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Federated Ship Painters and Dockers' Union - Royal Commission (Mr F.X. Costigan, Q.C.) - Report - Final, dated October 1984 - Volume 5 - Drug Trade


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The Parliament of the Commonwealth of Australia

ROYAL COMMISSION ON THE ACTIVITIES OF THE FEDERATED SHIP PAINTERS AND DOCKERS UNION

Commissioner: Mr Frank Costigan, Q. C.

Final Report

Volume 5

Pursuant to Resolution of the Senate of 22 October I984-(l) Deemed to have been presented to the Senate, and publicat ion authorized, on I November 1984,

and

(2) Ordered to be printed, on the authority of the President of the Senate, on I November I984

Parliamentary Paper No. 288/1984

ROYAL COMMISSION ON the activities of the Federated Ship Painters and Dockers Union

FINAL REPORT, Volume 5

The Government of the Commonwealth of Australia

and

The Government of the State of Victoria

ROYAL COMMISSION ON THE ACTIVITIES OF THE FEDERATED SHIP PAINTERS AND DOCKERS UNION

Commissioner: Mr Frank Costigan, Q.C.

Final Report

Volume 5 Drug Trade

Ordered to be printed by the Legislative Assembly Victoria 1982-84

No. 179

ISBN for set: 0 644 03746 6

I SBN for Final Report - Volume 5: 0 644 03751 2

Publisher's note: This publication has been reproduced in part from photocopies of the original documents. Any loss of definition in reproduction quality is regretted.

Printed by Authority by the Commonwealth Government Printer, Canberra 1984

ROYAL COHMISSION ON THE ACTIVITIES OF THE FEDERATED SHIP PAINTERS & DOCKERS UNION

FINAL REPORT

VOLUHE 5

DRUG TRADE

NOTE

Certain material has been deleted from this published Volume upon the advice of the National Crime Authority. These deletions have been made to avoid possible prejudice to investigations. As a result, blank spaces appear in parts

of the Volume.

VOLUME 5

THE DRUG TRADE

Table of Contents

CHAPTER PAGE NO.

1. Introduction 1

2 . Some Investigations 10

3 . Affairs Of Bu 11 20

4 . Previous Commissions 74

5. Attitudes 101

6 . The S i tu a t ion 116

7. Objectives & Solutions 126

8 . Publicity 146

9 . A New Approach 158

References 173

CHAPTER l - INTRODUCTION

1.00 1

"'And how do you

business with this

length.

feel drug?' about doing

he asked at

Auguste shrugged his shoulders and raised his hands at his sides almost to shoulder height in an emphatic flourish. 'I have

no problem with that, Buonaparte. To me

it's the same as a farmer who grows corn

even though he knows it will be used to

make liquor that will be bought by men

who drink too much. You can't stop men

from being fools. If opium isn't the

source of their foolishnesss, they'll

find something else to make fools of

themselves with.'"

William Heffernan, The Corsican (1983, Granada)

It wa s a lmost inevitable tha t I would be

involved, at some level, with an investigation into dru g

t raff ick ing . There a re some peculiar characteristics of

me mbe r s o f the Uni on which make the involvement of some of

t hem in th e d ru g indu s try a lmost inevitable. For e xample : -

(a ) Their association with

puts them in an ideal

f a cilita te the entry of

Austra lia ;

the docks

posit ion to

drugs into

(b) their association with criminal

element s in the community generally make it - certain they will come into

conta ct with suppliers, pedlars and users of drugs.

1. 0 0 2 I do not wish there to be any misunderstanding

abou t the content of this volume. In other parts of this

Report I have described the facilities which the Union

p r o v id e s fr o m time to time to a ssist its members in their

Vo lume 5 -1- Chapter l

Introduction

crimina 1 activities (false identities, harbouring and the like). I do not suggest the Union or its Ex ecutive, as

oppo s e d to its members or some groupings of them, is

i nvo lved in the organisation of drug importations and

dis tribution. The associa tions which are described do n o t depend necessarily, or at all , upon the me mbership by the

particular person of the Union. That is to say, it is not

possible to allot blame to the Union Executive for the sins

of i t s membership in this a rea of crimina lity.

1 . 003 Drug trafficking is an activity which rightly

provo k es great vocal condemna tion in our society. There are membe r s of the criminal underworld who wil l ingly will admit

thei r involvement in crime but who draw the line at dru g s

a n d protest their innocence of participation in its trade

mos t vehemently. Occasionally, these protestations remind

me of the Player Queen in Hamlet who was thought to "protest

too much"; but I accept that for many people - otherwise of

a di s honest or violent bent - drugs are an anathema.

1. 0 04 Thus, I ha ve treated this as a sensitive area

a n d one in which I must exercise great care in preparing

th i s Report. In particular, I have been anxious to avoid:-

1.005

(a) Associating unfairly any person wi th drug trafficking ;

(b) Interfering with any current covert opera tion mounted by law enforcement bodies; (c) identifying any drug offender

currently waiting tria 1.

These restrictions have mea·:nt it is

virtually impossible, publicly, to describe my

investigations. Throughout the last two yea rs I have been

mon i toring various drug offenders and operations which ha ve

b een run by different "task forces". Information has been

transmitted to and from appropriate police and other forces.

Volume 5 - 2- Chapter 1

Introduction

In this way, some loosely coordinated role has been

achieved. When I have

information, following the other documentary records, a vailable. A number of

been able to obtain u se f u 1

acquisition of banking and/or I have been anxious to make that

arrests and

resulted from information obtained,

Where

prosecutions ana lysed possible, I

ha ve

and ha ve dis semina ted by my Commission. referred to those in chapter 7 of volume 1.

1.006 In appropriate cases I have encouraged joint

a ction by those entrusted with drug enforcement and those

ha ving the res pons ibi li ty to collect revenue. Althou g h

Section 16 of the Income Tax Assessment Act prevents

Taxation investigators from distributing information gleaned from tax offenders (who are also drug dealers) nothing in

the law prevents police officers from informing Ta x

investigators of suspicions as to the undeclared income o f the d ea 1 e r . Thu s , i t rna y be t ha t a 1 though the d ea 1 e r i s

a ble to escape the heavy penalties imposed by the crimina l

l a w he may still fa 11 fou 1 of the revenue law - which in

turn, in some cases, may provide penal sanctions for the

particular misbehaviour (if some conspiracy is involved). This is an area which should be explored by the authorities an d is the subject of more detailed discussion later in this volume.

1.007 I have from time to time conferred with

Go vernment as to the state of investigations and the subject of targetting. Bearing in mind time constraints and other

factors I sought guidance as to those areas on which the

Government would prefer me to concentrate. The area of dru g -associated criminality was given highest priority.

1.008 This meant the Commission has within its

limits of time- collected, collated and analysed a vast

amount of material. The intelligence material available to the various law enforcement authorities around Australia is

Volume 5 -3- Chapter 1

Introduction

staggering. But colla ted. It is

it has never been properly collected and

true that both the AFP and Customs ha v e

computer hardware capable of storing the appropriate data . The problem appears to be in providing the input. It is

still difficult to break down the barriers which different police groups build around individual target and projec t

a rea s. An investigative team collects data but if its task

i s to prosecute "A" (on "admissible" evidence) it may well

di s ca rd "inadmissible" materia l in relation to him and o t her sepa rate material which may relate to "B". It is essentia l, f rom an information point of view, that this material fin d s its way to the appropriate intelligence organisation.

1.009 Consequently I ha ve not received a 11 th e

a va ilable information. What I have received has been

largely because of the good relationship developed with the a ppropriate policing forces. Although there is sti ll

present a philosophy of "protecting the patch", my staff and

I ha ve been able to develop a good understanding with police forces around the country (a nd for tha t ma tter ove rseas).

By giving assistance - and providing good information a n d

a na lytical backup, which has enabled on a number of

occasions arrests to be made - these relationships have been cemented.

1.010 It must be remembered that the Commission does

not have an opera tiona 1 arm in the true sense. It is n ot

i nvestigating crime with

prosecuting the offenders. a view

It is an

to solving it and

intelligence g a thering

o r ganisation. It does not arrest, interview "suspects" or p r osecute. I ha ve not regarded my role as one o f making

spectacular arrests leading to impressive trials, a la t he

US District Attorney. Generally, I have not obtained, n o r

have I sought, credit for prosecutions and convictions

a rising from the work of my Commiss i on.

Volume 5 -4- Chapter l

Introduction

1.011 The reports which have come to me - which are

by no means complete and are merely a selection

demonstrate the breadth of the Australian problem in

combatting drug importations. There has been tremendous publicity in Australia over recent years given to various

aspec ts of the illegal drug industry. Our community has

been saturated by the media coverage including the exposure of the Mr Asia Group, the drug connotations of the Nugan

Hand exercise, and many and varied Royal Commissions and

some particularly extravagant seizures of drugs.

1.012 There have been a number of arrests involving

marijuana plantations. These have occurred in every State of Australia. There was the notorious case of the American "Grannies". There always seems to be at least a scintilla

of corruption surrounding the arrests (or non-arrests) of villains involved in these areas. The circumstances

surrounding the Trimbole case hardly need further

restatement here. There have been allegations of too early release of various drug of fenders, light sentences, improper deportation, incomplete investigations, ad nauseam.

1.013 There has been such a surfeit of reported drug

of fences and drug-related . corruption allegations that the community is in danger of becoming inured to them. This

will be disastrous as the joint resolve of Governments and law enforcement organ.isa tions to overcome the drug problem will be weakened if there is not a continued outcry against the perpetrators of these particularly nauseating criminal activities. The rage must be

1.014 There were a number of extant investigations

into drug related matters of criminality being investigated by me as at 30 June 1984. In respect of these rna tters

analyses had either been completed or were well advanced.

Volume 5 -5- · Chapter 1

Introduction

Those rna tters have been rna de the subject of proposed

references trust that

to the

the

Na tiona 1

Au thor i ty

Crime Au thor i ty. will proceed

I sincerely

with those

investigations.

1.015 Having said that, I am concerned that the NCA

might be side-tracked (as , I have been

investigating individual drug syndicates by the Inter-Governmenta 1 Committee. I

occasionally) into as referred to it

believe the NCA

should, in this area of criminality, demonstrate a more

globa 1 approach. Its aim should be to develop a new

strategy to control the importation of drugs. I offer this

volume of my Report as some contribution to the development of a more effective total strategy than has yet been found.

In expressing that hope I am conscious that much work has

been done in this area. There has been a plethora of

Commissions in Australia in the last decade which have

concentrated on the issues involved in the drug trade. They have considered those issues with great care and offered

solutions to the problems. I have collected in chapter 4

their recommendations and some of the discussion in their reports.

1.016 In the following chapters of this volume I set

out some of the matters investigated by me (bearing in mind

the guide lines established for myself in paragraph 1. 004

above). I include a detailed analysis of one man whose

financial affairs became of some interest. That wi 11

represent, to some extent, a case study on which will be

based some of the observations later in this volume.

1.017 Needless to say, I regard the availability of

drugs in Australia - pursuant to the activities of criminals -as one of the major threats to the stable future of this

country. If a solution can be found to the problems then I

believe it will justify the time and cost expended.

Volume 5 -6- Chapter 1

Introduction

Previous Commissions

1.018 I have referred to the fact that a number of

Roya l Commissions have enquired into drug related matters.

I wi ll be referring to their work and reports in the course

of t his volume. It is a s well tha t I identify those

Comm issions here.

1.019 The South Australian Government set up its

Ro yal Commission into the non-medical use of drugs on 13

Janua ry 1977 ("The Sackville Commission"). It comprised

Pr ofessor Sackville and Drs. Hackett and Nise. It reported

in Apri l 1979. It concentrated on social aspects of dru g

u s e.

1.020 On 5 August 1977 Mr Justice Woodward of the

New Sou t h Wales Supreme Court was commissioned by the New

South W a les Government to enquire into drug trafficking in

tha t Sta te ("The Woodward Commission"). His Commission was known a s the Ne w South Wales Royal Commission i nto Drug

Traffic k ing. the end of

October 1979.

His investiga t i ons substantially concluded by December 1978. His report was submitted 31

It was divided into three volumes but the

pages ar e numbered consecutively from volume to volume.

Pag e references only will be given when reference is made to it in the course of this document. Further rna tters were

r efer red to this Royal Commission just prior to the

pr esen tation of its report in 1979. These necessitated

fu rth e r investigat i ons and a second report was presented in Ma y 1980. All references in this volume will be to the

fi r s t report unless the contrary is stated. The Woodward

Commis sion concentrated on individuals and organisations in

New South Wales involved in drug trafficking.

Vo lume 5 -7- · Chapter l

Introduction

1.021 The Australian Royal Commission of Inquiry

into Drugs ("The 13 October 1977. Williams Commission") was commissioned on Mr Justice E.S. Williams of the Queensland

was appointed by the Governments of the Supreme Court Commonwealth, Queensland, Tasmania, Western Australia and

Victoria. New South Wales and South Australia did not

fo rmally participate in the national inquiry a lthough a

measure of cooperation was received from these States.

Obviously, New South Wales and South Australia regarded

their own initiatives as sufficient in the circumstances. Th e Wil liams Commission was a

reported on 21 December 1979.

volumes A F and references

wide-ranging enquiry which Its report appears in six

to it will identify the

appropriate volume by letter. References to the Commission a nd its report will identify it by the name of the

Commi ssioner.

1 . 022 On 30 June 1981 the Acting Prime Minister, the

Rt Han. J.D. Anthony, C.H., M.P., and the Premiers of those

three States made a joint statement in the following terms:-

Volume 5

"'The Commonwealth, New South Wales,

Victorian and Queensland Governments have established a judicial inquiry into the

possible drug trafficking and related

activities of Terrence John Clark and

other persons associated with him. It

will be headed by His Honour Mr. Justice

Donald Gerard Stewart of the New South

Wales Supreme Court, who has been

requested to report no later than 30th

June 1982. It is envisaged that the

judicial inquiry may be given

supplementary terms of reference

referring to the activities of other drug trafficking groups should the occasion rise. The Victorian Coroner's Report on the

deaths of D .R. and I .M. Wilson found that

a criminal group involving Terrence John Clark (also known as Alexander James

-8- Chapter l

Introduction

Sinclair) existed in Australia. The

Coroner stated that a huge drug empire

had grown within Australia, under the

leadership of Clark, involving many other persons. The judicial inquiry will be

supported by a Commonwealth/State

mu Hi-discipline task group comprising especially seconded Fed era 1 and State

police officers. The task group will be

assisted by lawyers from the Commonwealth and States experienced in the conduct of

prosecutions and as required by persons experienced in accounting and banking.

