Fake Russian diplomats revealed as heart of ‘hive’ spy ring in Australia

A highly active “hive” of Russian spies posing as diplomats operated in Australia for more than 18 months before it was dismantled as part of a sweeping and aggressive counter-espionage offensive by ASIO.

The Australian intelligence agency spent months tracking the Russian spy ring, which comprised purported embassy and consular staff and operatives using other deep cover identities, before ASIO finally moved to force the ring’s key players out of Australia, according to sources with knowledge of its operation.

ASIO director-general Mike Burgess described the spying operation in a major speech he delivered in Canberra on Tuesday, but did not name Russia.

Sources confirmed ASIO had uncovered the spy ring operating out of a number of locations, including the Russian embassy in Canberra, while the Morrison government was in power.

The spy ring’s aim was to recruit Australians with access to classified information and, according to one source with knowledge of the Russians’ activity, use sophisticated technology to steal data and communicate without being intercepted.

Rather than press for the expulsion of Russian embassy staff after President Vladimir Putin’s invasion of Ukraine — a move that occurred in other Western nations and which was sought by some within Australia’s intelligence community and Labor in early 2022— ASIO instead conducted a clandestine counter-espionage probe.

The spy ring has been operating out of a number of locations, including the Russian embassy in Canberra.

It tracked the Russian spy ring, ensuring targets did not suspect they were being watched by ASIO.

The sources said one factor influencing ASIO’s decision-making throughout the operation was the possibility Russia might retaliate by targeting the small number of Australian diplomatic staff in Moscow.

Some intelligence operations have previously led to tit-for-tat reprisals. One source with knowledge of the Russian spy ring said that if undeclared spies were aggressively and publicly expelled, there was an increased likelihood diplomats or other Australians living in Russia would have been targeted.

An early indicator of the Russian spying operation was the relatively high number of diplomatic staff it maintained in Australia given the extent of bi-lateral relations, especially when compared to the small number of staff maintained by Canberra in Moscow.

Intensive ASIO investigations had revealed several of Moscow’s diplomatic staff in Australia were involved in the spy ring, the sources said.

The abuse of diplomatic status to conduct espionage, while common in the intelligence world, represents a serious breach of protocol on the rare occasions it is exposed.

The revelations about the scale and seriousness of the breaches in Australia will inflame already strained relations between Moscow and Canberra.

In early 2022, then-opposition leader Anthony Albanese and then-shadow foreign affairs minister Penny Wong called on the Morrison government to expel Russian diplomats in light of reported atrocities in Ukraine.

“It is hard to conceive how the decision can be made to allow these individuals to stay, given the sickening abuses being carried out by Russian forces,” the pair said in a joint statement.

At that time, the ASIO operation was in full flight and there was division within the intelligence community about the impact of any aggressive, large-scale deportation move.

In response to Labor’s deportation call in April, then-foreign minister Marise Payne — a member of the National Security Committee that has access to ASIO intelligence — said such a move was “under review … at the highest levels of the government”.

The sources said the decision to let Russian diplomats remain in Australia allowed for ongoing efforts to monitor the spy ring members. Then members of the ring were quietly forced out of Australia over the past six months with their visas not renewed or cancelled.

In November, as the Ukraine-Russia conflict became entrenched, Wong released a statement stressing that “all options remain under consideration” in connection to the high number of Russian diplomats in Australia.

“While our preference is to maintain diplomatic channels, diplomatic profiles must always be consistent with our national interest,” a spokesperson for Wong said in the statement.

“The Australian government is looking hard at Russia’s diplomatic profile in Australia.”

That same month, at a Senate estimates hearing, Liberal senator James Paterson queried Labor and federal bureaucrats about the presence of Russian diplomats in Australia.

ASIO director-general Mike Burgess.Credit: Alex Ellinghausen

The Russian embassy was contacted by phone and email on Thursday but provided no response.

A spokesperson for Home Affairs Minister Clare O’Neil declined to comment on the revelations noting that Burgess had not named the nation involved in the spy ring.

“Espionage and foreign interference are happening in Australia and ASIO has been onto it like a shot. I want people to understand, those states that operate in the shadows, we have a very simple message – we are watching you,” O’Neil said on Thursday.

When he delivered his annual threat assessment speech on Tuesday evening, Burgess described a major spying operation that his agency had disrupted.

‘Proxies and agents were recruited as part of a wider network. Among other malicious activities, they wanted to steal sensitive information.’

ASIO director-general Mike Burgess

Burgess declined to name the country involved and ASIO subsequently refused to answer questions sent by this masthead.

“Consistent with long-standing practice, ASIO does not comment on operational or intelligence matters,” a spokesman said in a statement.

However, sources with knowledge of the Russian spy ring have described it in identical terms as Burgess, who said on Tuesday it was “bigger and more dangerous” than another major recent espionage operation ASIO had dismantled.

In 2022, Burgess described that earlier thwarted espionage operation as involving a “nest” of spies.

The sources confirmed Burgess’ comments this week referred to the larger and more recent Russian spy ring, a larger “hive” of spies working “undeclared” or “undercover”.

“Some were put in place years earlier,” Burgess said in his Tuesday speech in comments that match descriptions from sources about the use of Russian diplomatic cover by the spy ring.

“Proxies and agents were recruited as part of a wider network. Among other malicious activities, they wanted to steal sensitive information,” Burgess said in his speech.

“I’m not going into more detail because the foreign intelligence service is still trying to unpick exactly what and how we knew about its activities. It was obvious to us that the spies were highly trained because they used sophisticated tradecraft to try to disguise their activities.

“They were good – but ASIO was better. We watched them. We mapped their activities. The hive is history.”

In March 2018, the Turnbull government announced it was expelling two Russian diplomats as part of global action against Moscow over an alleged nerve agent attack on a former Russian spy living in the UK. Turnbull said the pair were undeclared intelligence officers and had been ordered to leave Australia within seven days.

The Morrison government was largely silent on the issue of expulsions of Moscow’s operatives after Western nations announced they were deporting Russian spies after the invasion of Ukraine.

In March 2022, the US government expelled 12 Russian diplomats from New York for “engaging in espionage activities”.

Across Europe, an estimated 400 suspected Russian spies were expelled from Moscow’s diplomatic posts as part of a campaign of sanctions and military support in retaliation against Putin’s invasion of Ukraine.

ASIO has a long history of countering Moscow-directed spying. The organisation was created in 1949 to probe suspected leaking of Australian government secrets to the Soviet Union.

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