Bill Sutch (far left) with his wife Shirley Smith and his counsel Mr Mike Bungay, arriving at the Wellington Magistrate's Court after Sutch was charged under the Official Secrets Act 1951 with the offence of obtaining information that would be helpful to an enemy. Photograph taken circa 23 October 1974 by an unidentified photographer for the Evening Post and held at the National Library.

Redmer Yska on the long, strange story of Bill Sutch, the Wellington civil servant busted for spying

A plaque appeared during lockdown under a grove of pohutukawas by the corner of Holloway Road and Aro Street in Wellington. It marks the spot where civil servant Bill Sutch was arrested on a filthy night in September 1974 and charged with espionage.

It states this was where Sutch “allegedly passed unspecified documents to the Soviet Union, via KGB agent Dimitri Razgovorov”. There’s an engraved reproduction of a black and white image of a portly commissar in hunting jacket and homburg. He’s bobbing away from the SIS officer with the camera, down Aro Street towards the drenched city, pointing his umbrella like a weapon.       

The plaque is attributed to a Wellington Historical Society. No such society exists. A headline in the Dominion-Post reported, “Cold War Wellington Spy Case Gets Murkier”.

Moscow Rules on Aro Street? With its layers of tragedy, farce and genuine mystery, the Sutch story is our closest thing to a homegrown John Le Carre thriller. The question of his guilt or otherwise still divides opinion among the capital’s political elite. But nearly half a century on, the rainy night in 1974 is slipping off the radar.

Which is why Sarah Gaitanos was smart to get her book Shirley Smith: An Examined Life out last year. It was a great thumping biography of Sutch’s widow, and a more interesting, exemplary human being than the slippery fish in the raincoat. Classics lecturer turned lawyer, she had a lifetime involvement in social, political and cultural issues. Smith (she kept her name) was a trailblazer for women in the legal profession.

And without really trying, Gaitanos, one of our sharpest, most respected biographers, succeeded in getting as close as anyone ever has to explaining what Sutch was up to in 1974. Her book, gloriously readable and detailed, made the Ockhams shortlist this year. Many think it should have won.

The trouble was her focus was meant to be the remarkable Shirley; once again nettlesome Bill stole the limelight. But her slab of a book gives the first thorough analysis of what Sutch probably handed across to the Reds under the pohutukawas – and what he might have got in return.

At the start the biography was sanctioned by the family. The idea came from Shirley and Bill’s daughter Helen and her husband Keith Ovenden. In 2011, they invited Gaitanos to take on the project. She agreed, reluctantly. But by the time Shirley Smith, An Examined Life was published eight years later, she no longer had their support.

We go tableside to Sunday night lamb roasts with the in-laws in the early 1970s, Bill in broadcast mode, so hideous the couple needed valium

Ovenden, a skilled biographer himself, has just published a book setting out his and Helen’s version of events, without a single mention of the Gaitanos book they helped conceive. Elegant, bittersweet and oddly equivocal, Bill and Shirley: a memoir, is in its own way an attempt to pin down baffling Bill.

We go tableside to Sunday night lamb roasts with the in-laws in the early 1970s, Bill in broadcast mode, so hideous the couple needed valium. Bill is arrogant, brilliant and unfaithful to Shirley. However Ovenden remains firm that while Sutch may have betrayed his wife, he did not betray his country.

The Gaitanos book is much more convincing on this point. We get, in crisp and enthralling detail, a final plausible explanation for the complex, always murky events surrounding Bill’s arrest and trial. The analysis belongs here. This event shook apart Shirley’s world at the time and profoundly shaped her life and times thereafter. She’d spend the rest of her life defending Bill.  

So who was he anyway? Son of a Lancashire carpenter and expected to be one, Sutch fought to overcome the poverty of his Brooklyn, Wellington childhood. By his twenties he won a doctorate at a prestigious American university. A foretaste of his Nietzchean self belief showed in 1933 when he and tramping friends walked out 15 days overdue, having sparked a massive search. Ovenden puts it well:“Bill did not endear himself to everyone by observing that they were never lost, and had not been found.”

But it was the derring do of another 1930s wander, a lone one across the Soviet Union and deep down into India, often sleeping rough, that helped convince Shirley Smith he was for her. The blurb on his famous book, The Quest for Security in New Zealand, laid out the epic itinerary: “from the shores of Lapland in the Arctic Circle through Helsinki, Leningrad, Moscow, Samara, Tashkent, Samarkand, Bokhara, Termez, over the Hindu Kush ranges to Kabul, through the Kyber Pass and the cities of the Ganges, home to New Zealand”. Gaitanos tells how in 1994, Smith was devastated to find letters showing that Bill had taken the Trans-Siberian express across the Soviet Union, then hopped a commercial plane to Kabul. He was in the Soviet Union for a fortnight. Ovenden describes Sutch’s legendary trek as “largely fictional”.

Sutch always pleased himself, working in the heady engine room of the First Labour Government, at home and often abroad, churning out economic bestsellers and strolling arm in arm with Greenwich Village socialists. Cold-eyed spies like R. Thistlethwaite at Britain’s Washington Embassy despaired, describing him in 1937 as “another socialist more or less guiding the destinies of the NZ government”.

