As critics leak against Peter Dutton’s plan to employ the Signals Directorate against Australians, the minister defends the powers as necessary. By Karen Middleton.

Cabinet split on Dutton's ASD plan

Prime Minister Malcolm Turnbull and Home Affairs Minister Peter Dutton.
Prime Minister Malcolm Turnbull and Home Affairs Minister Peter Dutton.
Credit: AAP Image / Glenn Hunt

Home Affairs Minister Peter Dutton got what he wanted when the prime minister decided to establish the Home Affairs Department last year, despite few of his cabinet colleagues and none of the security agencies actively supporting its creation.

Now, as the minister seeks to expand his portfolio’s reach, some in both of those groups are pushing back.

This week, Dutton was asked if the agency that collects foreign intelligence in defence of the nation, the Australian Signals Directorate, should be allowed to spy on Australians as well.

In a roundabout way and with a few qualifications, he said yes.

Such a change would be a dramatic departure from the operational structure that has governed the work of Australia’s security and intelligence agencies for decades.

The Saturday Paper has been told that most of Dutton’s colleagues on cabinet’s national security committee – including Prime Minister Malcolm Turnbull – do not support it.

Prompting Tuesday’s question to Dutton was a report by journalist Annika Smethurst in News Corp’s Sunday Telegraph newspaper, detailing correspondence between Home Affairs secretary Mike Pezzullo and Defence secretary Greg Moriarty.

Accompanying the story was a smartphone snap of part of a ministerial submission notifying Moriarty and Defence Minister Marise Payne of “proposals from the Home Affairs portfolio for further legislative changes to enable ASD to better support Home Affairs priorities”.

Exposing the proposal to public scrutiny, the report quoted Home Affairs as wanting ASD to have powers to “proactively disrupt and covertly remove” onshore cyberthreats by “hacking into critical infrastructure”.

Security sources confirmed to The Saturday Paper what has been widely speculated: that the leak was a deliberate move by opponents of any further expansion of Home Affairs, to draw public attention to the proposal and stop it in its tracks. Police are now investigating.

Previously called the Defence Signals Directorate, ASD was given its new name by the Gillard government to reflect an increasing engagement with security agencies conducting non-military work.

But the agency remained within the Defence portfolio, with its primary role to gather intelligence abroad and provide it to assist both the department and the Australian Defence Force in their mission to protect Australia’s interests.

The Australian Federal Police and the domestic spy agency, the Australian Security Intelligence Organisation, are responsible for conducting surveillance at home and can ask ASD for technical advice when necessary.

There are strict rules around ASD’s activities and if it discovers an Australian is caught up in its overseas net, it must report that and either cease the operation or obtain special authorisation to continue. It cannot conduct spying operations onshore.

After the leak, the two departmental secretaries and ASD director Mike Burgess jointly issued a public statement.

They denied any plans to covertly access Australians’ private data but noted that ASD’s cybersecurity role was being enhanced through legislation.

“The cybersecurity function entails protecting Australians from cyber-enabled crime and cyber-attacks, and not collecting intelligence on Australians,” the statement said. “These are two distinct functions, technically and operationally.”

But they added: “In the ever changing world of cybersecurity as officials we should explore all options to protect Australians and the Australian economy.”

The statement says the agencies “would never provide advice to Government suggesting that ASD be allowed to have unchecked data collection on Australians – this can only ever occur within the law, and under very limited and controlled circumstances”.

Peter Dutton was asked about the proposed expansion during a Tuesday news conference he had called to announce the appointment of a new deputy AFP commissioner focused on Commonwealth transnational and serious organised crime.

Dutton outlined why he supported an ASD change, zeroing in on the cyberthreat from “sophisticated criminal syndicates” and particularly child pornographers.

“In the child exploitation space we know that there are sophisticated networks onshore and off that are streaming live product of children being exploited online,” Dutton said.

