Venona in Australia and its long-term ramifications

Soviets est. embassy in Canberra after pressure from Doc Evatt on Molotov 5 October 1942 after pressure from the trade unions when the Soviet Union had entered the war. 34 diplomats arrived in March 1943. Previously there had been a TASS agent in Sydney from September 1942
“Sillitoe revealed to Chiefly early in Feb 1948 that MI5 had learned that copies of two British documents sent to Australia had fallen into Soviet hands and that the names of three Australian government workers were known to the Soviets – Frances Bernie (electorate office of Dr. Evatt), Ian Milner of DFAT and UN in New York and Jim Hill in Foreign Affairs.
On 20 May 1948 the Pentagon announced that it would provide no further defence technical information to the British unless it could guarantee that it would not be revealed to the Australians.
This alarmed Brits and Oz because they had just signed an agreement in May 46 to do missile testing. The US had wished to stop tech info flowing to the UK, and used Gouzenko as an excuse, concern that classified docs would fall into hands of enemies.
US Navy rep on the SANACC said, “Because of political immaturity, a leftist government greatly influenced by communistic infiltrated labor organisations, and the fact that Australian governmental activities have violated the basic security principle that classified information should not be divulged to unauthorized persons, Australia is a poor security risk.” Emphasis in original, Report to meeting of SANACC-MIC, 18 May 1948, file 206/57 RG353, NARA, p 235
Director of Central Intelligence in Jan 1948 Rear Admiral Hillenkoetter, “Indications have appeared that there is a leak in high government circles in Australia, to Russia. This may, in magnitude, approach that of the Canadian spy expose of last year insofar as high Australian Government officials are concerned. The British government is now engaged in extensive undercover investigations to determine just where, in the Australian government, the leak is. P236
Sir Percy Sillitoe of MI5 reported that Rear Admiral Ingilis and some other members aid that “there could be no settlement while the Australian Labour Government was in power, as they considered the members pro-communist, and they looked to its replacement at the next elections.” p 237
27 May 1952, Foreign Minister Casey replied to a Dorothy Dixer to announce that there was a “nest of traitors in our midst.” P 239
Petrov brought papers that named 63 Australians. P. 240
Walter Clayton – CLOD – appeared and declared that he had never had any contact with Soviet officials. “The Commissioners could not contradict him without exposing their knowledge of the decryptions.” P 240
The Royal Commission into Espionage ended the career of the political career of Dr. Evatt. P 241
The Canberra traffic was collected between 1943 and 1949. P 241
4050 messages to and from Canberra were collected.
In Australia, the Soviet cables were transmitted by the post office via undersea cable or beam wireless and could have been intercepted by Sigint or handed to the Australian army intelligence by the post office officials who gave them to the US army.
Late in 1945 it was noticed by US army exports that Canberra-Moscow messages used the same one time pad as Washington-Moscow messages. Through decrypting it was found that the documents that had been to Moscow from Canberra was the British Post-Hostilities Planning committee. Because there were of British origin, the US disclosed what they had learned to the Brits.
The PHP papers had been taken for 35 minutes by Clayton from an unknown person in foreign affairs, for them to be photographed.
Menzies saw Venona as an opportunity to strike at the ALP and the Communist Party, “This was a politically adroit move; it helped him win elections by promoting anti-communism at home and it gave him a cachet in the SUA that opened doors for him in Washington.” P 248