A Washington tortured by Vietnam was flummoxed in 1972 when Australian voters made the Labor party’s antiwar Gough Whitlam prime minister after 23 years of conservative rule. Entering Henry Kissinger’s office at the White House on December 23 for a conversation about China relating to President Nixon’s new opening there, I found the national security adviser (and my former professor, to whom I acted as an informal adviser) waving Whitlam’s December 21 cable protesting the “Christmas bombing” of Hanoi. Angrily Kissinger said, “It’s unforgivable for this new Australian government to put Hanoi and Washington on the same footing. How can an ally behave like this?” I meekly replied that Whitlam considered the mutual security treaty ANZUS (New Zealand is the third signatory) “unshakable.” He riposted, “Can it be unshakable? You can’t apply ANZUS on some points and not on others.”

The Nixon White House had run into a storm not expected from pliant Australia. They did not grasp the significance of Whitlam’s recent triumph within the Labor party​—​in which I (then an Australian citizen) had played a small role. The struggles between a liberal democratic right wing and a Marxist left wing within the Labor party had been as wrenching as the Truman-Henry Wallace feud in the Democratic party in the 1940s. For his part, Whitlam was unaware of how much Washington knew of Moscow’s spying in Australia in the 1940s and 1950s and the huge Communist influence in Australian unions over the years.

Kissinger went on grimly: “We’re going to pretend this cable from Whitlam never came. I’m not even going to show it to the State Department.” C. L. Sulzberger, however, got wind of it and wrote in the New York Times that the cable was ignored. In fact, Whitlam was sent an “unofficial” reply. “I have never seen such language,” Australian foreign ministry chief Keith Waller later told me in Canberra, “in a cable from one government to another.” All this made 1973 a lousy year for the Canberra-Washington relationship, hitherto one of the closest alliances in the world.

Unruly shouting by the left wing of the victorious Labor party did not help matters. The trade minister jumped into foreign policy with insults to Nixon. Other ministers, who had partnered with Communists in “Stop Work to Stop the War” anti-Vietnam war events, referred to American “maniacs” and “mass murderers.” Australian maritime unions refused to service U.S. ships.

All this vexed Whitlam, as his memoir The Whitlam Government, 1972-1975 indicates. He was not on the left of his party on many policies (though, like Jimmy Carter, he veered ever leftward after leaving office). He retained the vital U.S. defense facilities in Australia, but he did please the left with a quick withdrawal from Vietnam. Like many left of center leaders during wars, then and since, he was looking for the exit.

Whitlam often said he backed ANZUS but disdained SEATO (the South East Asia Treaty Organization), which included France and the United Kingdom but no major Asian country. Yet information possessed by Nixon and Kissinger about Moscow’s meddling in Australia suggested they were dealing with a Janus-faced party with a “Truman wing” and a “Henry Wallace wing,” and they rejected the ANZUS-SEATO dichotomy. Kissinger said to me, “No government, perhaps other than the British, has been given the intelligence information that Australia has received under [conservative prime minister William] McMahon and his predecessors. Whether that can continue under Whitlam remains to be seen.”

A week after visiting Kissinger I was in Australia and related his words to Whitlam at Kirribilli House, a prime ministerial residence overlooking Sydney Harbor. A U.S. warship sat in the blue waters beyond the sweeping gardens. “It cruised up yesterday,” the prime minister said sardonically, “and has been anchored there ever since.” He said of the White House reply to his Vietnam cable, “We’re going to pretend Kissinger’s cable never came.”

Heady with his electoral victory, Whitlam minimized the known facts about Soviet spying in Australia and the problems this had caused Washington. A 2010 book, The Family File, by Mark Aarons​—​son of Laurie Aarons, a Communist Party of Australia (CPA) leader equivalent to Earl Browder or Gus Hall​—​contains a taped confession of the chief local Soviet agent within the CPA. “I had some very high-level information,” the agent told Laurie Aarons in 1993 not long before he died (post-spying he became a fisherman). “I gave it to [Moscow]. What was I to do?”

The book shows several senior Labor figures in cahoots with the CPA on foreign policy and union issues in the 1970s. Whitlam, like Martin Luther King Jr. in the ’50s and ’60s, probably knew about Communists in his movement but looked beyond them. He effectively addressed the public with soaring rhetoric and turned a blind eye to compromising details, expecting surrogates to handle them.

After reading The Family File, the current Australian foreign minister, Bob Carr, a former Labor premier of the country’s most populous state, said (before taking office in the Labor cabinet of Prime Minister Julia Gillard), “This forces us to reassess the Labor left.”