It is considered that the means adopted

are the best ones of ensuring that major

drug offenders are identified and

prosecuted and exposing their techniques and methods, which can then be countered by the au thor i tes.'"

"The Stewart Commission", as it has been since known,

commenced its operations in June 1981. Its report, from

which the reference to the joint statement above comes, was presented on 25 February 1983.

1.023 A summary and discussion of the

recommendations contained in the various Royal Commission reports wi 11 appear in chapter 4 below.

1.024 With the termination of my Commission, only

the National Crime Authority with its more limited powers will remain. The role of investigation and suppression of the drug trade will again be the preserve of the overworked police forces with an absence of essentia 1, expensive

facilities. This volume surveys both the history of the

problem of illegal drug abuse and, to some extent, the

current state of play. New proposals are suggested in the

concluding chapter which I trust will be fully considered by Government. The longer it is before effective action is

taken, the harder becomes the fight.

Volume 5 -9- ·chapter 1

CHAPTER 2 - SOME INVESTIGATIONS

2. 001 Most of the investigative and analytical work

conducted by my Commission in drug trafficking is of a

confidential nature. It has been conducted in collaboration with other law enforcement agencies. Let me illustrate.

2 .002 At the end of April 1982 a joint analytical

research team of the Australian Federal Police, Bureau of Customs and the Bureau of Criminal Intelligence of the

Victorian Police Force determined to collate information c oncerning the facilitation of prohibited imports into

Australia by various men and to submit a joint situation

p aper for presentation to the Joint Task Force Management Committee. The analytical task group consisted of six

members from the three bodies. As a result of this

collation the view was expressed (carrying a probability rating of 70%) that certain facilities were being used to

import narcotics and firearms, export meat and steal

containerised cargo. The report on which this cone lus ion

was based was forty pages in length and was supported by

documentation obtained through the three agencies . amounting to some hundreds of pages.

2 . 003 As a result of this report a meeting was held

at Russell Street police complex in Melbourne attended by representatives at a very senior level of the Victorian

Police, the Australian Federal Police, and Bureau of Customs and the Australian Bureau of Criminal Intelligence. I also attended together with the two counsel then assisting me. At this meeting there was an in-depth presentation by the

team analysts of the material which they had put together.

Volume 5 -10- Chapter 2

Some Investigations

Dis cussion enstied and in due course it was agreed in

principle that there should be formed an investigative team cons i s ting of personnel from the various bodies represented a t this meeting to carry the matters dealt with in the

report into further in-depth investigation.

2. 004 That recommendation was considered by the

J oint Task Force Committee of Management at its meeting in J uly 1982 and an Investigative Team was set up. Members of

i t h ave attended at the premises of the Royal Commission for f urther discussion as to the methods and structure of the

i n vestiga tion.

2 . 005 The investigation team operated from July to

De cember 1982 , when jt became non-operational and was

r e duc e d to a smaller collating and data collection team . It

was thought that the orig inal target area was too

wi de-ra ng ing, with too many investigative areas requiring servicing . It was too big a job for one small team. I do

believe I should identify here the nature of the target - it

remains an object of the attention of drug enforcement

b odies , albeit the original team - even in its reduced form

- is n o longer together. Personnel who have been identified

by me as possible offenders in this area, and who are

associated with the original target zone, have become the

s ubject of closer investigation.

2. 00 6 It is now no secret that I have investigated

t h e involvement in the drug trade of Queensland members of

the Union. In close cooperation with the Queensland Police - who had done a great deal of work in this area - painters

a nd dockers have been identified as being part of various

drug trafficking teams. These involved at least one man who was very senior in the Queensland Branch of the Union . Some of thos e investigations have been inconclusive to date.

Volume 5 -11- · chapter 2

Some Investigations

Further work needs to be done. Given the current perception as to the manner in which the drug fight in this country

should be conducted it may be very difficult to conclude

s uccess fully many drug-related enquiries. The difficulty, a s always in this kind of case, is the acquisition of

admissible evidence which can be produced before a court to

justify a conviction. This, as I will detail below, seems

to be the ultimate objective sought by law enforcement

b odies and the community.

2 .007 I had endeavoured to maintain as confidential

the Queensland-based Unfortunately, they were

exposed as a result of proceedings taken in the Federal

Court against me late in 1983 and a subsequent discussion in the Queensland Parliament. The statement I issued as a

c onsequence thereof on 23 December 1983 details these

matters. On 21 December I said:-

Volume 5

"My attention has been drawn to a

question asked of the Premier

and the answer given, the Parliament

of Queensland last Thursday and Friday, 15 and 16 December. For the sake of

complete accuracy I have arranged for

copies of each to be procured.

The question was:

'(1) Is he (that is, the Premier) aware

that allegations have been made by Mr

Frank Costigan in recent Federal Court

proceedings in Sydney that the Comalco

House Branch of the Bank of New South

Wales (now Westpac) was used in 1980 and

1981 by the Painters and Dockers' Union

to finance drug transactions in the state?

(2) Has he made any enquiries regarding

these allegations and if so, what was the

result of such enquiries?' The Answer given by the Premier was:

-12- Chapter 2

Some Investigations

'I am aware of these allegations and have made inquiries of the police department. The Queensland police have no of any painter and docker involvement 1n

drug trafficking in this State, nor do

the Queensland police have any knowledge or information which would suggest that the Comalco House Branch of the then Bank of New South Wales was used to finance

drug trafficking in this State. The

Queensland police have co-operated

extensively with the Costigan Royal

Commission. At no time, however, have

these allegations or matters relating to them been raised with the Queensland

police. I am most concerned that the

serious allegations concerning our State would be made without their first being

raised with the Queensland police. I do

not wish to add to the public controversy concerning several public figures

currently in dispute with Mr Costigan,

but I am concerned that allegations which on their face appear to be without basis

would be made by Mr Costigan,

particularly \lhen they are calculated to cause serious damage to the reputations

of such public figures.' That is the end

of answer." (Transcript p. 17672a-17673)

I then dealt with those portions of the question and answer

which referred to "several public figures". I continued:-

Volume 5

"It is further stated by the Premier that

the Queensland police have no knowledge of the involvement of the painters and

dockers in drug trafficking in

Queens land. No doubt the Premier is not

aware of the information held by that

Force. My relationship with the

Queensland police, and its Commissioner, Mr Lewis, has been warm and beneficial.

Without exception they have responded to any request I have made and have acted

with great professionalism and

efficiency. At the suggestion of the

Chief Commissioner, Mr Lewis, members of the Force concerned with the suppression of drug trafficking by painters and

dockers in Queensland have given sworn

-13- · Chapter 2

Some Investigacions

evidence before me and produced and

allowed me to copy their charts and files in which the complete ne twork is set

out. Indeed, that Force has been engaged

in painstaking investigations over the

past three to five years and has a deep

understanding of the drug distribution network and its foundation s which lie in

the Queensland branch of the union. The

work of this police force has been

mirrored to some extent by the AFP,

Northern Division, wh ich like the

Queensland police has shown great

professionalism in the work it has done .

The investigations of the AFP confirms

the conclusions of the Queensland

police. All of these matters are well

known, I expect, to the Chief

Commissioner of the Queensland police .

The Premier has not written or spoken to

me about these matters. If his concern

is not abated by my remarks t oday, and he

seeks further information, then I would

be happy to explain to him,

confidentially, for fear of prejudicing my investigations, the basis of my

enquiries. These are not ma tters for

public debate, nor are they matters where I expect to be subjected to uninfo rmed

comment in Parliament by the hold e r of

the highest political office in tha t

State."

(Transcript p. 1 7 67 4 - 1 7 6 7 5)

The Premier has not sought from me any "furthe r info rmati on" in relation to these matters.

2 · 008 Despite what otherwise mi ght appear t o be a

likely rupture of my hitherto strong wo r king relat ionship with Commissioner Lewis and his police fo r ce I am pleased

to report that cooperation continued undimini shed until

conclusion of my operational phase. I n Febru a r y 198 I

attended on the Commissioner together wi t h counsel assisting me. I sought an update briefing of t he i nvestigat ions into

mutual drug related targets. I received i nformat i on and, in

Volume 5 -14- Chapter 2

Some Investigations

turn, passed on information. As a result of the informa tion g iven to me I mounted a full analytical and investigative

operation. I will refer to that again later. The

information I passed on lead to, within a few days, the

arrest by Queensland Police of at least three drug offenders in Cairns. The offences with which they are charged involve trafficking in heroin in quan tities in respect of which

s ubstantial penalties are applicable.

2 .009 The matters which I have investigated have

been, with one exception, of fairly small compass in the

scheme of things. There are many individuals and groups

involved in the heroin trade. In the Woodward Report, the

following observations were made:-

Volume 5

"It is clear on the evidence that there

is no suggestion that heroin importation and distribution is in the hands of one,

or even a small number of permanently

established groups. No 'Mr Big' was

discovered nor was there evidence of a

small number of major controlling or of the prerequisites of

control. It was firmly established that

suppliers in Thailand or elsewhere did

not restrict sales to any Australian

importatton monopoly and were prepared to sell to anyone who would meet their

price ... Vast amounts of capital are not

required. A venture costing $50,000 will likely in excess of $1 million and

one or two quite small ventures could

quickly generate sufficient capital for a project of that size. Accordingly, the

necessity for high order 'organised

crime', 'gambling syndicates',

'unscrupulous businessman' and the like to put together significant amounts of

capital is just not a prerequisite in

heroin importation." (Woodward, 1979, 1946)

-15- Chapter 2

Some Investigations

2.010 Because of the sensational treatment by the

press of the Mr. Asia syndicate - and in particular the

ultimate disposition of the murdered Christopher Martin Johnstone - the public became very much aware of the

activities of that particular group. The subsequent Royal Commission into the activities of Terrence Clark and his

associates justified and heightened the public interest.

One of the estimates made by the Stewart Commission was that

between 1976 and 1979 the Clark/Johnstone syndicate had imported 85 kilograms of heroin into Australia. Some

attempt was made to allocate the degree of prominence

occupied by the syndicate in the .Australian heroin trade.

The various estimates made by other Commissions were not regarded as very helpful or expressed as being reliable in

the area. Short of confirming that the Clark group did occupy some prominence it was difficult to confirm any

particular position. If other estimates that 1000 kilograms of heroin were being consumed annually in Australia in the

years 1979-1980 are accurate, then Clark's group's position

was not of major significance. However, those estimates

cannot be verified.

2.011 What can be verified is that Clark's operation was only one of many then active (it was Rossibly the

biggest individual group). But there was a large number of small teams and ”privateers” operating. The enormity of the

industry was and is such as to defy normal policing methods.

2.012 The methods of importations are themselves

innumerable.‘ The list is endless with the inventive imagination of the importer being as unlimited as that of any entrepreneur. Drugs have been imported in the soles and

heels of shoes, in wooden statues, picture frames, drinking

Straws, knitting wool, spray cans, cosmetic jars, the

insides of fruit, rolled up newspapers and electrical

Volume 5 ~16- Chapter 2

Some Investigations

goods. I have received information as to even more

ingenious methods. On 21 August 1983 at: Copenhagen Airport, two individuals were arrested on arrival from Mombassa,

Kenya, in possession of one litre of cannabis oil concealed

in a length of 66 metres of electrical cable tubing. The

plastictubing, black in colour, was provided at each end

with approximately 10 cm of genuine cable serving as a

stopper. The tubing contained some 143 m1 of oil per metre, probably inserted under pressure of compressed air. Power

plugs and electrical items were joined onto the section of

genuine cable to add authenticity.

2.013 I have been advised that: the concealing of

heroin in writing paper is a comparatively new method being utilised by traffickers in Pakistan. The writing paper is

saturated with a solution of heroin, and is being offered in both white and brown varieties. Sheets of paper impregnated

with white heroin are s‘vlling for approximately $5,500 per kilogram and paper impregnated with brown heroin costs approximately $1,100 per kilogram. Reports indicate that each sheet of paper contains 3-7 grams of heroin depending

on the thickness of the paper. A sample of brown paper was

analysed and the purity found to be 27.2% and although low, grades of heroin are being reports indicate that various

have been Offered for sale. Pakistani heroin traffickers

relatively innovative, apparently, in their smuggling methods. In early 1983 heroin with a purity of 21% to 4570 was soaked in the cardboard liners of suitcases and also in

1983, heroin saturated towels (purity 61%) were used. The

heroin can be removed by soaking the articles chloroform or other suitable solvents. Pakistani heroin is

also being trafficked by other nationalities.

Iranians, resident in Bangkok, with Pakistani paSSports is

the smuggling of heroin soaked

in alcohol ,

A group of

alleged to be involved in

into Pakistani carpets. Each carpet is impregnated with a

Volume 5 -l7- Chapter 2

Some Investigations

sol ution of heroin and can hold from 1 to 1.5 kgs of

hero i n . The carpets are then carried from Pakistan to

Bang kok where arrangements are made for their transhipment

to the United States, Australia and other destinations.

2.014 Other methods of importation have also come to

my k n o wledge. One involves false insides of walking sticks

which a re secured to make it appear that they have not been

hollow ed out. Another method involves splitting planks of

woo d, h o llowing out the inside and filling it with drugs.

The p lank is then re-glued and grease is rubbed over the

join t s o the same is not obvious. In 1981-1982 hashish was

impor ted from India in cricket bats. I received information

of anot her method which involved the use of the dead letter

off i c e in Harbour Street Sydney. Heroin was being imported

from Lebanon in mail sent to previously arranged fictitious

address es in Sydney. The letters arrived at the dead letter

offi ce where arrangements were made to collect the same via

people a ssociated with the illegal importation.

M ovement

2 . 01 5 At the point of entry of goods into Australia

- wh ether by sea container, accompanied air luggage, posta l

fa ci l ities or whatever - the Customs are fighting a losing

batt le. The best that can be done is to carry out random

an d intuitive checks of passengers save where the couriers

are e ither on some kind of alert system or come from a

susp ect departure point. But, of course, that does not

pre ve n t people travelling in peculiar paths. For example

they arrive in Australia (although actually, perhaps,

leav ing originally from Asia) from Fiji which is not

rega rded by the Immigration/Customs officers as a usual drug

impo rt poi n t. This stratagem led to, at least some years

ago , p eople coming into Australia and going straight out

V o lu me 5 -18- Chapter 2

Some Investigations

again with a connecting Fijian flight so that they could

then return, carrying their drugs, with the family tourists.

2 .016 Another ruse was to carry two legitimate

passports. In this way the passport showing an entry into,

for example, Thailand, would not be used. The method of

obtaining a second passport is or was quite simple. When

travelling to Arab or Israeli countries it was not

difficult, apparently, to get a second passport from the

Australian Embassy in one or other of those areas if the

traveller announces they wish to travel to the "other s ide

of the fence". For valid security reasons people in those

circumstances are issued the second passport. This method was being used by drug offenders some years ago , and

possibly still i s although I have no current information as to the present attitude of the Department of Foreign Affairs in this regard.

