People Australia

Walter Clayton, 1956

National Archives of Australia, A6119, 941

Walter Seddon (Wally) Clayton (1906-1997) travelling salesman, spy, Communist and fisherman.

Birth: 24 March 1906 at Ashburton, New Zealand, son of Thomas Ernest Clayton (c.1873-1953), an ironmonger and merchant born at Sheffield, Yorkshire, England, and Alice Maud, née Bean (1875-1951), born at Kaiapoi, Canterbury, NZ. Marriages: (1) 24 June 1931 at Prahran Registry Office, Melbourne, Victoria, to Hilda Mary Lane (1899-1976), a professional singer, born in Paraguay, niece of the Australian socialist William ‘Billy’ Lane. They divorced in 1945. (2) 1 March 1965 at the Registry Office, Sydney, New South Wales, to Peace Joy Gowland (1918-2006), born at Broken Hill, NSW, a fellow Communist, who survived him. Death: 22 October 1997 in Mater Misericordiae Hospital, Waratah, Newcastle, New South Wales: usual residence Michael Drive, Waratah. 

• Wally was educated at Christ College, Christchurch, New Zealand. He first worked in sports dealers’ stores in Christchurch, migrating to Australia in the early 1930s.
• Joined the Communist Party of Australia (CPA) in 1933, radicalised by wretchedness of the unemployed. In 1934-1935 he became a full-time party organiser in Melbourne and a member of the Victorian State committee, also working as a travelling salesman selling bags and travel-goods, traversing the countryside on a motor bike. By the late 1930s he was a regular speaker on the Yarra Bank, Melbourne.
• In July 1938 he was arrested during a visit of Nazi spy Felix von Luckner. In 1939 he moved from Melbourne to Sydney perhaps because of a factional dispute in the CPA and to organise sales of the Workers’ Weekly.
• He was a member of the CPA Control Commission and chief organiser of the CPA underground during a period of illegality in World War II, a position that gave him considerable experience in tradecraft of conspiracy and covert activity. He resurrected this machinery in the post-war period due to the threat of party illegality. He was allocated the code-name, ‘Klod’, in coded cables sent to Moscow by MVD/KGB authorities. Drawn into espionage in 1945 for Russians when offered £15 by an MVD/KGB senior official in Australia, Makarov, who reported that Clayton was initially “taken aback” because he “had always considered it his duty to help our country”.
• An unlikely spymaster who cultivated links with CPA activists in sensitive government departments and External Affairs officers Jim Hill and Ian Milner, he then provided Makarov with sensitive documents in 1945-1946 and 1948.
• Clayton’s activities were uncovered through the Venona decoding operation and led to the United States denying the British government secrets re rocket technology. Clayton’s activities also generated momentum for ‘The Case’ and the Petrov Royal Commission, during much of which he hid in a remote farm at Milton, on the south coast of NSW. He appeared before the commission in March 1955, providing “a masterful piece of steely self-assuredness, evasion, lies and outright defiance’.
• In 1955-1957 he was subjected to relentless harassment by the Australian Security Intelligence Organisation, whose officers mounted ‘Operation Pigeon’ and staked out Clayton’s home in semi-rural Pennant Hills, believing he planned to escape to the Soviet Union.
• He later retreated to Port Stephens and worked as a professional fisherman where he developed a reputation in the local fisherman’s cooperative as its ‘snapper king’. Believing he might be picked up by a Russian submarine, ASIO continued to stalk him.
• Tall, balding, thin, with a receding chin, he wore horn-rimmed spectacles and was enigmatic and secretive, described by Gloria Garton as “the great Pooh-Bah” of the CPA and by Cecil Sharpley as ‘a fanatic, a plodder, nothing brilliant but loyal and hard working, completely ruthless and impersonal’, ASIO regarded him more favourably, describing him as ‘unassuming, quietly spoken, highly strung, intelligent individual with a magnificent obsession’.
• Clayton protested his innocence of espionage until his death. His occupation on his death certificate was given as “fisherman”. Cause of death: cardiorespiratory arrest (minutes), acute pulmonary oedema (1 day), metastatic adenocarcinoma of the bowel (3 years) and ischaemic heart disease (years). 

Sources
Desmond Ball and David Horner, Breaking the Codes: Australia’s KGB Network, 1944–1950. Sydney, 1998; Stuart Macintyre, The Reds: The Communist Party of Australia from origins to illegality (Sydney, 1998); David McKnight, Australia’s spies and their secrets (St Leonards, NSW, 1994) and Espionage and the roots of the Cold War: the conspiratorial heritage, (London, 2002); Sydney Morning Herald, 8 August 1998, Weekend Australian, 5-6 October 1996, 26-27 October 1996, 3-4 April 2004; John Playford Doctrinal and strategic problems of the Communist Party of Australia, 1945-1962, PhD thesis, ANU, 1962, p. 217