Percy Spender, writing from Washington, suggested taking fewer immigrants because too much would need to be spent to ‘provide the new roads, the power, lights and water, hospitals and schools they will need, and the plant and equipment which will give them work benches . . . by driving the car too hard we have uncovered a host of structural weaknesses’. There was a chronic shortage of investment capital as a result of Australians’ habitual reluctance to save in forms other than home ownership. This meant more borrowing from and trading with the United States, but greater economic integration with the US had implications for foreign policy, reducing Australia’s room for independent action from America just as greater independence from Britain was possible (though the latter was not very popular with Menzies). The sense that the government was at a loss and poorly led had first impressed some of the electorate in late 1952, when the Liberals had lost the Victorian seat of Flinders in a by-election, and then Labor won power in Victoria, led by John Cain. Menzies’ Treasurer Harold Holt was worried about newly emerging unemployment (in an electorate where full employment was taken for granted) in an economy that was ‘all dressed up with nowhere to go’.
The urbane Holt had grown up in the world of theatre and radio stations (which in the age of the radio serial were closely connected). He had graduated as a lawyer and opened a practice dealing with theatrical, film and performance industrial matters, had been in Parliament since the mid-Depression and had been a junior minister during Menzies’ first, early-war prime ministership. Now he was very much an habitué of those high Melbourne social and artistic circles (were there any higher in Australia?) Menzies himself belonged to, and was a trusted lieutenant to Robert Gordon Menzies.
Menzies showed the strain of these economic problems—to lay eyes, very much like those which had alienated people from Chifley—and the most sleek-looking of men began to look unwell. Menzies thought the younger members of the government were unimpressive: ‘There is almost every month a closer consolidation of the group of Great Public School, English University and men from the high ranks of the Defence Services who got into the houses [of Parliament] in 1949. And the result is not healthy from the point of view of party solidarity—or sobriety, since this large coterie has formed a “good food and wine club” which dines every Wednesday night when the House is sitting in a private room behind closed doors and does itself very well.’
But the comfort was that he knew the ALP was deeply divided over sectarian and political conflicts that would lead to its fatal schism (the Split) in 1955. Labor’s hopes were high, in view of a coming ‘horror budget’ and Menzies’ defeat in the referendum seeking to ban the Communist Party. Between late 1951 and June 1953, most opinion polls had Labor with a sufficient lead to win the coming election. Then, in 1954, people began to buy again and the economy started to revive. Cars, refrigerators, washing machines and carpets were bought by the enthusiastic but thrifty household acquisitors of Menzies’ Australia.
The Liberal Party won the May 1954 election and there was a view that the victory was created by the Petrov affair, which will be explored in more detail later in this chapter. News-Weekly, the organ of the anti-Communist Catholic Labor right, wrote that Mrs Petrov, ‘distraught, sobbing, gripped firmly on either side by a burly Soviet official . . . had brought into this never-never land a little touch of the harsh reality of life . . . in Iron Curtain Countries’. There is no evidence that the defection was stage-managed or that in 1954 the electorate voted on the issue of espionage. The Age however wrote, ‘The Petrov affair has been responsible for the restoration of the government’s morale.’
Though Menzies had behaved with some delicacy, Artie Fadden had cranked the ‘Reds are everywhere’ paranoia shamelessly, asking, ‘Could you trust the destiny of Australia in the hands of Dr Evatt [who had become leader after Chifley’s death] . . . Can you afford to make Dr Evatt the nation’s trustee after his association with Communists and communism over the years?’ Billy McMahon, a rising minister from Sydney’s eastern suburbs (who represented the more westerly electorate of Lowe for forty years without living there), speaking at a Brisbane rally, declared, ‘the Socialist has always been closely identified with Communism . . . the Labor Party actively affiliated with Communists during the Red referendum campaign’. Evatt could protest that ‘the theory and practice of communism are alien and opposed to Labor’. But the Liberals won the rhetoric battle.
