What Bill Sutch was up to on the evening of Thursday, September 26, 1974 remains as murky as the dark and stormy night of his arrest.
The tūī couldn’t keep a secret even if you paid them. The pōhutukawa trees, rattling as the wind blusters across the small war memorial park, are full of the birds’ excited chatter. From up there, they can see a lot.
This pleasant and unremarkable corner of Wellington’s Aro Valley was once thought the ideal location for a secret Cold War rendezvous. Stand in the park and there are at least four obvious escape routes if you’re rumbled, along with thick bush close at hand.
On a dark and stormy night 50 years ago – and the evening of Thursday, September 26, 1974 really was dark and stormy, according to Niwa – West met East on this corner of suburban Aro St and Holloway Rd.
This time, Bill Sutch’s game was up. The career public servant had just met KGB officer Dimitri Razgovorov in the park in the teeming rain and passed something on.
Razgovorov had then handed that package to the driver of a Mercedes-Benz with diplomatic number plates parked nearby, who then took it back to the Soviet embassy in Karori.
As Razgovorov returned to the reserve, Security Intelligence Service and police officers sprang from their hiding places in the bush, in nearby streets and from within a cramped and seedy men’s public toilet, despite low visibility from the torrential shower making it nigh-on impossible to see what was happening.
Razgovorov ran off down Aro St, umbrella in hand, his flight and the heavy raindrops caught forever in a famous SIS photograph. And at 8.41pm, outside the toilet, the officers apprehended a somewhat bewildered Sutch.
It was the culmination of five months of surveillance leading to Sutch’s arrest and a Supreme Court case in February 1975, charged under the Official Secrets Act with obtaining information that would be helpful to an enemy. He was acquitted after a five-day jury trial, but died in September 1975, a year after his apprehension.
‘An actor of many parts’
Sutch’s motivations for the surreptitious meetings remain hazy. Former SIS intelligence officer Kit Bennetts, who wrote the 2006 book, Spy, about the Sutch affair, has no doubt about the guilt of the “recruited intelligence asset”.
Bennetts thinks Sutch genuinely believed he could improve New Zealand’s future through greater co-operation with the Soviet Union. A socialist, Sutch was a great admirer of the Soviet Union and had visited Moscow and Leningrad in the early 1930s.
The trained economist accompanied finance minister Walter Nash on trade missions in the government of Michael Joseph Savage and wrote seminal books: Poverty and Progress in New Zealand (1941) and The Quest for Security in New Zealand (1942). He worked for the United Nations in New York and Australia and, in 1958, Nash as prime minister appointed him permanent Secretary for Industries and Commerce.
SIS files marked top secret and declassified in 2008 described Sutch as “a grave security risk” and a complicated, difficult, arrogant and superior man, “an actor of many parts, all of which he plays equally well”.
“It could be that only the Soviets know the real Sutch”, a “target assessment” dated May 30, 1974, noted, a month after he was first spotted by the SIS at a furtive meeting with Razgovorov at the Karori Bowling Club. Among those watching was Bennetts: it was George Smiley come to Wellington.
Career spy
Fifty years on, it’s a great day for spy-hunting in the Aro Valley. Cars and buses glide down from the heights of Kelburn. Pīwakawaka flit in the bush, tūī deafen by the war memorial. Partly hidden by shrubs are the broken brick wall remains of the men’s toilet, now home to a couple of park benches.
On the phone from Brisbane, where he lives, Bennetts guides me around the area. He wishes he could be here as well, “to talk up how good the surveillance was”, he jokes.
Near the war memorial, on top of a small wall, is a metal plaque memorialising the running Razgovorov and wrongly claiming the date of Sutch’s apprehension was August 28, 1974.
Bennetts has had a whole career since Sutch – he’s now a PhD in transport infrastructure security and an adjunct fellow lecturing in business and aviation at Southern Cross University’s Gold Coast campus.