2.017 I do not wish to be specific about any methods

of importations or schemes in respect of which current

operations are proceeding. I do propose, however, in the

next chapter to analyse in some detail the financial

dealings of one man who is suspected to have been involved

in illegal drug trafficking over a number of years.

Volume 5 -19- Chapter 2

CHAPTER 3 - AFFAIRS OF BULL

"There, where your sail, -argosies with partly Like signiors and

flood,

rich burghers on the

Or, as it were,

Do overpeer the the pageants of the sea, -That curtsy

reverence ••• "

petty trafficker, to them, do them

Shakespeare, The Merchant of Venice (Act I, Scene I, 9)

3.0Ul I have been aware for some time of a

"congregation" of criminals along the Sunshine Coast of

Queens land. The concentration appears to be in the Noosa

area . The district has come to be regarded as an "R b< R"

area for southern criminals. Additionally, many of these criminals have taken up permanent residence locally.

Concern has been shown not only by local police but also by

local community leaders in this criminal infiltration.

3.002 The phenomenon of criminal migration to Noosa

has been discussed in other volumes of this Report in

particular, in that dealing with Ian Carroll where the

Nams ina development by Melbourne criminals Stuart Perry and

Barry Kycroft has been examined. The joint and several

association of these men with figures such as John

Hustwaite, Ross Todaro and Bruno Savron and the Damiani

family is there clearly shown. The Helbourne painter &

docker and SP bookmaker Phillip Scott was also a

"contributory•• to the Namsina project.

3 .003 The Commission has become aware that Noosa is

the scene of thriving drug distribution networks.

Volume 5 -20- Chapter 3

Affairs of Bull

Cocaine, cannabis and heroin are widely available. One of the leading lights in these activities is Barry Richard

Bull. It appears he is both a user and trafficker in

cocaine and he certainly is a user of cannabis. He is

suspected of having dealt in heroin. The Commission's

interest in him is particularly justified because of his

close association with Robert John Lawson.

3.004 In February 1984 I visited Queensland to

conduct hearings of the Commission. While there I conferred with the Queensland Commissioner of Police, Mr Lewis, and senior members of his force. I was anxious to obtain

up-to-date information as to the involvement of members of the Union in drug

that regard. I

activities. I received information also was briefed in relation to

in

the

involvement of criminals in the distribution of drugs in the Sunshine Coast area. At the same time I was able to provide

some information in relation to drug distributors operating in Cairns. As a result of that information I understand

that some investigative work was conducted in that city and various arrests resulted within a few days of the

transmission of that information. As I have said elsewhere in this Report this was an example of efficient cooperation between bodies with a joint interest in enforcement of the law. The briefing I obtained in Brisbane indicated that

Barry Richard Bull was of major interest to the Queensland Police. In turn I was informed that he was closely

associated with Robert Lawson. Bull maintained a close

association with Lawson throughout 1983 and into 1984.

Lawson knew the parents of Bull's defacto wife, Sylvia Lux, who lived in Bald Hills, a Brisbane suburb. In October 1983

Bull gave to Lawson the parents' telephone number. My

enquiries indicate that Lawson was working in Sydney in or around the docks early in 1984 and was maintaining his

association with Bull at that time.

Volume 5 -21- Chapter 3

Affairs of Bull

3 . 00 5 Lawson was born 26 December 1940. He is a

Bri sbane painter & docker. He is shown in the Union records as living at 20 Oak Street, Shailer and as having Unio n

numb e r 4234. That Union number is shared with two other

me n. The Union records indicate that he consistently paid

his union dues each quarter from 1975 to

( bear in mind that the Union records held by

do not extend beyond 1980. Employment

1980 inclusive the Commission records from

employers in Brisbane and Townsville confirm that a Robert John Laws o n born 26 December 1940 (who at one stage lived at 20 Oak Street, Shailer Park) was consistently employed

during 1979 to 1982 inclusive. Lawson has a criminal

his t o ry extending over the period 1961-1983 but it is of n o

part i cular significance to these matters.

3 .006 Bull also had an association with another

member of the Union, Paul Goopy of Camp Hill in Coorparoo.

Goopy is shown in records as a casual painter and docker

whils t on leave from marine steward duties. He has

ma i ntained his association with the Union regularly during

the years 1975-1980 paying each quarterly instalment of his subscription that has fallen due. He has had various union

numb e rs allocated to him ..

a l located to Robert Lawson. me n a re associated.

BACKGROUND OF BULL

including 4234 being that

It would appear that the three

3 . 007 Barry Richard Bull was born in Brisbane on 25

July 1943. His parents were George Richard Bull a labourer

who was born in Cairns and Dorcas Susan Bull (nee Stibbs)

who had been born in Mapleton Queensland. Their address at the time of the birth is shown in the birth certificate as

69 Gavin Street, North Bundaberg. It follows that a special trip of some kind was made to Brisbane for the birth of the

young Bull.

Volume 5 -22- Chapter 3

Affairs of Bull

3.008 Bull was living at 719 Bowman Street, Noosa

Heads as at 23 August 1982 when he was interviewed by police officers at the Tewantin police station. The reason for

this interview will be discussed in more detail below.

During the course of this interview he gave some background information. He said he had been born in Brisbane in 1943

but lived there only a few months prior to moving to

Townsville. He stayed there and was 11 educated11 until he was about 18 when he left home and went to Sydney. In Sydney he

had numerous forms of employment. During that time his

mother remained in Townsville and he returned to the family home on many occasions.

3.009 He married Shane Beatrice Porter in Townsville

in 1964 and moved with her to Sydney where they lived for

two years. They returned to Townsville in 1966 whereupon

they separated. Some years later they were divorced. After the divorce he followed the meat trade in Victoria, New

South Wales and back up to Queensland. Shane Bull was

listed as the wife of Barry Bull in his passport application in May 1978. Presumably the divorce took place after that

time. As at 1978 she was living at Flat 3/8 St Neat Street,

Potts Point NSW. Bull refers to himself as a divorced

person in his passenger card for his return trip from

Thailand on 18 August 1978. It is possible he was divorced

between May and 1978. This has not been checked.

3.010 Bull claimed that he had lived in New South

Wales for about 2 years before finally moving to Noosa

Heads. One address in Sydney had been 57 Randwick Street,

Randwick. He claimed not to have had any children of his

marriage with Shane Porter. As at the time of the interview he claimed to be living with Sylvia Lux.

Volume 5 -23- Chapter 3

Affairs of Bull

3.0ll Bull said he had lived in the Noosa Heads area

f o r three and a half years prior to the interview in

Since that time his occupation was in partnership

Sylvia claimed

3.012 l icence.

in a hairdressing salon called Hairloom. He

to do some sub-contracting building work in

On 5 April 1978 Bull obtained a student pilot

The licence gave as his home address 14 Gordon

Street, Randwick and was current until 31 March 1980. It is

not known whether Bull ever lived at that address. It seems

surprising that he would give a false address on a document

which included his correct name. This address was also used by him in connection with his bank account at CBC Coogee.

3. 013 On 8 May 1978 a new passport was issued to

Bull at the Sydney office of the Department. In that

passport (which includes the normal photograph) he is

described as 1.75m in height with blue eyes and fair hair.

The passport then records overseas travel from 13 July 1978

until 1981. His travel movements will be referred to

below.

3.014 Bull has had a criminal history dating back to

1960. He was first before the Townsville Childrens Court on 30 June 1960 on a charge of disorderly behaviour and his

bail of two pounds was then forfeited. On 30 June 1960 he

appeared in the Police Court at Townsville and .was charged with stealing petrol. He was convicted and discharged and released on a good behaviour bond. Later in the year he was

again (nominally) before the Police Court in Townsville. On 24 December 1960 charges of "disorderly manner" and

resisting arrest were heard. His bail in both cases was

forfeited. On 20 July 1961 he was charged with assault and

fined 10 pounds at Townsville.

Volume 5 -24- Chapter 3

Affairs of Bull

3. 015 He next appeared before the Courts in Mackay

on 7 July 1966 when he . was charged with stealing and

possessing property suspected of being stolen. It is not

clear as to whether he was convicted on all charges. The

decision is noted as fines in respect of 11 each charge11 •

They totalled $45. He then appeared at the Moonee Ponds

Court in Victoria on 27 January 1967 when he was fined $50

for wilful damage and $25 for unlawful assault. On 25 May

1972 he appeared at the Newtown Court in New South Wales

when he was convicted of stealing meat and fined $40.00.

His criminal history mirrors his movements from place to

place during this period.

3 . 0 1 6 Bull's next criminal activity is best

described as it appears in the judgment of Barwick C.J. in

the High Court.

Volume 5

11 In March 1973 the vessel Mariana made a

voyage from Darwin in the Northern

Territory of Australia to the Island of

Bali in Indonesia. On its return voyage

towards Australia, the vessel was under the observation of the Australian

authorities concerned with the

administration of the Australian

Customs. As the vessel neared the port

of Darwin, an Australian Army helicopter co-operating with those authorities began to descend over the vessel in a fashion

and to a degree well calculated to alert

those on the vessel to the fact that the

vessel was under close surveillance. A

launch carrying customs officers was at the same time on its way from Darwin

towards the vessel. It may be,

particularly having regard to the

subsequent actions of those on board the vessel, that the action of the helicopter indicated to them the imminence of a

boarding operation by the customs.

Joseph vessel: Corns was the master

Barry Richard Bull, John

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of the

Chapter 3

Affairs of Bull

Plithakis and Gregory James Conn were

either crew members or passengers upon

it. The vessel was carrying cannabis,

procured in Bali and packed in

suitcases. On the near approach of the

helicopter these suitcases were

jettisoned by those on board the vessel

and its decks washed down so that upon

the subsequent inspection of the vessel when boarded by the customs officers no

cannabis was found on board. Later, in

the port of Darwin, no cannabis was found upon any of the persons who had been on

the vessel other than 14.8 grams of

cannabis resin which was found on Gregory James Conn. However, as the vessel after

being boarded was brought into port under escort, the possession within the limits of the port of this quantity of cannabis

resin was not relied upon by the Crown in

connexion with any of the charges

subsequently laid. Some of the contents of the jettisoned suitcases, amounting to 31,000 grams of cannabis, was recovered from the sea by officers of customs.

Joseph Corns, Barry Richard Bull, John

Plithakis and Gregory James Conn {the

accused) were thereafter indicted before the Supreme Court of the Northern

Territory with having committed offences . against the Customs Act 1901-1971."

((1974) 131 C.L.R. 203 at 207-208)

3.017 The proceedings referred to in the High Court

Judgment had commenced in the Supreme Court of the Northern Territory in the second half of 1973. Various points of

issue were taken and these were referred to the full bench

of the High Court in a reserved Case Stated following the

jury's verdict. The verdict was that the men were guilty of I importing a prohibited import, having in possession a

prohibited import on the ship (namely cannabis) and of

assembling for the purpose of preventing the seizure of the import. The High Court heard argument in November 1973 but did not give its judgment until June 1974. The effect of

the judgment was to overturn certain of the convictions but

Volume 5 -26- Chapter 3

Affairs of Bull

it did not affect the ultimate position. The judgments are

76 pages and comprise a lengthy exposition of the relevant law. There was one count alleged against Bull and the other

accused of conspiring together and with John David Belment Wholagan and with other persons unknown to import cannabis into Australia. This particular charge did not result in a conviction against Bull (nor the others for that matter).

It should be noted that the particulars allege the activity had taken place between 23 January 1973 and 2 March 1973 at

Darwin and "elsewhere".

3.018 Whilst awaiting the decision of the High Court

in relation to the Mariana importation Bull had a further

appearance before the Northern Territory courts. He

appeared in Darwin on 13 February 1974 and was convicted on a charge of possessing cannabis and sentenced to three

months gaol. It is not clear from his criminal history

whether that sentence was commenced forthwith or whether it was served concurrently with his subsequent sentence of

imprisonment which occurred in the June of that year.

Following the judgment of the High Court the Mariana

importation was referred back to the Supreme Court where

Bull was sentenced in respect of the verdicts which still

stood to a total of five years and ten months hard labour on

each of the charges. They were to be served concurrently,

with a non-parole period of two years and six months.

3.019 It appears that Bull may have appealed

following the imposition of the five year sentence but this was unsuccessful. He was required to serve two years nine

months as a result of the non-parole period on the major

charge and the three months sentence on the possession

charge. He was transferred to Adelaide gaol during the

course of his sentence. This was on 6 November 1974. He

was subsequently released on 17 August 1976. It is not

clear from his record what period he spent in gaol - if any

- prior to the High Court decision in June 1974.

Volume 5 -27- Chapter 3

Affairs of Bull

3.020 His criminal history indicates that he

appeared before the Central Petty Sessions (Sydney) on 27 January 1977 when he was charged with possessing Indian Hemp and "drugs" and was fined $150 on each charge. Charges of

forging and uttering documents were also dealt with on that day. In respect of those charges sentencing was deferred on his entering into a good behaviour bond and accepting three years probation. It is hard to renconcile that sentence

with his previous history although he may have presented as a drug addict. He had two subsequent appearances in New

South Wales in August of that year. On 3 August he appeared

again before the Central Petty Sessions and was fined $500 for supplying Indian Hemp. Again, this appears to be a

fairly modest penalty in view of his previous record. On 24 August he was charged before the Waverley Petty Sessions in New South Wales with stealing from a retail store; he was

convicted and fined $200. It is likely that all . these

offences had been committed prior to Bull's imprisonment on the Mariana charges. The Mariana charges would not then

have been previous convictions for the purposes of

sentencing and would not have been alleged against . him when he appeared in the New South Wales courts. Following his

appearance on 24 August 1977 he did not appear again in

court until 1982. This was to be in respect of offences

committed in the Noosa District.

3. 021 Bull appeared at the Petrie Magistrates Court

on 26 January 1983. This resulted from offences committed on 3 September 1982, including driving under the influence and exceeding the speed limit. He was convicted on the two

charges and fined a total of $395 with his licence to drive

suspended for nine months. In the result he was suspended

from driving a motor vehicle until October 1983. Despite

that suspension of his licence it appears that Bull

continued to drive and this led to him once again being

charged with driving offences in either August or September

Volume 5 -28- Chapter 3

Affairs of Bull

of 1983. It is thought that these matters may have been

dealt with at the Pomona Court on or about 15 September 1983 when Eull may not have been present. It is possible that

the court case in September proceeded in the absence of Bull and that he may have been disqualified for life from driving as a result of that hearing. He had had the earlier

conviction of January 1983 which had suspended his licence for the nine month period. I have been unable to clarify

the precise pos ition in respect of these outstanding

matters. There is a further oustanding charge of possession of a firearm. I will refer to the basis of that matter

later.

