JOHN MENADUE. The Ausgrid decision and the growing power of security and intelligence agencies. A REPOST from August 2016

Jan 5, 2018


The Ausgrid decision on Chinese investment raises two important issues.

The first is how do we get a proper balance between security concerns and the wider benefits of the relationship. Our major strategic ally the US sees China our major economic partner as a rival and threat. Read about a recent discussion between Hugh White and Geraldine Doogue on this issue.

The second is how good are our security/intelligence agencies in advising the government? It is this second issue that I discuss here.

In his press conference to announce the veto on the Chinese investment in Ausgrid, the Treasurer was asked ‘what was the security concern?’. He replied that ‘the only person security-cleared in this room to answer that question ,is me’. That is hardly reassuring but it is a continuing feature of Morrison’s ministerial career. Remember the need for ‘on water secrecy’. He loves being smarter and better informed than other people and telling us about it.

In my blog ‘Military/Security takeover of Australia’s foreign policy’, I drew attention to the effective takeover of our foreign policies, by the Australian and US Defence and Intelligence Complex(AUSDIC). That complex now even extends to our Foreign Investment and Review Board. The recently retired head of ASIO is now a member of the FIRB that advised on the Ausgrid decision.

AUSDIC is raising serious problems for us in our relations with China. One unfortunate illustration of this was the recent comment by Peter Jennings, the Executive Director of the Australian Strategic Policy Institute . Jennings confidently told us that the Chinese government was the source of the cyber attacks that had allegedly crashed the Bureau of Statistics site. It was just not true. He told us earlier that Chilcott was very naïve in his report and didn’t understand how countries go to war. A proper reading of the Chilcott Report would clearly show that the point that Chillcot was making was that the Blair Government improperly and unwisely took the UK to war and sucked us in on faulty security advice. The consequences for millions of people has been tragic. Yet ASPI claims that is an independent, non partisan think tank.!

Three decades ago we had a similar xenophobic response to the threat of Japanese investment in Australia. ‘ The Sydney Morning Herald and the Australian Financial Review variously told us in the 1980s that ‘The Japanese have today what they call “Japan Incorporated” … The [Australian] community begins to feel Japanese are not playing fair and square … A single piece of seamless fabric – [Japanese] companies interwoven with government … Japan’s 20 biggest companies could buy the entire state of NSW using just one year’s profits’.

But in the 1980s, the paranoia about Japanese investment was mild compared with what we see today in respect of China. More importantly AUSDIC did not then have the influence it has today.. We now have a much more serious problem with much more weight given to dubious security/intelligence advice.

We saw that recently in the Defence White Paper that identified China as a major threat. The decision to spend $50 billion on new submarines is so that we can operate against China in the South China Sea. The financial cost of that decision will haunt Australia for decades.

Despite the security and intelligence information which the government accepted in denying the Ausgrid investment, we have not really been told why Chinese investment in similar government enterprises in Australia was acceptable. What has changed.?

In my earlier experiences with security agencies, I learnt to be very skeptical about these agencies. In my book ‘Things you learn along the way’,  published in 1999,I set out on page 134, my reservations. I wrote:

“My experience with people in the intelligence and security community over 20 years taught me to be very cautious. They seriously deceived me twice without any apology or seeming regret. Deception of friend as well as foe was all in the game. I found many of them brittle, and not all that smart or well balanced. They are however adept in doling out juicy bits of information that are often untested, but draw one into the inner circle of people with privileged information, a twilight world of secrets and gossip. Perhaps we all read too many spy thrillers and vicariously want to be part of the action. Few are immune.’ 

I also set out in that book my particular concern about abuse of security services by government. I wrote (p.181)

Foreign Minister Peacock and his department were instructed [by Malcolm Fraser] to open an embassy in Bagdad as a cover for the posting of an ASIS agent, with the task of investigating Whitlam and his connection in Iraq. Alan Renouf, Secretary of the Department of Foreign Affairs and his Deputy, Nick Parkinson, together with Ian Kennison, Head of ASIS, were to say the least disturbed that this was not a legitimate intelligence gathering exercise. As Head of Fraser’s Department I spelt out my concern to Kennison and others and told him that he should refuse to open an ASIS office. If he couldn’t refuse, he should at least insist on a written direction from Peacock, his Minister. The written direction was given, the Bagdad post opened, including an ASIS agent. The post was closed within 12 months.’ ( To access the book click on’John Menadue Web Site’ at top left on blog home page, then click on ‘book’ at top right.)

But all this was some decades ago. Since then the security/intelligence agencies have significantly increased powers and increased resources. But I cannot see much improvement in their performance and accountability.

  • ASIS bugged the East Timorese Cabinet Room in 2004 to obtain information to help Australia in negotiations over the Timor Gap with its estimated oil and gas reserves worth $40b. The ASIS Director General at the time subsequently became the Director General of ASIO. He is now a member of the FIRB board which advised the government on Chinese investment in Ausgrid.
  • A former senior ASIS officer ( Witness K) who had been closely involved in the bugging in Timor had his passport seized and was harassed continually by ASIO because he was proposing to testify on the subject to the Permanent Court of Arbitration in the Hague. Apparently he decided to testify when he leaned that former Foreign Minister, Alexander Downer had become an advisor to Woodside Petroleum. In 2014 the Court ordered Australia to stop spying on East Timor.
  • ASIS bugged the family of the Indonesian President.
  • Man Haron Monis was interviewed many times by ASIO. The national security hotline received 18 calls about the behaviour of Monis and his threats. But Monis was found by ASIO not to be a threat.
  • ASIO has been a major blockage in our accepting the 12,000 Syrian/Iraqi refugees announced by Tony Abbott in September 2015. At my last check, only a few hundred had arrived. At that time, Canada had settled over 25,000 Syrian and Iraqi refugees. Canada would seem to have a much more efficient checking process than we have with ASIO.

Too often ministers invoke national security, relying in some instances on doubtful advice. They deliberately seek to stifle public debate. The media has also allowed itself to be silenced whenever the mantra ‘national security’ is rolled out.

And it is not just ministers and the media who are often misled by the security and intelligence club. With the increasing problem of terrorism around the world private terrorism and security consultants including at universities have been booming. It has become a major growth industry. I am yet to discover how one becomes a security expert!. Many of them are former intelligence officers or have heavy dependence on news feeds from these agencies. When I see and hear so many of these  so called  experts on terrorism and security, I  do wonder how competent they are. It is becoming a very incestuous security and intelligence club.

Governments have introduced measures in attempts to supervise the competence and integrity of our security agencies, e.g. parliamentary committees and the Inspector-General of the agencies. But it is not clear how effective they are. All too often the minders of the agencies, like ministers, join the club.





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