: On a crisp Canberra day, 3 00:00:23,380 --> 00:00:23,620 two senior REPORTER: On a crisp Canberra day, 4 00:00:23,620 --> 00:00:26,220 two senior American intelligence officials 5 00:00:26,220 --> 00:00:26,460 two senior arrive in the Australian capital 6 00:00:26,460 --> 00:00:28,340 arrive in the Australian capital 7 00:00:28,340 --> 00:00:30,740 on a top-secret mission. 8 00:00:36,060 --> 00:00:42,380 They're here to break some shocking news to Australia's spy agency, ASIO. 9 00:00:44,020 --> 00:00:47,140 JOHN BLAXLAND: This was a grave national-security breach... 10 00:00:48,260 --> 00:00:50,500 ..the extent of which is hard to fathom. 11 00:00:50,500 --> 00:00:50,740 ..the extent of which (INDISTINCT CHATTER) 12 00:00:50,740 --> 00:00:52,060 (INDISTINCT CHATTER) 13 00:00:52,060 --> 00:00:57,140 The pair from the CIA and the FBI are ushered in to ASIO headquarters 14 00:00:57,140 --> 00:01:01,060 to brief the acting director-general alone. 15 00:01:01,060 --> 00:01:03,940 No-one else is allowed in the room. 16 00:01:03,940 --> 00:01:06,340 ASIO has been warned for years 17 00:01:06,340 --> 00:01:12,140 that it's been penetrated by Russia's feared spy agency, the KGB. 18 00:01:12,140 --> 00:01:15,020 But repeated inquiries have found nothing. 19 00:01:15,980 --> 00:01:19,980 Now the Americans deliver a bombshell 20 00:01:19,980 --> 00:01:20,220 Now the Americans provided by a KGB insider. 21 00:01:20,220 --> 00:01:23,500 provided by a KGB insider. 22 00:01:23,500 --> 00:01:26,220 "Oh, we've got a spy inside ASIO." 23 00:01:26,220 --> 00:01:28,420 I mean, it was kind of like, "Wow!" 24 00:01:30,100 --> 00:01:33,780 Information sourced from Russian KGB defectors 25 00:01:33,780 --> 00:01:34,020 Information sourced triggers the most extensive mole hunt 26 00:01:34,020 --> 00:01:36,260 triggers the most extensive mole hunt 27 00:01:36,260 --> 00:01:39,300 in the history of Australia's intelligence services. 28 00:01:40,660 --> 00:01:43,140 NEIL FERGUS: Red alarm bells are going everywhere. 29 00:01:43,140 --> 00:01:43,380 NEIL FERGUS: Red alarm bells This was a critical asset, 30 00:01:43,380 --> 00:01:45,140 This was a critical asset, 31 00:01:45,140 --> 00:01:45,380 and I think when people understand This was a critical asset, 32 00:01:45,380 --> 00:01:49,260 and I think when people understand just how critical 33 00:01:49,260 --> 00:01:49,500 and I think when people understand it will shock many. 34 00:01:49,500 --> 00:01:50,780 it will shock many. 35 00:01:53,180 --> 00:01:55,380 What those investigations find 36 00:01:55,380 --> 00:01:58,140 has been kept secret for 30 years, 37 00:01:58,140 --> 00:01:59,900 until now. 38 00:02:00,860 --> 00:02:02,340 What was your reaction 39 00:02:02,340 --> 00:02:02,580 when you learned that there was What was your reaction 40 00:02:02,580 --> 00:02:05,460 when you learned that there was a traitor in your office 41 00:02:05,460 --> 00:02:05,700 when you learned that there was in the team that you worked on? 42 00:02:05,700 --> 00:02:07,340 in the team that you worked on? 43 00:02:07,340 --> 00:02:08,940 Hate. 44 00:02:08,940 --> 00:02:10,460 Utter frustration 45 00:02:10,460 --> 00:02:10,700 at realising Utter frustration 46 00:02:10,700 --> 00:02:13,860 at realising that the best years of my life 47 00:02:13,860 --> 00:02:14,100 at realising were spent working for an opponent. 48 00:02:14,100 --> 00:02:16,700 were spent working for an opponent. 49 00:02:16,700 --> 00:02:19,940 Sadness for Australia 50 00:02:19,940 --> 00:02:22,420 and for this service that I worked for. 51 00:02:24,020 --> 00:02:28,300 Now Four Corners reveals the identity of the mole 52 00:02:28,300 --> 00:02:31,220 and the full extent of his betrayal 53 00:02:31,220 --> 00:02:35,220 in Australia's greatest untold spy story. 54 00:02:50,140 --> 00:02:53,060 It's autumn 1977. 55 00:02:53,060 --> 00:02:57,220 An early chill is beginning to creep over the Australian capital... 56 00:02:59,500 --> 00:03:02,980 ..and a wintry pall hangs over international affairs. 57 00:03:02,980 --> 00:03:05,140 ARCHIVE REPORTER: The Americans are not completely powerless 58 00:03:05,140 --> 00:03:06,740 to keep an eye on the Kremlin's moves. 59 00:03:06,740 --> 00:03:08,740 ARCHIVE REPORTER: The question of whether Uncle Sam 60 00:03:08,740 --> 00:03:09,820 can trust them to abide... 61 00:03:09,820 --> 00:03:12,380 ARCHIVE REPORTER: Critics insist that the Soviets have the desire 62 00:03:12,380 --> 00:03:15,220 to circumvent halting the spread of nuclear weapons. 63 00:03:20,420 --> 00:03:24,700 NEIL FERGUS: It was a very sombre, very serious time 64 00:03:24,700 --> 00:03:30,580 because the Cold War was really at its apogee, at its absolute peak. 65 00:03:30,580 --> 00:03:30,820 So, we had no doubt whatsoever because the Cold War was really at its apogee, at its absolute peak. 66 00:03:30,820 --> 00:03:32,380 So, we had no doubt whatsoever 67 00:03:32,380 --> 00:03:34,940 that, in terms of where Australia sat... 68 00:03:35,900 --> 00:03:39,500 ..in the global geopolitical situation, 69 00:03:39,500 --> 00:03:44,180 we were, in a way, fighting to preserve democracy. 70 00:03:45,140 --> 00:03:47,140 It was high stakes, 71 00:03:47,140 --> 00:03:49,540 and people got hurt. 72 00:03:49,540 --> 00:03:51,740 Every action had consequences. 73 00:03:51,740 --> 00:03:55,300 Life or death? Life or death in some cases. 74 00:03:58,420 --> 00:04:00,020 DAN MULVENNA: My own service 75 00:04:00,020 --> 00:04:04,980 was in what I would call an intelligence battle with the KGB 76 00:04:04,980 --> 00:04:05,220 was in what I would call at that point in time. 77 00:04:05,220 --> 00:04:07,020 at that point in time. 78 00:04:07,020 --> 00:04:07,260 In Australia it was the same thing as we were getting up to in Canada. at that point in time. 79 00:04:07,260 --> 00:04:09,900 In Australia it was the same thing as we were getting up to in Canada. 80 00:04:09,900 --> 00:04:13,900 They were trying to first of all penetrate the intelligence service. 81 00:04:13,900 --> 00:04:14,180 They were trying to first of all penetrate the intelligence service. If you can penetrate the counter-intelligence component 82 00:04:14,180 --> 00:04:18,900 If you can penetrate the counter-intelligence component 83 00:04:18,900 --> 00:04:19,140 If you can penetrate of an adversary service, 84 00:04:19,140 --> 00:04:20,700 of an adversary service, 85 00:04:20,700 --> 00:04:22,020 you can control them. 86 00:04:23,940 --> 00:04:26,140 Australia is seen by the Soviets 87 00:04:26,140 --> 00:04:28,140 as a back door into the secrets 88 00:04:28,140 --> 00:04:28,380 shared by the Five Eyes as a back door into the secrets 89 00:04:28,380 --> 00:04:31,300 shared by the Five Eyes intelligence partnership 90 00:04:31,300 --> 00:04:34,660 with the US, the UK, Canada and New Zealand. 91 00:04:37,980 --> 00:04:41,300 What secrets did we have that the KGB wanted at the time? 92 00:04:41,300 --> 00:04:41,580 Quintessentially, our access to American secrets. What secrets did we have that the KGB wanted at the time? 93 00:04:41,580 --> 00:04:45,100 Quintessentially, our access to American secrets. 94 00:04:45,100 --> 00:04:45,340 Quintessentially, our access to American secrets. Pine Gap and Nurrungar, 95 00:04:45,340 --> 00:04:47,020 Pine Gap and Nurrungar, 96 00:04:47,020 --> 00:04:52,660 they were crucial to our ability to warn America of a nuclear strike. 97 00:04:52,660 --> 00:04:57,020 Pine Gap was the most powerful American intelligence facility 98 00:04:57,020 --> 00:04:59,460 outside of the United States. 99 00:04:59,460 --> 00:05:02,220 There was the fact we would receive from the CIA 100 00:05:02,220 --> 00:05:05,820 the CIA's top-secret code-word assessments, 101 00:05:05,820 --> 00:05:06,060 the CIA's top-secret which I read once a year, 102 00:05:06,060 --> 00:05:07,620 which I read once a year, 103 00:05:07,620 --> 00:05:10,460 Soviet nuclear-threat capabilities. 104 00:05:10,460 --> 00:05:13,780 There was plenty of potentially rich pickings 105 00:05:13,780 --> 00:05:14,020 There was plenty for an active Soviet embassy. 106 00:05:14,020 --> 00:05:15,420 for an active Soviet embassy. 107 00:05:15,420 --> 00:05:21,260 And, by hell, were they active in the late '70s through the 1980s. 108 00:05:24,700 --> 00:05:26,940 The Soviet embassy in Canberra 109 00:05:26,940 --> 00:05:32,700 is bristling with KGB and military intelligence spies. 110 00:05:34,180 --> 00:05:36,020 JOHN BLAXLAND: The overwhelming purpose 111 00:05:36,020 --> 00:05:36,260 JOHN BLAXLAND: of the Soviet embassy in Canberra 112 00:05:36,260 --> 00:05:39,180 of the Soviet embassy in Canberra 113 00:05:39,180 --> 00:05:39,380 and in Australia, of the Soviet embassy in Canberra 114 00:05:39,380 --> 00:05:40,660 and in Australia, 115 00:05:40,660 --> 00:05:43,020 its diplomatic presence in Australia, 116 00:05:43,020 --> 00:05:45,060 was about intelligence. 117 00:05:46,660 --> 00:05:48,340 Inside the embassy, 118 00:05:48,340 --> 00:05:51,820 the KGB station chief, Gerontiy Lazovik, 119 00:05:51,820 --> 00:05:52,060 the KGB station chief, is about to strike gold. Gerontiy Lazovik, 120 00:05:52,060 --> 00:05:54,340 is about to strike gold. 121 00:05:54,340 --> 00:05:56,860 In his daily mail delivery 122 00:05:56,860 --> 00:05:58,940 he finds an anonymous letter 123 00:05:58,940 --> 00:06:01,140 addressed personally to him 124 00:06:01,140 --> 00:06:03,340 offering classified intelligence 125 00:06:03,340 --> 00:06:05,220 in exchange for money, 126 00:06:05,220 --> 00:06:09,380 to be paid into a post office box in Canberra. 127 00:06:10,380 --> 00:06:13,940 DAN MULVENNA: So, the ASIO mole 128 00:06:13,940 --> 00:06:18,860 wrote a letter addressed to Lazovik. 129 00:06:18,860 --> 00:06:22,220 He writes it directly to Lazovik. 130 00:06:22,220 --> 00:06:25,020 And he includes in this letter 131 00:06:25,020 --> 00:06:32,660 a sample of the kind of information that he's able to provide. 132 00:06:33,620 --> 00:06:36,700 So, he's put in there 133 00:06:36,700 --> 00:06:39,780 something that is going to... 134 00:06:39,780 --> 00:06:41,780 ..you know, interest them, 135 00:06:41,780 --> 00:06:43,660 and he's saying it's for money. 136 00:06:45,140 --> 00:06:47,020 Lazovik is stunned. 137 00:06:47,020 --> 00:06:51,820 An approach like this is too critical for him to handle alone. 138 00:06:51,820 --> 00:06:53,700 He needs instructions from Moscow. 