John Kerr and Pine Gap surveillance base (Image: National Archives of Australia; Wikimedia)

It was Monday November 3, 1975, and on a practice track somewhere in Melbourne, champion horse Think Big was being taken for a light canter.

It was the day before the Melbourne Cup, and the 1974 winner was widely tipped to get the double. Think Big — she was a crowd favourite and the name was much in the air. Was it on the minds of the nation’s leaders that morning, as they descended on Melbourne for the race that stops a nation?

Sir John Kerr and Gough Whitlam would all be in town that momentous day, as Sir John would tell the palace in his letter about that day. With the Palace Letters now available, we can see clearly what a momentous day this was — measured not only by what John Kerr told the Palace, but by what he didn’t. 

Monday November 3 was the start of the last full week that the supply crisis could play out, without a decision having to be made as to whether a pre-Christmas election could be called — either a half-Senate or a double dissolution. That would have to be done by Tuesday November 11, for a December 13 poll (December 20 was out of the question).

Opposition leader Malcolm Fraser had announced his intent to block supply on October 15. But his early confidence was already slipping. Whitlam had turned the crisis into what both Kerr and the Queen’s secretary Martin Charteris would call a 1909/1910 moment — referring to UK prime minister H. H. Asquith’s breaking of the power of the House of Lords. 

Thus, Kerr notes that Fraser had come to see him with a compromise — if Whitlam agreed to a House of Representatives election by mid-1976 (a year early), then Fraser would accept a half-Senate election before Christmas. At a Melbourne Cup eve function, Kerr passed on the offer to Whitlam and Whitlam told him there would be no deal whatsoever

But it’s what Kerr didn’t mention that is of interest. For the day before, Sunday November 2, in a speech at Port Augusta, Whitlam had announced that National Country Party leader Doug Anthony was tied up with a CIA agent operating clandestinely in Australia, and accused the NCP of getting CIA funding.

Whitlam hadn’t named him, but on the morning of Monday November 3, in the AFR, Brian Toohey had. He was Richard Stallings, first director of the Pine Gap spy facility in the 1960s, who had returned to Australia in the ’70s as a covert operative. 

That week, the revelation of Stallings (and others) would send the national security establishment into uproar. Why? Well, because the US government regularly gave the Australian government a list of CIA agents operating in Australia.

Stallings wasn’t on that list, but he was on a second list which included deep cover agents, and which was provided only to ASIO, ASIS and permanent defence head Arthur Tange. Whitlam’s intention to, as prime minister, name Stallings in parliament as an unlisted agent would throw the intelligence relationship into uproar.

For the national security establishment, Whitlam’s punchy attitude was a clear indication that he had gone rogue. By 1975, US-Australia relations were at a low ebb. The US national secretary establishment had been gunning for the Whitlam government since attorney-general Lionel Murphy’s raid on ASIO HQ in 1973.

ASIO had been letting violent, fascist Croatian Ustashe groups run wild in Australia, as a way of preventing a visit by the Yugoslavia president Josip Broz Tito, the key player in the Non-Aligned Movement group of nations.

This was seen as unforgivable, according to CIA counter-intelligence guru James Jesus Angleton; a government raid on the “crown jewels” of inter-agency shared intelligence. 

Going for broke

Through 1975 things were heating up. In December 1974, Whitlam had endorsed Labor MP Rex Connor’s search for billions in petro-dollars loans, to bypass the priority hold British banks had on Australian capital raising; the ASIO head had been replaced by a non-spy; and the ASIS head had been sacked for running an off-the-books mission in newly independent East Timor.

The nat sec establishment had presumed Whitlam to be a pro-US centrist figure. It now looked like he had been captured by the party’s anti-US left.

By far the most alarming gesture was Whitlam’s raising of the leases on US bases, particularly Pine Gap. These were due for renewal on December 9, and it was hitherto thought to be a formality. But in early 1973, Whitlam had told US ambassador Walter Rice that the bases would become an issue if the US continued to heavy Australia on security or cut it out of export markets.

The revival of that threat so close to lease renewal was a nightmare. In his Port Augusta speech, Whitlam had asserted that the National Country Party was funded by the CIA. He was going for broke.

Now here’s what’s significant in the Kerr letter of November 3: he makes no mention of any of this at all. Having kept the palace updated on the political situation at a level of such detail that he asked whether it was perhaps too much for Her Majesty, he entirely leaves out matters pertaining to national security — and to the unity of the Commonwealth.

Why would that be? The plain fact is that Sir John Kerr was now the servant of two masters. He was a former CIA asset who had become a British high-Tory type. He was desperate to serve both, while keeping them apart.

The real John Kerr

History has bequeathed us the top-hatted drunk. But the real John Kerr was an entirely different man, about which I’ll say more next week.

The short take is that Kerr was a Marxist radical in the 1930s who got taken up by powerful forces in World War II and became, in the late 1940s, both an anti-communist and a client of CIA front groups, such as the Australian Association of Cultural Freedom, of which he made a failed tilt to be president.

The British bling and fawning came later, and very much as a consolation prize. Kerr saw himself as a man in history, part of the double movement — people called to the radical left by the squalor of the ’30s, and then called to US support by the squalor of Stalinism. 

So I do not believe for a second that he was unaware of the back-and-forth over US bases and CIA sleeper agents. We know that he quizzed Whitlam at length over the sacking of the head of ASIS — yet that doesn’t appear in the letters either. 