Lord Casey, returned to the House after a struggle with depression, and now Menzies’ Minister for Foreign Affairs, declared, ‘International communism could be right at Australia’s northern gateway in eighteen months to two years.’ With the fall of Vietnam would come Thailand, Burma and Indonesia. Certainly the fact that the French had been driven out of Vietnam in early May 1954 helped this sort of argument. Casey was observed as being unable to get proper sleep for worrying about the French catastrophe at Dien Bien Phu. The fear of a new world war rose again as it had in 1950–51, now with Indochina rather than Korea as its focus.
The Catholic right in particular argued that it was from Indochinese bases that the Japanese had conquered much of South-east Asia. Evatt responded to these criticisms by saying that if anyone had the right to boast about defence it was Labor, which had led Australia through the whole period of war against Japan.
So, in his election launch, Evatt concentrated on social policies, abolition of the means test on the pension, increases in child endowment and maternity allowances, and the release of housing funds through the Commonwealth Bank. However, it was easy for the Liberals to mock these policies as inflationary.
In the final ballot the two-party-preferred vote was 49.5 per cent for the Coalition and 50.5 per cent for Labor. Labor gained five seats but needed eight to win government. In any case, although people mentioned domestic issues as their primary concern, it did not mean that the fear of international Communism, and a belief that Evatt was somehow associated with it, was not a factor in the voting pattern. It was apparent, whether seen from the point of view of foreign affairs or domestic issues, that the election occurred at the right time for Bob Menzies.
VLADIMIR ENTERS
Understandably enough, Menzies would attack the idea that the 1954 defection of Vladimir Petrov and his wife from the Soviet Embassy in Canberra, and their seeking and securing of political asylum in Australia, was an electoral stratagem as Dr Evatt claimed. The defection was a triumph for the Australian Security Intelligence Organisation (ASIO), the security establishment created by Chifley and Evatt in March 1949, at a time when so many unions were controlled by Communist executives. In 1950, Menzies had appointed ASIO’s second, influential leader, Brigadier Charles Spry, a polished Australian intelligence officer who would develop a repute amongst the left of politics for saturnine power similar to that of Hoover in the United States.
Evatt questioned whether the announcement of the defection was simply too convenient for Menzies, given the coming election. Menzies answered that it was Chifley who laid down the rule that the details of ASIO’s activities would not be exposed in Parliament or to the public at large, and so he could not respond to questions about Petrov.
On 10 February 1954, Spry told Menzies that a defection was possible by a member of the Soviet Ministry of State Security. On 3 April, Petrov, a dumpy, bald little man, son of Central Siberian peasants, left the Soviet service and sought political asylum. He would claim disillusionment with the Soviet system, which had collectivised his home village and imprisoned many of the good Communists he had known in his childhood. This was a more important issue to him, he said, than the fact that he was due to be sent home very soon. But the truth was also that he had seen colleagues purged in the 1930s, and may well have been traumatised by that experience. In his later book, Empire of Fear, co-written with his wife, Petrov explained, ‘I had an inside view of the great internal purges; I lived through the most fantastic reign of terror imposed by a modern government on its people, and a bloodbath almost too fearful to be bel
ieved. Those years can only be described as a nightmare, in the blind, inexplicable, capricious terror they unleashed.’
Menzies approved directly of the granting of the application for asylum. Nearly two weeks later, the Department of External Affairs informed the Soviet Embassy of the fact. The Soviet Embassy declared that the documents Petrov had handed over to the Australians were forged, and soon began depicting him as an embezzler of Soviet funds. In response, Petrov would declare, ‘The Soviet Embassy in Canberra, whose doors we [he and his wife] entered for the first time on 5 February 1951 was to a unique degree among foreign embassies, a microcosm of its parent. It was a Soviet fortress on alien territory, a little Moscow on Australian soil.’