139 00:06:53,700 --> 00:06:58,580 DAN MULVENNA: So, Lazovik does what any officer should do - 140 00:06:58,580 --> 00:07:03,860 he sends the actual documents to Moscow, 141 00:07:03,860 --> 00:07:04,100 he sends the actual documents and they end up in Directorate K, 142 00:07:04,100 --> 00:07:06,380 and they end up in Directorate K, 143 00:07:06,380 --> 00:07:06,620 which handles so-called - and they end up in Directorate K, 144 00:07:06,620 --> 00:07:11,100 which handles so-called - and I use a KGB term of art here - 145 00:07:11,100 --> 00:07:11,340 which handles so-called - 'precious agents'. 146 00:07:11,340 --> 00:07:12,700 'precious agents'. 147 00:07:12,700 --> 00:07:19,020 You know, really important agents will be handled by Directorate K. 148 00:07:19,020 --> 00:07:24,140 Clearly, this individual, to them, is an important person. 149 00:07:24,140 --> 00:07:26,420 Obviously, he's in ASIO, 150 00:07:26,420 --> 00:07:28,300 and, obviously, he has access 151 00:07:28,300 --> 00:07:33,780 to top-secret SCI material from Five Eyes. 152 00:07:37,140 --> 00:07:38,660 In Moscow 153 00:07:38,660 --> 00:07:40,420 the package sent by Lazovik 154 00:07:40,420 --> 00:07:45,660 lands on the desk of the infamous KGB spymaster Oleg Kalugin, 155 00:07:45,660 --> 00:07:45,900 who runs Directorate K. KGB spymaster Oleg Kalugin, 156 00:07:45,900 --> 00:07:48,220 who runs Directorate K. 157 00:07:48,220 --> 00:07:48,460 who runs Directorate K. it's a trap, 158 00:07:48,460 --> 00:07:51,820 Kalugin initially suspects it's a trap, 159 00:07:51,820 --> 00:07:52,060 as he told Four Corners in 2004. it's a trap, 160 00:07:52,060 --> 00:07:54,420 as he told Four Corners in 2004. 161 00:07:55,380 --> 00:07:58,420 OLEG KALUGIN: Well, initially we had, 162 00:07:58,420 --> 00:07:58,660 as it happens usually, OLEG KALUGIN: Well, initially we had, 163 00:07:58,660 --> 00:08:00,500 as it happens usually, 164 00:08:00,500 --> 00:08:05,540 some suspicions whether there was a plant or double agent, 165 00:08:05,540 --> 00:08:05,820 some suspicions whether there was a plant or double agent, someone who would get us involved in a major scandal. 166 00:08:05,820 --> 00:08:10,780 someone who would get us involved in a major scandal. 167 00:08:11,740 --> 00:08:16,740 Kalugin needs to verify that the top-secret material is authentic, 168 00:08:16,740 --> 00:08:17,020 so, he takes it to the notorious British defector Kim Philby, Kalugin needs to verify that the top-secret material is authentic, 169 00:08:17,020 --> 00:08:21,380 so, he takes it to the notorious British defector Kim Philby, 170 00:08:21,380 --> 00:08:21,620 a member of the Cambridge spy ring British defector Kim Philby, 171 00:08:21,620 --> 00:08:23,860 a member of the Cambridge spy ring 172 00:08:23,860 --> 00:08:26,860 who fled to Moscow in 1963. 173 00:08:28,300 --> 00:08:32,300 OLEG KALUGIN: We deleted all references to Australia, 174 00:08:32,300 --> 00:08:34,860 and I showed this document to Kim Philby 175 00:08:34,860 --> 00:08:38,180 and asked if this document was genuine. 176 00:08:38,180 --> 00:08:40,740 To my amazement, he said, 177 00:08:40,740 --> 00:08:43,500 "It's genuine and it comes from Australia." 178 00:08:44,980 --> 00:08:46,980 At KGB headquarters 179 00:08:46,980 --> 00:08:48,620 the spymasters are jubilant. 180 00:08:48,620 --> 00:08:48,860 The Soviets now have a mole inside a Five Eyes intelligence service. the spymasters are jubilant. 181 00:08:48,860 --> 00:08:54,340 The Soviets now have a mole inside a Five Eyes intelligence service. 182 00:08:55,300 --> 00:08:56,940 For at least two years 183 00:08:56,940 --> 00:08:57,180 the ASIO traitor For at least two years 184 00:08:57,180 --> 00:09:00,900 the ASIO traitor will be the Russians' only insider 185 00:09:00,900 --> 00:09:04,900 giving them access to American and British secrets. 186 00:09:04,900 --> 00:09:05,140 giving them access Once we penetrate ASIO, 187 00:09:05,140 --> 00:09:07,380 Once we penetrate ASIO, 188 00:09:07,380 --> 00:09:10,260 we have actually some penetration 189 00:09:10,260 --> 00:09:10,500 and sometimes we have actually some penetration 190 00:09:10,500 --> 00:09:12,740 and sometimes very deep penetration 191 00:09:12,740 --> 00:09:12,980 and sometimes of the CIA or the FBI 192 00:09:12,980 --> 00:09:15,300 of the CIA or the FBI 193 00:09:15,300 --> 00:09:17,860 and the British MI5 and MI6. 194 00:09:17,860 --> 00:09:20,060 That's precisely what happened. 195 00:09:21,660 --> 00:09:23,900 NEIL FERGUS: This was a critical asset, 196 00:09:23,900 --> 00:09:28,340 and I think when people understand just how critical 197 00:09:28,340 --> 00:09:28,580 and I think when people understand it will shock many. 198 00:09:28,580 --> 00:09:30,140 it will shock many. 199 00:09:30,140 --> 00:09:32,420 How senior was this mole? 200 00:09:32,420 --> 00:09:39,980 He was the supervisor of the espionage unit in Sydney. 201 00:09:39,980 --> 00:09:40,220 He was the supervisor So, he had access to... 202 00:09:40,220 --> 00:09:42,980 So, he had access to... 203 00:09:42,980 --> 00:09:47,180 ..was actually running the operations 204 00:09:47,180 --> 00:09:49,420 against the KGB and satellite desk. 205 00:09:49,420 --> 00:09:50,820 So, how significant was it 206 00:09:50,820 --> 00:09:55,340 for the KGB to have secured the services of someone in this position? 207 00:09:56,540 --> 00:09:58,060 Very significant. 208 00:09:59,020 --> 00:10:02,500 Former Canadian intelligence officer Dan Mulvenna 209 00:10:02,500 --> 00:10:05,740 has spent decades working with Western spy agencies 210 00:10:05,740 --> 00:10:07,020 around the world. 211 00:10:07,980 --> 00:10:11,500 His friends and contacts include major KGB players, 212 00:10:11,500 --> 00:10:14,780 like the former spymaster General Kalugin 213 00:10:14,780 --> 00:10:18,140 and the famous KGB colonel Oleg Gordievsky, 214 00:10:18,140 --> 00:10:23,300 who spied for Britain's MI6 for years before defecting to the West. 215 00:10:24,260 --> 00:10:28,580 Dan Mulvenna has investigated the activities of the ASIO mole 216 00:10:28,580 --> 00:10:30,060 for a forthcoming book. 217 00:10:31,020 --> 00:10:33,260 DAN MULVENNA: Gordievsky once told me 218 00:10:33,260 --> 00:10:37,860 that he was in Moscow in his department, 219 00:10:37,860 --> 00:10:40,780 a part of which was Australia, 220 00:10:40,780 --> 00:10:42,340 and he went into the department one day 221 00:10:42,340 --> 00:10:45,740 and he saw Kalugin coming into the department from Directorate K 222 00:10:45,740 --> 00:10:45,980 and he saw Kalugin coming into and meeting with his boss 223 00:10:45,980 --> 00:10:47,500 and meeting with his boss 224 00:10:47,500 --> 00:10:47,740 and apparently and meeting with his boss 225 00:10:47,740 --> 00:10:49,980 and apparently coming in a couple of times. 226 00:10:49,980 --> 00:10:56,780 And he realised immediately, "Well, Kalugin from Directorate K's here. 227 00:10:56,780 --> 00:10:59,420 "These are the guys that run all the penetrations 228 00:10:59,420 --> 00:10:59,660 "These are the guys "of the adversary services. 229 00:10:59,660 --> 00:11:01,620 "of the adversary services. 230 00:11:02,580 --> 00:11:04,820 "We must have a penetration of ASIO." 231 00:11:04,820 --> 00:11:08,900 And then there was kind of euphoria inside the department - 232 00:11:08,900 --> 00:11:09,140 And then there was kind of euphoria "Oh, we've got a spy inside ASIO." 233 00:11:09,140 --> 00:11:12,060 "Oh, we've got a spy inside ASIO." 234 00:11:12,060 --> 00:11:14,020 I mean, it was kind of like, "Wow!" 235 00:11:14,020 --> 00:11:18,220 The work being done by Dan Mulvenna is breathtaking. 236 00:11:18,220 --> 00:11:22,140 Neil Fergus is an international security expert 237 00:11:22,140 --> 00:11:26,220 and highly respected advisor to Western intelligence agencies, 238 00:11:26,220 --> 00:11:29,100 who's worked closely with Dan Mulvenna. 239 00:11:29,100 --> 00:11:32,060 He has painstakingly, over many years, 240 00:11:32,060 --> 00:11:38,300 spoken to some of the most senior Western counter-intelligence heads. 241 00:11:38,300 --> 00:11:38,540 spoken to some of the most senior He speaks to them regularly. 242 00:11:38,540 --> 00:11:39,820 He speaks to them regularly. 243 00:11:39,820 --> 00:11:40,060 He's speaking He speaks to them regularly. 244 00:11:40,060 --> 00:11:44,580 He's speaking to a number of former KGB officers. 245 00:11:44,580 --> 00:11:51,780 He has had access, better access than any other person I know of, 246 00:11:51,780 --> 00:11:52,020 He has had access, better access to living Russian defectors. 247 00:11:52,020 --> 00:11:53,860 to living Russian defectors. 248 00:11:56,500 --> 00:12:00,580 The Soviets give their new mole a codename - Mira, 249 00:12:00,580 --> 00:12:00,820 which means 'peace' in Russian. a codename - Mira, 250 00:12:00,820 --> 00:12:03,060 which means 'peace' in Russian. 251 00:12:03,900 --> 00:12:05,660 The mole has top-secret 252 00:12:05,660 --> 00:12:07,100 security clearance, 253 00:12:07,100 --> 00:12:08,780 which gives him access to many 254 00:12:08,780 --> 00:12:11,740 of Australia's most prized secrets. 255 00:12:11,740 --> 00:12:15,620 He works out of ASIO's New South Wales office, 256 00:12:15,620 --> 00:12:18,620 located in this heritage-listed building at Kirribilli 257 00:12:18,620 --> 00:12:18,860 located in this heritage-listed on the shores of Sydney Harbour. 258 00:12:18,860 --> 00:12:21,100 on the shores of Sydney Harbour. 259 00:12:22,060 --> 00:12:26,660 His colleagues here suspect nothing. 260 00:12:26,660 --> 00:12:26,900 You worked with the man, His colleagues here suspect nothing. 261 00:12:26,900 --> 00:12:28,460 You worked with the man, he was your boss. 262 00:12:28,460 --> 00:12:30,980 Can you tell me about him? What was he like? 263 00:12:30,980 --> 00:12:34,500 The word that springs to mind is 'nondescript'. 264 00:12:34,500 --> 00:12:34,780 The word that springs to mind is 'nondescript'. He was a supervisor, so, he was running a team, 265 00:12:34,780 --> 00:12:38,420 He was a supervisor, so, he was running a team, 266 00:12:38,420 --> 00:12:38,660 He was a supervisor, and I was part of that team. 267 00:12:38,660 --> 00:12:40,900 and I was part of that team. 268 00:12:40,900 --> 00:12:44,100 But somehow, somewhere along the line, something happened, 269 00:12:44,100 --> 00:12:46,700 something happened to him, something really big, 270 00:12:46,700 --> 00:12:46,940 something happened to him, or something snapped. 271 00:12:46,940 --> 00:12:48,700 or something snapped. 272 00:12:49,660 --> 00:12:53,740 And, you know, we are trained to pick these things up, 273 00:12:53,740 --> 00:12:53,980 And, you know, we are trained and this guy flew under the radar. 274 00:12:53,980 --> 00:12:58,940 and this guy flew under the radar. 