Spying operation hosted without approval
The Government’s electronic spy agency hosted a foreign intelligence spying system for years without the approval of its minister.
The spying system hosted by the Government Communications Security Bureau (GCSB), which may have contributed to the foreign country’s military targeting from 2012, was only “rediscovered” during an internal audit in 2020.
Limited details of its existence were made public by the intelligence agencies watchdog, Inspector-General of Intelligence and Security (IGIS) Brendan Horsley, yesterday in a report that criticised the GCSB’s lack of due diligence and failure to inform its minister – then-Prime Minister John Key.
“The details of the capability are highly classified, limiting the detail I can provide in a public report. Broadly, the capability produced intelligence that could help find remote targets,” Horsley said.
“I was concerned that the bureau had apparently decided to host in New Zealand a signals intelligence system controlled by a foreign partner agency without seeking ministerial approval and without subsequently informing its minister of the system’s existence or purpose.
“I was concerned also that the bureau’s current senior leadership and legal team apparently knew nothing of the system until it was brought to their attention in 2020.”
The spy agency agreed to host the foreign country’s capability in the years before claims of mass surveillance spying made headlines and became a political controversy for Key’s government. A review of the agency in 2013 found major organisational problems at the GCSB.
Prime Minister Christopher Luxon said the inspector-general’s report was about “historical issues”, and the actions of the bureau were consistent with legislation at the time, legislation which had since been strengthened.
“But we take on board those learnings, and I know the agency will take that very seriously, as well as the minister.”
Intelligence Agencies Minister Judith Collins and the GCSB have both also insisted that the bureau has significantly changed in the decade since it decided to host the foreign spy agency’s system.
The IGIS largely agreed that significant developments in the GCSB, its laws, and policies had “reduced the risk that the shortcomings I have identified might recur today in a similar situation”.
“I also consider it is less likely that the bureau would implement such an arrangement as poorly as it did in this case.”
Horsley said that from 2009, the GCSB considered hosting the spying system, which he said had the potential to be used with other intelligence sources to support military actions against targets.
The sensitivity of this was identified by senior GCSB officials at the time. Then director-general Sir Bruce Ferguson reportedly had “no problem” with it being hosted, though legal and policy issues and “oversight concerns” with it were raised.
By 2011, an agreement with the country was being prepared. Then-director-general Simon Murdoch suggested in an email that the minister should potentially be consulted. However, under subsequent director-general Ian Fletcher in 2012, this did not occur, and no record could be found of briefing the minister.
“It was improper, however, for the GCSB to decide on hosting the capability without bringing it to the minister’s attention. By doing so, it failed to respect and enable ministerial control of the agency,” Horsley said.
The spying hardware, Horsley said, had “collection and processing suites” and was “a data-sharing mechanism, not a collection activity”.
It was installed at a GCSB facility in 2012. However, Horsley said its operation was not adequately recorded by GCSB staff,and there was a lack of due diligence and visibility about how it was being “tasked”.
Collins, who was unavailable for an interview yesterday, said in a statement the GCSB today “is not the one reflected in this report”.
“While this report covers events from more than a decade ago, it highlights what were unsatisfactory operational processes of that time, albeit in line with legislation of the day.”
Collins said she was satisfied there had been significant change at the GCSB since, including how the agency “works with my office”. There was also new legislation, and a strengthened Office of the Inspector-General that provided robust oversight.
GCSB director-general Andrew Clark said in a statement the review of “what could be described as a ‘historical issue” would help to “refine our current processes that ensure we act with propriety in everything we do”.
The GCSB agreed to the inspector-general’s recommendations, which included auditing its systems, compiling “a register of collection or analysis capabilities in New Zealand that are operated by foreign partners”, and to review its international agreements within specified time frames.