We know that Kerr had an official, calendared meeting with chief defence scientist John Farrands on October 28. A week earlier, Whitlam’s staff had asked Tange for the list of CIA agents in Australia — with Tange providing the “outer” list which had not included Stallings. Tange had not, at that stage, known that Whitlam’s office had Stallings name. 

Farrands was one of the few Australians who knew how Pine Gap really worked and its huge importance to the US empire — that it not only gave the US an edge on the USSR in monitoring (in breach of treaties), but was a pioneer in mass surveillance of general communications, hoovering up phone calls and telexes.

Farrands’ meet with Kerr would appear to be part of a decision by Tange and others to do an “end run” around Whitlam. Did Kerr raise these matters with Whitlam at the November 3 Cup Day eve meeting? It would seem unlikely he did not, since there is no indication that Kerr observed any propriety boundaries in general discussion of politics.

Things were moving fast now, as Brian Toohey related. On Tuesday November 4 Whitlam’s defence minister Bill Morrison went to see NCP leader Anthony on Tange’s request (Tange, now Morrison’s servant, had been Morrison’s boss) to try and talk him out of challenging Whitlam on Stallings CIA membership (Anthony had not known Stallings was CIA). Anthony refused, and on Thursday November 6 tabled a question on notice for Tuesday 11 November regarding the matter.

Staying in line

On Saturday November 8 things kicked up a notch, with the arrival of a telex from Ted Shackley, head of the CIA’s East Asia desk, to his ASIO opposite number stating that intelligence sharing would cease if ASIO, basically, couldn’t keep its own government in line.

The telex went to Tange on Sunday November 9, and to Whitlam’s office on Monday November 10 (an indication of where the power lay). 

Farrands would later tell Toohey that he had briefed Kerr by phone that weekend regarding the Shackley telex — the scientist’s involvement in this lobbying can only have been because of the importance of the bases.

Farrands would later deny he had said such (though Toohey had repeated Farrands assertion to Whitlam the same afternoon as he spoke to Farrands – the occasion was a Canberra garden party).

Tange would deny that Farrands had briefed Kerr at all, save for the calendared October 28 meeting which was listed as a “get to know the public servants” meet.

But Tange would later slip up.

In his posthumously-published memoirs, he records a “November meeting” between Kerr and Farrands. Was this the phone briefing of November 8-9? Or was it a November 3 meeting at the Watsonia, Melbourne army base, which Farrands somtimes worked out of because it was the base for the Defence Signals Directorate, the Australian liaison with the US operators of Pine Gap?

On Monday November 10, Tange and Farrands tried to persuade Whitlam, via a briefing note, to answer Anthony’s question the next day by using the official US line that Stallings was merely a US defence department ex-employee.

Whitlam refused to mislead parliament. He never got the chance; Kerr sacked him before Question Time was due to begin.

Thinking big

This sequence of events has been known for some time (though previously no one appears to have twigged that Tange inadvertently owned up a November Farrands-Kerr meeting), but the revelation of the Palace Letters fills it out absolutely.

Why? Because at the beginning of the week Sir John Kerr is still referring to the Senate votes on supply as “deferrals”, remarking that the government has funds until the end of November — and treating the matter, in conversation, as if it was still a party political stoush. 

But through that week of November 3 to November 10, he is seeking more urgent advice on the use of “reserve powers”. Importantly, he asks not only whether they still exist in a usable form (which was a real question at the time) but, crucially, whether they would have had to be exercised the first time the Senate blocked supply. 

In other words, Kerr is asking whether reserve powers are somehow tied to the events of parliament, or whether they retain an absolute and arbitrary character.

He gets the answer that they do from two quarters: from right-wing high court chief justice Garfield Barwick who reaffirms their independent character; and from the palace, which supplies the argument from Canada’s King-Byng affair of the 1920s.

But Barwick’s written advice, which arrived on November 10, is perfunctory — it simply asserted that the powers continue to exist. And the palace affirms the governor-general as the people’s representative in the older framework of dominion status. 

That interpretation is anti-democratic and leads to absurdity — as it did on November 11, when the House immediately passed a no confidence vote in Malcolm Fraser and a confidence vote in the “member for Werriwa”.

How did Kerr deal with that? He told the Palace on November 20 that he presumed the reserve powers to carry over beyond the crisis, and to give him the authority to prorogue parliament until the election, refusing any communication from the House of Reps speaker, with Fraser’s commission as caretaker PM still in tact.

What was one of the duties that befell him as caretaker? The renewal of the Pine Gap lease falling due on December 9, four days before the election. Which of course Fraser duly did.

As Barwick said later, “Sir John did his duty”. So did Farrands. After denying he had said he had briefed Kerr, he ended his career being made a Companion of the Order of the Bath, a rare honour indeed.

After the Dismissal, Kerr would include a clipping of an article by Brian Toohey outlining the Stallings affair — which would seem to be very much arse-covering. The Palace Letters give strong weight to the evidence that Kerr was crucially influenced by the US-alliance crisis to make a decision for an arbitrary dismissal at a date and in a manner that, two weeks earlier, he does not appear to have been contemplating. 

Quite a lot happened on Monday November 3, 1975. The next day Think Big thundered home to get the Melbourne Cup double. And Sir John Kerr began thinking big himself.