275 00:12:58,940 --> 00:13:01,700 He wouldn't be the last person I'd suspect, 276 00:13:01,700 --> 00:13:01,940 He wouldn't be the last person but he wouldn't be the first. 277 00:13:01,940 --> 00:13:04,180 but he wouldn't be the first. 278 00:13:10,420 --> 00:13:16,740 The KGB's man in Canberra, Lazovik, returns to Moscow in July 1977. 279 00:13:18,220 --> 00:13:21,300 He'll be appointed to the rank of general 280 00:13:21,300 --> 00:13:24,980 and given one of the Soviet Union's highest awards. 281 00:13:26,380 --> 00:13:30,300 So, Lazovik gets recalled 282 00:13:30,300 --> 00:13:34,820 and goes back to Moscow as something of a hero 283 00:13:34,820 --> 00:13:41,700 and he gets an award of the Red Star, which is... 284 00:13:41,700 --> 00:13:46,940 Traditionally, if the order of the Red Star is given to someone, 285 00:13:46,940 --> 00:13:47,180 Traditionally, if the order it was a prestigious order 286 00:13:47,180 --> 00:13:48,940 it was a prestigious order 287 00:13:48,940 --> 00:13:51,980 given to somebody who's made a significant recruitment. 288 00:13:55,860 --> 00:14:00,140 While ASIO has no idea it now harbours a traitor, 289 00:14:00,140 --> 00:14:04,620 the new mole proves difficult to manage for the KGB. 290 00:14:04,620 --> 00:14:10,620 He steadfastly refuses to reveal his identity to his new handlers. 291 00:14:10,620 --> 00:14:13,900 DAN MULVENNA: Of course, the mole, like most moles, 292 00:14:13,900 --> 00:14:17,060 would prefer to remain totally anonymous. 293 00:14:17,060 --> 00:14:21,220 The KGB would prefer to know who you are and what your motivation is, 294 00:14:21,220 --> 00:14:26,100 this is from many conversations with General Kalugin. 295 00:14:26,100 --> 00:14:28,860 They were sending messages to Canberra saying, 296 00:14:28,860 --> 00:14:32,460 "Look, we need to take control of this operation." 297 00:14:35,540 --> 00:14:37,780 NEIL FERGUS: We're talking about a mole 298 00:14:37,780 --> 00:14:41,100 who was an experienced operations person. 299 00:14:41,100 --> 00:14:41,340 who was an experienced This person was highly skilled. 300 00:14:41,340 --> 00:14:45,260 This person was highly skilled. 301 00:14:45,260 --> 00:14:50,460 Initially, this person was running the KGB, 302 00:14:50,460 --> 00:14:53,980 and General Kalugin said that was unacceptable, 303 00:14:53,980 --> 00:14:55,740 and gave orders, direct orders - 304 00:14:55,740 --> 00:14:59,060 "We need to determine the identity of the person 305 00:14:59,060 --> 00:15:02,300 "who was seeking to maintain anonymity, 306 00:15:02,300 --> 00:15:04,740 "and once we've identified the person 307 00:15:04,740 --> 00:15:06,620 "we take control of the case. 308 00:15:06,620 --> 00:15:12,260 "The KGB runs agents, agents don't run the KGB." 309 00:15:13,420 --> 00:15:15,620 General Kalugin's words. 310 00:15:19,660 --> 00:15:23,140 The KGB assigns a highly trained agent runner 311 00:15:23,140 --> 00:15:26,540 to manage its precious new asset in Australia. 312 00:15:28,780 --> 00:15:31,900 Yuri Shmatkov takes over handling the mole 313 00:15:31,900 --> 00:15:36,060 and reports straight to Directorate K in Moscow. 314 00:15:36,060 --> 00:15:38,380 DAN MULVENNA: We do know that Shmatkov, 315 00:15:38,380 --> 00:15:38,620 DAN MULVENNA: We do know that Shmatkov, who confided to someone that I know, 316 00:15:38,620 --> 00:15:40,900 who confided to someone that I know, 317 00:15:40,900 --> 00:15:44,580 that he had some difficulties running the mole, 318 00:15:44,580 --> 00:15:47,860 that there was some disagreements in who's in charge. (CHUCKLES) 319 00:15:47,860 --> 00:15:52,780 The mole was a...for all intents and purposes, from what I understand, 320 00:15:52,780 --> 00:15:53,020 The mole was a...for all intents and was a take-charge kind of a guy. 321 00:15:53,020 --> 00:15:55,380 was a take-charge kind of a guy. 322 00:15:55,380 --> 00:15:55,620 He was confident, he knew what he was a take-charge kind of a guy. 323 00:15:55,620 --> 00:15:58,700 He was confident, he knew what he was doing, this was his territory. 324 00:16:00,940 --> 00:16:04,980 So, the Soviets mount a high-risk surveillance operation 325 00:16:04,980 --> 00:16:05,220 targeting their own agent. a high-risk surveillance operation 326 00:16:05,220 --> 00:16:07,460 targeting their own agent. 327 00:16:08,380 --> 00:16:10,620 It's a battle of spy craft. 328 00:16:10,620 --> 00:16:15,500 The KGB successfully tracks the mole and establishes his identity. 329 00:16:15,500 --> 00:16:15,740 The KGB successfully tracks the mole (CAMERA SHUTTERS CLICK) 330 00:16:15,740 --> 00:16:16,700 (CAMERA SHUTTERS CLICK) 331 00:16:16,700 --> 00:16:19,540 Finally Moscow knows who the mole is 332 00:16:19,540 --> 00:16:24,220 and that he's head of espionage in New South Wales. 333 00:16:24,220 --> 00:16:24,460 and that he's head of espionage OLEG KALUGIN: He had good access. 334 00:16:24,460 --> 00:16:27,660 OLEG KALUGIN: He had good access. 335 00:16:27,660 --> 00:16:27,900 Everything about Australia, the United States, OLEG KALUGIN: He had good access. 336 00:16:27,900 --> 00:16:31,220 Everything about Australia, the United States, 337 00:16:31,220 --> 00:16:33,740 mutual cooperation, political plans, 338 00:16:33,740 --> 00:16:36,420 agents planted in the Soviet embassy, 339 00:16:36,420 --> 00:16:36,700 agents planted in the Soviet embassy, surveillance squads, I mean, everything. 340 00:16:36,700 --> 00:16:39,020 surveillance squads, I mean, everything. 341 00:16:41,180 --> 00:16:45,660 It's taken the Soviets months to identify their mole. 342 00:16:46,780 --> 00:16:49,340 'Mira' is 54 years old. 343 00:16:49,340 --> 00:16:53,140 He was an RAAF pilot during World War II 344 00:16:53,140 --> 00:16:55,860 who joined ASIO soon after it was established 345 00:16:55,860 --> 00:16:56,100 along with many other ex-servicemen. soon after it was established 346 00:16:56,100 --> 00:16:58,700 along with many other ex-servicemen. 347 00:16:58,700 --> 00:17:01,220 He is one of the earliest recruits, 348 00:17:01,220 --> 00:17:07,540 the celebrated first generation known in the service as 'The Old And Bold'. 349 00:17:07,540 --> 00:17:13,020 His treachery comes in the twilight of a 30-plus-year career. 350 00:17:14,580 --> 00:17:17,460 NEIL FERGUS: At this particular point in time, 351 00:17:17,460 --> 00:17:17,740 NEIL FERGUS: At this particular point in time, when this ASIO mole volunteered his services and betrayed his country, 352 00:17:17,740 --> 00:17:22,620 when this ASIO mole volunteered his services and betrayed his country, 353 00:17:22,620 --> 00:17:25,500 he was of critical importance. 354 00:17:25,500 --> 00:17:25,740 he was of critical importance. We know from General Kalugin's own account 355 00:17:25,740 --> 00:17:29,020 We know from General Kalugin's own account 356 00:17:29,020 --> 00:17:33,060 that he was the first mole recruited in ASIO, 357 00:17:33,060 --> 00:17:37,220 so, they were deliriously happy about THAT in Directorate K. 358 00:17:44,060 --> 00:17:46,340 In his office at the Soviet embassy, 359 00:17:46,340 --> 00:17:49,340 Shmatkov, the mole's KGB handler, 360 00:17:49,340 --> 00:17:54,580 devises an elaborate routine for the exchange of documents and cash 361 00:17:54,580 --> 00:17:57,220 using so-called 'dead letter drops'. 362 00:17:58,180 --> 00:18:01,380 Shmatkov smuggles himself from Canberra to Sydney 363 00:18:01,380 --> 00:18:04,820 in a hidden compartment in the boot of an embassy car 364 00:18:04,820 --> 00:18:08,020 before heading to the pre-arranged drop location. 365 00:18:09,900 --> 00:18:13,620 DAN MULVENNA: When they were sure that they weren't being surveilled 366 00:18:13,620 --> 00:18:13,860 DAN MULVENNA: When they were sure Shmatkov would roll out of the car 367 00:18:13,860 --> 00:18:15,820 Shmatkov would roll out of the car 368 00:18:15,820 --> 00:18:16,060 and then he'd just go to Shmatkov would roll out of the car 369 00:18:16,060 --> 00:18:19,540 and then he'd just go to shopping centres or movie theatres 370 00:18:19,540 --> 00:18:19,780 and then he'd just go to until the evening. 371 00:18:19,780 --> 00:18:21,220 until the evening. 372 00:18:21,220 --> 00:18:21,420 And most of the dead-drop materials until the evening. 373 00:18:21,420 --> 00:18:24,580 And most of the dead-drop materials 374 00:18:24,580 --> 00:18:27,900 took place in the evening in parks and in wooded areas. 375 00:18:39,740 --> 00:18:42,340 Sometimes Shmatkov uses diversions 376 00:18:42,340 --> 00:18:45,900 like joining an early morning exercise group at Bondi Beach 377 00:18:45,900 --> 00:18:48,540 with staff from the Soviet consulate. 378 00:18:50,260 --> 00:18:54,540 He then peels off on what's known as a 'dry-cleaning run', 379 00:18:54,540 --> 00:18:56,780 spending the day on buses and trains 380 00:18:56,780 --> 00:18:59,500 to shake any possible ASIO surveillance. 381 00:19:00,780 --> 00:19:02,340 As night falls, 382 00:19:02,340 --> 00:19:06,220 the Russian heads to the dead-drop zone in Centennial Park 383 00:19:06,220 --> 00:19:09,300 to collect the latest stash of classified documents 384 00:19:09,300 --> 00:19:12,660 left in an agreed hiding place by the mole. 385 00:19:14,180 --> 00:19:16,620 And what kind of material was he providing? 386 00:19:16,620 --> 00:19:16,860 And what kind of material DAN MULVENNA: As far as we're aware, 387 00:19:16,860 --> 00:19:19,100 DAN MULVENNA: As far as we're aware, 388 00:19:19,100 --> 00:19:22,940 almost anything that could cross his desk that he thought was useful 389 00:19:22,940 --> 00:19:23,180 almost anything that could cross and especially Five Eyes material. 390 00:19:23,180 --> 00:19:25,740 and especially Five Eyes material. 391 00:19:25,740 --> 00:19:27,780 There was no doubt that the Five Eyes material 392 00:19:27,780 --> 00:19:32,100 was of particular significance back in KGB head office. 393 00:19:32,100 --> 00:19:36,180 But also in terms of any operations going on in Australia, 394 00:19:36,180 --> 00:19:43,940 this person had access to the details of basically all cases, 395 00:19:43,940 --> 00:19:44,180 this person had access to all current cases, 396 00:19:44,180 --> 00:19:46,420 all current cases, 397 00:19:46,420 --> 00:19:52,980 all ASIO activity around the Russian residency in Australia. 398 00:19:52,980 --> 00:19:57,540 Everything they're doing is being compromised by the mole. 399 00:20:02,140 --> 00:20:03,660 In Moscow 400 00:20:03,660 --> 00:20:07,380 the secrets the mole is betraying are so highly valued 401 00:20:07,380 --> 00:20:11,940 that the head of the KGB and later head of state, Yuri Andropov, 402 00:20:11,940 --> 00:20:15,020 is given regular updates. 