“Now, if we had a capacity to disrupt that and to destroy those networks, would we want to consider it? Of course we would.”

The widely held view within the security and intelligence community – and in cabinet’s top ranks – is that that capacity already exists, not least within the AFP, whose commissioner Andrew Colvin was standing beside Dutton as he spoke.

The AFP has recently received an extra $70 million in funding towards that work. Colvin said any change to ASD was a matter for policymakers.

The Sunday Telegraph report quoted the Home Affairs submission as saying the expansion would enable ASD to “counter or disrupt cyber-enabled criminals both onshore and offshore”.

It also said the plan was for the ministers for Home Affairs and Defence to authorise such activities, bypassing the attorney-general, who otherwise retains the power to sign off on warrants.

On the day the new security arrangements were announced in July last year, the then attorney-general George Brandis emphasised the necessity of the first law officer’s ongoing checks-and-balances role.

This week, Dutton dismissed as “complete nonsense” suggestions he planned to spy on Australian citizens and insisted any change “would be accompanied by the usual protections, including warrant powers either with the AG or with the relevant justice, whatever the case might be”.

The issue of duelling ministerial powers also highlights ongoing confusion about how the new Office of National Intelligence, within the Department of Prime Minister and Cabinet, will relate to the Department of Home Affairs and which will have superior authority in intelligence matters.

There is also a practical problem with seeking to expand ASD’s remit.

Its focus currently is on helping to disrupt activities abroad, not on prosecuting criminals.

ASD uses covert methods not able to be disclosed publicly, complicating matters if agencies needed to rely on evidence it gathered to support a domestic criminal prosecution.

The president of the Australian Institute of Professional Intelligence Officers, Dr Phil Kowalick, told The Saturday Paper this week that his organisation did not support extending ASD’s role to include spying on Australians onshore.

“Our position is that Australia already has the capability to investigate criminal matters at the Commonwealth, state and territory levels and [has] processes in place to enable those investigations legally and with proper process and warrants must be approved through the courts,” Kowalick said.

This was to ensure that if a case proceeded to prosecution, the evidence produced could be used.

“Australia also has mechanisms that enable intelligence collection that safeguard Australia and Australian interests through certain agencies, ASD being one,” he said. The activities of those agencies were authorised at ministerial level.

Kowalick said: “The question seems to be whether and under what circumstances those intelligence collection agencies should be given powers to take action on issues that would require them to turn their attention to criminal matters and what that would mean for prosecuting those offences.”

He asked: What is the problem that would be remedied by making this change?

“It seems to me that there’s scope for discussion on what problem government would be seeking to address by expanding ASD powers and what would be the mechanism for addressing that problem,” he said.

“Giving ASD greater powers – it’s not necessarily the most appropriate thing to do. You need to have a discussion about the problem, look at what we already have in place and [at] what’s the gap we’re trying to fix.”

Foreign Minister Julie Bishop says there is none.

After Sunday’s leak, Bishop was asked directly if senior public servants were planning for the ASD to spy on Australians.

“No,” she said. “The current laws safeguard the privacy of Australians but also provide us with an opportunity to keep Australians safe … I don’t see any national security gap and I certainly believe the current laws safeguard the privacy of Australians but also keep Australians safe.”

She emphasised that view came from the experts. “I take my advice from our security and intelligence agencies and they have not raised with me any issue that would require an expansion of ASD powers such that you would use them against Australians.”

That advice includes the findings of the independent intelligence review that formed the basis last year for overhauling the nation’s security structure.

The review recommended the establishment of what is now the Office of National Intelligence – a restructure of the old Office of National Assessments – to play a coordinating role. It also recommended turning ASD into a statutory authority, a move that was legislated earlier this year.

The 2017 intelligence review did not recommend establishing the Department of Home Affairs.

“We consider the broad architecture of Australia’s oversight arrangements remains appropriate and does not require fundamental change,” it said.

