Images courtesy of Macadam and Dubro. Image editing by Yuliya Tsoy and Ben Ruby.

When Canada Learned It Had Spies

The government had constantly denied that Canada was involved in spying or espionage—until an enterprising young Englishman named William Macadam came along.

Aug 5 2015, 1:00pm

Images courtesy of Macadam and Dubro. Image editing by Yuliya Tsoy and Ben Ruby.

In 1972, a senior analyst at the National Security Agency (NSA) reached out to the editors of the radical left-wing magazine Ramparts and volunteered to give a wide-ranging interview under the pseudonym of Winslow Peck. Though even he didn't know it at the time, what Peck would tell the editors of Ramparts over several days in a San Francisco hotel room would come to change the course of Canadian history forever.

In that interview, Peck spoke widely about the NSA's activities around the world, and made two references to Canada—specifically, a major Canadian agency called the CBNRC. According to him, this rather opaque acronym represented the Canadian equivalent to America's NSA, and the UK's shadowy GCHQ.

There was just one problem: the Canadian public had never heard of anything called the CBNRC.

Peck and the rest of the global security establishment knew that this Canadian agency, known today as the Communications Security Establishment (CSE), had been engaged in comprehensive eavesdropping and code breaking initiatives ever since the end of the Second World War. The Canadian government had secretly collected the country's post-war signals intelligence talent at the National Research Council (NRC) in 1946, establishing the intentionally vague-sounding Communications Branch: the CBNRC.

Three years later, Canada secretly signed a tailored amendment to a prior US intelligence arrangement with the UK, called the UKUSA Agreement. The contract guaranteed a mostly free exchange of intelligence between members, and the CBNRC's secret activities were the main source of the intelligence Canada brought to the table. Australia and New Zealand signed onto the Agreement in 1956, completing the group widely known today as the Five Eyes.

Unknown even to the majority of parliament, by 1972 the CBNRC had grown to employ some 600 people—slightly smaller than the Department of Justice, and about half the size of the Canadian Forces unit for military signals intelligence. Every successive federal government vehemently denied that Canada engaged in any international espionage, while the CBNRC secretly helped to fight and even escalate the Cold War.

Peck's interview in Ramparts provided one of the first concrete pieces of evidence pointing to this fact. It practically begged for further investigation—though that investigation wouldn't begin in earnest until the following year, with an enterprising young Englishman named William Macadam.

George Robertson had only just become head of the Canadian Broadcasting Corporation's Current Affairs department when William Macadam walked in with an absurd idea. Had Robertson been around longer, the young programming director might have been more skeptical; Macadam was a known shit disturber at the CBC, a long-time political operative for the Progressive Conservative party. His primary interaction with the news department had been repeatedly accusing them of favoring the extremely camera-friendly Liberal candidate, Pierre Trudeau, throughout the 1968 federal election.

But despite Macadam's best efforts, Trudeau went on to win a strong majority government. It was one of many moments that left the young political staffer disillusioned, but it also impressed on him the power of television to affect people's thinking on political matters. Aimless, but still ambitious, he decided to attempt an unexpected move into freelance video journalism.

Given his history with news organizations, however, he did still have to pay his dues. Robertson thinks someone at the CBC must have decided to have some fun by implying that the best way for Macadam to prove his worth as a new reporter would be to somehow get film of a violent biker gang in their clubhouse in Hull, Quebec. A bookish-looking young man with an upper-class English accent, Macadam naively came to Robertson with an offer to film the piece—with the understanding that if he was successful it would lead to more work, on topics of his choosing.

"The government had constantly denied that Canada was involved in spying or espionage," said Macadam. "I thought it was important to find out if we were."

"I had never met him before," Robertson recalled in a phone interview. "But he intrigued me. He had a great confidence in his ability to get things done."

He bought the story, still wondering if Macadam had the skillset to deliver the goods—and Macadam, somehow, delivered. To get the footage, the rookie reporter was forced to employ hidden cameras, enormous at the time, and a sheer audacity that would come to define his later investigative work. Though it was short, the biker piece generated uncommon buzz for the Current Affairs department. The public was clearly interested in getting a window into hidden, even dangerous worlds—a lesson Macadam would learn well.

It was the ability to deliver on such a challenging assignment that pushed Robertson to greenlight an even more ambitious pitch: a 10-minute news segment that would highlight some of the US Central Intelligence Agency's activities inside Canada. It was just one of several ideas Macadam had at the time, but it fit the public's interests and seemed well suited to the sorts of clandestine talents he had already displayed.