403 00:20:15,020 --> 00:20:18,060 NEIL FERGUS: Andropov was deeply interested, 404 00:20:18,060 --> 00:20:24,220 and this is, of course, not because of all of the Australian material, 405 00:20:24,220 --> 00:20:24,460 and this is, of course, not because which was highly valuable, 406 00:20:24,460 --> 00:20:26,060 which was highly valuable, 407 00:20:26,060 --> 00:20:26,300 but because the mole had access which was highly valuable, 408 00:20:26,300 --> 00:20:30,380 but because the mole had access to Five Eyes material, 409 00:20:30,380 --> 00:20:33,860 and it was a doorway, if you like, or a window, 410 00:20:33,860 --> 00:20:34,100 and it was a doorway, if you like, into what was going on 411 00:20:34,100 --> 00:20:35,620 into what was going on 412 00:20:35,620 --> 00:20:40,140 in the United States and Canada and the United Kingdom. 413 00:20:40,140 --> 00:20:44,140 For a few years this was gold for them. 414 00:20:44,140 --> 00:20:44,380 For a few years Metaphorical gold. 415 00:20:44,380 --> 00:20:46,620 Metaphorical gold. 416 00:20:51,100 --> 00:20:53,300 The cash used to pay the mole 417 00:20:53,300 --> 00:20:56,820 arrives at the Soviet embassy every few weeks from Moscow 418 00:20:56,820 --> 00:20:57,060 arrives at the Soviet embassy in a diplomatic pouch. 419 00:20:57,060 --> 00:20:59,300 in a diplomatic pouch. 420 00:20:59,300 --> 00:21:01,340 It's labelled 'tobacco' 421 00:21:01,340 --> 00:21:05,860 and contains fat wads of Australian 50-dollar bills. 422 00:21:06,740 --> 00:21:11,300 DAN MULVENNA: It was considerable chunks of nice Australian money 423 00:21:11,300 --> 00:21:11,540 DAN MULVENNA: It was considerable and nice blocks of it 424 00:21:11,540 --> 00:21:12,820 and nice blocks of it 425 00:21:12,820 --> 00:21:15,700 and very large amounts too, 426 00:21:15,700 --> 00:21:18,940 about every five or six weeks. 427 00:21:18,940 --> 00:21:21,820 You know, so, that kind of indicates to you 428 00:21:21,820 --> 00:21:27,580 how many times, you know, there might be meetings. 429 00:21:27,580 --> 00:21:31,380 Anywhere maybe from four to five meetings a year 430 00:21:31,380 --> 00:21:32,740 or six meetings a year. 431 00:21:32,740 --> 00:21:36,900 But we do know that there were considerable amounts of material 432 00:21:36,900 --> 00:21:37,140 But we do know that there were was passed in those meets. 433 00:21:37,140 --> 00:21:39,380 was passed in those meets. 434 00:21:39,380 --> 00:21:42,380 How much do you think he was paid over the years? 435 00:21:42,380 --> 00:21:46,740 Don't know, but they were not going to scrimp on this guy. 436 00:21:48,260 --> 00:21:50,620 His colleagues will later be gutted 437 00:21:50,620 --> 00:21:53,620 to realise that the secrets sold by the mole 438 00:21:53,620 --> 00:21:57,460 also include personal details about his workmates 439 00:21:57,460 --> 00:22:02,100 so the Soviets could assess who else might be vulnerable to recruitment. 440 00:22:03,060 --> 00:22:07,220 NEIL FERGUS: There was no question that the mole was providing 441 00:22:07,220 --> 00:22:12,460 all the data that he could on his work colleagues. 442 00:22:13,780 --> 00:22:16,100 Not just who worked in what section, 443 00:22:16,100 --> 00:22:18,580 in what area and was responsible for... 444 00:22:19,540 --> 00:22:22,820 Where did they live? Photos of them. 445 00:22:23,780 --> 00:22:26,060 The details of their family. 446 00:22:26,060 --> 00:22:26,300 Looking for someone who's vulnerable The details of their family. 447 00:22:26,300 --> 00:22:30,900 Looking for someone who's vulnerable one way or another, 448 00:22:30,900 --> 00:22:36,580 whether to be blackmailed or seduced or suborned. 449 00:22:36,580 --> 00:22:36,820 For me to walk into that team whether to be blackmailed or seduced or suborned. 450 00:22:36,820 --> 00:22:41,140 For me to walk into that team 451 00:22:41,140 --> 00:22:44,740 and to have my file in the Kremlin 452 00:22:44,740 --> 00:22:44,940 and to have my file in the Kremlin expanded that far... 453 00:22:44,940 --> 00:22:47,540 expanded that far... 454 00:22:47,540 --> 00:22:49,540 Because that's what this person would've been doing, 455 00:22:49,540 --> 00:22:51,260 they would've been giving chapter and verse 456 00:22:51,260 --> 00:22:55,780 not just on me but on my family, my friends, everything I did, 457 00:22:55,780 --> 00:22:58,740 my vulnerabilities in particular, because I would've been a candidate. 458 00:22:58,740 --> 00:23:01,700 "What's this guy like? Can we recruit him too?" 459 00:23:01,700 --> 00:23:01,940 "What's this guy like? This sort of thing. 460 00:23:01,940 --> 00:23:03,420 This sort of thing. 461 00:23:03,420 --> 00:23:05,060 So, you're sure that the traitor 462 00:23:05,060 --> 00:23:05,300 would've been reporting So, you're sure that the traitor 463 00:23:05,300 --> 00:23:07,820 would've been reporting back to Moscow on his colleagues? 464 00:23:07,820 --> 00:23:08,060 would've been reporting That's what traitors do. 465 00:23:08,060 --> 00:23:10,300 That's what traitors do. 466 00:23:10,300 --> 00:23:13,220 That's what they do. That's why they're paid big bucks. 467 00:23:15,100 --> 00:23:17,340 By the late 1970s 468 00:23:17,340 --> 00:23:19,780 ASIO staff are growing suspicious 469 00:23:19,780 --> 00:23:24,020 that someone on the inside might be working with the Russians. 470 00:23:24,020 --> 00:23:29,420 Operations against Soviet bloc targets in Australia repeatedly fail 471 00:23:29,420 --> 00:23:30,980 for no clear reason. 472 00:23:32,740 --> 00:23:34,220 What they don't know 473 00:23:34,220 --> 00:23:36,420 is that their colleague is giving the Russians 474 00:23:36,420 --> 00:23:38,940 ASIO's surveillance priorities 475 00:23:38,940 --> 00:23:42,900 as well as details of phone taps and operational targets. 476 00:23:43,860 --> 00:23:46,100 MICHAEL BOYLE: We all felt and people were complaining 477 00:23:46,100 --> 00:23:48,020 that operations were going down. 478 00:23:48,020 --> 00:23:48,260 The expectations for a number of them that operations were going down. 479 00:23:48,260 --> 00:23:49,500 The expectations for a number of them 480 00:23:49,500 --> 00:23:49,740 The expectations apparently were quite promising, 481 00:23:49,740 --> 00:23:51,020 apparently were quite promising, 482 00:23:51,020 --> 00:23:53,660 and then they would peter out. 483 00:23:53,660 --> 00:23:53,860 and then they would peter out. Among a number of people 484 00:23:53,860 --> 00:23:55,300 Among a number of people 485 00:23:55,300 --> 00:23:57,540 were feelings they're being compromised in some way, 486 00:23:57,540 --> 00:24:00,580 which meant there could have been a mole in the organisation 487 00:24:00,580 --> 00:24:00,820 which meant there could have been targeting those particular areas. 488 00:24:00,820 --> 00:24:02,660 targeting those particular areas. 489 00:24:04,500 --> 00:24:06,460 In a typical case, 490 00:24:06,460 --> 00:24:12,100 ASIO is bugging the home of a Russian it's identified as a military spy. 491 00:24:13,060 --> 00:24:14,780 Midway through the operation 492 00:24:14,780 --> 00:24:18,700 the target is suddenly relocated to the Soviet embassy compound, 493 00:24:18,700 --> 00:24:21,780 beyond the reach of ASIO's eavesdroppers 494 00:24:21,780 --> 00:24:22,020 beyond the reach as though he's been tipped off. 495 00:24:22,020 --> 00:24:23,940 as though he's been tipped off. 496 00:24:24,900 --> 00:24:28,220 GARY MICHAEL: Very frustrating, very frustrating, 497 00:24:28,220 --> 00:24:31,340 particularly when you think that you've got an operation 498 00:24:31,340 --> 00:24:31,580 particularly when you think which is going to 499 00:24:31,580 --> 00:24:33,820 which is going to 500 00:24:33,820 --> 00:24:35,340 give good pay dirt 501 00:24:35,340 --> 00:24:37,020 and it just turns to dirt. 502 00:24:37,020 --> 00:24:39,060 That becomes very hard. 503 00:24:40,020 --> 00:24:44,420 It was getting to be the norm in the late '70s and into the '80s. 504 00:24:44,420 --> 00:24:47,220 The norm was that the operations were not successful. 505 00:24:47,220 --> 00:24:47,460 The norm was that the operations were not successful. So, there were prolonged periods 506 00:24:47,460 --> 00:24:49,740 So, there were prolonged periods 507 00:24:49,740 --> 00:24:53,820 where key Soviet officers 508 00:24:53,820 --> 00:24:54,060 were going undetected where key Soviet officers 509 00:24:54,060 --> 00:24:59,260 were going undetected and getting away, breaking contact, 510 00:24:59,260 --> 00:25:04,300 you know, essentially getting away from ASIO's surveillance efforts. 511 00:25:07,180 --> 00:25:09,740 The fears that ASIO is penetrated 512 00:25:09,740 --> 00:25:12,500 reach Australia's Five Eyes allies. 513 00:25:12,500 --> 00:25:14,540 The US is so concerned 514 00:25:14,540 --> 00:25:19,620 it begins to restrict the flow of classified intelligence to Australia 515 00:25:19,620 --> 00:25:25,300 and the CIA dispatches a new station chief to Canberra to investigate. 516 00:25:25,300 --> 00:25:29,180 PAUL DIBB: Michael Sednaoui, this man was an operator. 517 00:25:29,180 --> 00:25:29,420 He told me several times PAUL DIBB: Michael Sednaoui, this man was an operator. 518 00:25:29,420 --> 00:25:30,940 He told me several times 519 00:25:30,940 --> 00:25:35,860 his mission was to see if ASIO had been penetrated. 520 00:25:35,860 --> 00:25:36,100 his mission was to see if ASIO had been penetrated. And towards the end of 12 months, 521 00:25:36,100 --> 00:25:38,220 And towards the end of 12 months, 522 00:25:38,220 --> 00:25:39,500 before he had to go home, 523 00:25:39,500 --> 00:25:43,020 he said to me he believed it WAS penetrated 524 00:25:43,020 --> 00:25:43,260 he said to me but he never even intimated a name. 525 00:25:43,260 --> 00:25:46,500 but he never even intimated a name. 526 00:25:46,500 --> 00:25:48,700 (INDISTINCT CHATTER) 527 00:25:48,700 --> 00:25:51,620 Still no-one suspects the ASIO mole. 528 00:25:51,620 --> 00:25:55,220 His behaviour gives nothing away. 529 00:25:55,220 --> 00:25:58,820 He joins his colleagues for Friday night drinks after work 530 00:25:58,820 --> 00:25:59,060 He joins his colleagues at the office bar. 531 00:25:59,060 --> 00:26:01,340 at the office bar. 532 00:26:01,340 --> 00:26:01,580 He's remembered as being affable at the office bar. 533 00:26:01,580 --> 00:26:05,860 He's remembered as being affable and well-liked by his workmates. 