Malcolm Fraser ‘told of Croatian Six terror case conspiracy’

Top secret documents reveal that Malcolm Fraser was aware of an extraordinary conspiracy to pervert the course of justice in a terror trial 42 years ago.

Former prime minister Malcolm Fraser in 2013. Picture: Kym Smith

Top secret documents have revealed that prime minister Malcolm Fraser was aware of an extraordinary conspiracy to pervert the course of justice – and the offer of a plea deal to a Yugoslav spy – in a terror trial 42 years ago.

While a NSW jury in what was then the longest-running criminal trial in the country was being told “there is not a skerrick of evidence” that Vico Virkez “is a foreign agent”, Fraser had been given a briefing note saying: “The Australian Federal Police believes Mr Virkez has been operating in Australia as an agent of the Yugoslav government … for tactical reasons, the NSW authorities want Mr Virkez to be convicted of the ­offences charged (so his evidence against his co-conspirators would not be tainted by a charge of agent provocateur)”.

Testimony by Virkez – who was freed after the trial – was used to convict six Croatians of terrorism. They were jailed for 10 years.

The cover-up by NSW police, possible contempt of court by government officials and a deal to allow the spy to go free once the trial was over is revealed in a Nat­ional Archives file of 252 documents containing letters between ASIO, the AFP and the prime minister’s office.

In February 1979, NSW authorities arrested the Croatians for conspiracy to commit terror offences on the basis of unsigned confessions and the testimony of an “insider” – an informant who had accused the men of wanting to blow up the Elizabethan Theatre in Newtown and a water supply line in western Sydney.

For decades, there have been suggestions the informant, Virkez, was working for the Yugoslav ­secret police to frame the Croatians. The newly released documents show that in 1980, before the verdict was handed down, commonwealth officials were worried about a miscarriage of ­justice.

One document, dated April 9, 1980, refers to a meeting between ASIO, the Department of Foreign Affairs, the Attorney-General’s Office, the AFP and the Department of the Prime Minister and Cabinet.

The chair of the meeting, Mr Enfield, from the Prime Minister’s Department, “spoke of the dangers involved if the commonwealth authorities stood by and a miscarriage of justice occurred because of the part played by an agent provocateur”.

In March 1979 – a year before the trial – ASIO had informed NSW police that Virkez was a spy.

A top secret briefing note to Malcolm Fraser in March 1980. Picture: National Archives of Australia

A top secret briefing note to Malcolm Fraser in March 1980. Picture: National Archives of Australia

According to the minutes of the meeting, Enfield asked why NSW police claimed state authorities didn’t know Virkez was a ­Yugoslav agent, with the ASIO official present, Mr Cavanagh, replying: “There is a difference between knowing and knowing and the NSW police do not know ‘for evidentiary purposes’.”

As well as not intervening to correct evidence in the case, ­commonwealth officials were also party to the decision to deport Virkez soon after he had been ­convicted.

In March 1980, the AFP wrote that the NSW police were anxious to have “a commitment from the commonwealth” to deport Virkez upon conviction, and that NSW authorities were “anxious to come to some form of arrangement with Mr Virkez as his voluntary testimony is considered to be vital to the successful outcome of the case”.

This prompted government lawyer Ian Cunliffe to warn of a miscarriage of justice. He expressed “concern about the propriety and wisdom of holding out any inducement to Mr Virkez”.

Another senior government official, Mr Emerson-Elliot, said the “commonwealth is being drawn into something that could be characterised as an attempt to ‘pervert the course of justice’ ”.

Cunliffe’s advice to Fraser was that the commonwealth could not be part of the plea deal.

In the end, Virkez, whose testimony sent six men to jail for a decade, was handed a two-year sentence then was immediately deported to Yugoslavia where he lived as a free man.