Comintern chief Georgi Dimitrov said in 1935, “It cannot be expected that Social Democrats under the influence of class collaboration with the bourgeoisie .  .  . will break with this ideology of their own accord. .  .  . No. It is our business as Communists to help them free themselves from reformist ideology.” In France, Spain, and other countries where the Communist party was strong, it sought an open alliance (popular front) with Labor parties, but in the United States and Australia, where the Communist party was smaller, it adopted an underground approach. This unfolded for decades in Australia. Amidst the eucalyptus trees of Canberra, Moscow’s fiats were passed to Aarons; near Sydney’s beaches, the TASS correspondent handed over tens of thousands of dollars in cash. By 1945 the CPA had 20,000 members and held sway over almost half the delegates to the congress of the Australian Council of Trade Unions, the key pillar of Labor’s support. Between 1945 and 1948 Moscow obtained crucial secret American and British documents from the hands of Australian Communists working in the foreign ministry at Canberra.

Whitlam knew of “unity tickets” in trade union elections that gave Communists a role in Labor conferences as delegates of affiliated unions, and the practice of “dual membership” in the Labor party and the CPA. John Curtin, Labor prime minister during World War II, had belonged both to Labor and the Victorian Socialist party, which stood for revolution and believed World War I had been a sordid feud among capitalists in which workers were mere fodder.

Whitlam complained to me soon after becoming prime minister, “Even my own staff have to be cleared by ASIO [the Australian Security Intelligence Organization].” Certainly with Labor out of power since 1949, ASIO had grown cozy with the conservative side of politics, but Whitlam might have recalled that after Soviet diplomat Vladimir Petrov defected to Australia in 1954 in one of the key espionage cases of the Cold War, Soviet agents were found on the staff of Whitlam’s 1950s predecessor as Labor leader, Herbert Evatt (who was, incidentally, Labor foreign minister during the egregious 1945-48 security lapses).

As ASIO sequestered Petrov, the Soviet embassy put his wife on a plane for Moscow. But during a stopover at Darwin airport, ASIO snatched her back, and the Petrovs gave Canberra mildly valuable information and settled in Australia. Conservative prime minister Robert Menzies exploited the drama for political advantage, but Evatt rubbed salt in his own wounds by writing to Soviet foreign minister Molotov to ask whether or not Petrov had spied!

I was a Trojan horse union delegate to the 1965 Victorian State Labor party conference in Melbourne, one of a band of young pro-Whitlam Labor members combating Communists who used “unity tickets” to influence Labor. From a podium under heavy CPA influence, the chairman said all wars were “a result of the free enterprise system.” Moderate unions affiliated with the Labor party had little voice in deliberations; 100 of the 400 union delegates at the conference had Communist secretaries. “Let’s get on with attacking capitalism,” one speaker cried. “That’s what we are here for.” Appalled, I wrote an article for Rupert Murdoch’s recently established Australian newspaper and sent it first to Whitlam, then deputy leader of Labor, to check the wisdom of publishing my direct attack on the left. He phoned: “Publish and be damned!” but advised a pseudonym. Murdoch ran the piece under the title “Class-War Crusaders in the Affluent Age,” by a Special Correspondent. “Is Labor politics only about the interests of the unionist,” I wrote, “not at all about the interests of the housewife and the teenager?”

“The ‘general line’ was always set in Moscow,” Theodore Draper said of the U.S. Communist party, and the same occurred Down Under. True, the CPA did struggle for Aboriginal rights, help the unemployed, and later push East Timor independence. But Moscow was an albatross never far from its neck. Laurie Aarons and his flock were wounded by the Stalin-Hitler pact, blindsided by Petrov’s defection, given pause by the crushing of the Hungarian uprising in 1956, made fools of by the split between China and the Soviet Union, and appalled by the Soviet invasion of Prague in 1968. Ultimately, Soviet spying in Australia and Communist undercover efforts within Labor were two sides of a coin. Moscow’s brain and purse were inseparable. The Soviets paid the bills even as they stymied the CPA’s political prospects.