On 15 April, after the Soviet Embassy had been told, Menzies convened Cabinet, and was given approval to deliver a statement to Parliament. Menzies told the House, ‘Mr Petrov, who has been carrying out the functions of the Russian Ministry of State Security—the MVD [the Ministry of Internal Affairs]—has disclosed a complete willingness and capacity to convey to our own security people a large number of documents and what may turn out to be much oral information and explanation.’ In fact, as well as being Third Secretary at the Russian Embassy in Canberra, Petrov was a colonel in the Soviet secret police, and had originally been appointed by the notorious Lavrentiy Beria, Stalin’s murderous security chief. Stalin having died in 1953, Beria had recently been executed under orders of Stalin’s successor, Nikita Krushchev, and some would ask if Petrov feared he too might be purged, like his former master, if he returned to Russia. Petrov was later accused by the Soviet ambassador of trying to form a pro-Beria clique amongst the embassy officials while he was Third Secretary; the Ambassador claimed Petrov was frightened he would be reported to Moscow for it.
Petrov occupied a number of safe houses to begin with, but the government meanwhile paid him a sum of £5000 towards his future maintenance. Petrov’s handsome wife, Evdokia, worked as an intelligence officer for the MVD. As of April, she had not yet asked for asylum. What Petrov’s plans were in that regard is a mystery, but it seems he might have been willing to sacrifice his marriage if necessary.
In any case, enough information had been turned up to justify judicial investigation into names thrown up by the documents, said Menzies. He added that while ‘it would have been agreeable for all of us’ to defer the investigation until after the new Parliament had met, the emergence of ‘systematic espionage’ demanded action as quickly as it could be organised.
Evatt said he would support a royal commission and that an Australian Labor government would see that any person guilty of espionage would be prosecuted. On the last sitting day before the election, Menzies introduced a bill to set up the foreshadowed royal commission. Its head, Justice W. Owen, was from the Supreme Court of New South Wales, and his colleague Justice R. Philp was from the Supreme Court of Queensland. Both these jurists were World War I veterans. The third, Justice G. Ligertwood, had been for nine years on the Supreme Court of South Australia.
In encouraging Petrov to defect, ASIO used the services of Michael Bialoguski, an immigrant born in Russia of Polish parents. A physician who was willing to supplement his professional earnings by acting as a part-time secret agent, Bialoguski’s pose was to utter left-wing sentiments while being passionately anti-Communist. His control was G.R. Richards, Spry’s deputy. Petrov was well known in Canberra, had many friends and an extensive social life. He had a taste for Kings Cross in Sydney, and as Menzies said, ‘Enjoyed the freedom of Australian habits and had developed a real attachment to the country.’ He had also failed at building up a spy ring in Australia. And he was under notice of recall to Moscow and was due to leave with his wife in a couple of weeks’ time (he met his MVD successor in Sydney on 3 April, the day he defected). On 1 April 1954, the ambassador had officially accused Petrov of dealing with a secret document ‘in a manner contrary to the administrative regulations’. This was a gift to Bialoguski, making it easier to persuade Petrov to defect.
Menzies claimed that when he got news of Petrov’s defection, he asked for advice on whether he should conceal it until after election day, 29 May. ‘Should I, in breach of all diplomatic courtesy, have concealed it (I don’t know how) from the Soviet Embassy?’ That phrase ‘diplomatic courtesy’ rings strange given the anti-Soviet passions of the time, and thoughts of electoral etiquette probably did not delay Menzies long.
Petrov’s wife was unaware of his defection until the Soviet ambassador dismissed her from her post and also ordered her to leave her home in Canberra and come to the embassy, where she would be placed under guard. She came not entirely against her will. She was still a Russian, still a Communist, an accomplished linguist who was a member of Soviet military intelligence and worked for it as a cipher clerk. Her expertise was in Japanese, English and Swedish. She had married Petrov in 1940 and gone with him to serve in the Russian Embassy in Sweden. In 1951 she accompanied her husband to Australia. Members of her family still lived in Russia. When the news of Petrov’s defection first reached her, she believed that it must have been a form of kidnap by the Australians.
On 16 April, the Department of External Affairs sent a note to the ambassador enclosing a letter to Mrs Petrov from her husband in which he denied he had been forcibly seized and said that he was being treated well. The Soviet ambassador compelled Mrs Petrov to write to her husband, refusing to see him. On 19 April, she was driven to the airport in Sydney to catch a plane for Darwin en route for Moscow. She was escorted by two armed couriers.
