Bill Sutch (left) arriving at Wellington Magistrate's Court with wife Shirley Smith and lawyer Mike Bungay in October 1974. Photo: NATIONAL LIBRARY / Ref: EP / 1974 / 6745a / 8aF
It's 50 years since Dr Bill Sutch was arrested on a rainy night in Wellington's Aro Valley. RNZ's Black Sheep podcast takes a look back at the controversial Cold War spy story.
On the night of 26 September 1974, Holloway Road looked deserted. In fact, it was the epicentre of intense, silent scrutiny.
Over a dozen police and SIS officers were posted around Aro Valley, hidden in parked cars, behind bushes and, in the case of three men, inside a public toilet. They were there to intercept a secret meeting between a senior KGB officer, Dmitri Razgovorov, and Dr Bill Sutch.
Dr Sutch, a famous author and public intellectual, had been among New Zealand's most senior civil servants. But over the several months prior to his arrest, the SIS had spotted him holding covert meetings with Razgovorov - and suspected he was acting as a Russian agent.
What happened next is a controversial chapter in modern New Zealand history. Police swooped, a famous photo was taken, Sutch was whisked away. The following morning, September 27, Sutch was arrested on charges of breaching the Official Secrets Act.
Photo: https://natlib.govt.nz/records/22607921
These much-debated events are the subject of a special, deep-dive episode of the RNZ podcast, Black Sheep, released today.
Follow and listen to Black Sheep on Apple Podcasts, Spotify, iHeart and YouTube Music, or wherever you get your podcasts.
Sutch and the Soviets
In a 2008 interview with Kathryn Ryan on RNZ's Nine to Noon, Dr Sutch's daughter Helen Sutch said her father admired the Russians, but his allegiance always lay with New Zealand.
"With his experience of the [Great] Depression and so on, he admired the Soviet Union for what he perceived as its economic success, at least in those days … He saw that they were trying to give universal, access to health and education services of the population," Helen explained.
Positive views of Soviet Russia weren't unusual in New Zealand in the 1930s and '40s. But in the mid-50s, when the true extent of Stalin's brutality was publicly revealed, many communists outside of Russia were disillusioned.
That included Sutch's second wife, trailblazing feminist lawyer Shirley Smith, who resigned from the Communist Party in protest against the Soviet invasion of Hungary.
However, when Smith asked her husband what he thought about reports of Stalin's atrocities, he replied those reports were "a lot of old cobblers".
"She says he couldn't believe his God had feet of clay," says Shirley Smith's biographer, Sarah Gaitanos, author of Shirley Smith: an Examined Life.
However, while the couple split on the issue of Soviet Russia, Smith remained his strongest defender.
"She would say, well, he was never a communist," Gaitanos says. "Well, no, he wasn't. He never joined the party, that's true. You didn't join the party if you were going to actually hope to become a KGB agent."
And by the time Bill and Shirley were having their disagreement about Stalin and the Soviets, there is evidence he had already been recruited as a KGB agent.
Dimitri Razgovorov running from his meeting with Bill Sutch, Aro St, Wellington, September 1974 Photo: NZSIS
"Maori" and Mitrokhin
In 1992, KGB archivist Vasili Mitrokhin defected to the United Kingdom. He brought six suitcases with him, filled with documents he'd secretly copied from the KGB archives.
The documents include information about former Soviet agents. One was a man codenamed "Maori" (sic).
"Maori" is described as an "ex-high ranking official in state machinery". Born 1907. Obtained a PhD. Recruited as a KGB agent in 1950. Retired from public service in 1965.
Those details are an exact match for Sutch.
When the existence of the Mitrokhin Archive was declassified in 2014, Helen Sutch stridently rejected the suggestion that it proved her father was a spy.
She said: "it is still simply an allegation by KGB agents who presumably had every interest in trying to impress [their] bosses at home - because nasty things tended to happen to them if they didn't deliver."
But Gaitanos thinks the fact Dr Sutch was described as an "agent" in the Mitrokhin archive suggests he was more than just a Soviet sympathiser who passed the odd bit of gossip.