In 1958 Aarons visited China (which also bankrolled the CPA), and later, in Moscow under Nikita Khrushchev, he waxed eloquent to his hosts about Mao’s Great Leap Forward. “It was very tactless, when I think about it,” he later mused, “and went down like a lead balloon.” He “suddenly understood” that Beijing-Moscow relations “weren’t too flash.” In Melbourne the head of the pro-Beijing faction of the CPA, Ted Hill, prepared to found his own Communist party and acquire weapons and train workers in the jungles of northern Australia for “armed struggle” in the coming “class war.” (I later interviewed Hill, a successful lawyer neat in suit and tie, for my biography Mao; although his organization in Melbourne was pitiably small, he was often received by Mao in Beijing. Mao didn’t talk to Hill about guns and Molotov cocktails, leaving that enthusiasm to Paris intellectuals and the New York Review of Books.)

As the crisis in Prague built in 1968, Aarons was “invited” to visit the Soviet ambassador in Canberra and hear a letter from Moscow on Czechoslovakian reformer Alexander Dubcek. “They wouldn’t give you the letter, so you had to write it down. It was six or seven foolscap pages. .  .  . That was the worst political experience I’ve ever had. .  .  . We had some lunch and some vodkas and I came back [to Sydney]. On the plane I read the thing, and my heart was sinking.” It dawned on Aarons that Australia, as a small country like Czechoslovakia, could also one day face Soviet intrusion. He belatedly began a search for “an Australian socialist model.” Most of Aarons’s doings were observed by ASIO, whose hit-and-miss, amusing reports make it virtually a coauthor of The Family File.

Thanks to Soviet string-pulling and the good sense of the Australian electorate, the CPA never made it into parliament and the cabinet, as Togliatti’s Communists did in Italy and Thorez’s Communists in France. To its credit, right-wing Labor, exemplified by Bob Carr and Kim Beazley​—​the current ambassador in Washington​—​kept its distance from the Moscow-Beijing-subsidized cabal that was Australian communism.

To be sure, some blame for the 1972-73 crisis belongs on the American side. Kissinger at first referred to Prime Minister Whitlam in our December 23 talk as “Mr. Whitelaw.” Assistant Secretary of State Marshall Green said to me of Gough Whitlam and his deputy, Lance Barnard, three weeks after their election: “I know and like them both, Mr. Gough and Mr. Whitlam.” Secretary of State William Rogers was unaware that a Labor prime minister did not (then) choose his cabinet members; Walter Rice, the American ambassador in Canberra, had not told him. The Nixon administration was ill prepared for a changed Australia and paid the price.

In late April 1973, the Australian embassy in Washington had zero assurance that Nixon would receive Whitlam on a planned July trip to the United States. No newly elected Australian prime minister had ever been in such a pickle. “Snub!” cried the press. Whitlam’s top aide, Peter Wilenski, phoned me at Harvard on April 14 from Canberra. “The PM agrees with you,” he said, “that the [Washington] embassy’s access to the White House is not very good. He wants you to arrange a meeting for me with Kissinger.” The prime minister feared that requests to Nixon through the embassy, if refused, would get into the press and besmirch his government.

Whitlam told Wilenski, “If you get this meeting with Kissinger and my meeting with Nixon is set for July, you can take a week off on the way back to Australia!” Kissinger quickly agreed to see Wilenski on May 2. Wilenski swore me to secrecy before that talk, and he told the Australian ambassador about it only one hour beforehand. Kissinger assured Wilenski that Nixon would receive Whitlam. Wilenski got a few days on the beaches of Hawaii.

Marshall Green, Rice’s successor as ambassador, took effective steps during the first half of 1973 to ease tensions. At a dinner the Australian ambassador in Washington gave for him on April 18 before he left for Canberra, I told Green a certain operative at the U.S. embassy there was objectionable to Whitlam. “I’m getting rid of him, he’s going to Tokyo,” said Green. He also remarked to the dinner table, “If we can’t get on with Australia we can’t get on with anyone.” Green and Whitlam came to respect each other, and the atmosphere improved by 1974.

At the White House, when Kissinger calmed down over Whitlam’s cable, he reminisced about Zhou Enlai, whom we had both met, and made a prescient remark: “For American policy [in East Asia] there are two phases. In the first, Thailand has to be linchpin. But that will give way to a second phase, when détente with China will be the best guarantee of security in Asia.” I knew this would appeal to Whitlam, who had switched Australia’s embassy from Taipei to Beijing immediately on taking office. In Sydney the prime minister asked me, “What am I going to say at my press conference about the Hanoi bombing?” I explained Kissinger’s “two phases,” which pleased him. If phase two came soon, it was clear, Australian-American relations would stabilize. This eventually occurred.