534 00:26:05,860 --> 00:26:11,180 But he rarely stays late, saying he has to go home to his wife. 535 00:26:12,660 --> 00:26:16,540 JOHN BLAXLAND: ASIO was a bit of a club back in the day. 536 00:26:16,540 --> 00:26:21,340 You got recruited based on not what you know but who you knew. 537 00:26:21,340 --> 00:26:23,020 (INDISTINCT CHATTER) 538 00:26:23,020 --> 00:26:26,180 So, once you were in, you were good. 539 00:26:26,180 --> 00:26:29,460 There was very little by the way of double-checking or vetting 540 00:26:29,460 --> 00:26:29,700 There was very little by the way or reviewing of security clearances 541 00:26:29,700 --> 00:26:32,620 or reviewing of security clearances 542 00:26:32,620 --> 00:26:34,140 or checking of bank accounts 543 00:26:34,140 --> 00:26:37,700 or checking for any personal factors 544 00:26:37,700 --> 00:26:41,860 that might point to you having lost your morale 545 00:26:41,860 --> 00:26:46,100 or your sense of raison d'etre, your confidence in the cause, 546 00:26:46,100 --> 00:26:49,820 and people would excuse behaviour 547 00:26:49,820 --> 00:26:53,020 because there was for quite a while 548 00:26:53,020 --> 00:26:56,300 a fairly boozy culture in the organisation, 549 00:26:56,300 --> 00:26:59,340 a blokey culture in the organisation, 550 00:26:59,340 --> 00:27:00,700 where everybody knew each other 551 00:27:00,700 --> 00:27:03,580 and everybody kind of gave each other 552 00:27:03,580 --> 00:27:03,820 and everybody a degree of benefit of the doubt. 553 00:27:03,820 --> 00:27:05,780 a degree of benefit of the doubt. 554 00:27:07,700 --> 00:27:13,780 The first concrete lead that ASIO is penetrated comes in mid-1980. 555 00:27:13,780 --> 00:27:17,540 The source is KGB colonel Oleg Gordievsky, 556 00:27:17,540 --> 00:27:21,140 who's been secretly working for Britain's MI6. 557 00:27:21,140 --> 00:27:21,380 Gordievsky is regarded for Britain's MI6. 558 00:27:21,380 --> 00:27:22,820 Gordievsky is regarded 559 00:27:22,820 --> 00:27:23,060 Gordievsky is regarded intelligence out of the Soviet Union 560 00:27:23,060 --> 00:27:26,580 as the most critical source of intelligence out of the Soviet Union 561 00:27:26,580 --> 00:27:26,820 during the Cold War. intelligence out of the Soviet Union 562 00:27:26,820 --> 00:27:28,260 during the Cold War. 563 00:27:33,660 --> 00:27:38,540 DAN MULVENNA: The information that flowed from Gordievsky - 564 00:27:38,540 --> 00:27:41,100 and there were three times that he provided information - 565 00:27:41,100 --> 00:27:41,340 and there were three times he was the jewel in the crown. 566 00:27:41,340 --> 00:27:43,620 he was the jewel in the crown. 567 00:27:46,100 --> 00:27:48,900 Gordievsky tells his British handlers 568 00:27:48,900 --> 00:27:49,140 about the medal given to the former Gordievsky tells his British handlers 569 00:27:49,140 --> 00:27:53,420 about the medal given to the former Canberra station chief Lazovik 570 00:27:53,420 --> 00:27:56,860 for recruiting an Australian intelligence officer. 571 00:27:57,820 --> 00:27:59,780 ASIO launches an investigation, 572 00:27:59,780 --> 00:28:00,020 but, when they go to review ASIO launches an investigation, 573 00:28:00,020 --> 00:28:02,660 but, when they go to review their Lazovik files, 574 00:28:02,660 --> 00:28:02,900 but, when they go to review they're in for a shock. 575 00:28:02,900 --> 00:28:04,540 they're in for a shock. 576 00:28:06,260 --> 00:28:13,260 DAN MULVENNA: Apparently 19 volumes of Lazovik's files in ASIO 577 00:28:13,260 --> 00:28:15,500 had literally disappeared from the registry. 578 00:28:15,500 --> 00:28:21,460 And nobody would come up or could come up, at least publicly, 579 00:28:21,460 --> 00:28:28,100 with an explanation as to why these files had been removed or destroyed 580 00:28:28,100 --> 00:28:33,100 so soon after he'd just gone back home. 581 00:28:33,100 --> 00:28:33,340 This is really unsettling, so soon after he'd just gone back home. 582 00:28:33,340 --> 00:28:35,020 This is really unsettling, 583 00:28:35,020 --> 00:28:36,980 when they go to check the Lazovik files 584 00:28:36,980 --> 00:28:40,340 and whole segments are just not there, 585 00:28:40,340 --> 00:28:40,620 and whole segments are just not there, completely missing and not signed out. 586 00:28:40,620 --> 00:28:43,220 completely missing and not signed out. 587 00:28:43,220 --> 00:28:44,900 So, basically, they've been destroyed 588 00:28:44,900 --> 00:28:48,300 by...you know, in evidently a malevolent manner 589 00:28:48,300 --> 00:28:51,060 by somebody who's got access to the files. 590 00:28:51,060 --> 00:28:54,260 For information to just vaporise like that, 591 00:28:54,260 --> 00:28:56,500 it's outrageous, it's seriously outrageous. 592 00:28:58,300 --> 00:29:02,580 The investigation into the Gordievsky lead goes nowhere. 593 00:29:02,580 --> 00:29:07,780 Inexplicably, ASIO concludes that the mole is not within its own ranks. 594 00:29:08,740 --> 00:29:10,340 JOHN BLAXLAND: So, the problem 595 00:29:10,340 --> 00:29:12,740 was that our principal, national, 596 00:29:12,740 --> 00:29:16,140 counter-espionage, counter-intelligence agency 597 00:29:16,140 --> 00:29:17,380 was dropping the ball 598 00:29:17,380 --> 00:29:20,580 on counter-espionage and counter-intelligence. 599 00:29:20,580 --> 00:29:20,820 on counter-espionage They weren't good at their job. 600 00:29:20,820 --> 00:29:22,740 They weren't good at their job. 601 00:29:22,740 --> 00:29:24,340 The fundamental task 602 00:29:24,340 --> 00:29:24,580 that ASIO had been set up for - The fundamental task 603 00:29:24,580 --> 00:29:28,260 that ASIO had been set up for - as spy catchers - 604 00:29:28,260 --> 00:29:28,500 that ASIO had been set up for - they were failing in. 605 00:29:28,500 --> 00:29:29,980 they were failing in. 606 00:29:31,420 --> 00:29:33,740 After six years of treachery, 607 00:29:33,740 --> 00:29:33,980 After six years of treachery, the end of his career in 1983. 608 00:29:33,980 --> 00:29:37,900 the mole reaches the end of his career in 1983. 609 00:29:37,900 --> 00:29:38,180 the mole reaches the end of his career in 1983. His workmates turn out for a drinks party 610 00:29:38,180 --> 00:29:40,660 His workmates turn out for a drinks party 611 00:29:40,660 --> 00:29:40,900 His workmates at the ASIO office in Sydney. 612 00:29:40,900 --> 00:29:43,140 at the ASIO office in Sydney. 613 00:29:43,140 --> 00:29:44,260 (INDISTINCT CHATTER) 614 00:29:44,260 --> 00:29:44,500 The mole bids farewell (INDISTINCT CHATTER) 615 00:29:44,500 --> 00:29:46,740 The mole bids farewell to his colleagues 616 00:29:46,740 --> 00:29:49,940 after more than three decades in the service. 617 00:29:51,460 --> 00:29:54,460 Cheers, everyone. Thank you so much. 618 00:29:54,460 --> 00:29:54,700 How do you Cheers, everyone. Thank you so much. 619 00:29:54,700 --> 00:29:57,500 How do you and the others who worked with him 620 00:29:57,500 --> 00:29:57,740 How do you feel about him now? 621 00:29:57,740 --> 00:30:00,140 feel about him now? 622 00:30:00,140 --> 00:30:01,620 Hate. 623 00:30:03,140 --> 00:30:04,740 Utter frustration 624 00:30:04,740 --> 00:30:08,340 at realising that the best years of my life 625 00:30:08,340 --> 00:30:08,580 at realising were spent working for an opponent. 626 00:30:08,580 --> 00:30:11,100 were spent working for an opponent. 627 00:30:11,100 --> 00:30:15,660 Sadness for Australia 628 00:30:15,660 --> 00:30:15,900 and for this service Sadness for Australia 629 00:30:15,900 --> 00:30:18,380 and for this service that I worked for, 630 00:30:18,380 --> 00:30:18,620 and for this service which was a good service. 631 00:30:18,620 --> 00:30:20,860 which was a good service. 632 00:30:20,860 --> 00:30:24,060 There's immense amount of loyalty and trust. 633 00:30:26,340 --> 00:30:28,300 At the age of 60 634 00:30:28,300 --> 00:30:31,580 the mole leaves ASIO on a full government pension. 635 00:30:31,580 --> 00:30:34,180 He's looking forward to a long retirement 636 00:30:34,180 --> 00:30:38,740 playing golf at his club at Balgowlah on Sydney's Northern Beaches, 637 00:30:38,740 --> 00:30:40,980 where he becomes a director. 638 00:30:40,980 --> 00:30:42,980 He must believe he's gotten away 639 00:30:42,980 --> 00:30:48,100 with the most damaging betrayal of ASIO's secrets in its history. 640 00:30:48,100 --> 00:30:48,340 with the most damaging betrayal What kind of damage did this mole do? 641 00:30:48,340 --> 00:30:52,100 What kind of damage did this mole do? 642 00:30:52,100 --> 00:30:54,020 They would've been able to give away 643 00:30:54,020 --> 00:30:56,980 incredibly significant information 644 00:30:56,980 --> 00:30:59,780 about Australian technology, 645 00:30:59,780 --> 00:31:02,180 Australian plans, 646 00:31:02,180 --> 00:31:06,020 Australian relations with British and UK counterparts 647 00:31:06,020 --> 00:31:08,540 that would've been useful for the Soviets 648 00:31:08,540 --> 00:31:10,940 to corroborate leads for them, 649 00:31:10,940 --> 00:31:17,860 for exploiting potential defectors in the UK and the United States. 650 00:31:17,860 --> 00:31:23,100 They would've gained access to a wealth of hard-won information 651 00:31:23,100 --> 00:31:26,820 about operatives in Australia and abroad 652 00:31:26,820 --> 00:31:29,620 that would undoubtedly have compromised 653 00:31:29,620 --> 00:31:33,740 the operations that they're involved in, 654 00:31:33,740 --> 00:31:36,020 if not the lives of the people involved as well. 655 00:31:36,020 --> 00:31:36,260 (CHEERING) if not the lives of the people involved as well. 656 00:31:36,260 --> 00:31:38,540 (CHEERING) 657 00:31:38,540 --> 00:31:40,940 Then the Cold War ends, 658 00:31:40,940 --> 00:31:43,140 the Soviet Union collapses 659 00:31:43,140 --> 00:31:43,380 the Soviet Union collapses and former KGB officers are giving up long-held secrets. 660 00:31:43,380 --> 00:31:49,220 and former KGB officers are giving up long-held secrets. 661 00:31:49,220 --> 00:31:51,740 HARRY P RUSSELL: As you know, there's been a rash of defectors, 662 00:31:51,740 --> 00:31:54,420 particularly when the KGB was being re-badged 663 00:31:54,420 --> 00:31:54,660 particularly when the KGB and the Berlin Wall came down. 664 00:31:54,660 --> 00:31:56,100 and the Berlin Wall came down. 665 00:31:56,100 --> 00:31:57,380 There was chaos. 666 00:31:57,380 --> 00:31:59,220 And where there's chaos there's opportunity, 667 00:31:59,220 --> 00:32:01,740 and the Western services took that opportunity 668 00:32:01,740 --> 00:32:03,300 and people were snapped up. 669 00:32:05,500 --> 00:32:09,780 This is when the CIA and the FBI travel to Canberra 670 00:32:09,780 --> 00:32:13,220 to break the news that a second KGB insider 671 00:32:13,220 --> 00:32:13,460 to break the news confirms ASIO has been penetrated. 672 00:32:13,460 --> 00:32:16,300 confirms ASIO has been penetrated. 