The mathematics of spying: when the figures don't add up

In recent years, Australians have been told that foreign espionage operatives are thick on the ground in this country. Few in our intelligence community would dispute this, with Russia and China being the prime gatherers of our secrets, especially those shared among our Five Eyes partners. And American intelligence is at the top of every operative's shopping list. The public, however, are generally unaware of the fact that if those thousands of foreign spies fail to produce quality intelligence within, say four-six months, they'll be promptly withdrawn and replaced by someone more aggressive. After all, spies aren't posted here because Australia is the espionage world's favourite holiday destination.

But the question of how many spies there are in Australia, and their level of success, is only half the story. The other half you'll never get to hear about is the number of Australians they're paying to procure the secrets they want, and pay handsomely for. One foreign operative here doesn't run just one Australian agent (traitor); they'll have a stable of local providers with good access to highly classified material doing their bidding. The total number of traitors therefore will be exponentially greater than the number of operatives.

One of the great failings of our Canberra system is its continuing aversion to prosecuting identified traitors in the court system (or in any other way), as the Americans and our other allies do. Canberra prefers Australians to believe that, as a people we are more pristine than the Immaculate Conception and consequently have no traitors in our midst. If that were true we'd have had a thousand or more PhD theses published on this phenomenon.

This tendency towards denial is not uncommon; where Australia differs is that traitors here are never subjected to harsh punishment. In the United States, treachery in any form is ultimately dealt with in a most severe manner, especially where moles are exposed inside its intelligence agencies. A leading KGB agent-handler, Victor Cherkashin, who ran two of America's most damaging traitors, commented in his 2005 memoirs (Spy Handler: Memoir of a KGB Officer, The True Story of the Man Who Recruited Robert Hanssen & Aldrich Ames ), the FBI and CIA were both risk-averse. "They concentrated on protecting their own and were in denial about the possibility of having traitors within their own ranks," he writes. "Secrecy was aimed at avoiding scandal and maintaining careers."

In Australia, this syndrome was highlighted by the late Paddy McGuinness, a veteran Australian journalist, writing in The Australian in March 1994, before a Judicial Inquiry into ASIS began its hearings: "It has now been revealed," he wrote, "that in the latter half of last year six Russian intelligence agents [spies] operating in Australia were expelled. The Government has for some reason tried to play down the significance of this. For an agent to be expelled in this way means that he or she was sufficiently important to be 'running' a number of Australian agents – not casual contacts, not 'agents of influence' or silly dupes, but people who were actively co-operating in passing on secret information about Australia and Australia's allies."

As Cherkashin indicates, denial is generally driven by the fact that by the time the traitor is identified, particularly if they've been at it from some time, a lot of people around them who have promoted and protected them stand to suffer acute embarrassment. Or worse, if it is shown that these people have ignored giveaway signs such as an expensive lifestyle incommensurate with a traitor's known earnings, they too are implicated. The support network around a traitor has often been actively engaged in perpetuating the existence of the offender in deliberate and blatant defiance of the national interest.

A recent history of ASIO (taxpayer-funded) acknowledged that a handful of traitors had almost certainly existed inside that agency – our key spy-catching organisation – and that it had been penetrated by Russian intelligence. But we've not been told who they were or how damaging their treachery was, nor how they were punished.

In 1985, a top KGB officer, Oleg Gordievsky, had defected to the British and brought with him a wealth of information. From this, it was obvious that all was not well with Australian intelligence. The debriefing of Gordievsky by Australian officers appeared to have been deliberately delayed and when it did take place the details were tightly restricted. This was a manifest slap in the face to those loyal and experienced ASIO officers who were interested in seeing their agency cleansed.

In 1992, it was revealed that Vasily Mitrokhin, a KGB archivist, who had been exfiltrated from Russia by MI6, had brought with him a treasure trove of information on KGB operations in the West. A certain amount of information was ultimately released to the public in two books authored by Professor Christopher Andrew of Cambridge University, but anyone seeking references to Australia was destined to be disappointed. The British Government acknowledged that information relating to Canadian and American operations was relayed to the appropriate agencies in those countries in that same year. In a review of one of Andrews' books, The Mitrokhin Archive II, published in 2005, an American scholar, Stephen W. Stromberg, comments that: 'The Australian Security Intelligence Organisation even used the files to break up a network of local agents in Australia. Many of the documents remain classified."

