The intelligence watchdog found an Asio activity transcended “the bounds of propriety in one respect” as part of an investigation into complaints raised by the former US marines pilot Daniel Duggan.
Duggan’s family and Asio have both confirmed that the investigation by the inspector general of intelligence and security (IGIS) made one negative finding against the spy agency, but they are sharply at odds about its significance.
The exact nature of Asio’s transgression will not be publicly revealed, but remain in a classified report.
The family of Duggan – an Australian citizen who is fighting an attempt to extradite him to the US – accused Asio of attempting to “whitewash its involvement in the case” by selectively commenting on the outcome.
However, an Asio spokesperson maintained that despite the report raising “a propriety issue”, the watchdog had found Asio acted “both ethically and within the law at all times in matters regarding Daniel Duggan”.
IGIS has sweeping powers to inspect documents as part of its role scrutinising the operations of intelligence agencies, but it does not generally announce the outcome of complaints it investigates, making it hard for journalists to verify the findings.
Asked on Tuesday to reconcile the two public accounts of the outcome of the Duggan investigation, a spokesperson for IGIS said: “The office has no comment.”
Duggan, 55, a former US marines pilot accused of training Chinese pilots to land fighter jets on aircraft carriers more than a decade ago, had complained to IGIS about Asio’s alleged role in securing his return to Australia from China.
His legal team had raised concerns an “unlawful lure” – in the form of an Asio clearance for an Australian aviation security identification card – may have been used to entice Duggan back to Australia where he could be arrested on behalf of the US and extradited. He was arrested in October 2022.
The outcome of the investigation into Duggan’s allegations had not been public until Sunday when the Asio chief, Mike Burgess, told Guardian Australia’s Australian Politics podcast: “The inspector general conducted his own inquiry [with] full access to everything we did. He found all the allegations against us were unfounded.”
But Duggan’s family said in a statement on Monday that Burgess had “failed to reveal” one finding of impropriety.
They said a letter from IGIS to Duggan’s legal team, dated 16 August 2023, included the sentence: “Additionally, to the elements of Mr Duggan’s complaint as such, I found that that one activity did transcend the bounds of propriety in one respect, full details of which are set out in the classified report.”
Duggan’s family said these findings “remain classified and unavailable to Dan and his legal team, raising the question over whether he can get a fair extradition hearing”.
Duggan’s legal team has not released the full letter from IGIS, so the context of that sentence is unclear. His family said Duggan’s complaint had asked IGIS “to investigate Asio’s role in 10 matters relating to his case”.
Asked to respond, an Asio spokesperson said the IGIS report was “unequivocal in its findings that Asio acted both ethically and within the law at all times in matters regarding Daniel Duggan”.
“IGIS found that one Asio activity raised a propriety issue, but this did not affect the IGIS’s conclusion about the lawfulness of Asio’s activities,” the spokesperson told Guardian Australia.
“Therefore, the statement from Mr Duggan’s public relations company is misleading.”
Guardian Australia has been unable to verify the details of the propriety issue but a source familiar with the matter said it was a single element of a single matter “subordinate” to the multiple claims made by the Duggan camp.
Duggan’s legal team is requesting a copy of the full IGIS report. The letter that summarises the report, Duggan’s representatives say, lacks detail and fails to address all of his complaints.
The dispute was raised at a brief court hearing on Wednesday morning. Magistrate Daniel Reiss described the IGIS letter to Duggan as “not very helpful”.
“‘Something came up but I’m not going to tell you what it is’,” the magistrate said, paraphrasing the correspondence, and holding up the redacted document from the bench.
The court hearing focused on an application to delay the case while Duggan applies for legal aid. Duggan is arguing that an order obtained by the US government, stopping him from selling a NSW property he owns, has prevented him from funding his defence.
The magistrate noted Duggan had already spent between $800,000 and a million dollars on legal fees. The matter has been adjourned until April.
Outside court, a member of Duggan’s legal team, Howard Adams, said Duggan had been “held for about 500 days in solitary confinement in a maximum security prison”.
“He’s of previous good character, honourably discharged from the US marines back in 2002, he’s married to an Aussie, he has six Aussie kids, and at the moment he’d not even allowed to have a laptop computer to prepare his case. As you can imagine, he’s feeling an immense amount of frustration.”
Duggan’s wife, Saffrine, urged the prime minister and the attorney general to “prove the value of Australian citizenship and how much they will protect our nation’s sovereignty when it comes to matters involving our most powerful ally”.
She said: “What happened to the concept ‘fair go’, when Asio is allowed to use the media to whitewash its involvement in the case behind a veil of secrecy and classified reports?”
The Asio spokesperson defended Burgess’s original comments.
“As the director general stated, the IGIS resolved that Mr Duggan’s complaints were not substantiated,” the spokesperson said.
“IGIS dismissed all elements of Mr Duggan’s complaint and did not identify any acts of illegality by Asio.
“IGIS found that Asio did not use Mr Duggan’s application for an aviation security identification card to ‘lure’ Mr Duggan back to Australia.”
They said as the matter was still before the courts, Asio could not comment further.