Intelligence officers’ curricula vitae are justifiably scanty. Bennetts was only 22 and had been in the SIS for less than three years when he was on the Karori Bowling Club surveillance team. But by the late 1970s, he was involved in what he says was the most exciting part of his career, on exchange as a case officer with one of the West’s major intelligence services.
“That’s the part I talk about least. But I was working face to face with the Soviets then. I was looking to do recruitments-in-place of KGB and GRU [Soviet military intelligence] officers, so we could run them in place.
“It was supposed to be for two years and ended up being six. I had a kind of commercial cover and I worked overseas, primarily as a businessman, export consultant, that sort of thing. And I worked out a couple of techniques to get close to Soviets and trade commissions.”
Sutch’s silence
Bennetts says he never actually talked to Sutch, even on the night he was caught. In fact, the rain was so heavy he couldn’t see what was going on less than 100m ahead of the surveillance van he was in, around the corner in Holloway Rd. He did see Sutch with other officers by the public toilet, fleetingly lit up by flashbulbs as an SIS colleague took photos.
It must have been disappointing for Bennetts, who had played such a key role in uncovering Sutch at the first meeting in Karori five months earlier.
“There is no doubt it made a huge impression on me. It was definitely a watershed in my life. In many respects it made me a little bit of a star in the game very early.”
After Sutch was apprehended, he refused to talk to the SIS. “It was that arrogance that angered me the most, because he had a way out of this,” says Bennetts. “He would have been interrogated, but there would have been a series of interviews over the next six months or so while we went back over it. And it would have been, ‘You come clean and away you go.’
“He was in line for a knighthood, and we would never have stood in the way. I don’t think he would have died [of cancer] a year later; I think he would have lived longer.
“What we wanted was information. The police were quite happy to arrest; that’s what police do. But we just wanted to know more. Who else was he talking to? What was his modus operandi? How did they contact him between meetings? What, and how, was he paid? What did they want him to do as an agent of influence? What knowledge did he have of other recruited assets?
“I was so upset when he was acquitted, but within a week, I realised how bloody lucky we were that he was. Imagine if he’d died in prison a martyr?”
The closest Bennetts got to talking to Sutch was in May 1975, when he saw him walking towards him down Lambton Quay. “That was the last time I saw him. I looked him straight in the eye, but he couldn’t look me in the eye and he turned away.
“He knew I knew he had lied [in court]. That was a Pyrrhic victory, but I felt a little bit vindicated.”
Popular speaker
Future Labour cabinet minister Margaret Austin and teacher colleagues on a course in Karori could have saved Sutch’s bacon that night. Then head of science at Christchurch Girls’ High School, she and nine others were at Futuna Chapel for a week of intensive training as potential principals. Retired from public service for nine years by then, Sutch was chair of the QEII Arts Council, and a popular speaker.
“Sutch came in to do an early afternoon session with us, and we were so impressed, we begged him to have dinner with us. He said he would love to stay but he couldn’t, because he had a meeting in the city. So we didn’t think any more of it. Of course, the next day we were buzzing when we read the Evening Post. If he’d stayed and had dinner, we could have provided him with an alibi.”
Austin says she had never heard of Sutch before he came to Futuna. “I never felt that Sutch was guilty, but I could be wrong. He was so open and engaging.”
After the session, Sutch went back to his office in the city, Bennetts says. The surveillance team knew he was there, and when he left later that evening, they tracked him all the way up Willis St on his walk to Aro Valley.
Not everyone thought Sutch was open and engaging. The 1974 target assessment said his personality often caused conflict between him and his superiors. He had been the subject of security interest here and overseas since he went to the Soviet Union in 1932.
“He is generally regarded as one who is impatient of the conventions of NZ Society [sic] and intolerant of those who are intellectually his inferiors. However, his own opinion of his intelligence and capabilities is such that it would not be surprising if he considered no one to be his equal, let alone his superior.”
Close associates had said he was hypocritical and sometimes dishonest.