"The government had constantly denied that Canada was involved in spying or espionage," Macadam said in one of a series of phone interviews. "I thought it was important to find out if we were."

If only he had known the depths of the rabbit hole he was about to enter.

Macadam knew that tackling a subject as difficult as the American clandestine services would require some extra talent. There were a number of false starts, as he discarded several able researchers off the bat. "They would tell me that things were impossible, that we couldn't get an interview with somebody," he said. "I had no use for that—being defeated before you start."

Eventually, Macadam's attention fell on a young Bostonian ex-pat at the University of Toronto named James Dubro. The 26-year-old academic was lecturing in 18th century literature, but had caught Macadam's eye through his innovative work setting up databases of cross-referenced donor info for the University's fundraisers. "The joy was that Dubro had a great naiveté," Macadam said. "He quickly understood my belief that anything was possible."

It was this attitude, that anything was possible, that led Dubro to take another look at the interview in Ramparts. Like most at the time, he was more interested in the feature interview's juicy American angle than some boring Canadian acronym, but he did suggest to Macadam that this Winslow Peck might make a good interview subject on the CIA.

Once Macadam saw the reference to Canada, however, their focus immediately shifted to this alleged intelligence agency, the CBNRC.

Rather than arouse suspicion by coming at the Canadian establishment directly, they chose to begin their investigation in the United States. "I think the fact that I was American may have helped," Dubro admitted over the phone in a thick Bostonian accent. "Once we stumbled on [the Ramparts interview], we started throwing the CBNRC into questions with US intelligence people. And they, stupidly, would tell us more."

The first such break came in an interview with John D. Marks, former staff assistant at the US State Department, who was probably unaware that the CBNRC's existence was supposed to be secret. Marks not only corroborated Peck's reference in Ramparts, but also told them about a Canadian agent who had come down to Washington to completely reorganize the Canadian presence there.

This was clearly an important lead but, frustratingly, Marks didn't remember this agent's name. He only recalled one identifying detail: the Canadian had walked with a limp.

Later, they followed a seemingly long-shot lead to a former Canadian officer now working at the World Bank—and sure enough, when they showed up to their meeting, this World Bank official walked to greet them with a pronounced limp. "It was one of those moments in investigative journalism, where a tingle just goes up your spine," Macadam remembers. He had to kick Dubro in the ankle to keep him from starting in on their real reason for coming, and he quickly excused them from the meeting. They corroborated the limping man's name with Marks, over the phone in the building's lobby.

But the final nail in the coffin of the CBNRC's anonymity would have to come from a Canadian. They managed this in a powerful way during an on-camera interview with former RCMP deputy commissioner William Kelly. Late into the interview, after some rapid questioning on the CIA, Macadam asked if Kelly thought that RCMP had sufficient cooperation with the CBNRC. Kelly jumped to the defense of his men, assuring viewers that the coordination was very good—excellent, in fact.

"At that point, we had it," Macadam remembers. "That it existed, at least." Former Prime Minister Diefenbaker later told Macadam he'd been incredulous at seeing the revelation on screen, and wondered aloud whether Kelly had been in breach of the Official Secrets Act.

"That's often the way, you know," Macadam told me in his self-effacing manner. "If you throw things out, you can often get things back."

Macadam and Dubro had no real doubts about exposing the workings of a secret national security organization. "Of course, the KGB knew all of it," Dubro argued, "so it didn't really matter. Only the Canadian people didn't know." Support for this view came from, of all people, RCMP deputy commissioner Kelly; he told the pair in a separately published interview that "it's amazing how much of the material that we keep secret the enemy knows about, but the ordinary man on the street doesn't."

Despite their success in the US, the CBNRC was still largely hidden from Canadian public documents, so when they brought the investigation back to Canada the leads continued to come from in-person work. Even cover-agencies need office buildings, they surmised, so with few other leads available they decided that's where they had to go next.

Macadam's approach was simple, but ingenious: call the CBNRC's switchboard and ask for the name of someone in charge of recruitment, then hang up. After a few days, long enough for the operator to forget his voice, he called back and simply asked authoritatively to speak with that name. Banking on the fact that a secret agency would be used to cryptic and unusual messages, Macadam flatly demanded a meeting, and refused to specify what he wanted. He insisted on meeting at CBNRC headquarters, would settle for absolutely nothing less—and, in a move even Macadam calls "sort of incredible," the agency agreed.

CBNRC headquarters was so close to CBC headquarters that the intelligence agency would later actually expand and take over both complexes. Macadam drove to the meeting mostly to keep up appearances.