TRAVEL MOVEMENTS

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BULL'S FINANCES

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v .

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, Cha ter

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3.088 I cannot leave the question of Hull's

financial activities without making further reference to the part played in his quest for wealth by the solicitor

Cartwright. This solicitor facilitated the activities of Bull over a period of four or five years full well knowing

that the man was using assumed names. The evidence taken

from Cartwright clearly indicates a complicity on his part in the tax evasion activities of his client. In the

Williams Report there is reference to the aura which

surrounds the wealthy drug traffickers such as to divert the attention of their professional advisers from the source of those assets. I am not prepared to believe in the case of

the solicitor Cartwright that he had no knowledge of the

source of Bull' s money. He was . aware of Bull' s background

as a man with drug convictions. I am not to be taken as

saying that he should therefore have refused to act for

him. What I am suggesting is that in acting for Bull he

should have done so honourably and in accordance with the

traditions of his profession. It 'is simply not good enough

for a professional man to bury his head in the sand and

choose to by giving That is,

solicitor business

ignore criminal activities of his client which he, the clothing of respectability thereto, enhances. Bull by acting through an apparently reputable

using different names is able to conduct

in a manner which belies the illegal activities

which have been the source of the funds involved.

on behalf of

I

his recommend client that Bull Attorney-General

Cartwright's activities be referred by the Commonwealth

to the Queensland Law Society for its

information and, if appropriate, action.

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BULL'S DRUG ASSOCIATIONS

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Conclusions

3.124 As I have expressed earlier in this chapter I

have no doubt that the source of the wealth acquired by Bull as demonstrated by his property transactions was from drug dealings. Insofar as those properties have been identified it appears that he has been stripped of that wealth by the

combined action of the Taxation Office and the coordination by the Special Prosecutor. That is to be applauded. It is

unfortunate that his activities have not been sufficiently identified to enable criminal prosecutions to be launched. However, at present, there is no direct evidence of

particular drug transactions sufficient to place Bull on his trial.

3.125 It is also unfortunate that for a number of

reasons I did not have the opportunity of hearing evidence

from Bull as to the acquisition of that wealth. There has

been no explanation given to the Tax investigators or, as

far as I can tell, to any other person. It will have to be

left to some other body to follow the trail further and, in

due course, confront Bull with the accusat_ions. It may be

because of his awareness of the likelihood of such a future

confrontation that he presently prefers not to be

"available" for law enforcement agencies. For the moment he remains a fugitive.

3.126 It should not be assumed that Bull is unique.

My investigations indicate it is common practice amongst his

associates to acquire wealth and not to declare the income. SP bookmakers may (and do) declare some of their

illegally-obtained income; they reveal its source even if describing themselves euphemistically as Commission Agents • Prostitutes may declare their income (although I have no

evidence they do) possibly describing themselves as

"entertainers". It is fatuous to think that hired killers, bank robbers, burglars or drug traffickers will declare

their receipts. This is the area where the trafficker is

most susceptible. Perhaps this is where the attack should

aim. Volume 5 -73- Chapter 3

CHAPTER 4 - PREVIOUS COMMISSIONS

4.001 On 15 July 1977 Donald Bruce Mackay of

Griffith disappeared in circumstances suggested he had

been murdered. (In September 1984 a man pleaded guilty in

the Victorian Supreme Court to a charge of conspiring to

murder Mackay). He had prior to his disappearance been an

influential and outspoken opponent of the drug culture and, in particular, that which was said to exist in the Griffith

area of New South Wales. The disappearance was the final

catalyst required for public pressure in New South Wales to dema nd a judicial enquiry.

4 . 002 There were a number of matters which had led

to the build up of the pressures. There was by 1977 a n

awa reness of the drug menace which involved cultivation of

mar ijuana in Australia, as well as its importation together

with that of heroin and other drugs. In New South Wales, in

particular, there was a knowledge of persons in the

community who had recently acquired considerable assets and

were following a remarkably changed lifestyle. Unexpected transitions to states of affluence were apparent. · Prior to July 1977 there had been media agitation for an enquiry and i t appeared that both Commonwealth and New South Wales

Governments were feeling those pressures.

WOODWARD COMMISSION

4 . 003 On 5 August 1977 Mr Justice Woodward of the

Supreme Court of New South Wales was appointed Royal

Commis s ioner by the New South Wales Government. The terms

of hi s Commission required him to inquire into a nd report

on:-

Volume 5 -74- Chapter 4

(1) The cultivation,

drugs (other

alcohol)

etc. than

Previous Commissions

of specified tobacco and

(2) The identity of persons involved in:

(3)

4.004

(a) such cultivation, etc.; or

(b) i llega 1 or improper activities

connected therewith; and

Whether, in the light of his

findings, changes \vere desirable in: (a) the manner in which the

relevant laws were

administered; or (b) those laws.

The terms of the Woodward Commission varied

considerably from other concurrent Commissions. Essentially it was limited to law enforcement and associated areas. It

was not concerned with matters of in t erna tiona 1 or

sociologica 1 importance. The requirement to fdentify

persons involved in

Commission apart. drug trafficking was Substantially, the what set

Commission this had

completed its investigations at the end of December 1978 and its report was presented to the New South Wales Government in October 1979. It is noted that the Commission submitted

a further (and final) report in May 1980 following its

investigation of a matter referred to it late in its other

work. This report dealt with companies Balmain Welding Pty Ltd and Wings Travel Pty Ltd and associated persons. Some of the personnel involved in that latter report have been of interest to me in the conduct of my investigations. They

w i 11 b e r e f e r r e d t o la t e r .

Volume 5 -75- Chapter 4

Previous Commissions

SOUTH AUSTRALIAN COMMISSION

4.005 On 13 January 1977 the South Australian

Government set up a Roya 1 Commission into the non-medical use of drugs. The Commissioners were Professor Sackvi lle (as Chairman) and Drs Hackett and Nise. Its Terms of

Reference were to enquire into the factors underlying or

relating to the non-medical use of narcotic, analgesic,

sedative and pyschotropic drugs or substances of dependance, not including nicotine or alcohol, and in particular:

Volume 5

"1. To marshal from available sources in South Australia, Australia and

abroad information concerning such drugs or substances and their use;

2. to inquire into and report on

current scientific, medical, social and other knowledge on the effects

of such drugs or substances; 3. to inquire into and report on the

extent and character of the use or

abuse of such drugs or substances in South Australia, the types of

persons engaging in such use or

abuse, sources of supply, and the

medica 1, socia 1 and economic factors underlying or associated with such practices; 4. to inquire into and report on the

effects of the existing law and its

administration in relation to the

use of such drugs or substances in

South Australia ;

5. to inquire into and report on the

provision of educational,

preventive, treatment and

rehabilitation programs in South

Australia for persons using or

abusing such drugs or substances; and

6. to recommend such changes to the law

in r e la t ion to the u s e and a bu s e of

-76- Chapter 4

such drugs and the

such education,

treatment and

programs as you think

Previous Commissions

provision for preventive, rehabilitation a ppropr ia te."

(Sackvi lle et a 1, 1979, 1-2)

4.006 Its final report was presented in April 1979.

The terms of reference embraced issues of law enforcement

and the operation of the illicit market in drugs. The

Commissioners, however, took the view that social questions should take priority in its investigations. Intensive

investigations of law enforcement would have involved

exercising powers to compel the production of evidence which would not, it was thought, have been conducive to the

climate required for the gathering of worthwhile information and opinions on non-legal related matters. Thus it dealt,

in the main, with sociological questions. It will not be

necessary, in this chapter, to discuss its findings in any

deta i 1.

WILLIAMS COMMISSION

4 . 007 The Australian Royal Commission of Inquiry

into Drugs was established by Letters Patent dated 13

October 1977 issued by the Governor-General. Letters Patent incorporating identical Terms of Reference were issued to Mr Justice E.S. Williams_, by the Governments of Queensland (27 October), Tasmania (28 October), Western Australia (2

November) and Victoria (13 November). As Roya 1 Commissions into related areas had already commenced in New South Wales and South Australia no Commissions were issued by the

Governments of those States. The Terms of Reference were

wide-ranging. They required an investigation into the

existence and methods of importing, production and

trafficking in drugs; the extent to which those rna tters were organised; the adequacy of existing laws and law enforcement and the desirability of new laws.

Volume 5 -77- Chapter 4

Previous Commissions

4.008 The Report of the Williams' Commission was

contained in six volumes. Its mandate was not to rna ke

recommendations as to criminal charges and as a result it

does not name names in its reports. Although it did obtain

information identifying individual criminal activities and thereof it did not see its role as the perpetrators identifying them. whole of Australia and South Australia

were operating) but

Its inquiry therefore ranged over the

(with the exception of New South Wales

where the separate Royal Commissions did deal with the social problems as

well as the purely criminal aspects. The inquiry commenced in October 1977 and the reports were delivered at the end of 1979 (that is, a period of some two years).

STEWART COMMISSION

4.009 Trafficking The was

next Roya 1

that appointed by Commission into

the Governments Drug of the

Commonwealth, New South Wales, Victoria and Queensland on 30 June 1981. Mr Justice D.G. Stewart of the Supreme Court of

New South Wales was appointed as Commissioner • . The early

background to the establishment of this Commission was set out in a statement made by the Prime Minister in September.

1980:-

Volume 5

"A number of recent incidents and

i nq u 1r 1 e s ha v e g i v en r is e to public

concern whether present methods of law

enforcement are adequate to dea 1 with the activities of major criminal groups

involved in drug trafficking. These

include:

the Reports of New South Wales

Woodward Drug Commission;

the findings of the Victorian

Coroner in the inquest into the

deaths of D.R. and I.M. Wilson; and

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Previous Commissions

the murder of an intended witness

(Mr Gordon) in a rna jor drug tria 1.

Commonwealth/State Police Task

Groups have already been established to deal with particular aspects of

the drug problem as follows :

Australian Federal Police/New South Wales Police Task Force on Drug

Trafficking in New South Wales (this was established on the

recommendations of the Williams and Woodward Drug Commissions).

Vic tor ia , New South Wales,

Queensland and Commonwealth Joint Police Group under the command of

Assistant Commissioner Hall of the Victoria Police to investigate

alleged leaks from the former

Narcotics Bureau .

The report of the Victor ian Coroner

indicates that one of the criminal

groups operating in Australia in

recent years engaged in very large

scale illegal drug trafficking at

enormous profit and appears to have engaged in corruption of several law enforcement agencies. Present law enforcement methods have had only

limited success in bringing members of these groups to just ice.

The threat to the maintenance of law and order and to the community

presented by the activities of some major · drug trafficking groups

requires new approaches and

methods. The Government has

concluded that the problems

presented by the group identified by the Victorian Coroner and like

groups can best be dealt with by the

establishment of a special judicial inquiry armed with the powers of a

Royal Commission under the Royal

Commission Act 1902 of the

Commonwealth and equivalent State legislation, operating in

conjunction with a Federal/State

multi-discipline tasks

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4.010

Previous Commissions

group. In our view, this task group

should include specially seconded Federal and State police officers

a nd it should also have the

assistance of lawyers from the

Commonwealth and States experienced in the conduct of prosecutions as

well as persons experiened in

accounting and banking as required .. .

The task of the judicial inquiry and

the supporting group would be to

inquire into and report on specific

cases of large-scale illegal drug

trafficking and associated

corruption. The Government believes this to be the best means of

ensuring that major drug offenders are detected and are brought to

justice. It should also expose the

techniques and methods of these

crimina 1 organisations which can

then be countered by the authorities.

(Stewart, 1983, 2-3)

Discussion took place for some months between the Governments before the Commission was set up in June

Royal Commission 1981. The Terms of Reference for the required an investigation into the activities of Terrence John Clark and his associates relating, in particular, to

contravention of laws relating to the importation,

exportation and possession of drugs. The Commission was

required to make recommendations arising out of the enquiry a s were thought appropriate but including recommendations as

to the method of enforcement of the crimina 1 law and any

legislative or administrative changes necessary or desirable in the light of those enquiries. The announcement made by

Government at the time of the commencement of the Commission included the following statement:-

Volume 5

"The judicial inquiry will be supported by a Commonwealth/State mu Hi-discipline task group comprising specially seconded Federal and State police officers. The

task group will be assisted by lawyers

from the Commonwealth and States

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Previous Commissions

experienced in the conduct of

prosecutions and as required by persons experienced in accounting and banking.

It is considered that the means adopted

are the best ones of ensuring that major

drug offenders are identified and

prosecuted and exposing their techniques and methods, which can then be countered by the authorities."

(Stewart, 1983, 3)

The Stewart Commission delivered its final

report (following a number of interim reports) in February 1983. Including appendices it comprised 908 pages. It

dealt in great detail with the personnel involved, their

financial transactions, other activities and the people with whom they associated. It then spent some time considering

nat iona 1 crimes commissions and making recommendations. It examined the activities of a single drug syndicate which

operated over a three year period. The Commission itself

had professional and other staff in some numbers and needed to devote itself over a period of some 18 months to a

reconstruction of events. The work involved in carrying out this task was obviously considerable.

RECOMMENDATIONS

4.012 There ha-s been over a six year period four

Royal Commissions operating in Australia, all of which had

as their subject matters relating to the illicit drug

industry in Australia. With the exception of the South

Australian Commission which concentrated on the social

aspects, the Commissions gave a great deal of consideration to strategies for the future control, in terms of law

enforcement, of the drug problem. It is proposed to

summa rise and compare some of the recommendations contained

in the reports and to set out some of the discussion the

reports contained justifying the approaches taken.

Volume 5 -81- Chapter 4

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Civil Liberties

4.013 The question of civil liberties constantly

found expression in the reports of the Commissions. Whilst it was accepted that drug enforcement was a real problem in

Australia and some strenuous efforts by Governments and the community were required, the hard options were not

attractive. The Sackville Commission concluded that it was unrea listie for the community to attempt to eliminate the

non-medical use of drugs. This cynical view, with which

incidentally I agree, was based as follows:-"This is partly because a large

proportion of the community does use

drugs non-medically, notably alcohol, caffeine, and nicotine. Moreover, even if genera 1 agreement could be reached on the desirability of eliminating

non-medical drug use this would require a degree of surveillance of private

behaviour that simply cannot be achieved in a democratic society."

