Australia set up a domestic security and spy-catching service to secure intelligence access to the US and Britain. Without the service—the Australian Security Intelligence Organisation—the formal alliance with the US might not have happened. If the crown jewels of Australian defence are the intelligence-sharing arrangements with the US, then ASIO was created to protect the jewels.

Indeed, ASIO’s creation story (1948-49) is founded on the growing panic in Canberra that the US and Britain were refusing to pass confidential information to Australia. Washington and London had discovered, via signals intercepts, that secrets given to Canberra flowed to the Soviet Union. The Brits thought that if Australia didn’t act on security London would have to ‘watch our secrets pour down the drain’ in Canberra.

As the flow of US and British intelligence shut down in 1948, Australia’s top Defence Committee predicted that ‘the whole basis of Australian Defence Policy will be radically weakened’ unless classified access could be restored. America’s ambassador to Canberra bluntly warned that ‘the only conditions under which the US would pass material to Australia would be when the new Security Service had been formed.’

The irony and the duality in ASIO’s birth in 1949 is that Australia created a domestic security service for a set of international reasons. ASIO was the price paid for intelligence access. ASIO’s existence was one element in the achievement of the formal alliance with the US. And ASIO’s birth was a key moment when Australia enlisted in the Cold War.

The former Labor Leader and Defence Minister, now ambassador to Washington, Kim Beazley, thinks ASIO was decisive for Australia’s alliance and alignment:

Not many Australians realise that the most important single government action aligning Australia with the West in the post-World War II Cold War power distribution was the decision by the Chifley [Labor] Government to create ASIO. It was a defensive step. It demonstrated our willingness, in an environment of intense intelligence attacks on various elements of our and our allies’ national security capabilities, to be a trustworthy player. A capable protector of our and other secrets.

All these quotes and thoughts are drawn from The Spy Catchers, the first of a three-volume Official History of ASIO by Professor David Horner. He writes:

Signals intelligence was at the heart of American and British concerns about security in Australia in 1948, and led directly to the establishment of ASIO in March, 1949. These concerns focused on two areas. First, information from decrypted Soviet cables [codenamed Venona] revealed unequivocally that Australian citizens in key government departments such as External Affairs were spying on behalf of the Soviet Union. Second, as a result of this spying Britain and the US cut off Australia from access to Allied Sigint, thus damaging Australia’s standing as a reliable defence partner.

In July 1948 the Australian Naval Attaché in Washington was told Australia had ‘a security grading equivalent to that of India or Pakistan, and was in the lowest category of any foreign power having representation in the US’. Consider the turnaround: in September, 1951, the US, Australia and New Zealand signed the ANZUS treaty in San Francisco.

In the first of four interviews with Professor Horner, we started with the Venona program, the decrypted cables between Moscow and 26 cities around the world, including Canberra, New York and Washington. Venona cryptanalysts read more than 200 cables between Canberra and Moscow, revealing the names or cover names of about a dozen Australians who provided information to the Soviet embassy. Venona led to ASIO and that, in turn, played a signal part (in several senses) in the development of Australia’s alignment and alliance.

Graeme Dobell is the ASPI journalist fellow. Video produced by Luke Wilson.