The guard at the gate quickly admitted him for the appointment, and once inside the building Macadam was left alone with the visitor sign-in book, which he opened. The nature of the place was clear from the affiliations column alone: this banal-seeming branch of the National Research Council hosted guests almost exclusively from the NSA, CIA, RCMP, GCHQ, MI6, and more. He signed in as his freelance video news production company, Norfolk Communications.

The actual meeting that day achieved little more than alerting the CBNRC to their interest, as the recruiter quickly clammed up when questioned. But as he drove back past the security checkpoint on his way out, Macadam paused to ask the guard a seemingly casual question: Is the boss in town? The guard asked if he meant Kevin O'Neill. "Well, he's still the Director, isn't he?" asked Macadam. "Oh yes, yes. He came in this morning," the guard replied.

"They just were totally unprepared for us," Macadam remembers. With the name in hand, they set out to track down CBNRC's director.

Kevin O'Neill was one of many high ranking foreign-born agents at the time, having been recruited into Canadian intelligence straight out of Britain's Bletchley Park. Macadam and Dubro simply looked up his residence and called him, setting a time for a friendly chat. O'Neill was "extremely gracious" but declined to give them much information, eventually shuffling away with apologies.

The choice to go to the homes of high-ranking officers—the very un-Canadianness of such brazen investigative moves—quickly caused worry and even anger in the government. Dubro recalls an episode late in 1973, when he was staking out the Washington, DC home of the RCMP's top man in America, Harry Brandes, whose office was actually inside CIA headquarters. Had CSIS existed at this time, he would have been one of its agents.

"By August 1973 it was felt that the unclassified cover story for CBNRC left something to be desired," reads a partially declassified intelligence document

"[Brandes] saw people with cameras, and he called the police," Dubro remembered, laughing. "We said we were CBC, and then the ambassador got involved, somebody said they were going to raise it in the House of Commons… Anyway, they backed off finally," he sighed. "Those were heady days."

It turned out that the clandestine approach to their subjects was not always the most efficient way to get what they wanted—even if what they wanted was the clandestine approach. A few days later, Brandes actually called Dubro, who recalls the conversation vividly. "He asked what I had wanted, and I said an interview. He said, 'Oh, uh, sure.'" Dubro admitted that he also needed some candid "surveillance" footage of the Canadian spy, "and Brandes said, 'No problem, I can come in and out of the secret office for you and everything.'"

They also drew heavily from an on-camera interview with Peck himself, who was later revealed as Perry Fellwock. The former security analyst's claims would end up being some of the program's most explosive, as he accused the US government of listening in on "virtually every means of communication that your government has."

Over time, the weight of their research built up to the point that even the CBNRC couldn't ignore it. A (very) partially declassified CSE document called The History of the CBNRC shows the agency's knack for understatement when it says that "by August 1973 it was felt that the unclassified cover story for CBNRC left something to be desired."

The powers that be were clearly beginning to realize that if they didn't take action now, their carefully protected culture of secrecy would be destroyed forever—and these inexperienced journalists were proving persistent. If avoidance and even mild legal threats couldn't end this investigation, then the government would simply have to take the matter up CBC's chain of command.

In the weeks leading up to the CBC's airing of the investigation, there was a panicked feeling behind the scenes.

Macadam and Dubro's various run-ins with important personalities were beginning to create problems at the Kremlin—CBC's nickname for the company's top brass. At one point, someone in the CBC hierarchy was pressured to send the then-Prime Minister Pierre Trudeau's office a rough cut of the program, which immediately sent back an advisory invoking the Official Secrets Act, threatening to throw the investigators in jail.

"Well," Macadam recalls saying, "just tell them that I've packed my toothbrush."

It's indicative of the way the pair thought about the subject matter, their belief in its importance as a public service, that the immediate reaction to pushback from above was to protect the story itself. Macadam screened a preliminary cut of the program for his friend Peter Newman, who was then editor of Maclean's Magazine. Newman promised that if the CBC refused to air the piece, he would give the CBNRC front page in the next issue of the magazine. Macadam simply told the brass that if the story was axed, it would be in print the next morning.

Paranoia did eventually take a toll. In one interview Walter Luyendyk, then the head of the Prime Minister's secretariat on intelligence, told them that "there's not a call you've made to anyone in this that we aren't aware of." They took to storing all original footage in a lock-box at CIBC's head office in Toronto. Only Macadam and the banker knew which box was theirs, an enormous container large enough to hold 1970s film cans.