(Sackvi lle et a 1, 1979, 1)

This view accords with that expressed by the Woodward

Commission. In dealing with penalties that might be

regarded as appropriate for drug traffickers the following observations were made:-

Volume 5

"This accords with a growing appreciation of the limited effectiveness of legal

sanctions in deterring drug traffickers (and other criminals) and with a general acceptance of the need to avoid

unrealistic expectations, or even

aspirations, of total elimination of

illicit drug trafficking. This result is not practicably obtainable except by

extreme measures which would be

intolerable in a free society." (Woodward, 1979, 1887-1888)

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I add that even in those societies which are not free, and

where harsh measures may be taken, there remains a

considerable drug problem. "Harsh measures" are not

effective simply by reason of being "harsh".

4.014 Those views may be set in proper context by

having regard to the serious nature of the drug problem

perceived by the Williams Commission. In terms of argument of cost effectiveness the following statement was made:-"In discussing national goodwill and

involvement it is desirable to say a word

on the matter of 'cost'. Cost is an

argument nearly always appealed to by

those who oppose initiatives that are

suggested in peace time. It is not

advanced so much in war time or in times

of national emergency. In the view of

the Commission, the problem of drug abuse in Australia contains many elements of

war time situation. Australia is a

country striving to defend its people

against an undisputed social evil. It is

not being over -dramatic to describe the

present position as one of national

emergency."

(Williams, 1980, D87)

National Strategy

4.015 The thrust of the recommendations of the

Williams Commission was for a national strategy on drug

abuse.

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"What is urgently needed is total

national involvement. Such involvement means not only active participation by

all governments, Commonwealth, State and local, but includes the positive support of the community as a whole." (Williams, 1980, D86)

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It must be remembered that this Royal Commission was into

"drug s" generally, involving all the various aspects o f

the i r use. Thus a large amount of its time was spent with

classifying drugs and their pattern of use. The "Nationa l

Strateg y" therefore combined the treatment of drug users

with the enforcement of the appropriate laws.

4.016 It was recommended there be a uniform Dru g

Tra fficking Act. This was to be a national code. This

would be enacted by the Commonwealth Parliament and by the leg islatures of the States and Territories and be enforced in each State as Federa 1 and State legislation

notwithstanding Section 109 of the Constitution.

4.017 The Customs Act was to remain to constitute a

prohibition against the importation into Australia of

i llega 1 drugs.

4.018

Volume 5

" ... Evidence before the Commission amply demonstrates that the distribution of

illegal drugs by traffickers in Australia is not solely an intrastate activity.

The Australian Federa l Police should give specia 1 attention to interstate

operations. It should do so, however, in

co-operation with State law enforcement agencies. Joint operations against large targets (i.e. allegedly major

traffickers) should be instituted as a

rna t t e r of c ou r s e . "

(Williams, 1980, D29)

The uniform Drug Trafficking Act was to:-

focus police efforts against the

criminal element rather than the

user population.

assist police to harrass and capture the large operators.

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4.019

overcome Commonwealth barrier.

Previous Commissions

the deficiency in

law behind the Customs

facilitate joint operations between different police forces.

The proposed Act provided for the setting up

of Na tiona 1 and State crimina 1 intelligence centres and

confiscation of proceeds of drug trafficking supported by hig h monetary penalties in addition to gaol terms. The Act

was also to contain provisions to:-

Volume 5

" ... overcome the difficulties connected

with prosecuting a crime where a person

has given willing co-operation in a

covert activity (e.g. the sale of drugs

on a street level) and it is desired to

call him as a witness for the

prosecution. This requires specia 1

provisions relating to witnesses.

Persons such as accomplices and

informants who witness these activities may not make the best witnesses but they

are often the only ones. To make this

evidence available to the courts:

(a) the privilege against self

incrimination waived where given, thus

(e.g. of

compellable;

is to be compulsorily

a grant of immunity is

rna king the evidence

a minor accomplice)

(b) the privilege of police not to be

compelled- to revea 1 information

received in confidence is re-stated;

(c) the Attorney-General for the

Commonwealth is empowered to

relocate witnesses." (Williams, 1980, D32-33)

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4.020 The Commission thought it appropriate to

concentrate on the trafficker higher in the distribution

chain rather than the street level pedlar who was regarded

as almost certainly an addict himself. Thus it was

appropriate to place in the Uniform Act an expansion of the powers that law enforcement agencies are usually able to

call upon.

Intelligence Collection

4.021 The Williams Commission also saw

shortcomings in the area of criminal drug intelligence. a ccepted the recommendations of the Woodward Commission

this regard. Those were in the following terms:-"In respect of the establishment of a

central intelligence system, it would be desirable that initial staffing come from State police, Federal police, Customs and other appropriate enforcement agencies,

including Maritime Services, Immigration, Naturalisation, the Taxation Department, the Defence Forces and the Commonwealth Department of Transport (Civi 1

Aviation). All agencies joining the

system must, so far as the operation of

the system itself is concerned, be

prepared to be under one authority. It

must support all law enforcement agencies but be under the direction of one central body upon which those other agencies have representations.

The central body should:

(l) Control the collection and

production of intelligence.

(2) Ensure that a close working

relationship is established and

rna in ta ined with all a ppropr ia te

bodies and agencies which produce

and/or require drug intelligence.

(3) Ensure optimum efficiency in

reporting, analysing, storing,

retaining and exchanging such

information.

the It

in

Volume 5 -86- Chapter 4

Previous Commissions

(4) Undertake a continuing review of the

drug intelligence effort identify

the deficiencies and to correct them. (5) Be vested with a power of

controlling (by having the right to

impose sanctions) the procedures to be followed by agencies and their

members to a void unnecessary waste of money, time, or effort and

interferences with an existing

investigation of another agency." (Woodward, 1979, 130)

The Williams Commission proposed the establishment of

National and State Criminal Intelligence Centres to improve what were perceived as "sadly incomplete and fragmented drug i ntelligence facilities in Australia". It was thought that the centres would permit a uniform and coherent approach to

be taken in the exercise of the proposed enforcement powers and a system of recording the use of those powers.

4.022 The three Commissions making recommendations

in the area of law enforcement tended to adopt a uniform

approach. The Stewart Commission, for example, availed

itself of the work done by the previous Commissions and

adopted with approbation many of the recommendations. It recowmended, inter alia, as follows:-

Volume 5

" .•. The recommendations of the Williams Commission in favour of cooperating to

pool resources and ending the fragmented approach of law enforcement to organised crime, particularly drug trafficking,

should be implemented .

. . • Governments (and police forces) should strive to overcome the inefficiencies

imposed by the federa 1 system upon

Australian law enforcement by readily

appointing joint task forces with

elements drawn from different agencies.

-87- Chapter 4

Previous Commissions

... The joint task force should be

appointed to deal with limited objectives only and they should have a limited l _ ife .

. . . A joint task force with elements from

the Australian Customs Service,

Australian Federal Police, and Queensland Police should be based in Cairns to

gather intelligence upon allegations that fauna smuggling, drug smuggling and

illegal immigration are organised

activities in the north of Queensland.

The intelligence should be processed

through the ABCI and the Queensland

Police BCI. The force should send ground parties on a regular basis throughout

North Queensland to gather information and to arrange with responsible members of the community to assist in gathering

information. Naturally, adequate

logistical support must be given to the

force."

(Stewart, 1983, 833)

Task Forces

4.023 To some extent the Commissions regarded task

forces as a panacea. The Woodward Commission discussed the task force in the following terms:-

Volume 5

"The task force represents, through

increased organisational capacity, law enforcement's answer to the increased

capacity of organised crime. The

crimina 1 rarely pauses to contemplate the niceties of a terri tor ia 1 border and

neither should law enforcement agencies. The criminal does not hesitate to employ the skills of lawyers, accountants,

bankers, bookmakers, rea 1 estate agents and others and a successfu 1 enforcement effort needs an appropriate range of

individual abilities wedded to an

administrative structure based on

complete inter-agency co-operation to meet a new type of challenge. It is not

however my intention here to provide a

treatise . on the constitution, duties,

aims or procedures of a task force beyond

what I have already stated. These are

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Previous Commissions

matters to be determined after further

investigation and discussion with persons qualified to express views on the

individual matters involved. The role of the lawyer in the task force

is a rna tter of some disagreement. It is

my own view that a lawyer should not, in

the f irs t instance , be inc lu de d in the

personnel of such a force. Lega 1 advice

can be obtained as and when required from various sources available to law

enforcement agencies."

(Woodward, 1979, 1639-1640)

4.024 The Stewart Commission took up the concept of

the task force and discussed it in some deta i 1. Some

matters are worth repeating here:-

Volume 5

"It appears clear to this Commission that tota 1 police effectiveness wi 11 never be obtained in Australia unless cooperation between the Australian Federal Police

Force and the State forces is

significantly improved. In Victoria

there has been noticeable cooperation

between Victoria Police, Customs and the Australian Fed era 1 Po lie e at the leve 1 of the Bureau of Criminal Intelligence.

Some very successful joint operations

have been conducted in that State as a

result of this cooperation. As discussed elsewhere, an initiative of the Williams and the Woodward Commissions was the

recommendation of the establishment of the Joint Tas).< Force o-n Drug Trafficking in Sydney. As that task force has no

brief in relation to Terrence John Clark and his associates this Commission has

not examined its work closely. On the

proposed reference to this Commission

relating to the Nugan Hand group of

companies, in respect of which the Task

Force has had a brief, the Commission

will become more closely acquainted with its work. Its management committee has

reported tha.t the Task Force was a

successful initiative. This Commission has no doubt that there is great merit in

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Previous Commissions

setting up for limited periods and with

limited objectives groups whose members are drawn from the Commonwealth and from the States. As the two earlier Royal

Commissions observed, such a practice

utilises resources better, avoids

duplication and promotes cooperation in the longer term. This Commission is

elsewhere in this report recommending the setting up of such a force in North

Queensland.

The joint task force concept has really

been applied in the case of this

Commission. The Commission's

investigators were drawn from the

Australian Federa 1 Police and police

forces of New South Wales, Victoria and

Queensland. Freed from routine police

duties, able to concentrate on definite targets and, it is hoped, given

reasonably prompt directions and

decisions, they achieved a great deal

more than could ever have been expected. More importantly, when they return to

their forces it can be expected that a

further cooperative impetus will be given to those forces.

It has come to the Commission's attentjon that there is some reservation in the

Commonwealth area about the proliferation of task forces. This Commission believes that the only successfu 1 way that the

criminal justice system in Australia can deal with organised criminals breaking the laws of the Commonwealth and of a

State or States is by the use of joint

resources in the shape of a task force.

Such task forces should, of course, have

limited targets and a limited life.

In this regard, the 1981 Victoria Police

Annual Report states:-'The problems of organised crime are becoming increasingly apparent.

Coping with organised crime will

require greater emphasis on task

force operations in the future.

These are expensive in terms of

manpower and ancillary services but, on performance, highly effective."'

(Stewart, 1983, 516-517)

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4.025 It is significant that the Commonwealth/New

South Wales Joint Task Force had been set up as a response

to the recommendations of the Woodward and Williams

Commissions. The cons is ted of about task force was established in

25 Federa 1 and State police

1979 and

officers.

Its main aim was to conduct extensive surveillance of people identified by those Royal Commissions and other people

suspected of high level drug trafficking. It has been

involved in the arrest of 175 alleged offenders mostly in

connection with the supply, importation and use of heroin. It had originally been "commissioned" for a five year

period. Following a recent investigation of its operations and functions by a retired New Zealand police commissioner it has been given an extension of life. The work of this

particular task force has not been examined by Mr Justice

Stewart, at least as of February 1983. It does not meet the

requirements that a task force should have limited

objectives and existence. Nevertheless, its record appears to justify its continuance.

Penalties

4.026 doubted

Both the Woodward and Williams Commissions whether enforcement of drug laws

facilitated by an increase in penalties.

Volume 5

"The Commission has little doubt that law enforcement with regard to drugs will be much more successful if peofle breaking the prohibitions on illega drugs are

faced with a high risk of detection than

if they feel there is comparatively

little risk of detection although

penalties upon conviction are very

high ... It is a far greater deterrent that

nine traffickers go to gaol for five

years each than that one is sentenced to

gaol for life." (Williams, 1980, Dl2)

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would be

Chapter 4

Previous Commissions

Woodward thought that the imposition of greater pena lites would merely cause a restructuring of the top echelon of the indus try.

"Penalties of this nature are frequently prescribed as a result of emotive

reactions to recent events. Such actions will have wide consequences for State

policy and should be analysed in policy

terms. A penalty of life imprisonment is

usually prompted by a policy of

prohibition. Such a penalty does not

solve the problem. The result of the

imposition of such penalty is that

probably the way in which the high level

illegal industry conducts itself will be altered and steps will be taken by the

higher level to separate itself from the

lower level of trading where those

involved are more vulnerable."

(Woodward, 1979, 1623)

Woodward therefore recommended "against an escalation of

custodial penalties in New South furthermore, that the long delay

tria l in any event opera ted as

Wales". It was thought,

in having matters reach

a palliative a ·s far as

members of the drug industry were concerned in relation to

the heavy penalties which might be expected. That is, the

offenders were often released immediately after their arrest and were able to spend months, if not years, "on the

streets" still operating as usual.

Volume 5

" ... If the threat of a severe penalty is

to be believed by the potential drug

trafficker, resources necessary for

speedy prosecution and sentencing must be made available. On the other hand, if

drug trafficking offences are said to

require speedy disposal in the Courts, it might validly be questioned why they

should have preference over other serious offences in an already over burdened

criminal justice sy stern. These

considerations a 11 raise serious doubts a s to w ha t t h e c r i rn ina l ju s t i c e s y s t em

can hope to achieve in this area of

criminal activity." (Woodward, 1979, 1839-1842)

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These comments, although made no doubt in the light of the

New South Wales Court experience, are equally applicable to

the Victorian courts and,

jurisdiction in Australia. presumably, other crimina l

4.027 There have been recommendations, and these

have been implemented, which provide for substantia 1 fines in addition to custodia 1 sanctions for the drug offenders. Woodward doubted the efficacy of such penalties . .

"It is naive, also, to believe that

mercenary offenders such as drug

traffickers, if penalised in the pocket

(where, presumably, it hurts more) by a

severe fine, will be intimidated by this

experience or influenced not to commit

further offences because they cannot

afford to do so. Unlike some areas of

legitimate business activity in this

country, the capital barriers to either

entry or re-entry into the illicit drug

market are not high, credit is freely

available to proven and reliable

individuals, and the prospect of quick

financia 1 gain in an expanding high

demand industry is considerable. The

utility of fines in crimes based on greed

is questionable and it would be wrong to

assert that economic threats in the form

of a fine are of unique efficacy .