“He can be a confidant, eg, he was prepared to listen to the personal difficulties of his staff, and a flatterer, but wherever possible will manipulate his associates to his own advantage. Personal loyalty is apparently outside his scope. “He is described as a shrewd and polished individual: a cold man, probably incapable of any truly profound emotion,” the SIS dossier read.
While his contacts with Razgovorov “do not prove that he is, or was, a communist, they are additional evidence of his pro-Soviet leanings, and have led to our assessing him in the past as a grave security risk”.
Watershed moment
Bennetts returned to Wellington in May to address the New Zealand Institute of International Affairs about the Sutch affair. “A woman asked if I thought we would still be talking about the case in another 50 years,” he says. “I said I thought we would be.
“In many ways, it was a watershed in New Zealand history, a time when we had to come to terms with our place in the world, our allies, our responsibilities and some of the things that are important as to who we are and what future we seek.” The most recent SIS threat assessment warning of espionage, volatility in the Indo-Pacific and the risks of violent extremism, and debate around joining pillar two of the Aukus pact, show we can’t be complacent, he says.
He is looking ahead to next February, the 50th anniversary of Sutch’s trial, and, perhaps one day, a film. “A couple of little film companies bought options to make a film of my book, but nothing ever came of it.”
The Sutch File
Lancashire-born but New Zealand-raised from eight months, William Ball Sutch was an economist, author and senior public servant who worked on both sides of the Tasman and in the US. In 1958, he became Secretary for Industries and Commerce.
Here, he planned the milk in schools scheme, helped set up the Reserve Bank and promoted the development of non-agricultural exports.
From 1947-51, he headed New Zealand’s delegation to the United Nations and was instrumental in keeping humanitarian aid agency Unicef going, despite the United States’ desire to close it.
He retired in March 1965 but kept up his intellectual and cultural pursuits in Wellington and was a highly popular lecturer. He continued to write about his vision for a New Zealand cut loose from its colonial past, promoting decentralisation and equality.
His second wife, Shirley Smith, was a trailblazing lawyer and human rights activist. Their daughter, Helen, became an economist and worked for Treasury, the Prime Minister’s Department and the World Bank. The family home was a striking Modernist masterpiece – Sutch was a strong proponent of design – and in 1973, he became chairman of the Queen Elizabeth II Arts Council.
On the evening of April 18, 1974, routine SIS surveillance of known KGB officers from the Soviet Embassy observed a secret meeting outside the Karori Bowling Club in Wellington. Further investigation identified Sutch talking with Dimitri Razgovorov.
Three more clandestine evening meetings on the penultimate Thursdays of the month (except June) took place in Karori, Kelburn and the city, at which Sutch was seen giving packages or envelopes to Razgovorov. On a fourth evening in the Aro Valley, in pelting rain, Sutch was apprehended.
At the end of his five-day trial, the jury deliberated for 71/2 hours. Former SIS intelligence officer Kit Bennetts believes the jurors felt they could not convict without the court seeing what it was that Sutch had been passing to the Soviets.
What it was remains a mystery. Some believe it was files on other possible senior public servant converts to the Soviet cause. One account speculates he passed on details of international meat prices, which might have given the Soviets a commercial advantage.
On the day of Sutch’s arrest, then-PM Bill Rowling decreed Razgovorov and his driver Pertsev be restricted to the embassy. A week later, the Ministry of Foreign Affairs was advised both men and their wives would be returning to the USSR. The Razgovorovs flew out in early October.
Sutch’s family continued to believe he went to the meetings because Razgovorov wanted to defect.
Sutch died of cancer on September 28,1975, aged 68. Overseas bank accounts and several properties, including an estate in the Bahamas, were in his name.
In 2014, the collected papers of Russian defector and KGB archivist Vasili Mitrokhin were released, identifying a KGB operative codenamed “Maori”, who had been recruited in 1950, when Sutch was at the UN. These clearly pointed to Sutch, although his daughter argued that KGB agents were well known for talking up the value of any contacts.
