Most of the major Australian papers have reports of this, here's one from http://www.theage.com.au/articles/2002/09/26/1032734259148.html. The DSD is Australia's NSA.
Sex scandal undermines spy morale September 26 2002 Sexual misconduct has so comprehensively undermined morale within one of Australia's top-secret intelligence agencies it has become a national security risk, according to a report today. The rift within the Defence Signals Directorate was detailed in a file given to the News Ltd papers. It alleges improper sexual behaviour, nepotism and mismanagement by high- ranking agency officers. [...]