Other claims also circulated that ASIO's counterespionage operations had been totally compromised. In the early 1990s too, a former KGB general, Oleg Kalugin, who resided in Washington, claimed that his old service had had a great coup in Canberra by penetrating Australian intelligence and gleaning valuable US-supplied secrets.

Again, in 1992, an exercise of an unprecedented nature was launched. This was an Australian Federal Police investigation into treachery in ASIO. It was the equivalent of Britain's Metropolitan Police Special Branch running an operation into the affairs of MI5, the domestic security service. Known as Operation Liver, the AFP investigation was wide-ranging. ASIO offices were bugged, officers themselves were subjected to close surveillance and home and office telephone calls were intercepted. The results were too hot to handle publicly and no statements were issued.

Laurie Oakes, a now-retired veteran political correspondent in Canberra, reported in 1999 that several ASIO officers were pensioned off in mysterious circumstances. One source, he said, claimed that those involved were given payments in excess of their normal superannuation rights. Oakes perceptively observed that those involved in engineering that silence would no doubt prefer the term "damage control" to "cover-up". They certainly would, and that's because damage control carries the connotation of serving the national interest.

So where are our equivalents of Robert Hanssen and Aldrich Ames? Don't hold your breath. We're just not into catching whales; instead, we're lucky to catch the odd sardine every once in a while.

In 1999, the Australian media reported on the arrest in the US of Jean-Philippe Wispelaere, a 28-year-old Canadian-born intelligence analyst with Australia's Defence Intelligence Organisation (DIO). Wispelaere wasinfatuated with spying and had been expelled from Wesley College in Melbourne for creating numerous teenage identities of himself. None of this behaviour or history had been picked up when he was subjected to tough security screening for the position in DIO. Hehad only worked with that Organisation in Canberra for six months when he attempted to sell over 1,300 US-supplied secret intelligence documents to two Asian countries. The FBI arrested him in a sting operation in which he was lured to Washington. He was prosecuted in a federal court in Virginia and given a fifteen-year prison sentence, the latter part of which could be served in Australia under an international prisoner transfer scheme. It is, however, unclear whether he did in fact return to Australia or go to Canada. His US lawyer at the time of his sentencing suggested that the US had claimed jurisdiction over the documents Wispelaere had tried to sell and prosecuted him under US law because Australian law was so feeble.

ASIO's security vetting procedures had also failed to pick up the fact that Wispelaere had three nationalities (Australian, Canadian and French), had financial problems, an obsession with aliases and was hooked on anabolic steroids. This was all open source information, which the media readily exposed after the arrest.

A few months after the sentencing of Wispelaere, the Howard Government announced strengthened security procedures across the public service and especially in Australia's intelligence agencies. The country's espionage laws were toughened, with the maximum penalty increased from seven years to twenty-five.

In 2001, another employee of DIO, Simon Lappas, who suffered from depression, attempted to sell US secrets with the help of a friend who was a prostitute. The pair's plan was to gain financially by dangling their stolen wares before foreign embassies, particularly the Russians. During the charging process, the Americans remained adamant that they would not tolerate their secrets being openly displayed in any Australian court of law. This led to a farcical situation where lawyers were instructed to turn their backs when the secret documents involved were presented. After three trials, both Lappas and his associate were convicted.

The most extensive inquiry into treachery in Australia got under way in 1993, led by Michael Cook, then an immediate past Australian ambassador to Washington. It ranged well beyond ASIO and uncovered things no one wanted to deal with. So bad were the findings that the outgoing and incoming governments in March 1996 – from Labor to the Liberal/National Party Coalition – were moved to reach yet another "understanding" that what had been uncovered would never be revealed to the public.

You don't need to be a mathematician to realise that all this points to a continuous cover-up on a grand scale.

It also points to a number of choice ironies. One is that foreign intelligence services hostile to Australia and its democratic way of life, know almost everything about treachery in Australia while the citizens of our country know precisely nothing. Another is the stark contrast this failure poses when matched against our protective agencies' noteworthy success in thwarting numerous terror attacks on Australian soil. And last but not least, is the fact that loyal Australian intelligence officers often joke that it pays much better to betray our country than to serve it honestly. QED.