A secret agent, the KGB and a ‘witch-hunt’: The ASIO raid that infuriated Australia’s ex-spies

Spy agency ASIO has raided the home and office of a former high-profile Australian intelligence official as it probes his dealings with a retired KGB operative and efforts to crack a Cold War spying mystery.

ASIO declined to confirm the existence of the intrigue-laden operation and why it has targeted Neil Fergus, the Australian counter-intelligence official turned leading international security consultant who led federal government security planning for the Sydney 2000 Olympic Games.

Former intelligence operative Neil Fergus and ASIO chief Mike Burgess.Credit:

National security sources confirmed to this masthead that ASIO agents searched Fergus’ Sydney home in February, seizing phones and laptops, after Attorney-General Mark Dreyfus approved a warrant.

The decision by ASIO to use its powers on a high-profile former officer is unprecedented in the agency’s recent history and has divided pockets of Australia’s intelligence community.

Fergus and at least two other former security agency officials have lodged formal complaints about the raids with the ASIO watchdog, the Inspector-General of Intelligence and Security (IGIS).

“It is my contention to the IGIS that the facts and grounds in the warrant were unfounded,” Fergus told this masthead.

“The point that has been made to the IGIS is to exhume the facts and grounds to examine this matter. I have also been told by a middle manager from ASIO that nothing had been found of concern, and a line had been drawn over the matter.”

Spies’ fury over ‘witch-hunt’

Three sources with knowledge of aspects of the operation said one area of ASIO interest appeared to relate to the recent efforts of a small number of ex-Western intelligence officials, including Fergus, to fully document and expose the infamous Russian penetration of the domestic security agency in the late 1970s.

In mid-2023, the ABC’s Four Corners alleged that the ASIO traitor was the agency’s long-dead former espionage operative, George Ian Peacock. The ABC drew on the research of former Canadian intelligence officer Dan Mulvenna, who, along with Fergus, was interviewed by the ABC about Peacock’s suspected betrayal.

While supporters of Fergus have also questioned whether the raids are linked to his outspoken commentary with media outlets such as the ABC and Nine – the owner of this masthead – security sources dismissed the notion that ASIO would conduct a raid because of comments a person made in the media.

Neil Fergus spent several decades in the intelligence service before becoming a private consultant.

Fergus, who worked for ASIO in the 1980s and 1990s before forming his own consultancy firm, regularly appears in the media as an expert commentator on security and intelligence matters.

Sources aware of some details surrounding the raids have also confirmed a dispute about the extent to which Fergus was authorised to have contemporary dealings with a former member of the Soviet spying apparatus. The sources said the contemporary efforts by Fergus and at least two other ex-Five Eyes spying agency figures to probe the Soviet infiltration led to an ongoing liaison between Fergus and the retired Soviet spy in Europe.

An ASIO spokesperson said: “As a matter of long-standing convention, ASIO does not comment on individuals or investigations.”

The NSW manager of Fergus’ security company, William Dent, who worked alongside Fergus at ASIO between 1991 and 2001, criticised the raid on his friend and colleague as “the greatest witch-hunt I have ever seen. It beggars belief”.

“I support Neil wholeheartedly in this. From the Monday morning of the raid, it has been a big part of my life, although not as big as his. The damage caused by these malicious allegations being pursued is unconscionable,” Dent said.

The spook who chased a KGB operative

This masthead has confirmed the identity of the Russian, along with his Cold War role working to penetrate the “Five Eyes” agencies of Australia, the United States, Britain, the UK and New Zealand. However, this masthead is not naming the ex-KGB operative for safety reasons.

Fergus has privately insisted to supporters that he had authorisation from senior ASIO officials, who have since left the organisation, to pursue the ex-Soviet official for the complete details about how Russia penetrated ASIO.

But other intelligence community figures have queried the extent to which Fergus was authorised to operate in the manner he did and if he exceeded his brief.

While the infiltration of ASIO is a historical matter, some official records dealing with it remain classified.

The operation targeting Fergus is underpinned by allegations he may have carried out activities prejudicial to Australian security many years after he departed ASIO ranks, but these are untested, have resulted in no charges, and there is no suggestion by this masthead that Fergus has broken any laws.

A small group of ex-spy agency officials who are long-time supporters of Fergus is now querying whether the raids were overzealous or unwarranted. However, others in Australia’s espionage community said the case raised issues about the actions former spies could take when no longer in government service.

A life dedicated to protecting Australia

When contacted, Fergus dismissed the allegations of wrongdoing as fanciful. He stressed that all his consulting work for various Australian government agencies over the past two decades had been “appropriately approved and entirely lawful”.

“I have not at any stage been involved in any activities prejudicial to Australia’s national security,” he said. “My whole life has been dedicated to protecting Australian national security.”

His resume includes work planning security for Nine’s coverage of the Olympic Games and the security bids for this year’s Paris Olympics and the 2032 Games in Brisbane.

He also advised on security planning for several international political summits, including the G20, NATO and APEC, according to the website of Intelligent Risks, the consultancy firm he founded in 2001.

But over the past decade, Fergus has also conducted consulting work for Australian agencies that two former intelligence officials said involved highly sensitive and potentially classified matters. Fergus declined to comment on this work other than repeating that he had always acted under direction and lawfully.

Attorney-General Mark Dreyfus (right) signed off on the warrant from ASIO director-general Mike Burgess.Credit: Alex Ellinghausen

The ASIO Act requires that before granting the spy agency a search warrant, the attorney-general be satisfied that the head of ASIO has reasonable suspicions the person in question engaged in behaviour prejudicial to security.

They must also believe that issuing the warrant is likely to substantially assist the collection of relevant intelligence.

Dreyfus’ office declined to comment on the raid.

One intelligence community source defended the investigation, saying that ASIO search operations were not conducted lightly.

“I know ASIO will welcome scrutiny by the IGIS,” the source said. “Any investigation action that needs approval by the AG [attorney-general] passes through multiple hands in the agency prior to sign-off.”

The ex-spies who went corporate

The raids of Fergus’ premises have cast light on a little-scrutinised but thriving part of the national security establishment.

Dozens of former Australian spies and security officials have made the shift to private enterprise, with many retaining their security clearances and continuing to consult for government departments while also building a list of corporate clients.

The transition from government to industry requires ex-officials to effectively quarantine classified information they may have learnt in their previous roles or through ongoing government agency consulting.

Five national security establishment sources confirmed to this masthead that neither Fergus nor his backers knew the content of the information presented to Dreyfus that underpinned the operation that had led to the raids.

There is no suggestion from this masthead that the raid relates to the deliberate disclosure of intelligence information to aid a foreign adversary or undermine Australian interests.

Several sources confirmed that without access to this classified information – which this masthead has not seen – it was impossible to judge the appropriateness of the ASIO raids.

A source in the national security establishment said they had concerns about ASIO’s investigation but no evidence of impropriety.

“I hope IGIS will get to the bottom of it,” the source said.

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