673 00:32:16,300 --> 00:32:18,220 (BIRDS SQUAWK) 674 00:32:18,220 --> 00:32:24,300 NEIL FERGUS: So, the key comes with some information from the Americans, 675 00:32:24,300 --> 00:32:24,540 NEIL FERGUS: So, the key comes with which is specific. 676 00:32:24,540 --> 00:32:27,020 which is specific. 677 00:32:27,020 --> 00:32:29,420 Not to the identity of a person. 678 00:32:29,420 --> 00:32:30,700 No, no, no. 679 00:32:30,700 --> 00:32:31,780 (LAUGHS) 680 00:32:31,780 --> 00:32:33,820 Wouldn't that have been helpful? 681 00:32:33,820 --> 00:32:37,060 But the fact that there HAD been a penetration 682 00:32:37,060 --> 00:32:37,300 But the fact of Australian intelligence. 683 00:32:37,300 --> 00:32:39,180 of Australian intelligence. 684 00:32:40,140 --> 00:32:45,540 ASIO sets up a top-secret mole hunt in March 1992. 685 00:32:45,540 --> 00:32:45,780 ASIO sets up a top-secret mole hunt To ensure maximum secrecy 686 00:32:45,780 --> 00:32:47,660 To ensure maximum secrecy 687 00:32:47,660 --> 00:32:51,340 it's located outside ASIO headquarters. 688 00:32:51,340 --> 00:32:55,660 Investigators start identifying a list of possible suspects 689 00:32:55,660 --> 00:32:55,900 Investigators start identifying among their colleagues. 690 00:32:55,900 --> 00:32:57,900 among their colleagues. 691 00:32:57,900 --> 00:32:58,140 And then some information comes in from the British. among their colleagues. 692 00:32:58,140 --> 00:33:01,420 And then some information comes in from the British. 693 00:33:01,420 --> 00:33:07,380 That is where things can finally get started in earnest 694 00:33:07,380 --> 00:33:07,620 That is where things can finally get started in earnest because there are some coordinates 695 00:33:07,620 --> 00:33:09,420 because there are some coordinates 696 00:33:09,420 --> 00:33:13,180 in the material that is passed to the Australian intelligence services 697 00:33:13,180 --> 00:33:13,420 in the material that is passed to by the British. 698 00:33:13,420 --> 00:33:14,460 by the British. 699 00:33:14,460 --> 00:33:14,700 This crucial breakthrough comes from another Russian defector. by the British. 700 00:33:14,700 --> 00:33:19,940 This crucial breakthrough comes from another Russian defector. 701 00:33:19,940 --> 00:33:23,700 KGB archivist Vasili Mitrokhin arrives in the West 702 00:33:23,700 --> 00:33:28,420 with 11,000 pages of notes copied from the KGB archive. 703 00:33:29,380 --> 00:33:33,980 They include a copy of a document about the ASIO mole 704 00:33:33,980 --> 00:33:39,260 written after his retirement by his KGB handler and sent to Moscow. 705 00:33:40,220 --> 00:33:42,140 What was the critical information? 706 00:33:42,140 --> 00:33:45,020 It was two pieces of information that were critical, 707 00:33:45,020 --> 00:33:45,300 but the most critical one was the fact that he revealed It was two pieces of information that were critical, 708 00:33:45,300 --> 00:33:47,740 but the most critical one was the fact that he revealed 709 00:33:47,740 --> 00:33:54,380 that the mole was a supervisor of the espionage section in Sydney - 710 00:33:54,380 --> 00:33:54,660 that the mole was a supervisor of the espionage section in Sydney - a supervisor, SE, supervisor espionage - 711 00:33:54,660 --> 00:33:58,340 a supervisor, SE, supervisor espionage - 712 00:33:58,340 --> 00:33:58,580 a supervisor, SE, and that he retired in 1983. 713 00:33:58,580 --> 00:34:01,020 and that he retired in 1983. 714 00:34:01,020 --> 00:34:01,260 But just as ASIO is on the brink and that he retired in 1983. 715 00:34:01,260 --> 00:34:06,260 But just as ASIO is on the brink of uncovering the mole's identity, 716 00:34:06,260 --> 00:34:09,500 the investigation takes a dramatic detour. 717 00:34:11,220 --> 00:34:16,500 The focus switches to an ASIO translator, George Sadil. 718 00:34:16,500 --> 00:34:16,780 The focus switches to an ASIO translator, George Sadil. He's been spotted at the Russian Orthodox Church in Canberra 719 00:34:16,780 --> 00:34:20,540 He's been spotted at the Russian Orthodox Church in Canberra 720 00:34:20,540 --> 00:34:23,820 with a diplomat suspected of being KGB. 721 00:34:26,220 --> 00:34:29,700 Sadil is then caught on a hidden camera 722 00:34:29,700 --> 00:34:32,820 stuffing classified documents into his jacket. 723 00:34:35,180 --> 00:34:37,820 Well, it was late at night, 724 00:34:37,820 --> 00:34:43,260 it would've been about half past eight, perhaps even later. 725 00:34:44,300 --> 00:34:47,780 There was a banging on the door. 726 00:34:47,780 --> 00:34:50,260 My wife became very, very upset. 727 00:34:50,260 --> 00:34:52,540 I opened the door, 728 00:34:52,540 --> 00:34:56,500 and then this burly bloke, 729 00:34:56,500 --> 00:35:00,780 he just slammed the door open 730 00:35:00,780 --> 00:35:06,220 and he showed me the warrant card 731 00:35:06,220 --> 00:35:10,180 and first thing he said, "Where are the documents?" 732 00:35:11,980 --> 00:35:14,900 Sadil is charged with espionage. 733 00:35:14,900 --> 00:35:19,020 But it turns out the documents relate mostly to his looming retirement, 734 00:35:19,020 --> 00:35:19,260 But it turns out the documents relate and the case collapses. 735 00:35:19,260 --> 00:35:21,500 and the case collapses. 736 00:35:21,500 --> 00:35:24,060 He pleads guilty to removing documents, 737 00:35:24,060 --> 00:35:24,300 He pleads guilty and receives a suspended sentence. 738 00:35:24,300 --> 00:35:27,220 and receives a suspended sentence. 739 00:35:27,220 --> 00:35:28,780 Was Sadil a mole? 740 00:35:28,780 --> 00:35:30,100 No. 741 00:35:31,260 --> 00:35:33,780 No. No way. 742 00:35:33,780 --> 00:35:36,820 No way, there was no evidence whatsoever. 743 00:35:36,820 --> 00:35:39,340 NEIL FERGUS: It's not fair to call it a wild goose chase. 744 00:35:39,340 --> 00:35:41,740 That's not fair to George Sadil and the people who worked on it. 745 00:35:41,740 --> 00:35:47,220 But there was no intelligence ever obtained 746 00:35:47,220 --> 00:35:50,700 and no evidence ever presented in a court 747 00:35:50,700 --> 00:35:54,900 that George Sadil passed material to a foreign power. 748 00:35:55,940 --> 00:35:58,540 No evidence of espionage. 749 00:35:58,540 --> 00:36:00,740 Do you think they owe you an apology? 750 00:36:00,740 --> 00:36:02,060 (LAUGHS) 751 00:36:02,060 --> 00:36:03,940 They wouldn't know what it is. 752 00:36:03,940 --> 00:36:06,020 So, did the Sadil case 753 00:36:06,020 --> 00:36:08,620 derail the mole hunt, effectively? 754 00:36:08,620 --> 00:36:12,300 It would've, except the deputy director-general of ASIO 755 00:36:12,300 --> 00:36:18,620 was determined, as I understand it, to look under every stone. 756 00:36:18,620 --> 00:36:22,860 So, other ASIO operational activities, I understand, 757 00:36:22,860 --> 00:36:23,100 So, other ASIO operational were proceeding, or did proceed, 758 00:36:23,100 --> 00:36:26,460 were proceeding, or did proceed, 759 00:36:26,460 --> 00:36:31,460 because, remember, there was still the important task 760 00:36:31,460 --> 00:36:34,420 of identifying that original mole. 761 00:36:36,580 --> 00:36:39,420 After losing valuable time and resources, 762 00:36:39,420 --> 00:36:43,300 ASIO investigators are now determined not to rest 763 00:36:43,300 --> 00:36:46,340 until they unmask the real mole. 764 00:36:46,340 --> 00:36:49,740 The critical information in the Mitrokhin archive enables them 765 00:36:49,740 --> 00:36:55,780 to cut down their list of suspects from more than a dozen to just two. 766 00:36:57,300 --> 00:37:00,020 DAN MULVENNA: There were two individuals 767 00:37:00,020 --> 00:37:00,260 DAN MULVENNA: who had very similar profiles 768 00:37:00,260 --> 00:37:03,700 who had very similar profiles 769 00:37:03,700 --> 00:37:07,700 in as much as they each had at one time or the other 770 00:37:07,700 --> 00:37:07,940 in as much as they each had been supervisor subversive 771 00:37:07,940 --> 00:37:11,980 been supervisor subversive 772 00:37:11,980 --> 00:37:14,900 or supervisor espionage, 773 00:37:14,900 --> 00:37:18,740 and that they both had been in Rome, 774 00:37:18,740 --> 00:37:21,140 but not at the same time, 775 00:37:21,140 --> 00:37:24,660 and that they had wives that worked for ASIO. 776 00:37:26,380 --> 00:37:30,660 Piecing together the clues provided by the Russian defectors, 777 00:37:30,660 --> 00:37:32,380 investigators establish 778 00:37:32,380 --> 00:37:36,820 that the mole was supervisor of espionage in New South Wales 779 00:37:36,820 --> 00:37:41,260 when he first sold out to the Russians in 1977. 780 00:37:42,220 --> 00:37:45,660 At last ASIO identifies the mole. 781 00:37:45,660 --> 00:37:49,180 Finally they have their man. 782 00:37:50,340 --> 00:37:53,980 The mole is Ian George Peacock, 783 00:37:53,980 --> 00:37:58,100 a senior operations manager in ASIO's Sydney office, 784 00:37:58,100 --> 00:38:01,060 where he was the head of counter-espionage 785 00:38:01,060 --> 00:38:02,780 against the Soviets. 786 00:38:03,740 --> 00:38:05,940 Here he is in plain sight 787 00:38:05,940 --> 00:38:10,260 in a photograph featured in ASIO's official history. 788 00:38:13,020 --> 00:38:16,140 So, we now know that the mole was Ian Peacock, 789 00:38:16,140 --> 00:38:20,420 former RAAF pilot, supervisor of espionage in Sydney. 790 00:38:20,420 --> 00:38:22,940 What have you learned about him and his behaviour 791 00:38:22,940 --> 00:38:25,980 and the extent to which he fits the profile? 792 00:38:25,980 --> 00:38:26,220 and the extent He fits the profile 793 00:38:26,220 --> 00:38:27,460 He fits the profile 794 00:38:27,460 --> 00:38:31,180 of an individual who was disappointed with his career 795 00:38:31,180 --> 00:38:31,420 of an individual and what... 796 00:38:31,420 --> 00:38:33,380 and what... 797 00:38:33,380 --> 00:38:35,860 ..how it had unfolded for him, 798 00:38:35,860 --> 00:38:38,780 and he was, to a certain extent, 799 00:38:38,780 --> 00:38:41,500 somewhat bitter about that 800 00:38:41,500 --> 00:38:45,980 and felt that he had been not served well. 801 00:38:45,980 --> 00:38:47,420 And... 802 00:38:48,980 --> 00:38:53,820 ..I think that was a combination of the money and that reason. 803 00:38:53,820 --> 00:38:57,940 Is there any doubt in your mind that he was the mole? 804 00:38:57,940 --> 00:38:59,180 No. 805 00:39:00,620 --> 00:39:02,380 None. 806 00:39:03,740 --> 00:39:07,540 What's it been like for the people who worked with this man 807 00:39:07,540 --> 00:39:10,980 to have to live with the knowledge that he betrayed them 808 00:39:10,980 --> 00:39:11,220 to have to live with the knowledge and betrayed his country? 809 00:39:11,220 --> 00:39:13,460 and betrayed his country? 