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Spy Catching Caused Jakarta Rift
By Tom Allard, Sidney Morning Herald
March 15, 2004

An Australian spy's cover was blown in a counter-espionage operation
mounted by Indonesia in an extraordinary event that sheds light on
relations between Jakarta and Canberra before the East Timor crisis.

The sting occurred in September 1997, several intelligence sources

The Australian Secret Intelligence Service agent had arranged to
receive documents from a key Indonesian contact, believed to be a
military intelligence officer.

The document drop occurred in Jakarta but, unbeknown to both spies,
they were being observed by Indonesian counter-intelligence officers.

As he picked up the documents left for him, the ASIS agent was
collared by the Indonesians and strong protests relayed to the
Australian embassy in Jakarta.

Within days the officer had been quietly shuttled out of the country,
never to work in intelligence services again.

A Herald investigation over several months has uncovered the agent's
name, which, for legal reasons, cannot be published. He was operating
under diplomatic cover and was not declared to the Indonesians as a
spy, as is sometimes the case.

Australia was deeply embarrassed but, following discussions at the
highest level that are believed to have included the Minister for
Foreign Affairs, Alexander Downer, both countries agreed to keep the
incident secret.

A spokesman for Mr Downer said yesterday that the Government "could
not confirm or deny or offer any comment".

"Of course it went to Downer," an intelligence source said. "Of
course, the Prime Minister was informed.

"These situations have the potential to blow out into extremely tricky
situations. They would have had to work out a strategy to handle it."

In the world of espionage there are few more disturbing developments
than a foreign government uncovering a spy's identity - especially
when it occurs at a time of acute instability, as was the case with
Indonesia in 1997.

On that there was universal agreement. As to the incident's
consequences, opinion varies. "It was just one of those unlucky breaks
that happens from time to time," a former intelligence figure said.

"It was as embarrassing to the Indonesians as it was to Australia. You
see, we had obviously penetrated their intelligence network. They
wanted to keep it quiet, as much as we did."

What emerged was a "gentleman's agreement" common in the spying game,
the source said.

"The Indonesians are trying to pull the same stunts here all the time.
Everybody does it. The Indonesians knew they were in trouble if they
went public. They knew damn well that would have been tit-for-tat."

Others take a less benign view. First, it was highly likely that the
Indonesians had been tracking the agent for some time, observing his
movements and contacts and developing a rare, detailed picture of the
Australian and US intelligence in Indonesia.

"ASIS agents have extensive contacts with the CIA, both socially and
professionally," said another source who is familiar with ASIS
operations in the region. "And then, of course, they would have been
able to observe which Indonesian contacts the agent was running.

"The sting would have been the end of the story, in many ways, rather
than the beginning."

By choosing to inform Australia, Indonesia was intent on causing
maximum discomfort, putting Australia's intelligence agents and the
government on the back foot, he said.

And, then, what happened to the Indonesian operative who was caught up
in the sting?
According to one account, he was executed, causing anger in sections
of the Indonesian military.

The Herald has learnt that the fallout of the incident included death
threats made to another Australian living in Jakarta at the time who,
while innocent, shared the same name as the ASIS agent.

What is certain is that the incident coincided with the beginning of a
period of turmoil in Indonesia that wrong-footed Australian policy

The financial crisis that racked Indonesia was in full swing in 1997,
setting off a chain of events that led to Indonesia's president
Soeharto being deposed the next year.

By 1998 Australian intelligence reports were revealing increased
militia activity in East Timor, aided by the Indonesian defence

The alarming reports of organised violence against pro-independence
East Timorese and warnings of violent consequences of the independence
ballot to be held in 1999 were discounted or ignored by defence and
foreign affairs officials in Canberra.

It was in mid-1998 that a new intelligence sharing agreement between
Australia and the US was forged, largely giving Australia carriage of
Indonesia in terms of signals intelligence and with ASIS agents on the
ground gathering human intelligence.

As Australia's leaders continued to play down the increasing violence
in East Timor and the culpability of the Indonesian government, the US
became frustrated, and a schism developed in the relationship.

At this time Merv Jenkins, the Defence Intelligence Organisation
liaison officer in Washington, was castigated by superiors for passing
unauthorised Australian material to his US counterparts about what was
happening in East Timor.

Despondent at his treatment by Canberra, Mr Jenkins committed suicide
in 1999.

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