Bill Sutch

In 1933, following some teaching in Palmerston North Boys' High School, Sutch took up a position in the office of Gordon Coates, who was Minister of Finance. When the government changed, he continued on in the office of Coates's successor, Walter Nash of the First Labour Government. During this time he was elected as the first President of the newly formed New Zealand Association of Scientific Workers (now known as the N.Z. Association of Scientists).[4] He had considerable input into economic policy at the time. Eventually, Sutch's political activities were deemed incompatible with his official role, and he was transferred out of the economic sphere. He left the civil service to join the army, becoming an instructor. He returned to the Ministry of Supply arranging equipment and finance.[5]

At the end of the war, he took up a position with the new United Nations Relief and Rehabilitation Administration (UNRRA), working in Sydney and then in London, covering war-devastated Europe. As a result of this work, he was selected to head the New Zealand delegation to the United Nations, where he held positions with the Economic and Social Commission and UNICEF. He played a crucial role in a UN decision to continue with UNICEF, despite a United States desire to close it down. Ben Alpers has said that some of the credit for UNICEF's Nobel Prize for Peace should go to Sutch and New Zealand. Soviet documents claim he was recruited as a spy in 1950.[6]

Sutch in 1958

Upon returning to New Zealand in 1951, Sutch worked for the Department of Industries and Commerce, eventually in 1958 rising to be its Secretary. The First National Government had blocked Sutch's promotion to the head of the department because of an American threat that they would regard New Zealand's security as suspect (The United States communicated secret information to its ANZUS and SEATO allies which included New Zealand). Leading National Party MPs openly regarded Sutch to be a Communist. However the Second Labour Government appointed Sutch to be permanent head of the department. Prime Minister Walter Nash, who knew Sutch well, ignored the objections of the Security Service who thought an appointment was not worth compromising allegiance to the United States. Nash's biographer described Sutch's elevation as a "courageous decision".[7]

There he promoted the development of the New Zealand economy using the policy instruments of the day, including price controls, subsidies and import controls. He concluded that pastoral exports by themselves would not generate enough foreign exchange to maintain full employment, and would continue to make the economy highly vulnerable to fluctuations in international conditions. So he sought import substitution, the further processing of agricultural production for export, and the exporting of non-pastoral agricultural exports, manufacturing and services (such as tourism). As such he foresaw, championed and laid the foundations of the great export diversifications of the 1970s.[8]

Sutch's promotion of industrialisation was anathema to much of the farming community, though many in the business community supported him. In March 1965 he was forced to retire after 40 years of public service employment. His dismissal letter said, "you do not enjoy the confidence of the business community and of the Government to the measure desired of the permanent head of your department."[9] At the age of 57 he became a consultant. Among his many further publications were the books, Colony or Nation?, The Responsible Society in New Zealand, Takeover New Zealand, and Women with a Cause. His festschrift, Spirit of an Age, was published in 1975. Sutch became active in the arts and architectural communities, including the Wellington Architectural Centre. He was an early and active promoter of New Zealand design, asserting that quality design was central to economic and social development. He helped to set up the Wellington Architectural Centre, provided the intellectual framework that led to the formation of the New Zealand Industrial Design Council and chaired the Queen Elizabeth II Arts Council (now Creative New Zealand).[10]

Sutch's writing provides one of the most comprehensive accounts of, and visions for, New Zealand. While his views were often original and independent, many that were rejected at the time are now accepted. He was a nation-builder who wanted to see an economically strong and socially fair New Zealand, free from colonial ties, whether economic or political. He was a committed nationalist, and on many matters ahead of his times.[7]

Economist Brian Easton has argued that: "The events surrounding the trial overshadowed the significance of what went before, and have muted subsequent recognition of his intellectual contributions."[1] The trial also overshadowed his role in the establishment of UNICEF. Sutch's daughter, Helen Sutch, said after the declassification of New Zealand Security Intelligence Service (SIS) documents in 2008 said: "Our family hopes that justice can now be done to that historic legacy, which has been overshadowed for so long by events in the last year of his life".[11]

In September 1974, Sutch was arrested and charged under the Official Secrets Act 1951 following a series of clandestine meetings with KGB agent Dimitri Rasgovorov, an official of the Soviet Union's embassy in Wellington.[12][13] Sutch was the only New Zealander ever to stand trial under the espionage provisions of the Official Secrets Act, based on the British Act of 1951 and repealed in 1983.

The SIS aimed to catch Sutch passing on information during a meeting at night in a public park, but did not detain Sutch until after Rasgovorov had left. They assumed Sutch would co-operate once caught red handed. When he did not, they could not provide specific details of what information Sutch had passed to the Soviet diplomat (hence the curious charge that he faced, under the Official Secrets Act, of passing unspecified information to the Soviet Union). Sutch claimed his meetings with Soviet officials were after the Russian ostensibly approached him in his capacity as a stalwart of the NZ Friends of Israel, for information about who were the Zionists in New Zealand, and to discuss China.

At trial the SIS claimed that the retired Sutch had obtained official government information to give to the Soviets but was unable to provide details of what information. Following a high-profile trial, a jury acquitted Sutch of the charges in February 1975.

Sutch began to suffer ill health at about the same time as he was arrested and died from liver cancer six months after the trial on 28 September 1975 at Wellington, shortly after holding his just-born first grandson, Piers.[1]

Debate over his guilt or innocence continued long after his death. A book published in 2006 by C.H (Kit) Bennetts, the SIS officer who had first observed Sutch, reasserted the claim that he was guilty.[14][15] In an editorial, the New Zealand Herald applauded the publication of the book, and said "Bennetts' unauthorised account has done the SIS a service".[16]

On 9 May 2008, most of the SIS file on the Sutch and the trial were declassified. The files contained no new material information. On the other hand a Top Secret 1976 report by chief ombudsman Sir Guy Powles found that SIS actions had been unlawful when they burgled and bugged his office.[11]

In August 2014, the University of Cambridge released details from the KGB files from the Wellington Embassy that they held in archives that had been provided by Soviet defector Vasili Mitrokhin in 1992. According to Phil Kitchen of The Dominion Post, "The documents don't name Sutch but the details clearly identify him and state he was recruited [by the KGB] in 1950." If the person was indeed Sutch, he was recruited while representing New Zealand at the United Nations, and continued contact with the KGB for 24 years, including 15 years when he was employed in high Government office.[17] Sutch's daughter did not accept the evidence, stating: "It is well known that KGB agents in general were desperate to talk up any contacts they had because they were under pressure from their superiors".[18]