810 00:39:13,460 --> 00:39:15,900 There are people who have... 811 00:39:15,900 --> 00:39:23,180 ..suffered clinical depression and require ongoing medical care. 812 00:39:23,180 --> 00:39:25,460 Is it solely because of this? Well, I don't know, 813 00:39:25,460 --> 00:39:30,260 but I would hazard a guess it's a lot to do with this. 814 00:39:30,260 --> 00:39:36,860 Some people who were aware of the assessed identity of this person 815 00:39:36,860 --> 00:39:39,420 are still in disbelief. 816 00:39:41,580 --> 00:39:43,540 They can't believe it. 817 00:39:44,900 --> 00:39:50,860 But the material which has been obtained from three defectors 818 00:39:50,860 --> 00:39:53,660 is overwhelming. 819 00:39:53,660 --> 00:39:57,500 What would you say to the traitor now if you could say something? 820 00:39:57,500 --> 00:40:00,020 Probably hit him before I said anyth... 821 00:40:00,020 --> 00:40:01,820 No, seriously. 822 00:40:01,820 --> 00:40:02,060 I'm extremely passionate No, seriously. 823 00:40:02,060 --> 00:40:07,020 I'm extremely passionate about this sort of situation 824 00:40:07,020 --> 00:40:07,260 I'm extremely passionate and I want it to end. 825 00:40:07,260 --> 00:40:09,300 and I want it to end. 826 00:40:09,300 --> 00:40:13,060 Do you believe he was the only mole in ASIO at the time? 827 00:40:13,060 --> 00:40:13,300 Do you believe he was the only mole Yeah, I think so. 828 00:40:13,300 --> 00:40:14,540 Yeah, I think so. 829 00:40:14,540 --> 00:40:14,780 People have talked about Yeah, I think so. 830 00:40:14,780 --> 00:40:16,140 People have talked about there being... 831 00:40:16,140 --> 00:40:17,660 I know... ..three, four, five, 832 00:40:17,660 --> 00:40:17,900 I know... even a nest of moles. 833 00:40:17,900 --> 00:40:18,980 even a nest of moles. 834 00:40:18,980 --> 00:40:21,900 Oh, yeah, I read that. That's nonsense. 835 00:40:21,900 --> 00:40:23,260 Nonsense? Yes. 836 00:40:23,260 --> 00:40:23,500 Nonsense? Just nonsense. 837 00:40:23,500 --> 00:40:24,980 Just nonsense. 838 00:40:26,500 --> 00:40:30,020 So, who was Ian George Peacock? 839 00:40:30,020 --> 00:40:32,980 He was born in 1923 in Hobart 840 00:40:32,980 --> 00:40:35,220 into a life of privilege. 841 00:40:35,220 --> 00:40:36,900 His father was commodore 842 00:40:36,900 --> 00:40:39,700 of the Royal Yacht Club of Tasmania. 843 00:40:39,700 --> 00:40:39,940 of the Royal Yacht Club of Tasmania. private school, Geelong Grammar. 844 00:40:39,940 --> 00:40:44,940 He went to Australia's most expensive private school, Geelong Grammar. 845 00:40:44,940 --> 00:40:52,420 In 1941 he enlisted in the RAAF, aged 18, to become a fighter pilot. 846 00:40:52,420 --> 00:40:52,660 In 1941 he enlisted in the RAAF, aged 18, to become a fighter pilot. Evidently a risk-taker, 847 00:40:52,660 --> 00:40:54,580 Evidently a risk-taker, 848 00:40:54,580 --> 00:40:57,420 military records show he was court-martialled 849 00:40:57,420 --> 00:40:59,900 for reckless flying endangering life 850 00:40:59,900 --> 00:41:02,300 while training in Victoria. 851 00:41:02,300 --> 00:41:06,900 He was sentenced to three months in a military jail. 852 00:41:06,900 --> 00:41:11,700 Tragically, his father died by suicide in 1949 853 00:41:11,700 --> 00:41:14,420 after battling mental illness. 854 00:41:14,420 --> 00:41:18,620 Shortly after, Peacock joined ASIO. 855 00:41:19,820 --> 00:41:23,780 How would you describe that initial generation that came into ASIO? 856 00:41:23,780 --> 00:41:24,060 All the ones I met - and I met a great number of them - How would you describe that initial generation that came into ASIO? 857 00:41:24,060 --> 00:41:26,540 All the ones I met - and I met a great number of them - 858 00:41:26,540 --> 00:41:26,780 All the ones I met - were very dedicated. 859 00:41:26,780 --> 00:41:28,100 were very dedicated. 860 00:41:28,100 --> 00:41:30,580 They'd had a military or police background. 861 00:41:30,580 --> 00:41:32,860 Many of them had gone through The Depression as well. 862 00:41:32,860 --> 00:41:33,100 Many of them had gone through The Depression as well. They were very loyal to Australia, 863 00:41:33,100 --> 00:41:34,500 They were very loyal to Australia, 864 00:41:34,500 --> 00:41:37,260 and they were very determined to see the job done. 865 00:41:37,260 --> 00:41:39,580 But there's no real guidance at that stage either, 866 00:41:39,580 --> 00:41:41,460 so, they wrote the books as they went along 867 00:41:41,460 --> 00:41:42,900 to a large extent in this country. 868 00:41:44,620 --> 00:41:47,700 Initially Peacock's career blossomed. 869 00:41:47,700 --> 00:41:50,740 He was appointed to a crack new surveillance team, 870 00:41:50,740 --> 00:41:54,140 the Operational Base Establishment, or OBE, 871 00:41:54,140 --> 00:41:54,380 the Operational Base Establishment, to track Russian spies. 872 00:41:54,380 --> 00:41:56,380 to track Russian spies. 873 00:41:56,380 --> 00:41:58,460 Then there was a posting in Rome 874 00:41:58,460 --> 00:42:01,740 before returning to Sydney with his family. 875 00:42:04,460 --> 00:42:06,260 GROUP: (CHANTS) Equal pay now! 876 00:42:06,260 --> 00:42:08,460 Sisterhood is powerful! 877 00:42:08,460 --> 00:42:11,900 (GROUP SINGS INDISTINCTLY) 878 00:42:11,900 --> 00:42:13,860 But by the 1970s 879 00:42:13,860 --> 00:42:18,100 ASIO was in turmoil and out of step with social change. 880 00:42:19,060 --> 00:42:22,740 A hostile Labor Attorney-General, Lionel Murphy, 881 00:42:22,740 --> 00:42:25,060 raided the ASIO headquarters. 882 00:42:25,060 --> 00:42:27,340 Do you hear about phone tapping from ASIO? 883 00:42:27,340 --> 00:42:27,620 It's the great number of unauthorised ones Do you hear about phone tapping from ASIO? 884 00:42:27,620 --> 00:42:30,180 It's the great number of unauthorised ones 885 00:42:30,180 --> 00:42:30,420 It's the great number which are the concern. 886 00:42:30,420 --> 00:42:31,860 which are the concern. 887 00:42:31,860 --> 00:42:34,940 It's been going on for years. 888 00:42:34,940 --> 00:42:35,180 It's been going on for years. ARCHIVE REPORTER: Prime Minister Whitlam said later 889 00:42:35,180 --> 00:42:37,460 ARCHIVE REPORTER: Prime Minister Whitlam said later 890 00:42:37,460 --> 00:42:41,500 the raid was the worst mistake in Labor's first year of government. 891 00:42:41,500 --> 00:42:44,060 MICHAEL BOYLE: Well, the Murphy raid was a disaster 892 00:42:44,060 --> 00:42:45,580 not only for morale within the organisation 893 00:42:45,580 --> 00:42:47,380 but also because it interfered extensively 894 00:42:47,380 --> 00:42:49,900 with what the organisation was doing. 895 00:42:49,900 --> 00:42:51,620 So, it was a very backward step. 896 00:42:51,620 --> 00:42:51,860 For those people So, it was a very backward step. 897 00:42:51,860 --> 00:42:54,540 For those people who had been working very hard 898 00:42:54,540 --> 00:42:56,700 and taking the risks and doing the hard work, 899 00:42:56,700 --> 00:42:59,580 they were furious, but there was very little they could do about it. 900 00:43:01,740 --> 00:43:05,660 The military-style leadership of 'The Old And Bold' was out. 901 00:43:05,660 --> 00:43:09,580 A judge, Edward Woodward, was now in charge. 902 00:43:10,540 --> 00:43:13,460 MICHAEL BOYLE: The organisation almost went into hiatus. 903 00:43:13,460 --> 00:43:17,100 We lost leadership, we lost direction, we became confused. 904 00:43:18,580 --> 00:43:20,500 Many of the things that people had done 905 00:43:20,500 --> 00:43:20,740 Many of the things and regarded as a major threat 906 00:43:20,740 --> 00:43:22,020 and regarded as a major threat 907 00:43:22,020 --> 00:43:22,260 were told and regarded as a major threat 908 00:43:22,260 --> 00:43:25,500 were told were not so important anymore. 909 00:43:25,500 --> 00:43:25,740 were told I knew a number of people 910 00:43:25,740 --> 00:43:26,740 I knew a number of people 911 00:43:26,740 --> 00:43:30,820 who subsequently for a while lost their enthusiasm. 912 00:43:30,820 --> 00:43:34,380 They were moving towards retirement. They were a bit fed up. 913 00:43:36,060 --> 00:43:39,180 1977 was a tipping point. 914 00:43:39,180 --> 00:43:41,860 A Royal Commission delivered a scathing report 915 00:43:41,860 --> 00:43:45,380 criticising ASIO for illegal operations. 916 00:43:45,380 --> 00:43:47,060 ARCHIVE REPORTER: These public reports make it clear 917 00:43:47,060 --> 00:43:49,580 that his Royal Commission was no whitewash. 918 00:43:50,820 --> 00:43:52,820 Morale was shattered 919 00:43:52,820 --> 00:43:55,140 and Peacock's career had stalled. 920 00:43:56,100 --> 00:44:00,380 This was the year he offered his services to the enemy. 921 00:44:01,300 --> 00:44:03,780 What do you think was his motivation? 922 00:44:03,780 --> 00:44:06,740 HARRY P RUSSELL: In his case, it could have been money, 923 00:44:06,740 --> 00:44:06,980 HARRY P RUSSELL: In his case, it could also have been resentment 924 00:44:06,980 --> 00:44:08,380 it could also have been resentment 925 00:44:08,380 --> 00:44:11,980 because he plateaued at a middle-management level. 926 00:44:11,980 --> 00:44:13,340 And, I could understand why 927 00:44:13,340 --> 00:44:18,460 because I don't believe he was a particularly talented manager. 928 00:44:18,460 --> 00:44:21,420 Well, this individual is no longer with us, 929 00:44:21,420 --> 00:44:26,660 and, so, we're never going to hear the true answer, 930 00:44:26,660 --> 00:44:30,940 if the traitor could even confront the reality himself. 931 00:44:30,940 --> 00:44:34,980 A combination of ego and certainly money. 932 00:44:35,940 --> 00:44:38,340 Certainly, what we're aware of 933 00:44:38,340 --> 00:44:38,580 from the personalities Certainly, what we're aware of 934 00:44:38,580 --> 00:44:42,500 from the personalities that have been speaking about this, 935 00:44:42,500 --> 00:44:48,180 and I'm talking about General Kalugin, Oleg Gordievsky and others, 936 00:44:48,180 --> 00:44:48,420 and I'm talking about General large sums of money were being paid. 937 00:44:48,420 --> 00:44:51,940 large sums of money were being paid. 938 00:44:53,940 --> 00:44:57,100 Here's how General Kalugin described 939 00:44:57,100 --> 00:45:00,380 what he'd say to the mole if he met him. 940 00:45:00,380 --> 00:45:04,500 I would shake his hand and say, "Thank you. Do you need more money?" 941 00:45:04,500 --> 00:45:04,740 I would shake his hand and say, He was, after all, after money. 942 00:45:04,740 --> 00:45:06,620 He was, after all, after money. 943 00:45:10,820 --> 00:45:15,540 ASIO spends years trying to get Peacock to confess. 944 00:45:15,540 --> 00:45:15,820 ASIO spends years trying to get Peacock to confess. They give him their own codename - Regatta - 945 00:45:15,820 --> 00:45:19,020 They give him their own codename - Regatta - 946 00:45:19,020 --> 00:45:19,260 They give him their own codename - and meet with him dozens of times. 