Announcing the creation of Home Affairs on the same day as unveiling the review, Prime Minister Turnbull said it did not mention establishing a Department of Home Affairs because that was outside its remit. But the review did not identify any further governance gaps beyond its proposed changes, which included beefing up its role in advising government and business on cybersecurity while continuing to restrict its own activities to offshore surveillance.

It said the then-existing arrangements represented “a carefully constructed architecture” and reflected “appropriate divisions of responsibility while also incorporating important checks and balances”.

In a submission last month to a Senate committee that was examining the legislation to turn ASD into a statutory authority and expand its cybersecurity role, the Inspector-General of Intelligence and Security, Margaret Stone, also warned against any move to interpret the change as creating an onshore remit.

“Nothing in the Intelligence Services Act would allow ASD to access restricted data on a computer physically located inside Australia – even where doing so would assist in gathering intelligence or disrupting crime,” Stone’s submission says.

“Accessing data located inside Australia is properly an action that requires an ASIO or police warrant. A change which extended the immunity or which changed ASD’s focus for its covert or intrusive intelligence-related activities to people and organisations inside Australia would be a profound one – the proposed additional function relating to cybercrime is not such a change.”

In its own submission to the Senate inquiry, the ASD said: “ASD’s mission continues to see the agency operate in the slim area between the difficult and the impossible.” 

The legislation was subsequently passed. Any further expansion of its role would require new legislation.

Dutton’s responses on Tuesday caused some further irritation among his ministerial colleagues, not least because he was talking about ASD as if it were part of his portfolio. 

“We need to look at the capacities within the Australian Federal Police, within the agencies within the Home Affairs portfolio otherwise, including obviously a look at the capacity of ASD,” Dutton said.

In an interview the next day, Foreign Minister Julie Bishop suggested by implication that ASD was not Dutton’s to direct.

“[It] is in the Department of Defence and is answerable therefore to the minister for Defence,” she told Sky News.

“But if you are talking about expanding powers in relation to Australians, that is a matter for ASIO and the Australian Federal Police.”

Speaking on Sydney’s Radio 2GB on Thursday, Dutton denied there was any difference between him and Bishop.

“People are adding two and two together here and getting something other than four,” he said.

But he raised the possibility once again of expanding ASD’s powers and again mentioned stamping out child exploitation.

“We have the ability potentially to disrupt some of those servers,” Dutton said. “And at the moment, the ASD for example, which is a government agency, could disrupt that server if it was in operation offshore but not if it was operating out of Sydney or Melbourne.”

He agreed with Bishop that there was “no proposal on the table” to expand its powers.

“We’re looking at options at the moment and if we’ve got a proposal to put forward, we’ll put it forward.”

Former defence department secretary, now consultant, Paul Barratt suggests the idea is also causing angst in ASD itself.

“There would be people in ASD who would be deeply offended at the notion that their talents would be directed to spying on their fellow Australians, rather than defending the nation,” Barratt says.

“You get these kinds of leaks when people feel that something is seriously amiss.”

Towards the end of his Tuesday news conference, Dutton was asked what he would say to “cynics and sceptics” who believed his centralised portfolio has made him too powerful.

He urged people to “cut through the hype and look at the facts”, insisting those agencies being moved from the attorney-general’s portfolio into his own were retaining their autonomy.

“The idea of the Home Affairs portfolio is that we don’t get to a situation where America found itself post 9/11, and that is that there wasn’t a proper exchange of information, which was evidenced in the security failings,” Dutton said.

“We wanted to pre-empt to make sure that there was a continuation and an enhancement of the way in which all of that information was exchanged, and that’s the idea of the Home Affairs portfolio – it provides that coordination.”

Many in the intelligence and security community are still to be convinced. And some of those cynics and sceptics are people Dutton sits with at the cabinet table.

This article was first published in the print edition of The Saturday Paper on May 5, 2018 as "Cabinet split on Dutton spy plan".

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