The collapse of the Soviet Union in 1991 quickly brought the collapse of the CPA. What Ronald Reagan called (in advance) the “sad, bizarre chapter in human history” of Soviet communism reached its final page. Robbed of hope for revolution, 400-500 amiable political orphans gathered in a hall in Sydney to disband the CPA, close its bank accounts, then stroll into the Australian sunshine to plan their personal futures. As Aarons’s son concluded, “There were no models to inspire new generations.” Some joined the Labor party to pursue mere political “evolution.” A Stalinist remnant obtained explosives for terrorist acts against police, greedy businesses, Rupert Murdoch, and other oppressors.

The Communist problem for the Australian democratic left evaporated not only because of world events, but also because the pro-market economic policies of the Labor government of Bob Hawke (1983-91) and later the conservative one of John Howard (1996-2007) made Australia prosperous and rendered “class struggle” an anachronism. Hawke’s changes were not all permanent, however (just as Clinton’s changes to the Democratic party did not preclude Obama’s leftism). One of Hawke’s successors as Labor leader declared the U.S. alliance “the last bastion of the white Australia mentality” and called George W. Bush “the most incompetent and dangerous American president in decades.” But Howard thrashed him at the 2004 election; thus did the electorate speak.

Democracy solves many problems among democratic allies. Nixon and Kissinger were agitated over Australia in 1972-73, but the Australian people spoke, the democratic process worked, and it would work again three years later to toss Whitlam out. He lost in 1975 despite his achievements in foreign policy because he was a poor economic thinker and a social engineer beyond the taste of individualistic Australians (he wanted to start a government newspaper!).

Later, in turn, Prime Minister Hawke was agitated over the coming of Ronald Reagan. “The United States hasn’t had a decent president since Truman,” he complained to me in 1986. Yet Reagan influenced Hawke’s rule just as Hawke’s economic deregulation eventually helped Howard. The electorate is generally correct, and Labor leaders must follow it to win. (Alas, this corrective lacks with allies that are not democracies.) In a democracy each side learns from the other, though loath to admit it. Whenever Labor has teetered toward the far left, the Australian people have rejected it.

Kissinger as secretary of state (1973-77) never visited Australia and was ribbed for the omission. “It was because you never gave me any trouble,” he beamed. Indirectly, surmounting “trouble” in Australia-U.S. relations in 1972‑73 benefited Prime Minister Malcolm Fraser (1975‑83) and subsequent prime ministers. The conservative Fraser accepted Whitlam’s foreign policy departures in Asia and stronger voice within ANZUS. Likewise, without Reagan there could not have been a Clinton. Without Thatcher there could not have been a Blair.

In Australia today, the old Communist impulse flickers on as anti-Americanism, disgust at capitalism for the fresh sin of destroying nature, and a preference for China over the United States as the dominant power in the Asia-Pacific region. The Labor party dabbles in the fancy middle-class enthusiasms of climate change, environmentalism, and gay marriage, but its base remains the trade union machine.

Current Labor party prime minister Julia Gillard’s chief skill seems to be clawing for power. A product of the semi-Marxist left establishment as a lawyer for Melbourne unions, she came to power in a 2010 coup when intraparty maneuver knifed Kevin Rudd (a sitting prime minister!), who’d defeated Howard in 2007. To her credit, Gillard has held at bay the Beijing-appeasers, but her domestic policy line swings almost by the month, and she pushes a crippling tax on the mining industry and expensive carbon tax goals.

As prime minister, Tony Blair made a remarkable speech in 1997 in which he implied the British Labour party had made a mistake by setting up a separate workers’ party. They should have stayed in Lloyd George’s Liberal party, which they assisted with its dramatic establishment of the welfare state after a big Liberal victory in 1906; they could have formed its vigorous left wing. Blair pointed out that the Labour party instead spent decades in the wilderness between the end of Lloyd George’s government in 1922 and its first real stretch of power under Attlee from 1945 to 1951. This speech gave the rationale for Blair’s turning his party into New Labour, weaning it from the unions and nationalization​—​and giving it a record 13 years in power.

Today the Australian Labor party, its past ideology gone, yet not having sought renewal in the mold of New Labour, has little to guide it beyond opportunism. Only when an occasional leader lifts his eyes to the electorate​—​then wins​—​does this trade union party of factions escape the smoke-filled room. Gillard is not a soaring principled leader, and victory seems likely soon for Tony Abbott’s conservatives.

Ross Terrill is the author of The Australians, various books on China, and Socialism as Fellowship (a study of the British social democrat R. H. Tawney).

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