(Woodward, 1979, 1887)

Nevertheless, despite these reservations, Woodward

recommended that the Poisons Act (NSW) be amended to empower the court, upon conviction of a person charged with an

offence in relation to a prescribed restricted drug to order execution against:-

Volume 5

"(a) property held by or on behalf of

that person which has been obtained or paid for, whether wholly or in

part, as the result of the

commission of that offence

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Previous Commissions

(b) any account (e.g. bank, building

society, credit union, solicitor's trust or other similar account) kept in that person's name or on his

behalf, where an amount has been

credited to that account, as the

result of the commission of that

offence."

(Woodward, 1979, 1907)

4.028 One other aspect of the courts' ability to

impose sanctions should be considered. There is provision in various of the statutes dealing with drug trafficking to prevent the automatic bailing of suspects. Alternatively, reasonably high amounts of bail are fixed. Nevertheless the sums of disposable cash which are often available to

arrested drug traffickers, and the incentive to avoid heavy prison sentences, will inevitably increase the risk of

offenders not presenting for tria 1. Woodward, consistent with the attitude that the aim will not necessarily justify the means, commented:-" .•. legislation to diminish or remove

this risk represents too high a price to

pay for the increased assurance that such alleged offenders will be present at

their trials." (Woodward, 1979, 1830)

The Money Tra i 1

4.029 In the course of its investigations the

Williams Commission identified as a very significant matter the generation of money in the trafficking of drugs. It was

the movement of that money which was of part icu la r

significance both into and arising from the illegal drug

transactions. The point made was that an identification of the path of that money along the trail can lead to the

Volume 5 -94- Chapter 4

Previous Commissions

identification (and ultimately the conviction) of parties to the illegality who otherwise may have remained aloof from the physica 1 transaction itself. Furthermore money is

ac cu mulated and the wealthy criminal will eventually

demonstrate that acquired wealth in some way or another.

4.030 It was also said money gives access to

expertise and to equipment to facilitate the drug activity. The evidence received by the Williams Commission (and it is clear that this is supported by the material before both the Woodward and Stewart Commissions) indicated that those

involved in drug traficking have recourse to the best legal and accounting advice. It was suggested by the Williams

Commission -

" ... those g 1 v1ng the advice are not

necessarily aware of the i llega 1

activity. They may believe that they are advising legitimate businessmen, such is the aura that access to large sums of

money creates and the influence it

corrunands."

(Williams, 1980, C377)

4.031 While I agree with the aura that large sums of

money creates I have strong doubts whether the lawyers and

accountants giving the advice are as naive and

unsophisticated as to accept that the client has come by his assets legitimately, particularly when that clients insists on using false names, false bank accounts and evading

payment of tax.

4.032 Commission information the course

In the a rea of money controls the

stressed the use which should be

obtained .by the Australian Taxation of its normal work. It dealt

Williams made of

Office in

with the

constraints imposed by Section 16 of the Income Tax

Assessment Act and apparently took evidence from senior

officers of that office. Arguments were advanced by those officers in confidential session in relation to:-Volume 5 -95- Chapter 4

Previous Commissions

11 • •• the advantages of the present

situa tion where the system encouraged

fra nkness, even from criminals, in the

declaration of income and in the payment of tax on that income. The argument

wou l d be more compelling if the

Commission had not, in the course of its

hea rings, heard evidence of a number of

major traffickers who it is persuaded

would not be honest in the dec lara tion of

their income to the Commissioner of

Taxation."

(Williams, 1980, C373)

I heard the same argument from, probably, the same senior

not, and still am not , impressed at a ll of ficers. I was wi th those a rguments. I have evidence o f many cases where

the criminal failed to disclose any income at all to the

Comm issioner of Taxation. I endorse whole-heartedly the

approa ch of the Williams Commission in this area which is

represented by recommendations that continued and increased a t t e n t ion be

II

given to the financial implications of the

illegal importation, production and trafficking of drugs; the utilisation of existing

resources within the Australian

Taxation Office and the Foreign

Exchange Control Section of the

Reserve Bank of Australia in

assisting in law enforcement; and further endeavours to identify and

develop new resources in this a rea."

(Williams, 1980, C37 5)

Th e resources of the Reserve Bank of Australia are probably

n ow of no great consequence following the removal of certain

o f the restrictions for overseas financial dealings in

December 1983. Nevertheless, it is imperative that some

i nitia tive be taken in the area of movement of monies

oversea s. It is obvious that if drugs are being imported

Volume 5 -96- Chapter 4

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some financia 1 transactions must take place out of this

country. Money or kind must leave Australia in such a way

that the importation of drugs is financed. Some means must

be found to monitor that movement of monies.

National Crimes Commission

4.033 The Williams Commission believed that there

had been a large degree of inefficiency in law enforcement

operations to 1979. It was thought that a better result

could be obtained if a national mobilisation of resources

was effected with a combined effort to enforce the drug laws .

4.034

. . . "Law enforcement efforts should be

directed to the harrassment of organised groups by the seizure of drugs and

convicting those involved. At the level

of users and street pedlars, the rna in law

enforcement effort should be directed at identifying users and their associates and bringing them into the treatment

net. There has been too much

preoccupation in the past with having

users and minor pedlars convicted." (Williams, 1980, Dl2)

It was hoped that the concerted approach

advocated by the Williams Commission would be assisted by the establishment of National and State criminal drug

intelligence centres a·nd National and State drug information centres.

4.035 A slightly different view was taken by the

Stewart Commission which presented its final report at a

time when there was much public debate about a national

crimes commission. The Stewart Commission recommended the establishment of Commission with a in Australia was

are of particular of drug laws.

Volume 5

a standing Royal Commission or Crimes

general brief as far as "organised crime" concerned. However, the recommendations relevance to a discussion of enforcement

-97- Chapter 4

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"There seems little doubt that a standing Royal Commission, or crimes commission, would be of great assistance in

monitoring and investigating organised crime in Australia. It probably should

have power to investigate not only

organised crime but crime which is

interstate or even local to one State,

although, of course, its main focus would be on organised crime. The object of the

commission should be to make governments and the public aware of the existence and extent of the activities of organised

crime, to assemble material for the

prosecution of conspirators and to make a public report at least annually. The

first object would be partly achieved by public hearings but it would be better

achieved by regular public reports on

topics investigated. The second object would be achieved by assembling the

information gained concerning certain conspirators and recommending their

prosecution once the commission saw that there was a sufficient case against the

conspirators. The commission could

properly make recommendations as to how the prosecution should be undertaken a nd conducted. Finally, in its annual

reports the commission should make kno\-m whatever statistical and factual material that is discovered about organised crime and it should also make recommendations

for legislative improvements or

improvements in administrative

arrangements for the purpose of

combatting organised crime."

(Stewart, 1983, 783)

It was suggested that the function of this Commission should be:-

Volume 5

"(i) to investigate crime especially

organised crime;

(i i)

(iii)

to ex pose the existence of

organised crime and those

engaged in it;

to expose the role that

organised crime plays in

illegal activities, corruption and improper practice in

government at any level;

-98- Chapter 4

Previous Commissions

(iv) to recommend action against

crime especially organised

crime whether by prosecution of its perpetrators or by the

improvement of relevant

legislation and administrative arrangements;

(v)

(vi)

(vii)

(viii)

to report annually to

Par 1 ia men t ;

to report whenever desirable to the executive whether publicly or confidentially;

to pass to appropriate

prosecutors and law enforcement agencies for action information or evidence it has obtained; and

to monitor crime especially

organised crime and educate the puolic on these matters."

(Stewart, 1983, 785)

Of course the recommendations in respect of the Crimes

Commission were subsumed, to some extent, in the legislation for a Na tiona 1 Crimes Commission enacted in late 1982 and

then the su bsequ en t Nat iona 1 Crime Au thor i ty Bi 11 of

1983 -1984. Whether, ultimately, the Na tiona 1 Crime

Au thor i ty wi 11 be able to carry out the functions

recommended by the Stewart Commission is not clear. For

instance, the special references which are required before the NCA can "follow the money trail" require the naming of

targets . That is, a genera 1 reference in respect, for

example, of all importations of heroin in Australia, is not possible. I will take this matter up later in this Report.

4.036 The recommendations made by the Roya 1

Commissions have, as would be expected, covered the field in relation to the known and acceptable methodology of crime fighting. They have settled, though, for the soft options.

I do not necessarily intend that to be regarded as a

criticism. In the light of community awareness and

Volume 5 -99- Chapter 4

Previous Commissions

a spirations those recommendations and their implementation may be all that this country is ready for. Nevertheless,

there are some ha rder options which may be considered.

These will be developed l a ter in this volume. The bottom

line of all the recommendations appears to be the conviction of drug offenders and

s ense. It used to be

their punishment in the traditional that a period of imprisonment was

r ega rded as

da ys it is

the ultimate sanction. thought that a hefty

accompany a spell of incarceration. kinds of penalties do not seem to

In these "enlightened" monetary penalty should The imposition of those have had much effect .

Nor, it is arguable, will any penalties have any effect on

criminal activities. The criminologist will argue these ma tters in every direction without ever coming to a firm

cone lu s ion.

4.037 Perhaps the time has come to look for a

sepa rate method of dealing with the drug offender which does not necessarily involve him being convicted - by a judge and jury of a conventional drug trafficking offence. This is

not to say that the major objective of law enforcement

a g encies should not be to have drug offenders convicted and imprisoned. Operating by itself, unfortunately, it does not seem to provide a sufficient containment of the drug trade.

Volume 5 -100- Chapter 4

CHAPTER 5 - ATTITUDES

5.001 The South Australian Royal Commission into

drugs conducted its hearings during the period 1977-1978

before producing a report in April 1979. The views

reflected by it are therefore to some extent dated. But

they are worthy of regard. The Commission took evidence and held public and private hearings in different parts of South Australia. It was intended to be as accessible to the

public as possible. Some general attitudes were expressed which, although not necessarily representative, were

encountered regularly enough to justify recording. Some of these were:-

Volume 5

A widespread belief that medical

drugs are good and non-medical drugs are bad, although this is often

combined, somewhat inconsistently, with a belief that doctors tend to

over-prescribe.

A reluctance to recognise that

alcohol and tobacco are as harmful

or more ha rmfu 1 than presently

illegal drugs. Of course this view

is not universal, as indicated by

the comments concerning the

exclusion of alcohol and nicotine

from our terms of reference.

An anxious concern about i llega 1

drug use among the young, most often expressed by · thoughtfu 1 middle-aged people, usually with children of

their own. Mostly the people

expressing concern have not come

into contact with illegal drugs and do not believe that their children

have, although they fear this may

happen. These worries of parents

are accentuated by media stories

concerning drug use.

-101- Chapter 5

Attitudes

5.002

A belief, particularly among younger people, that cannabis has been

incorrectly classified as a drug that this classification

should be corrected.

A wi 11ingness to distinguish between the users of illegal drugs, who are

usually regarded with some sympathy, and the 1 pushers 1 , who are seen as

the rea 1 cause of the drug problem."

( Sa c k vi 11 e e t a 1 , 19 7 9 , 3 5 )

Current attitudes of some authorities to

offences involving cannabis are similar to those found by the Sackville Commission. There are those politicians who reflect the view that the use of marijuana is a victimless

crime and convictions for its use and possession should be expunged. On the other hand, there are police officers who see use of rna ri juana as only one short step from the use of

harder drugs, and is thus one step on the inevitable path to

addiction. Both sides ca 11 forth "expert" and

"uncontradicted" documentation to support their arguments. The non-using section of the community is somewhat bemused by it a 11. It may be that the de-crimina lisa tion lobby is

growing. It appears from statistics that the number of

arrests for possession is increasing rapidly, indicating

probably a greater deal of use of the drug. A newspaper

report of a seminar conducted by the Australian Institute of Criminology in March 1984 indicated that about 15,000 people had been arrested in the year 1983 for offences involving

the possession of marijuana:-

Volume 5

"Mr. Nick Koshn i tsky, a research

statistician with the South Australian Office of Crime Statistics, said there

had been a dramatic increase in the

number of people arrested for possession of drugs- mamly marijuana -in the last 10 years.

-102- Chapter 5

In NSW, arrests for drugs had risen from

fewer than 1,000 in 1971 to more than

5,000 in 1980, the latest year for which

statistics were available. Of the

arrests in 19 8 0 , 9 5 per cent r e la ted to

rna ri juana.

Similarly, in Queensland the number of

drug arrests had risen from 542 in 1973

to 6 , 480 last year. Of the 6, 480

arrests, 87 per cent were for marijuana

but only 141, or 2 per cent, related to

heroin.

Mr. Koshnitsky told the Australian

Institute of Criminology seminar on

corruption and illegal markets that

police drug arrest statistics could be

misleading because of multiple offence counting systems.

'With drug offences it is quite common

for someone to be arrested with a drug

and subsequently charged with at least

three offences (such as) possession, use, possess for sale, cultivating ... '

He said an important problem when

considering drug offences throughout

Australia was the lack of reliable and

comparative statistics supplied in police annua 1 reports."

(Sydney Morning Herald, 24 March 1984)

Attitudes

5.003 I do no.t propose to enter the argument about

the status of the marijuana laws. sma 11 amounts for persona 1 use

The use and possession of now are viewed, fairly

generally, as minor offences for which moderate penalties are imposed. The heavier penalties are reserved for those

who traffic in marijuana in the expectation of making huge

profits. Part of the argument is that de-criminalisation

\-10Uld render the illegal activities unnecessary.

sure that that argument is sound.

Volume 5 -103-

I am not

Chapter 5

Attitudes

5.004 However the community may regard the use of

mar ijuana , there is an united approach to the heroin

tra fficker. The community generally a bhors the dea ler in

ha r d d ru g s. I say "generally" because ther.e a re some

ex ceptions , unfortunately, including those who minister

professionally to the needs of the dealers. (I do not

i nc lude in this category lawyers whose responsibility it i s

to defend criminal charges and who discharg e that

r es ponsibility as they do a lmost without exception

h on oura bly). The community is aware from regular media

r eports of the effect on the minds, bodies and lives of drug

addicts. Reports reflect and foster these a ttitudes by the manner in which they are written. They are headlined a s

"drug horror story", "drug murder bodies found", "S.A. has

t h ousa nds of drug addicts", "The drugg i ng of Australia" a n d

t h e l i ke. The media generally adopts a view sympathetic t o

tha t of the police. For example, a recent article appeared

under the title "upkeep of drug squad a continuing battle". It commented :-"The methods of importing illegal drugs into Australia are many and devious :

They have developed over the past decade as the number of drug addicts and users

has increased. There are big profits to

be rna de bu t the r is k s a r e eq u a ll y g rea t

not just from law enforcement a gencies

either. Death or trial by the criminal

world can be swift, as the Australian

Federal Police records show. Murder is

very much part of the scene.

