Spies and Revolutionaries: Ch: 9 Dr Sutch and Mr R

Monday, 13 August 2007, 9:13 am
Article: Scoop News

Scoop is serializing the first 1000 words of each chapter of author Graeme Hunt's latest book: Spies And Revolutionaries – A History of New Zealand Subversion. Click here for Chapter Nine: The strange case of Dr Sutch and Mr Razgovorov

The history of New Zealand's intelligence agencies and those it has spied on have been laid bare in a book by Auckland-based journalist, author, and historian Graeme Hunt.

Spies And Revolutionaries – A History of New Zealand Subversion details how several prominent New Zealanders, all of whom are dead, spied for the former Soviet Union during the Cold War. Accusations and suspicions are laid bare before files and information that has never before been made public. This book will clearly recharge debate as to whether Dr Bill Sutch, diplomat Paddy Costello, and public servant Ian Milner were spies acting against New Zealand's national interest.

CHAPTER NINE: The strange case of Dr Sutch and Mr Razgovorov

The New Zealand Security Service, which started in earnest in early 1957, soon had to contend with a new prime minister who had little time for security men and even less for their judgments on who or what constituted a security threat to the country.

Walter Nash, who led Labour to a two-seat victory over National in the general election on 30 November 1957 (one seat after the appointment of the speaker), was far less concerned about the communist threat to the West than the former prime minister, Keith Holyoake, or his Labour predecessor, Peter Fraser, had been. He had not forgiven F.P. Walsh, now president of the Federation of Labour, for forcing his hand over the unmasking of the communist filmmaker Cecil Holmes in 1948. And he probably nursed a grudge against the security authorities for his prosecution in 1921 for importing seditious literature. That said, Nash allowed positive vetting of civil servants to continue despite finding the practice personally repugnant and in the face of objections from the Public Service Association. He was also careful not to employ known communists in his office. He did, however, allow Dr Bill Sutch to become secretary of industries and commerce without discussing security concerns with the industries and commerce minister,
Phil Holloway, or the Cabinet. But there was a proviso: he assured the Americans that no classified US material would be made available to Sutch or his department.

The secretary of the Department of Industries and Commerce was a pivotal post for an economic nationalist like Sutch in an economy governed rigidly by import licensing, exchange controls and state regulation. He was able to wield huge influence over international marketing, industrial development and state direction of the economy long after Labour lost office in 1960. His assistant secretary from 1959, also an economic nationalist, was the former communist and former Public Service Association president, Jack Lewin. Both officials remained under the watchful eye of Brigadier Gilbert’s Security Service but the service’s prime task was to ensure that the Soviet legation in Wellington, which had survived unscathed after the Petrov affair in Australia, did not misbehave.

That was, perhaps, expecting too much. Until 1959, when Australia restored diplomatic relations with the Soviet Union, New Zealand remained a vital staging-post for espionage in Australasia and the South Pacific. Most of the Soviet ‘diplomats’ were, in reality, members of the KGB or MVD. It is hardly surprising they should seek to ‘turn’ New Zealanders to the Soviet cause. The first known approach was made to an attractive single woman working in the passport office of the Australian high commission in Wellington. It was innocent enough: she was chatted up by E.P. Lutskij, the third secretary at the Soviet legation, in November 1956.

The woman did not think much of it but Lutskij, a married man, persisted with the compliments until July 1958 when he turned up at her flat out of the blue with a box of chocolates. According to author Michael Parker1 she alerted the high commission security officer the following day, who in turn contacted the Security Service. Suddenly the matter was in the hands of Brigadier Gilbert. With Gilbert’s tacit approval, the woman started dating Lutskij.

Lutskij was after Australian policy information –– important in the absence of a Soviet diplomatic presence in Canberra –– and pressed the woman to assist. At Gilbert’s direction she told Lutskij they should stop meeting. He made contact with her again and visited her flat in October 1960 at the end of his tour of duty in New Zealand. She, herself, planned to move to Sydney.

Two months later, according to Parker, the new second secretary and ‘cultural officer’ at the Soviet legation, Nikolai Shtykov, telephoned the woman saying he wanted to deliver a present from Lutskij. He used the meeting, which was in his car, to demand to know why she was planning to move to Australia. The tone, unlike Lutskij’s, was threatening. Shtykov said if he could not persuade her to stay in Wellington would she at least get in touch with a friend of his in Sydney after she arrived there? This was the start of the woman’s introduction to the real world of spying. Working with the Australian Security Intelligence Organisation, she was able to expose the first secretary of the Soviet embassy in Canberra, Ivan Skripov –– in reality, the KGB station chief or ‘resident’ –– as engaging in espionage on Australia soil. On 7 February 1963 the Australian government declared him persona non grata and he was given seven days to leave the country. His spying was not in the same class as the Soviet infiltration of the Australian External Affairs Department in the 1940s that had been exposed at the Petrov royal commission, but was proof nonetheless that Russian diplomats could not be trusted.

The New Zealand government had come to the same conclusion. Seven months earlier, on 10 July 1962, the bullying Nikolai Shtykov and the commercial counsellor at the Wellington legation, Vladislav Andreev, had been declared personae non gratae and given two days to leave. Prime Minister Keith Holyoake interrupted the Budget debate in Parliament to explain why the government had found it necessary to expel the pair:

The removal of the two was requested because they engaged in espionage. Of this the Government has conclusive proof. By illicit means, including the offer of gifts and money, they have endeavoured to obtain information to which they were not entitled and which could not be legitimately acquired through accepted diplomatic channels …

Holyoake would not disclose the secrets Shtykov and Andreev were after, other than describing them as ‘of a security nature, affecting New Zealand’s defence and external relations’ –– a veiled reference to secrets arising from New Zealand’s membership of the Anzus and Seato defence pacts. But British newspapers speculated that the pair had tried to secure details of secret work at the underwater warfare research establishment at the Devonport Naval Base in Auckland. Other reports said the Russians had sought a wide range of information from Pacific nuclear tests to details on New Zealand’s armed forces. Whatever their intended targets, they had been caught red-handed, despite the protestations of innocence from the Soviet chargé d’affaires in Wellington, N.V. Ivanov, who described the matter as a ‘big mistake’. It was a great victory for Brigadier Gilbert’s Security Service.

See Also:

Scoop is serializing the first 1000 words of each chapter of author Graeme Hunt's latest book: Spies And Revolutionaries – A History of New Zealand Subversion.

SRP: $29.99
ISBN: 9780790011400
340p, includes index, black and white photos
Reed Publishing (NZ) Ltd www.reed.co.nz
Release: August 6 2007
For more, see… Reed Publishers, Spies And Revolutionaries

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