Australia’s Intelligence Operations, 1901–45

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Australia’s First Spies: The Remarkable Story of Australia’s Intelligence Operations, 1901–45. By John Fahey. Allen and Unwin, Crows Nest NSW, 2018.

Reviewed by Tim Coyle

ON 01 January 1901 the Australian colonies became the Commonwealth of Australia; a newly proud dominion of the British Empire ‘on which the sun never set’. However, amidst this outwardly expressed fealty to imperialism there was an undercurrent of Australian nationalism. This was exhibited in the act of federation itself and the incipient movement towards naval self-defence grounded by suspicions of an emergent navalised Japan and German colonies in the Pacific region.

A handful of individuals in government, including the newly constituted Australian Commonwealth Naval Board, formulated an embryonic intelligence network to serve Australian interests. From these beginnings, Australia’s intelligence collection and analytical capabilities waxed and waned over the next several decades – demonstrating on the one hand triumphs of planning and organisation and, on the other, incompetence.

John Fahey, a former Defence Signals Directorate staff member, dispassionately analyses the history of Australia’s First Spies in human intelligence (HUMINT) and signals intelligence (SIGINT) from 1901 to 1945. He assesses the early HUMINT operations in the Pacific islands, by the Royal Australian Navy’s SIGINT and Coast Watching activities, as triumphs. Many of the HUMINT operations under several other intelligence organisations he concludes were largely dismal failures.

French and German expansion into the Pacific in the second half of the 19th century increasingly raised Australian colonial concerns which were not reciprocated by the imperial government. The Australian colonies’ representatives were mortified at British patronising of their concerns at conferences in the late 1880s which led to an independence of thought in external affairs after Federation.

The book may be divided into five divisions: pre-and First World War HUMINT, naval SIGINT 1914 and through the inter-war period, RAN and Allied SIGINT operations in World War II, HUMINT and special operations and Japanese intelligence networks and the fearsome Kempetai military police which largely negated Australian-sponsored special operations.

The first nascent Australian HUMINT mission was by Wilson Le Couteur in 1901. Le Couteur, a businessman with Pacific experience, approached prime minister Edmund Barton offering to undertake an intelligence collection operation in the New Hebrides against both the British and French colonial administrations. Barton approved this initiative and it was planned and supported at the highest levels of government. Le Couteur was to report on affairs generally in the territory and the colonial administration activities. The results informed the Australian government of social and local government issues and internal conflicts and, as Fahey points out, was professionally managed and highly fruitful. It also laid the basis for future regional collection opportunities.

The coordinator of these HUMINT activities, from 1901 to 1923 was Attlee Hunt, a senior public servant. One of Hunt’s responsibilities was effective enforcement of the immigration laws (subsequently known as the White Australia Policy). He established an intelligence reporting system using state and federal resources – including overseas trade representatives – and leading community members.

Hunt was also believed to have facilitated HUMINT against German influence in the Netherlands East Indies and Papua New Guinea through Reg Hocking’s Wanetta Pearling Company. Wanetta operated covertly under the auspices of the Australian Commonwealth Naval Board (ACNB) and Admiralty from early 1916, although Hocking and Hunts’ relationship extended from 1903.

The chapters detailing Hunt’s HUMINT intelligence networks show innovative use by government of Australian nationals with extensive Pacific islands experience; a feature which was capitalised upon by Commander Eric Feldt and his Coastwatcher network of the Second World War.

The RAN embraced intelligence from the service’s formal beginning in 1911 with Sydney and Fremantle as centres collating reporting from regional civilian reporting officers and inclusion in the Royal Navy’s worldwide network. The RAN intelligence organisation came under the deft command of Commander Walter Thring, a RN officer who, having fallen from the favour of his admiral, Lord Charles Beresford, was snapped up by the RAN. Thring’s oversight of the RAN’s intelligence function was summarised by Rear Admiral Creswell, Chief of Naval Staff as having ‘directed the Intelligence Service which he organised with careful and continuous attention and with such success as to elicit praise from the highest Naval Authorities, the Lords Commissioners of the Admiralty themselves’. The ACNB had daily direct liaison with the Admiralty using Admiralty codes whereas the army and all other government instrumentalities had to communicate with imperial counterparts via the governor-general’s office, a lengthy and untimely process. Coupled with the new 30-member SIGINT organisation, the RAN readily transitioned to war in August 1914.