And, according to the article, the war was being lost.

Volume 5

The officer in charge of the eastern

region since February is Assista nt

Commissioner Ray McCabe, who said when

asked if the AFP was winning the dru g

war, "No, I th i nk I can speak for all of

us involved- Customs, the State forces and AFP - we are not holding our own. Of

course, we don't know the extent of the

problem, so we can't say how much is

coming in.

-104- Chapter 5

5.005

The picture is gloomy and the criminals

continue to make a quid out of

corrupting, in many cases, relatively

innocent kids. Perhaps it has something

to do with out materialistic society and the power of the dollar.

I don't know if it will ever chang e.

Perhaps it will only change with a

better-educated public. But we can be

sure that, just as the criminal mind is

always devising new ways, the legislation will never catch up with the trends. Our intelligence is better, we have more men. Many are junior, but we are

learning fast and we are developing an

expertise and knowledge of what goes on

that we didn't have a few years ago.

I don't know what went wrong, why we find

ourselves in this position. The wa r

against the drug trafficker has on ly hee n s e

r i ou s in the pa s t few yea r s and in the

meantime he has become more

sophisticated. In a democracy the law

and system hold us back a lot. But do

the genera 1 public want to change that?

As you know, we have the power to tap

phones in drug matters and that requires a very complex a pprova 1.

No, we are not winning the war. It is

going against us, but not for the want of

trying".

(Canberra Times, 22 July 1984)

Attitudes

In an earlier article published in May 1984 it was suggested that, in fact, the police were winning:-

Volume 5

"It is the Federa 1 Police who keep an eye

on ports of entry and its records are

even more conclusive; almost as much

heroin and cannabis was seized in the

first four months of this year than in

the preceding 12 months.

-105- Chapter 5

Attitudes

In 1983, Federal Police took possession

of just over 97kg of heroin. The first

four months of this year have already

yielded more than 70kg. In the whole of

last year they seized 60kg of cannabis

oil and more than l500kg of cannabis

res in.

This year they've already taken 90kg of

oil and 2750kg of resin. But , as police are well aware, the

figures provide something of a dilemma. Are they to be interpreted as concrete

evidence of "some result" in the drugs

battle? Or is it an ominous indication

that more people are taking the chance;

that there's more of the stuff around?"

The role of the recent Royal Commissions in educating the

public and giving them an awareness of the business like

manner in which the drug industry operated was praised:-

"Royal Commissions, so often criticised as unnecessary, non-productive and

disproportionately expensive, emerge well from any survey of current trends.

Inspector Willis (of the NSW drug squad) pays tribute to the Stewart Drugs Royal

Commission (largely into the Terrence

John Clark syndicate), the Woodward Royal Commission and the Royal Commission into Drug Trafficking ...

They've been able to give a clearer

picture of what the organisation of the

drug scene is about. And there's been an

uncovering of people who have been

involved in drug crimes."

(Weekend Australian, 19-20 May 1984)

5.006 On the other hand, academics are less tha n

enthusiastic Commissions. in

In

their response the March 1984

to the work

seminar conducted of

by

the

the

Australian Institute of Criminology the figures estimated by the Williams and Stewart Commissions relating to the extent of the drug trade in Australia were severely criticised:-

Volume 5 -106- Chapter 5

Volume 5

"Mr. Ian Elliott, of the Melbourne

University Law School, told the

conference that Royal Commissions into drugs, including those by Mr. Just ice

Williams (1980), and Mr. Justice Stewart (1983), had produced figures which were

implausible.

He quoted figures from the Williams

Commission that between 14,200 and 20,300 ha rdcore heroin addicts were in

Australia, and that the supply of heroin

addicts was worth between $1,000 million and $1,600 million.

"In gross terms, these

large as almost to defy

Mr. Elliott said.

figures are so

comprehension,"

He said the Williams figures showed that a heroin addict would spend more than

$70, 000 a year on the drug close to

$200 a day.

"I hardly know where to place

Williams estimate on the gradient

implausibility," he said.

the of

Mr. Elliott said State and

governments had harnessed "the of the judiciary" to determine

to deal with the drug problem.

Federa 1 prestige po lie ies

have had (and) we continue to have, a

plethora, an unhealthy repletion of Roya 1 Commissions on the subject," he said.

He said the figures were not used as a

basis for an analysis of the costs and

benefits of· action against the drug trade. "The estimates of the number of addicts

and the cost of their dependence do not

have to be accurate," Mr. Elliott said.

"They are most

a k in to r i tu a l

shadowy enemy."

often used in a manner

incantations against a

Mr. Elliott said it was not necessary to

explain high crime rates in theft and

prostitution by blaming them on drugs.

-107-

Attitudes

Chapter 5

Attitudes

"For those who have nothing to lose,

theft and prostitution must be very

attractive propositions indeed," he said. "The only puzzle is why some thieves and

prostitutes proportion adulterated product.

chose to spend so

of their income

and extravagantly

large a

on an

expensive

"Theft and prostitution are rational

responses to deprivation.

"The furore about addiction is a

distressing sideshow."

(Mercury, Hobart, 24 March 1984)

Another speaker at the seminar, Mr Grant Ward law of the

Institute of Criminology, said drug enforcement in Australia was in a mess:-

Volume 5

"He said the war against drugs was in

full swing, and large amounts of time,

money and expertise were being spent on

drug enforcement.

Yet, the law enforcement approach to drug use had not succeeded in reducing the

availability of illicit drugs. Mr. Wardlaw said vast resources should

not be given to law enforcement agencies because they were unable to control the

supply of drugs.

"The evidence seems overwhelming that law enforcement should not be centra 1 to drug control policy," he said.

"It may have a valuable subsidiary role, but vast resources should not be

allocated to it, and not too much should

be expected of it."

Mr. Wardlaw said it should be remembered that about 20,000 deaths and 200,000 lost person-years were associated with drug use in Australia every year.

-108- Chapter 5

5.007

But, the major drugs responsible were

alcohol and tobacco, while drugs of

dependence accounted for less than 5 per

cent of drug-related deaths of people

under 35.

"How on earth have we got our view of the

drug problem so out of perspective?" Mr. Wardlaw said."

(Ibid)

Attitudes

Another view is expressed by the columnist,

Kenneth Davidson:-

"Organised crime still lives off

prostitution because it used to run it

outside the law. Today, the money is in

drugs. To me, the answers seem obvious:

lega lise soft drugs and tax them, and

provide hard drugs for registered addicts to remove the present pyramid selling

system which survives by continually

widening the base.

Yet now we are creating new opportunities for organised crime in making X-rated

movies illegal."

(The Age, 6 September 1984)

Legalisation of criminal acts is often seen as a panacea.

Make it legal, then it will not be Therefore,

there will be no crimes committed! Hence, there will be no

criminals. Society, unfortunately, is not structured so

simply.

NEW LAWS

5.008 Contrasted with these last views are those of

the legislators in Tasmania and Queensland. On llth July

1984 new laws came into operation in Tasmania. These laws

outlawed cannabis smoking equipment, allowed body cavity searches before arrest, search warrants to be granted by

telephone and allowed police to use reasonable force in

Volume 5 -109- Chapter 5

Attitudes

sea rches and drastically increased penalties. The penalties fo r d ru g tra fficking were increa sed from $4,000 or 10 years

impri s onment to 21 years .imprisonment and/or an unlimited fine . There was , however, no increase in the penalty for

mere possession. Further provisions allowed for the seizure a nd fo rfeiture of the profits of drug trafficking following

cou r t order including any vehicle, vessel or aircra ft used

i n the trafficking. The l a ws were to allow police to trace,

immobi lise, secure or freeze the proceeds of drug related

c r ime s with forfeiture to the Government's consolidated

revenue fund to follow. I have not seen the precise details

o f the new legislation. It is not yet clear to me how these

p r o v i sions are to be enforced. The press release referred

to t h e police being allowed to trace the proceeds of

crimes . The precise manner in which this is to be effected

is n o t specified. The Min i ster for Health in Tasmania,

Mr . Clea ry, in announcing the new legisla tion said:-

Volume 5

"The Government was not interested in

softening the law for users of marijuana, Mr. Cleary said.

"We have had to deal out punishment

commensurable with the amount of money they are making from the crime. We are

dea ling with people that are making 10

times fine in profit," he said.

The profits some drug dealers were making made a farce of the fines be i ng handed

ou t by the c ou r t s , he sa i d .

"We have to allow police enough power to

perform their duty properly but still

ha ve some checks and balances." Mr .

Cleary s a id.

"The police are dealing with a serious

problem that needs to be tackled

forcefully; we can't just tip toe a round

w i t h t h i s i s su e • "

A police sergea nt may also

search warrant by telephone

magistrate in urgent cases.

-llO-

obtain from a

a

Chapter 5

A body cavity - search may be done on

anybody suspected of hiding drugs on

their person before they were arrested. In the past, a person could not be

subjected to a body search unless there

was evidence they had drugs concealed on them and an arrest had been made."

(Mercury, 12 July 1984)

Queensland

Attitudes

5.009 Queensland Simila rly on 27 July

tough legislation was announced in 1984. The Premier of that State

announced planned new leg islation a t a National Party State Conference. Its plans would make its laws the toughest in

Australia including mandatory life imprisonment for

traffickers in heroin and other hard drugs. The legislation would deny parole for offenders sentenced to gaol for

selling hard drugs and allow for the forfeiture of assets

(similar to the Tasmanian legisla tion). The Premier said

that his Government would not de-criminalise marijuana. He went on:-

"Our aim will be to have the toughest

laws in Australia to deter these human

parasites from operating in Queensland," he said. "These merchants of death are

responsible for the destruction of many lives and terrible tragedy in many homes. "We know what drugs are doing in relation to robberies and murders right throughout

the nation. These continual day-by-day bank robberies to get money for drugs and raiding homes and so on is largely

related to the compelling urge to get

money to buy these very expensive drugs."

Cons is tent w it h Government that the previous views of the Queensland

drug dealing networks are centred in

Southern Stet tes, the Premier claimed would make visiting drug pushers

proceeding in a northerly direction.

Volume 5 -111-

that new legislation think twice before

Chapter 5

Attitudes

"We want to make it that they don't come

into Queensland because if they get

caught they know the consequences will be pretty tough," he said.

(The Age, 28 July 1984)

The strength of the views expressed by the Premier, and the

emotive l a nguage used, reflects the views of a large portion o f the community in regard to the drug traffickers.

5.010 The public view about the magnitude of the

drug problem is fed by other newspaper reports. In March

1984 it was reported that a prisoner had been transferred to Pentridge Gaol after heroin worth several thousand dollars was found at Ararat Gaol following a search by police

sniffer dogs. In 1983 a former Ararat prisoner had claimed

that drugs were freely available in the gaol. I have not

confirmed that newspaper report. In July 1984 there was a

newspaper report that 900 remote airstrips existed in the

Northern Territory which "drug runners could use". There wa s no evidence of such use but merely the possibility of

it. Nevertheless the public's imagination is stirred. I am not to be taken as saying that the community's attitude is

not justified. The exact opposite applies. But in this

Chapter I am indicating, in a fairly general way, some of

the attitudes and the way in which they are developed.

Availability of Drugs

5.011 The future of the illegal drug industry

appears bright. The following report was published in

London in May 1984 titled "The Boom in Drug Trafficking":-

Volume 5

"The murder on Apri 1 30th of the

Colombian justice minister, Rodrigo Lara, showed how far drug-traffickers are

prepared to go to defend their

multi-billion-dollar industry. The flow of drugs -heroin, cocaine, marijuana and

-112- Chapter 5

Volume 5

hashish into western countries will

increase this year. Foreign Report has

obtained the latest reports campi led in

Washington from information provided by American embassies in the producing

countries, from the Centra 1 Intelligence Agency, the Drug Enforcement

Administration and state department

sources, and from information from

western Europe. The best estimate of the 1983 crop compared with 1982 is as

follows:

Opium and heroin: The three

countries of the "golden crescent"

(Afghanistan, Iran and Pakistan)

dominate the world's opium/heroin

trade. They produced as much as

1,235 tonnes of opium in 1983, up

from 975 tonnes in 1982. The "golden

triangle" (Burma, Laos and Thailand) produced 670 tonnes, down from 707

tonnes in 1982. Mexico's output has, however, increased.

Coca leaf and cocaine:

countries (Bolivia, Peru

Three and

Colombia) produced 92,800 tonnes 1983 compared with 82,000 tonnes 1982.

in

in

Hashish: Afghanistan, Lebanon,

Morocco and Pakistan produced 1, 230 tonnes in 1983, up from 1,030 tonnes

in 1982.

American intelligence sources believe these figures would have been much higher had there not been an increase in

drug-control measures last year and more local consumption in countries such as

Colombia and Pakistan (where there were no reported heroin cases in 1980 and over 100,000 heroin addicts in 1983).

(Foreign Report, 10 May 1984)

-113-

Attitudes

Chapter 5

Attitudes

5.012 It is interesting to note that Hong Kong is

r egarded as the major financial centre for South East Asia's

drug trafficking with "old ties to supplies . in Thailand and distribution networks in Western Europe and North Africa". India is specified as a route increasingly used by dru g

tra ffickers in Asia for heroin as Pakistan, Hong Kong and

Tha ila nd were said to be cracking down on traffickers. It

was also suggested that the opium crop in Thai land ha d

reduc e d to 35 tonnes i n 1983 from 57 tonnes in 1982 because

of Government operations Tha i l a nd and other elicit

a lso said to have a large

against Burmese guerrillas in

drug traffickers. Malaysia was number of addicts consuming 4. 7

tonnes of opium a year with a further 4 tonnes pa ssing

t h rou g h tha t country from the "golden triangle" to con s ume r

countries. I might say there is no doubt from my enquiries

that dru g traffickers to Australia a re using India a n d

Mala y s i a in their trafficking activities. It would appea r

from the report that the market for the drug is continuing

a n d the suppliers a re readily available.

5 . 013 It can be seen from documents l ike The

Foreign Report that Australia is not a lone in it s

predica ment. There is much that can be done in the way o f

i n ternational cooperation to combat the trade. The

Au st r a lian Government has taken an initiative in supplying

computer a nd crime intelligence assistance to Tha ila nd.

Thai l a nd has been a major source of supply for the

Aust r a lian drug market so there is a degree of self

i n t erest, naturally, in the computer aid package to Thailand th e a im of which is to stem the flow of heroin and other

drug s from the golden triangle area out of Thailand and to

other countries. A newspaper report of the new system

i n di ca tes that it will enable Thai officials to check a nd

t e st travel documents of people moving through Thai land. It

i s designed to provide information on the travel pattern of these people in an attempt to locate drug rings and the

pa ttern of the trade from Thailand.