In 1958, Labour Prime Minister Walter Nash made him secretary of Industries and Commerce. It was a slap in the face for the Americans, who had politely indicated the promotion would “make them regard NZ’s security as suspect”. After a National government forced him out, Sutch set himself up as economic consultant, working out of the downtown offices of NZ Woollen Mills.

So exactly what was he doing with the Russians in 1974? Gaitanos sets out what persuaded the Labour government of Norman Kirk to prosecute under the Official Secrets Act. Sutch had done a Kim Philby and refused to talk, shrugging off unexplained meetings with Comrade Razgovorov, including one outside the Karori Bowling Club on Lewer Street, using a newspaper under the arm as a prearranged signal to meet.

A dossier unearthed during an NZSIS search of Sutch’s downtown office, finally, was enough to convince Attorney General Martyn Finlay what Sutch had been bandying about. It was a set of neatly typed profiles of senior public servants inside Foreign Affairs, Industries and Commerce and Statistics. Set out were their international political interests, personal ambitions, intelligence, comments about their wives and so forth. Dating from 1970, they were a carbon copy of what Sutch had presumably given his handler Drozhzhin, Rasgovorov’s predecessor.

Take this portrait of an assistant secretary in Foreign Affairs (name removed): “Mr L has the most knowledge of anyone in the department and has been used in all areas except protocol. As a young man he was one of the left-wingers who were suspected by the Americans, but they didn’t have sufficient information to ask for his removal … Mr L’s sympathies, therefore, have to be kept very quiet and he himself is very careful at expressing left-wing views and he is in fact now more interested in sport (he’s a good cricketer) and his home than being a political person outside his work. However he is most sympathetic to the Soviet Union though this attitude is not shown in any of his conversation.”

Gaitanos located and quoted from a declassified NZSIS assessment “that the memo was probably prepared by Dr Sutch for a trained Russian intelligence officer seeking personality information on leading NZ Govt representatives which could in turn be used by the Soviets for recruitment purposes”.

A second document found in Sutch’s office was a memorandum relating to the local Japanese fishing industry, including details of a Cabinet decision yet to be be made public. Long out of the public service and working independently, he could clearly still lay his hands on restricted material.

Ovenden writes: “The great wealth he was said to have, mainly via SIS-inspired rumour, certainly never came to any of us”

Once this material were assessed, the wheels were put in motion for Sutch’s prosecution. Ovenden claims that Attorney General Martin Finlay was “reluctant” to proceed. Not necessarily. During an interview in his Auckland home in 1992 on other matters, I pressed him about on his decision to charge Sutch. Then 80 and sharp as a tack, Finlay was adamant. The explosive material before him left the government no choice. The trial ended with an acquittal.  

Gaitanos also addressed the tricky question of Sutch’s wealth, the extent of which so riled prime minister Norman Kirk that he ordered his office bugged. In 1975, the weekly NZ Truth claimed Sutch was worth about half a million dollars with accounts in overseas banks including Switzerland, and an extensive property portfolio. That’s more than $5m in today’s dollars. Ovenden writes: “The great wealth he was said to have, mainly via SIS-inspired rumour, certainly never came to any of us.”

The allegation that NZSIS had leaked to Truth was central to an investigation conducted in 1979 by Chief Ombudsman Sir Guy Powles. He later found no evidence to support it. When researching my 2010 Truth history, I questioned reporter Rosalind Laing about her sources for the story. The information she’d pulled together in the Evening Post library was available in public records.

Sutch was lucky Kiwis never read about Stella Maris, the estate in the Bahamas he bought in 1970. Gaitanos explained how he’d taken out a lifetime membership for one, to the exclusive Stella Maris Tennis and Cabana club on Long Island, the most scenic of all 700 islands. Shirley only learned of the property in the late 1980s and after making inquiries started getting bills for road maintenance.

Gaitanos reminds us too of the evidence that emerged in 2014 that Sutch was likely recruited to the Soviet intelligence service in 1950. The Mitrokhin Archive, based on notes of KGB foreign intelligence files handcopied secretly by archivist Vasili Mitrokhin, contained the following morsel: “Maori’ – Englishman, born 1907, New Zealand citizen, doctor of philosophy, former high level bureaucrat in government service, retired in 1965, recruited in 1950, contract with him via Drozhzhin.”

The birth date and other biographical details fit Sutch exactly, even if the cover name “Maori” is a bit odd. Ovenden pounces on its brevity, the lack of an exact name. But the case is now closed. At very least, Sutch was a “recruited agent” for the Soviets, conducting a formal relationship with his handler.

Exactly what Sutch handed to the sprinter Rasgovorov that night in the Aro Valley will never be known. He’d spent his remaining career in the warmer climes of Syria. Tracked down in 1993 by former embassy colleague Alexei Makarov, who’d passed him the unopened parcel, the KGB man would only say it contained “a lot of interesting things”.

Bill & Shirley: A memoir by Keith Ovenden (Massey University Press, $35) is available in bookstores nationwide.


* ReadingRoom reviews appear with the support of Creative New Zealand*

Redmer Yska is a Wellington writer and historian.

Leave a comment