News of her removal had got out and there was a demonstration by a crowd at Sydney airport to prevent the boarding of the plane. But it was decided she did not yet seem to be under coercion. Overnight she flew across Australia with her escorts in a state of increasing inner turmoil. ASIO spoke to Menzies and it was decided to get in touch with the captain of the aircraft and ask him to find out whether she was going to Moscow against her will. A steward was given the job of questioning her.
From the report, the captain got the impression she wanted to stay in Australia but was afraid. She told her questioner that her guards were armed. When the plane arrived in Darwin the acting administrator interviewed her, and the guards were told it was unlawful to carry arms on an aircraft. Asked if they were armed, her escorts assaulted their questioners. After a tussle, their weapons were taken from them. Evdokia Petrov saw dangers in both going and staying—if she remained in Australia her relatives in Russia would be in trouble. She also doubted whether her husband was alive and well.
But before the plane took off from Darwin, Petrov spoke to her from Sydney. He told her why he had defected, and that he was well and free. He also said that when she arrived in Russia she would not be allowed to cross the threshold of her house and would never see her relatives. After this conversation she said to the administrator, ‘I will stay.’
The plane resumed its flight without her and the guards went with it—to what chastisements we do not know.
One of the documents released by Petrov to the royal commission was a press report written by Fergan O’Sullivan in 1951 when he was working for the Sydney Morning Herald in the Canberra press gallery. A Russian overtly representing the Soviet TASS news agency had given him the material, but it turned out that the Russian was an MVD operative and thus a tainted source. O’Sullivan had become Evatt’s press secretary in April 1953, but after the 1954 elections he admitted to Evatt he was the author of the document, and resigned. O’Sullivan’s contribution was reports on no fewer than forty-five journalists. The idea the royal commission got from it was that the MVD might be able to use this or that journalist according to his enthusiasms or weaknesses. The same MVD men gave Rupert Lockwood, an Australian journalist and Communist more false material still. Justice Victor Windeyer, the Royal Commissioner, would call Lockwood’s document ‘a farrago of fact, falsity, and filth’.
Evatt sought leave to appear before the royal commission, defending both Lockwood and a man called Grundema
n. Evatt wanted to destroy the idea that Lockwood, O’Sullivan and Grundeman had collaborated on Exhibit J, the multi-page rundown on the ideological tendencies of journalists. The conclusion of the royal commission the following year was that although the documents handed over by Petrov were reliable, there was no law under which O’Sullivan, Lockwood and others could be charged.
The money Vladimir Petrov had expected to make from publishing a book of his story did not eventuate, since sales were poor. The Petrovs had had to wait for the royal commission to be completed before their book could be published, and in the meantime Bialoguski published his account, which forestalled them. The Petrovs became Australian citizens in 1956 and with the grant of £5000 they received from the Australian government, bought a house in Bentleigh in Melbourne and lived under the protection of a D notice, a prohibition on the press revealing anything about them. Petrov’s new name was Sven Allyson. He found work developing film for Ilford Photographics—he had previously processed instructions from Moscow from undeveloped film. Petrov’s life after defection was fraught. He remembered Leon Trotsky, whom the Stalinists had chased to Mexico and assassinated, and did not leave the house except to go hunting or fishing. His dog Jack was eventually returned to him but was taken away again after it bit Evdokia. ‘No friends, no future. I wish I was dead. No one could dream of our misery,’ Petrov would write in 1967.
But the information the Petrovs supplied about other Soviet spies throughout the West was of great value—they were said to have identified over five hundred Soviet agents. And even if he were unhappy, Vladimir Petrov would live to a considerable age, dying in 1991 aged eighty-four.
Evdokia was haunted by thoughts of the fate of her family in Moscow. She believed they had been punished or killed because of her defection. In 1960 she was able to reconnect with them through the Red Cross. Her father, she discovered, had, in the manner of defectors’ families, been sacked from his job, and had died three years later. She and her mother corresponded until her mother’s death in 1965, but her sister Tamara emigrated to Australia. Still, Evdokia felt sometimes that she was nothing but a defector. The media still occasionally pursued her. She was known as Anna Allyson and worked as a typist with William Adams Tractors. She would live to see the fall of the Soviets and die in Melbourne in 2002.