Their dedication to the subject matter not only kept the project alive, but pushed it forward from a 10-minute segment to an hour-long stand alone documentary entitled The Fifth Estate: The Espionage Establishment. (It was not, as officially reported, a segment of the CBC's modern news feature show, The Fifth Estate, which did not begin airing for several more years.)

"If I had been a CBC employee, I would have had to stop," Macadam said. "But I wasn't, [Dubro] wasn't, and the camera-man wasn't... I could take on the CBC if they had no backbone."

Whatever its reasons, CBC eventually pushed past the legal threats, and on the evening of January 9, 1974 it aired the piece, outing Canada's espionage establishment to the world.

"When the story went on the air, all hell broke loose," Dubro recalls.

It began the next morning, when Macadam was woken by a call from a CBC News reporter, who rather breathlessly informed him that the president of the National Research Council—the government agency under which the CBNRC purportedly operated—had just flatly denied everything in their program. Though surprising at first, it quickly made sense that NRC's president would deny involvement in spying—the agency was of course just a cover, and had nothing to do with the CBNRC. "I simply told them that we were very certain of our facts, very positive, and that's all I have to say."

The program was raised immediately in Parliament, mostly fodder for attacks on Prime Minister Trudeau. MPs seemed incredulous that they could have been kept in the dark about such a fundamental part of the government; former Prime Minister Diefenbaker even claimed that "any suggestion that anything of that kind was done when I was Prime Minister is false."

Complicating matters was a pervasive misunderstanding, and even misreporting, of the issues. The Canadian Press wrote the first definitive account of the story for most newspapers, but placed greater focus on the agency's relationship with the CIA than its 'kindred' US agency, the NSA. During Question Period, MP Joe Clark also mistakenly grilled Trudeau about a secret international intelligence "treaty," as opposed to an agreement. In both cases, these missteps allowed the government to make very technically worded denials which seemed to—but did not actually—rebuke The Espionage Establishment's claims.

If the reaction from politicians fell mostly along party lines, the public's response was even more disappointing. Virtually every major paper in Canada ran a news article detailing the previous night's revelations, but many also ran editorials critical of the reporters who had produced that information for them. For Macadam, this point can still raise a bit of anger. "These are newspapers, they're supposed to be giving the news to people, and they're taking after us!"

The Toronto Sun's Peter Worthington said that the CBC seemed "more concerned about a security agency's cooperation with CIA, than with KGB subversion in Canada." The Ottawa Journal argued that the program has "succeeded only in making the sort of honest teamwork of the last 25 years more difficult."

It would take until 1983 for the government of Canada to openly acknowledge it was tasked with signals intelligence

"A lot of them seemed to think that, as the messenger, we were somehow attacking the existence of intelligence agencies." Macadam explained. "We weren't, we were attacking the fact that the government was saying that they weren't involved in it, and it was going on."

Ultimately, it was this total lack of oversight and perhaps even direction that seemed to prompt real legislative action. While there was a general understanding that signals intelligence was necessary (the Calgary Herald went so far as to say that "if [the government] didn't have such an agency, they'd be accused of delinquency"), it also became clear that there ought to be no room in Canada for a company of eavesdroppers with few checks or balances.

Worries about oversight would turn out to be well founded. Around the time Macadam and Dubro were investigating, Canada's spies were setting up projects like operation Pilgrim, which allowed the NSA to use Canadian embassies around the world as listening posts for interception of political communications. In previous years, the CBNRC had collaborated with the French government to surveil Canadians in Quebec, and with Ottawa to eavesdrop on separatist groups both violent and otherwise.

Today, CSE has strict prohibitions against spying on Canadians abroad, or anyone at all inside Canada; prior to this investigation, the CBNRC had few such taboos.

Still, looking back now, Bill Macadam doesn't think the core questions posed by their investigation have ever been fully addressed. "Can we have a democracy with unaccountable security agencies?" he mused. "On the other hand, can we have one without them?"

The investigation did have at least one proximate effect. In CSE's own words, "as a result of the unwelcome publicity, the government soon transferred [CBNRC] to the Department of National Defence portfolio, and renamed it the Communications Security Establishment." It would take a further eight years, until 1983, for the government of Canada to openly acknowledge that this new agency was tasked with signals intelligence.

The UK recently went so far as to release the full text of its own portion of the Five Eyes agreement, but the specifics of Canada's stake in this intelligence arrangement remain secret to this day.

Special thanks to Bill Robinson and Adrian Chen for assistance in researching this piece.