In explaining a claimed early RAN SIGINT success, Fahey details an intercept by direction finding and traffic analysis of 01-02 August 1914 placing the German East Asian Squadron (not the ‘German Pacific Squadron’ as referred to by Fahey) in the Bismarck Archipelago. He states that ‘unfortunately the information (‘broken out’ on 13 August) that it revealed was ignored because it had so easily obtained’. Fahey’s source for this is A W Jose’s volume 9, the RAN in the Official History of Australia in the War of 1914-1918 (published 1928). The implication here is that the alleged dismissal of the intelligence by naval commanders – because it was ‘so easily obtained!’ – led to the escape of the East Asian Squadron from probable destruction by the superior firepower of the battlecruiser HMAS AUSTRALIA (I). This assessment is too simplistic as the tactical situation was far more fluid and complex. The narrative of this operation is more competently handled in David Steven’s ‘In All Respects Ready; Australia’s Navy in the First World War’ (published in 2014) to which readers are referred.

The well-known and dramatic capture of the Handelsschiffs-verkehrsbuch (HVB) codebooks from the German merchant ship Hobart by the RAN and their subsequent exploitation is well told. Fahey continues his cove rage of RAN SIGINT through the lean years of the late 1920s and 30s and the difficulties in training operators and linguists for codebreaking. Perhaps the most famous Australian naval codebreaker, Eric Nave, is mentioned in the context of the narrative, but Fahey defers to the Nave biography ‘Man of Intelligence’ by Ian Pfennigwerth (published 2006) for details of this major intelligence figure. The other significant RAN intelligence personalities of World War II were Director of Naval Intelligence Rupert Long and Coastwatcher founder and director, Eric Feldt. Long receives scant mention but Fahey quotes extensively from Feldt’s book, ‘The Coast Watchers’ (published 1946).

The Second World War chapters deal with naval SIGINT as practised by the US Navy Fleet Radio Unit Melbourne (FRUMEL) and the US-Australian relationships within the unit which, despite its successes, suffered from severe personality clashes. The establishment and work of the Central Bureau is extensively discussed as is the dubious success rate of special operations units and the 1944 compromise of Allied secret intelligence. The record is not wholly distinguished as inter-service jealousies and incompetence undermined much of the fine work accomplished by SIGINT agencies.

Readers will be aghast at some of the appalling security lapses which led to the Japanese Kempetai arguably blunting much of Australian intelligence operations. The Kempetai are given their ‘rightful’ space in this history as they were highly effective and professional as well as brutal.

The book is supported by a good selection of illustrations and intelligence networks diagrams. A photograph of HMAS AUSTRALIA (I) appears together with two images showing RAAF Seagull aircraft being handled on board HMAS AUSTRALIA (II) in 1932. While the inclusion of the AUSTRALIA (I) photo is relevant to the 1914 operations, an image of AUSTRALIA (II) would have been helpful to avoid confusion should any reader presume that the aircraft were operating from AUSTRALIA (I) which was scuttled in 1924.

Fahey’s research is commendable using primary sources from the National Archives of Australia, the UK and the US together with an extensive list of published works. ‘Australia’s First Spies’ is recommended to all interested in SIGINT, HUMINT and all the other -INTs and their contributions to Australian national interests and war efforts. It lays bare both brilliance and the incompetence in the first 45 years of Australian intelligence. The book is particularly relevant to today’s intelligence practitioners to emphasise that the days of ‘silo mentality’ and ‘knowledge is power’ when held tightly by individual and insular agencies must be left in the past as lessons learnt.

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