The Bulletin, 5 May 2004

Excerpt from an article by John Lyons

Warnings that a spy may have penetrated the Australian military and been working for a foreign government were ignored for more than six weeks and then dismissed without a top-level investigation, according to secret evidence given to a Defence Department inquiry.

The man at the centre of the nation's worsening defence scandal, senior army intelligence officer Lieutenant Colonel Lance Collins, told the inquiry that when he notified a senior Defence Department official of the espionage allegation he was told events could be set in train that could push him to suicide. And in another interview recorded for the same inquiry, intelligence chief Frank Lewincamp reveals that federal cabinet was so concerned about the performance of defence intelligence that it considered abolishing his agency, the Defence Intelligence Organisation.

Lewincamp concedes that he intervened to delay restoration of the flow of ­intelligence to Australian troops in East Timor. While he says the initial suspension was due to a technical difficulty, he concedes: "I delayed it, probably for overnight."

Dozens of taped interviews were conducted as part of the investigation by naval barrister Captain Martin Toohey into the case of Lance Collins. The Bulletin has been leaked hundreds of pages of transcripts of the secret interviews. The claims made in the interviews are certain to increase pressure on Prime Minister John Howard for a royal commission into Australia's embattled intelligence agencies. Revelations include:

A claim by Lance Collins that a senior Defence Department official who was pressuring him to reveal a source told him he had such "coercive" power that "things he set in train could even force people to commit suicide".

An angry Minister for Foreign Affairs, Alexander Downer, furious at the leaking of up to 130 confidential reports from DIO, telephoned Lewincamp and told him DIO was an "awful" organisation.

The Chief of the Defence Force, General Peter Cosgrove, admits that the 4500 Australian Interfet soldiers in East Timor were cut off from intelligence, saying "we wondered whether they'd gone silent in Canberra". The prime minister still has not answered whether Australian soldiers were put in danger because of this suspension of intelligence.

Cosgrove says that when Collins showed him an assessment he planned to send criticising "the Jakarta lobby", Cosgrove told him: "This is pretty red hot, mate. Are you sure you want to send this?"

The most explosive of the new allegations is that for six weeks no action was taken after Collins passed on details of an alleged spy. Collins says in his taped interview: "Shortly before I was deployed to East Timor I had a junior officer of the corps came up to me and made an allegation about a mid-ranking army officer being involved in espionage on behalf of a foreign government. I thought on it for some time and decided I had no option but to report it, so I reported back to the Director of Army Security ... I didn't hear back from him, so I rang him some six weeks after that and asked whether there'd been any follow up, and he claimed not to know about it."

Frustrated that nothing was being done about an allegation as serious as espionage, Collins wrote to Cosgrove, then head of the army. Cosgrove arranged for Collins to go higher and Collins ended up meeting Jason Brown, then with defence security, and now an assistant secretary in the Defence Department.

"In the course of that interview," Collins alleges, "I was reluctant to name my source to them, for a range of reasons, and in attempting to give an opening into doing so, Jason Brown indicated that he possessed such power – such coercive power – that things he set in train could even force people to commit suicide, which was a reference to the Merv Jenkins case."

Jenkins hanged himself in 1999. He was DIO's senior officer in the Australian embassy in Washington, DC, and committed suicide after officials in Canberra decided to investigate him for passing Australian intelligence on East Timor to his US counterparts. Defence sources say Jenkins felt sharing intelligence with his American colleagues was acceptable but that after he was interviewed by the officials who had flown from Canberra, he became convinced he was going to be charged and killed himself.

Jason Brown was assistant secretary for defence security at the time of the Merv Jenkins affair. Approached by The Bulletin for comment last week about Collins' specific allegation that he had said he could set in train things that could even force people to commit suicide, a Defence Department statement said the allegation was "not new" and that Brown emphatically rejected it as untrue. The statement said that because the Merv Jenkins case was currently in the ACT Supreme Court (his wife is suing the Defence Department for damages), "we do not wish to comment in any detail" (see page 18 Collins transcript attached to this article).

The Lance Collins affair became public last month [Apr 2004] when Collins wrote to the prime minister seeking a royal commission to examine the "putrefaction" of Australia's intelligence services. Collins' career has suffered since July 1998 when he warned that a "pro-Jakarta lobby" was distorting information being given to government.

Collins, hand-picked by Cosgrove to be his senior intelligence officer during the Interfet deployment, lodged a redress of grievance with the army after being named in a federal police search warrant in relation to an investigation into Defence Department leaks to the media. Defence appointed a retired naval officer and barrister with a top-secret security clearance, Captain Martin Toohey, to investigate Collins' grievances with the army. Toohey's report concluded that DIO routinely distorts intelligence, finding that: "DIO reports what the government wants to hear."

Since then, Cosgrove and Defence Minister Robert Hill have tried to discredit the Toohey report by releasing another legal opinion by Melbourne QC Richard Tracey, which concluded that Toohey strayed from his terms of reference. But another opinion by Sydney magistrate Dr Roger Brown vindicated the Toohey report.

In the secret transcripts, Lewincamp admits DIO felt under siege at the time of Interfet. "Cabinet was on our backs, they wanted to, in fact, close this organisation down, we were on the nose basically over the leak, it was all our product over all of the national newspapers," Lewincamp tells Toohey. "I had minister Downer on the telephone saying, 'What an awful organisation I was running'. I said, 'Minister, you don't know it's coming from us'. He said, 'What do you mean?' I said, 'Well, our product goes to a huge range of customers' and I said, 'I am confident it's not coming from DIO'."

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