American Cryptology during the Cold War - The Black Vault

Ib) (1)
Ib) (3) -50 USC 403
Ib) (3) -18 USC 798
Ib) (3) -P.L. 86-36
discussion, Chilley agreed to establish a new Australian security organization, called the
Australian Security Intelligence Organization.
With the Australian security house supposedly in order, the British prime minister,
Clement Attlee, intervened with President Truman to get a new hearing of the Australian
matter. Attlee complained in a letter to Trumari that:
The intermingling of American and British knowledge inall these fields is so great that to be
certain ofdenying American classified information to the Australians, we should have to deny
them the greater part ofour own reports. We should thus be placed in a disagreeable dilemma of
having to choose between cutting off relations with the United States in defence questions or
cutting off relationswith Australia. 24
With matters at the crisis level, Attlee proposed to Truman that Sir Francis Shedden,
the powerful and respected Australian defense minister, visit the United States to plead
the case. Truman accepted, and Shedden visited Washington in April. But he was unable
to sway USCIB, and the British were back to their dilemma - whether to choose the United
States or the Commonwealth as allies. In 1949 the outcome was anythingbut certain.
Then one ofthose unexpected quirks offate intervened which was to save the day: the
Labor government under Chilley went down to defeat at the polls,\and Robert Menzies
formed a new Liberal-Country Party coalition in December. The conservative Menzies
was able to successfully disassociate his government from the leftist.elements of the Labor
government. This was critical since the actual source of the leaks was known (through the
VENONA project; see chapter 4) to be two leftists within the Australian diplomatic corps.
With a Conservative government in power, USCIB authorized a limited resumption of
cryptologic exchange with Australia. Full resumption ofties did not occur until 1953. The
incident tarnished American-Australian intelligence cooperation for years and caused a
serious rift with Britain which was made worse just a few years later with the Klaus Fuchs
case and the Burgess and McClean defections. It also had a deleterious affec\ on early U.S.
SIGINT efforts against the People's Republic ofChina (PRC).25
By 1953 relations had warmed to the point where Australia was reincorporated as a
full COMINT partner. The foundations of the Australian participation in the. UKUSA
Agreement (the name BRUSA was changed at British request a year later) came at the
Melbourne Tripartite Conference of September 1953.
New Zealand came in as a rIfth partner,
New
Zealand had contributed mainly DF to the Allied cryptologic effort in World War II and
had sent people to Australia to serve with the Commonwealth effort in Brisbane.,
\
\
Ih\UBbS VIii 'I\\bSU'f I(SYIISbS OSMIU'f OSU'fRSbS-YS'fSMBdSm'fbY
19 ~MBRA