947 00:45:19,260 --> 00:45:22,020 and meet with him dozens of times. 948 00:45:22,020 --> 00:45:24,100 In a last-ditch effort 949 00:45:24,100 --> 00:45:24,340 over lunch at a waterfront restaurant In a last-ditch effort 950 00:45:24,340 --> 00:45:27,780 over lunch at a waterfront restaurant at Sydney's Middle Harbour, 951 00:45:27,780 --> 00:45:28,020 over lunch at a waterfront restaurant ASIO offers him a deal. 952 00:45:28,020 --> 00:45:30,260 ASIO offers him a deal. 953 00:45:30,260 --> 00:45:34,620 They have no admissible evidence, and Peacock has denied everything. 954 00:45:34,620 --> 00:45:38,220 They offer him immunity from prosecution 955 00:45:38,220 --> 00:45:39,620 and a generous cash payment. 956 00:45:40,780 --> 00:45:42,340 DAN MULVENNA: Well, I understand 957 00:45:42,340 --> 00:45:46,740 that in a somewhat desperate attempt to entice him to confess 958 00:45:46,740 --> 00:45:51,020 they showed him a briefcase with a certain amount of money in it, 959 00:45:51,020 --> 00:45:51,260 they showed him a briefcase with I don't have an idea how much, 960 00:45:51,260 --> 00:45:53,020 I don't have an idea how much, 961 00:45:53,020 --> 00:45:54,500 and legend has it 962 00:45:54,500 --> 00:45:57,300 that he grabbed all the money and threw it up in the air 963 00:45:57,300 --> 00:45:59,300 and stomped out of the restaurant. 964 00:45:59,300 --> 00:46:01,700 I mean, nice try, guys, 965 00:46:01,700 --> 00:46:05,620 but, you know, it just didn't work. 966 00:46:05,620 --> 00:46:08,260 Is that legend or is that a true story? 967 00:46:09,860 --> 00:46:11,340 (LAUGHS) 968 00:46:11,340 --> 00:46:15,260 In the world of intelligence, they blend at times. 969 00:46:15,260 --> 00:46:17,540 That's the story that I've been told. 970 00:46:19,980 --> 00:46:23,620 Ian Peacock dies in 2006, 971 00:46:23,620 --> 00:46:26,900 taking his secrets to the grave. 972 00:46:26,900 --> 00:46:29,780 HARRY P RUSSELL: The betrayal is a sad story, 973 00:46:29,780 --> 00:46:31,020 a story of sadness 974 00:46:31,020 --> 00:46:34,020 because it's a story of human frailty. 975 00:46:34,020 --> 00:46:38,660 So, as a Christian, I look at the 30 pieces of silver - betrayal - 976 00:46:38,660 --> 00:46:38,900 So, as a Christian, I look at and the despair that comes from it. 977 00:46:38,900 --> 00:46:41,300 and the despair that comes from it. 978 00:46:41,300 --> 00:46:41,540 The only winner is your opponent, and the despair that comes from it. 979 00:46:41,540 --> 00:46:45,820 The only winner is your opponent, the enemy, as I call them. 980 00:46:45,820 --> 00:46:46,820 We all want it to end. 981 00:46:46,820 --> 00:46:49,940 My colleagues, my former colleagues want an end to it. 982 00:46:49,940 --> 00:46:50,180 My colleagues, my former colleagues We don't want this to happen again. 983 00:46:50,180 --> 00:46:52,100 We don't want this to happen again. 984 00:46:55,420 --> 00:46:57,940 But it doesn't end there. 985 00:46:59,420 --> 00:47:02,420 There's an excruciating twist to the story 986 00:47:02,420 --> 00:47:04,100 revealed in the Mitrokhin archive 987 00:47:04,100 --> 00:47:07,540 and never publicly reported before. 988 00:47:07,540 --> 00:47:12,620 The mole was paid by the KGB to find a replacement. 989 00:47:15,300 --> 00:47:17,980 The other key piece of information 990 00:47:17,980 --> 00:47:22,620 was that he was given $50,000 to recruit a replacement. 991 00:47:22,620 --> 00:47:25,660 Now, that is SOP - standard operating procedure. 992 00:47:25,660 --> 00:47:25,900 Now, that is SOP - If you're losing an asset, 993 00:47:25,900 --> 00:47:27,140 If you're losing an asset, 994 00:47:27,140 --> 00:47:27,380 they paid HIM If you're losing an asset, 995 00:47:27,380 --> 00:47:31,380 they paid HIM to identify a successor. 996 00:47:31,380 --> 00:47:35,460 On the one hand, it's great news that the mole has retired. 997 00:47:35,460 --> 00:47:38,820 On the other hand, red alarm bells are going everywhere 998 00:47:38,820 --> 00:47:44,860 that he was, clearly, a competent operational person, 999 00:47:44,860 --> 00:47:48,340 that's to say he had tradecraft and capabilities, 1000 00:47:48,340 --> 00:47:50,860 and he was working to find a replacement. 1001 00:47:51,820 --> 00:47:55,380 The Mitrokhin archive named a younger ASIO officer 1002 00:47:55,380 --> 00:47:58,860 who the mole approached to take his place. 1003 00:47:58,860 --> 00:47:59,100 who the mole approached DAN MULVENNA: When he retires 1004 00:47:59,100 --> 00:48:01,340 DAN MULVENNA: When he retires 1005 00:48:01,340 --> 00:48:06,460 and they offer him $50,000 to find a replacement, 1006 00:48:06,460 --> 00:48:10,420 he goes out and approaches a young individual 1007 00:48:10,420 --> 00:48:13,260 who had worked with him at one point in time, 1008 00:48:13,260 --> 00:48:13,500 who had worked with him who we call Ken, 1009 00:48:13,500 --> 00:48:16,220 who we call Ken, 1010 00:48:16,220 --> 00:48:17,820 and approached him. 1011 00:48:17,820 --> 00:48:21,540 And Ken did not buy that at all 1012 00:48:21,540 --> 00:48:26,780 and did not agree to that, 1013 00:48:26,780 --> 00:48:29,860 but never reported the approach. 1014 00:48:36,380 --> 00:48:37,900 (KNOCK AT DOOR) 1015 00:48:40,820 --> 00:48:44,780 When ASIO goes to interview the younger officer named Ken, 1016 00:48:44,780 --> 00:48:45,020 When ASIO goes to interview they learn he's recently died. 1017 00:48:45,020 --> 00:48:47,740 they learn he's recently died. 1018 00:48:48,700 --> 00:48:52,980 But the mole told the KGB he had others in mind. 1019 00:48:55,660 --> 00:49:01,340 So, the burning question remains - is there still a mole in ASIO? 1020 00:49:03,180 --> 00:49:06,740 Do you still fear that the mole found a replacement? 1021 00:49:08,100 --> 00:49:11,300 Well, I think that's the... 1022 00:49:11,300 --> 00:49:15,820 The holy grail of these Australian counter-intelligence operations 1023 00:49:15,820 --> 00:49:19,180 was to definitively resolve that question, 1024 00:49:19,180 --> 00:49:25,060 and one day hopefully it will be definitively resolved. 1025 00:49:27,780 --> 00:49:33,220 It's now almost 50 years since one of ASIO's longest serving officers 1026 00:49:33,220 --> 00:49:37,020 first betrayed Australian secrets to the KGB. 1027 00:49:37,980 --> 00:49:42,700 Decades of secrecy have seen rumours and suspicion flourish, 1028 00:49:42,700 --> 00:49:47,020 tarnishing the reputations of innocent officers. 1029 00:49:48,100 --> 00:49:50,740 NEIL FERGUS: It's extremely harmful to a number of people, 1030 00:49:50,740 --> 00:49:50,980 NEIL FERGUS: It's extremely harmful and it really is shameless. 1031 00:49:50,980 --> 00:49:54,020 and it really is shameless. 1032 00:49:54,020 --> 00:49:56,500 A number of these people, these personalities, 1033 00:49:56,500 --> 00:49:58,260 who are banding around names 1034 00:49:58,260 --> 00:49:58,500 have no primary information who are banding around names 1035 00:49:58,500 --> 00:50:02,780 have no primary information to corroborate their allegations. 1036 00:50:02,780 --> 00:50:05,260 And in some cases, unfortunately, 1037 00:50:05,260 --> 00:50:07,860 it appears that names have been thrown around 1038 00:50:07,860 --> 00:50:08,100 it appears because somebody disliked someone 1039 00:50:08,100 --> 00:50:10,020 because somebody disliked someone 1040 00:50:10,020 --> 00:50:10,260 or someone thought because somebody disliked someone 1041 00:50:10,260 --> 00:50:12,500 or someone thought someone hadn't helped their career. 1042 00:50:12,500 --> 00:50:14,740 But it's not right. 1043 00:50:14,740 --> 00:50:19,780 And the people who have done this should hang their heads in shame, 1044 00:50:19,780 --> 00:50:20,020 And the people who have done this individually and collectively. 1045 00:50:20,020 --> 00:50:21,620 individually and collectively. 1046 00:50:22,580 --> 00:50:27,380 Details of ASIO's mole hunt are still closely guarded. 1047 00:50:27,380 --> 00:50:30,860 A government review of the affair known as the Cook Report 1048 00:50:30,860 --> 00:50:31,100 A government review of the affair delivered in the 1990s 1049 00:50:31,100 --> 00:50:33,220 delivered in the 1990s 1050 00:50:33,220 --> 00:50:35,420 has never been released. 1051 00:50:35,420 --> 00:50:36,900 It's never been resolved, 1052 00:50:36,900 --> 00:50:39,140 there's never been any official clarity around it. 1053 00:50:39,140 --> 00:50:39,380 there's never been Cook Report, Mitrokhin Archives, 1054 00:50:39,380 --> 00:50:41,420 Cook Report, Mitrokhin Archives, 1055 00:50:41,420 --> 00:50:41,660 anything to do Cook Report, Mitrokhin Archives, 1056 00:50:41,660 --> 00:50:43,900 anything to do with this is still suppressed. 1057 00:50:43,900 --> 00:50:46,260 Do you think it's time now 1058 00:50:46,260 --> 00:50:48,420 to give clarity to what happened 1059 00:50:48,420 --> 00:50:49,940 so that we can learn from it? 1060 00:50:49,940 --> 00:50:50,180 The answer to your question so that we can learn from it? 1061 00:50:50,180 --> 00:50:54,020 The answer to your question is yes, I think it is about time. 1062 00:50:56,180 --> 00:50:59,060 JOHN BLAXLAND: This was a grave national-security breach, 1063 00:50:59,060 --> 00:51:02,380 the extent of which is hard to fathom. 1064 00:51:02,380 --> 00:51:05,980 I think we Australians are owed an explanation. 1065 00:51:08,980 --> 00:51:10,980 NEIL FERGUS: If we don't learn lessons from the past, 1066 00:51:10,980 --> 00:51:11,220 NEIL FERGUS: If we we're doomed to repeat them. 1067 00:51:11,220 --> 00:51:13,220 we're doomed to repeat them. 1068 00:51:13,220 --> 00:51:13,460 The point we're doomed to repeat them. 1069 00:51:13,460 --> 00:51:16,820 The point is we have an extremely aggressive 1070 00:51:16,820 --> 00:51:17,060 The point Russian intelligence service 1071 00:51:17,060 --> 00:51:19,620 Russian intelligence service 1072 00:51:19,620 --> 00:51:24,820 operating to the same old rules, or lack of rules, if you prefer. 1073 00:51:24,820 --> 00:51:25,060 operating to the same old rules, It's alive and it's happening, 1074 00:51:25,060 --> 00:51:26,300 It's alive and it's happening, 1075 00:51:26,300 --> 00:51:26,540 and that's why It's alive and it's happening, 1076 00:51:26,540 --> 00:51:29,500 and that's why ASIO needs to be on its game. 1077 00:51:30,460 --> 00:51:32,780 The mole hunt is never over. 1078 00:51:36,860 --> 00:51:38,900 (THEME MUSIC PLAYS) 1079 00:51:56,180 --> 00:51:57,780 Captions by Red Bee Media 1080 00:51:57,780 --> 00:51:59,980 Copyright Australian Broadcasting Corporation