"The word agent is a very specific translation from the Russian," Gaitanos said.
"It's very very clear - If you're a recruited agent … You are tasked, you'll be given things to do, and you will respond."
Whatever Sutch was doing covertly, publicly he was a celebrity. His books on history sold tens of thousands of copies, his public lectures drew packed crowds. Even today he is seen as remarkably farsighted in his analysis of New Zealand.
The year after he was controversially forced to retire from the civil service in 1965, his warnings of New Zealand's overreliance on agricultural exports to Britain proved accurate.
On 14 December 1966 the wool price collapsed by 40 percent overnight, cutting about 16 percent of New Zealand's export revenue.
Bill Sutch Photo: Alexander Turnbull Library
Sutch and the SIS
The revelation Sutch was meeting with the Soviets had blindsided the SIS.
In an interview for RNZ's award winning podcast The Service, retired SIS agent Kit Bennetts says he was too young to understand the significance when he spotted Razgovorov meeting with Sutch outside the Karori Bowling Club on 20 June, 1974.
"I was too young to really know or too naive to really understand what was going on because by then the senior officers in the service knew that they had a tiger by the tail," Bennetts says.
The SIS launched a surveillance operation. They bugged Sutch's phone, and, on the instructions of Prime Minister Bill Rowling they broke into his office and searched it - something later ruled to be illegal.
This search revealed a diary containing dates, times, and places for meetings between Sutch and Razgovorov.
The SIS spotted two more covert meetings between the pair, including one where Sutch appeared to open his briefcase - apparently to pass something to Razgovorov - but the agent watching the pair couldn't see what it was.
Bill Sutch in his office, 1958. Photo: Public Domain
Trial and exoneration
Finally, on 26 September, the SIS decided to strike. But in the confusion that night, it missed its chance, and never got evidence of a hand-over.
Sutch denied all accusations of espionage. He said he only talked about global politics with the Russian, and, at trial, was found not guilty of breaking the Official Secrets Act.
Sutch died a year and a day after his arrest of liver cancer, however his supporters believe his life was cut shorter than it might have been by the stress of the trial.
The failure to convict him didn't put an end to suspicions.
The piece of evidence Kit Bennetts finds most damning is a series of documents found in searches of Sutch's office.
"He had in his possession what, what you might call pen portraits, of people in key positions" Bennets says.
"Some of those pen portraits had indications of people's vulnerabilities, where there were flaws in their personalities or characters."
Bennetts says this type of material was useful for the KGB in recruiting new agents or cultivating sources.
Bank accounts and the Bahamas
The material in the Mitrokhin archive is not the only suspicious detail to emerge since Sutch's death.
In 1979 it was revealed Sutch had been one of New Zealand's biggest tax evaders. He'd dodged tax on an estimated $100,000 of undeclared income - over a million in 2024 dollars. He had cash stashed away in Swiss bank accounts and property in the Bahamas.
Gaitanos says his wife was totally blindsided by this revelation.
"He was very secretive. He wasn't a big spender, so it wasn't though he was suddenly out buying yachts or flashy things," Gaitanos says.
"People say, you know, he was a miser, but that doesn't really explain the volume of wealth that he actually acquired."
Good guy and bad guy
There's a lot still unexplained in this story.
We know Sutch met with Razgovorov on at least four occasions, and possibly gave him something from his suitcase - but we don't know what it was.
We have the Mitrokhin Archive suggesting Sutch was recruited as an agent in 1950, but no more details than that.
On top of that we have the tax evasion and tens of thousands of dollars in unexplained wealth
There's a lot of smoke and it feels like there must be a fire somewhere in there. But how big is the fire?
In his interview for The Service, host Guyon Espiner asked Kit Bennetts what he would say to those who still believe Sutch was innocent. Bennetts replied:
"I can perfectly understand the situation of family and friends because they knew a different side of the man. And as a young man, I thought he was a traitor … but with the benefit of some years in thinking about it, Dr Sutch, never for one second thought he was doing anything against the best interests of New Zealand. He thought that he was helping … the motivation was not simply good guy, bad guy."