Australia rules out inquiry into new spy chief

CANBERRA - Australia's new chief spy has been accused of compromising an undercover agent's identity with loose talk in Egypt 20 years ago but the government on Monday ruled out an inquiry into the claims.

Attorney-General Philip Ruddock said a 1995 judicial inquiry examined the allegations against Paul O'Sullivan, who began his job as the head of Australia's domestic intelligence agency the Australian Security Intelligence Organisation (ASIO) on Monday.

"These claims occurred almost 20 years ago," Ruddock told the Australian Broadcasting Corp, adding that the issue was examined by a former judge in a review of Australian intelligence.

"There are no adverse findings arising out of his inquiry and I don't think it'll be taken any further."

O'Sullivan, conservative Prime Minister John Howard's former foreign affairs adviser, was appointed a week ago to become director-general of ASIO as Australia reviewed its security in the wake of the London transport bombings.

The position had been vacant for more than six weeks after former ASIO boss Dennis Richardson was appointed Australia's new ambassador to the United States.

Intelligence analyst Warren Reed, a former spy, said O'Sullivan destroyed his cover in the early 1980s when he was serving as an agent in Cairo, where O'Sullivan was stationed as deputy Australian ambassador.

He said loose talk in front of English-speaking Egyptian staff had blown his cover and led to his assistant being detained and interrogated by Egyptian security agents.

"Our cover was blown. I was caught in the street and bashed," Reed told Australia's Nine Network television.

"My career was ruined and the (Cairo intelligence) station had to be closed down," he said.

Reed said O'Sullivan, who has made no comment on the allegations, was never called to give evidence in the 1995 inquiry.

Howard, in Washington for talks with US President George W Bush, said the allegations against O'Sullivan had been examined and dealt with.

"That inquiry did not report adversely in any way on Mr O'Sullivan. I don't therefore have anything further to say," Howard told reporters.

Australia's centre-left Labour opposition has demanded a full briefing on the claims.

- REUTERS