Volume 5 -114- Chapter 5

Attitudes

5.014 There is little doubt that the Australian

public is prepared to accept quite harsh legislation from Governments showing a determination to combat the industry. Most people do not see those laws as being directed at

them. In so far as they are directed at traffickers in hard

drugs, I believe the community is prepared to accept that

the fu 11 rna jesty of the law should be brought to bear.

Volume 5 -115- Chapter 5

CHAPTER 6 - THE SITUATION

6.001 The ultimate objective is to prepare and

design an effective plan for the control and/or suppression o f illegal drug trafficking in Australia. Given the

previous and current attempts made by various Royal

Commissions and law enforcement bodies to arrive at the same

ob jective it may be regarded as a fairly pretentious

u n dertaking. Nevertheless, a further attempt is worthwhile.

6 .00 2 The immediate task is to identify the nature

o f the drug trafficking industry. Once that is achieved

some appreciation may be attempted of the resources

presently a vailable to combat the industry and their current u se a nd usefulness.

6 . 0 0 3 The present situation is that the importation,

di s tribution, sale and use of certain drugs of addiction is p r ohibited in Australia and its several States, and severe

pena lties are imposed should these laws be broken. These

prohibit i ons have existed for many years, and a re supported as being desirable laws not only by every Parliament in

Au s tra lia, but the general populace. As evidence of this ,

i n recent years the penalties relating to marketing drugs

ha ve been increased, reflecting Parliament's wish that this t .ra d e be stopped. On the other hand, there is a minority

view tha t drug taking shou l d be "liberalised", and this view ha s gained some Parliamentary support which is reflected in

lesser penalties for personal use of certain drugs.

6. 004 The following conclusions may be drawn : -

Volume 5

(1) The illicit drug trade is condemned

by the Australian people, and they

wi 11 not countenance the remova 1 of the prohibition. Therefore the

remova 1 of the prohibition is not an

-ll6- Chapter 6

The Situation

acceptable remedy to any problem

which enforcement of these laws may present to law enforcement

agencies. No further consideration need be given to this course of

action. (It is possible to develop

a 11 of the rea sons for the

prohibition. It seems unnecessary to at tempt to do so. Parliament has

"spoken" repeatedly, and that is the end of this aspect of the matter.)

(2) Parliament's reduct ion of penalty

for users and increase in penalty

for marketers indicates that law

enforcement should give priority to suppression of marketing. Thus any course of "police" action which is

to be considered ought to reflect

this emphasis. (3) Criminal sanctions against users are not so severe, reflecting the view

that they are little more than

victims. Courses of action directed at users should emphasise,

therefore, persuasion based on

non-crimina 1 sanctions (for example education, medica 1 treatment).

6.005 Notwithstanding Parliament's persistence in

outlawing this trade, there are those in the community who break the laws, and do so over long periods of time. What

is more, the breach of these laws is increasing in

frequency, and has increased by extremely large proportions over the past fifteen years. (No attempt will be made here

to prove this statement which is treated as empirical).

This has occurred notwithstanding the increases in the

criminal sanctions which now provide serious penalties which may lead to many years imprisonment.

6.006

( 1)

Volume 5

It f o llow s t ha t : -

There is something very attractive, to those who breach these laws, in

their breach . Most 1a w s of ou r

Parliaments are generally obeyed, and whilst there are those who

-117- Chapter 6

The Situation

breach many of those laws, usually

the breach is by reason of

circumstances unique to the

offender. In this case, the

advantages of breaching these laws seems so considerable that more and more people are prepared to offend. Therefore, any law enforcement

effort should be directed at

removing those attractions.

(2) The increase in criminal sanction

has not had the effect of

diminishing the trade. Accordingly, the conclusion is drawn that further increases in penalty are unlikely to have any effect on the

non-observance of these laws.

Bo th of these matters require further development. What is

t he attractiveness of the trade? Why is the existence of

serious penalties not an effective suppression device in i tself?

6 .007 In assessing the positive advantages of

t rading in illicit drugs, one may approach it from the

businessman's view. It is, after all, a commercial business

(even though illegal). Why does this business succeed? It

undoubtedly does, for the profits are very large. No

legitimate business produces such profit ratios. There are $evera 1 possible explanations.

Volume 5

(a) The product being marketed is

produced very cheaply. The means of production where it is outside

Australia is serviced by people who are very cheaply employed. However, in Australia labour is not so cheap;

and the transportation from point of production to point of distribution is at least as expensive as

legitimate business operations, if not more so because of the need to

reward better those taking the risk

of detection. Overall, it is not

clear that this is a line of

business any more rewarding on

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The Situation

account of cheap production labour than is the production and

importation of leather goods,

clothing and electronics from

countries such as Korea or Hong

Kong. Of course, there are tariffs;

yet. smuggling of those goods and the consequent evasion of duty does not produce the profits found in this

trade.

(b) The market for importation and

distribution of the goods is not

controlled by a few. If it were

subject to monopolisation, then the selling price could be kept

artificially high. But that is not

the case. There are many operating

in the market. There is competition. (c) The extent of the market is

difficult to gauge, but it is not as

extensive as markets for legitimate products. Not as many buy illicit

drugs as drink alcohol, or purchase

cigarettes. Therefore it is not the

size of the market which produces

the huge profits. Of course, if the

market extends beyond Australia and encompasses the Western World, the rna rket may be very large indeed.

However, such a market is subject to

a great deal of competition, and

surely this would keep the profit

down. Australians may make some

money in, for example, the USA

market, but it would be

ins ign i _fican t when compared to that rna de by local Americans.

(d) The nature of the market is another

rna tter. Although it may be small in

number, it is a captive market.

Most of the drugs are drugs of

addiction. (Those which are not

such as rna ri juana - may be changed

to addictive markets by the "lacing" of the non-addictive drug with for

example heroin. This is probably

the marketing man's weapon. In any

event, the drug may become

psychologically addictive if not

physically so.) Once addicted, the

addict must have more and will pay

-119- Chapter 6

The Situation

excessive amounts to acquire it.

The need for the drug will suppress

his normal caution. Thus high

prices can be repeatedly.

Unless the addict knows another

supplier who sells cheaper, he must buy. (But there is a real [and

justified] fear that the cheaper

product may be inferior and

deadly.) There is a lack of the

normal commercial inhibition

restraining the businessman from

pricing himself out of the market.

He cannot do so in this case.

(e) Yet there is competition. If prices

are kept ex traordina r i ly high

pursuant to some unwritten

agreement, then how does the

competitive thrust occur? Surely it is not by seeking another

distributor's customer but rather by acquiring new customers. Drugs have been in plentifu 1 supply over a

relatively few years, and the

proportion of the public using drugs is still quite small. Accordingly, there is a large untapped market.

In those circumstances, the

distributor may be expected to

"pu s h" h i s " 1 in e" and a cq u i r e n ew ·

"customers" among people who have not used drugs before.

6 . 008 It may be concluded that, as a business, drug

tra fficking is very profitable. This is due to the

a ddictive nature of the drugs which allows very high retail price maintenance. Since only a small proportion of the

public has been captured in this market, and competition for those customers would lessen the profit, it may be expected that the businessman in drugs will seek to widen the market r a ther than compete within it. Thus drug usage may be

ex pected to increase. This conclusion is supported by

a ctua l experience in trends over the past few years.

6.009 One answer to high retail price maintenance is

to increase the competition. For factors already

considered, this may not be regarded as an option as the

Volume 5 -120- Chapter 6

The Situation

Australian people will not accept legal drug supply. Thus the profit remains, and is and will be an attraction to the

businessman who is not concerned at the illegality involved.

6.010 Another answer, which needs only to be stated

to be rejected as impractical, is to destroy the

addictiveness of the drug. If destroyed, then normal

prudence would surface and the customer would no longer be "captive". But there is no way yet known of destroying the

addictive nature of the drug. Nor is there any proven

system of converting the addict into a non-addict. There

are ways of assisting, but they require high motivation from the addict himself. No scheme based on medicine or

education will have a marked effect on the existing market although education may have a limiting effect on the

expansion of the market. As yet, there seems little

evidence that education has limited the expansion of the

market. Nevertheless, it is a possible course of action,

and is one already being promoted in the country.

6.0ll If profit is the main motive, then the object

of any law enforcement should be the destruction of the

profit. A course of action which should be regarded as high in priority ought to be that which results in the loss of

the profit, plus a financial penalty of a substantial

nature, so that the businessman must take into account the

likelihood of incurring that financia 1 loss (in addition to any term of imprisonment) when calculating his profit

potentia 1. These matters will be explored further below.

6.012 For the sophisticated businessman the scope

for reward in the illegal drug trafficking industry is

remarkable. A man with very limited capital can launch

himself into the business, the only other requirement being a little native cunning and an amoral outlook.

Volume 5 -121- Chapter 6

6.013

The Situation

"Irrespective of the initial source of

finance, the situation is that relatively little capital is required to commence a

heroin importing operation, though the

amount varies with the degree of

sophistication employed. Probably no more than a few thousand dollars will cover the costs of a return overseas airline ticket, the purchase of heroin which can be bought

in or around Bangkok for as little as

$1,000 a pound, and miscellaneous expenses of perhaps a few hundred dollars. One

successful venture which might involve the importation of only a few ounces would

provide the capita 1 not only for a further venture, but in addition the establishment of more sophisticated importation

procedures. In other words, heroin

importers do not need financiers to set up a simple operation. The initial costs

involved are minima 1. A successfu 1

operation generates ample finances to

cover the increased working costs which

can arise from continued operations and it is, perhaps, those factors which have

contributed significantly to the

development in New South Wales of the

multiplicity of unrelated heroin chains stretching from importation to the street. (Woodward, 1979, 349-350)

The nature of the industry, with its

encouragement of new entrants to it, is such as to make the

task of law enforcement agencies very difficult to perform.

Volume 5

"Though the structure of the heroin trade in this State may appear crude, it is

nonetheless effective. The

disorganisation of the trade and the

laissez-faire type competition that exists between unrelated importers and between unrelated wholesalers may, in part,

account for the continued success of

trafficking operations. Such a structure greatly hinders significant disruption of the supply sources by enforcement agencies and limits the effectiveness of

investigations. No matter where a chain

is broken, there are several other similar

-122- Chapter 6

The Situation

chains leading from importation to

consumption which are unaffected. The

disruption of one chain at a particular

point does not necessarily give

enforcement agencies any information on the operation of other chains. 11

(Woodward, 1979, 350)

(Another difficulty in piercing the industry is the complex system by which it is financed. Intelligence shows that

those who make the largest profits are shielded by a veneer of "respectable" businesses. The financing of transactions is filtered through a maze of shelf companies and merchant banks and the ordinary resources of law enforcement agencies

such as police forces are not adequate to the tasks with

which they are confronted).

6.014 But there is one factor which may be

manipulated in such a way as to obtain for the community an

advantage; the question of reputation. I have found

repeatedly during my investigations that the stain or stigma that men fear worst is the label of being a drug

trafficker. Thus, I have had witnesses assure me that

although they have committed various indiscretions and

illegal activities they would never be involved in drugs.

6. 015 Trafficking in drugs is regarded by the

community as 11dirty p·ool11 • There has been a high level of

media output demonstrating the despair, futility and

nightmarish existence of the drug addict. The conscious aim is to develop community attitudes despising the pedlar.

Emotive language is the order of the day. There has been at

least a limited success in this campaign. Members of the

general criminal themselves from involved in the

class are

that section drug trade.

at

of

pains to disassociate

the underworld which is

(Of course, this is a

ridiculous over-simplification. The notion of one

Volume 5 -123- Chapter 6

The Situation

homogeneous criminal class, exclusive of the drug industry one of the "targets" of the i s mythical.) For instance, Woodward Commission was Barry James Pyne. He was

interviewed by investigators in March 1978. He admitted

having travelled through England and Europe committing theft and fraud crimes, and generally having led a life of

cr i me .However, he denied being involved in drug activity

saying:-

told you I was mixed up in drugs

has got to be off their head. I can make

a good living without getting into that

filthy shit."

(Woodward, 1979, 1448)

Notwithstanding his protestations, the Commissioner found:-

" ... irrespective of whatever other

illegalities Pyne is involved in, he has

been, and probably still is involved in

the importation and distribution of

illegal drugs ... "

(Woodward, 1979, 1453) ·

6.016 The conclusion that may be · drawn from the

manner of the response of Pyne to the drug connection is

that even the hardened criminal prefers not to be identified a s involved in the drug industry. This may, of course, be

for reasons other than the shame and/or embarrassment of

being so identified (felt either for himself, his family or "loved ones"). That criminals do have pretensions for the

family I have no doubt. They have wives, friends, children, dogs and budgerigars. I was informed by a police officer

that he had arrested a well known and hardened criminal. He that the criminal's noted with some a ttending one of

responded:-

surprise the best public schools. The

son was

crimina 1

Volume 5

"It's like this; I don't want him to end

up a crook like me or a copper like you."

-124- Chapter 6

The Situation

6.017 The attack on reputation may be the achilles

heel of the drug offender. It is the fear of apprehension

that prevents many offenders from offending. As I have

said, some of the witnesses (not only painters and dockers) appearing before the Commission have claimed outrage at the suggestion they would be involved in such a dirty business as the drug industry. But if men of a criminal character

believe they can otherwise insulate their own families from the effects of drug use why should they differentiate

between reducing young people to vegetables through drug abuse or raping, shooting or other mayhem? It is not the

innate resistance to or abhorence of the particular illegal activity. Rather, it is the public exposure of the

criminal's participation in that field- and the effect this might have on the exposed person's friends and associates. If he is a lowly cog the actual effect might be small - but

the higher he is in the scale of things the greater will be

the shame. The following exchange in a long forgotten

English trial demonstrates the point rather nicely:-"Halsbury: Are you heartily ashamed of

the part you played in this (conspiracy)? Newton: I am rather sorry for it, yes.

Halsbury: Are you heartily ashamed of it?

Newton: Naturally

Ha lsbury: When did this feeling of shame

first come upon you? Newton: With the likelihood of exposure."

Du Cann, The Art of the Advocate; (The case involved the Midland Bank [the "Mr A" case], 1924.)

The "exposure" of the criminal's activity will be at the

heart of the matters I put forward for consideration in the

final chapter of this volume.

Volume 5 -125- Chapter 6

CHAPTER 7 - OBJECTIVES & SOLUTIONS

7.001 The Williams Commission proposed what it

termed "a comprehensive national strategy on drugs". The policy espoused noted that law enforcement, . education and trea tment all had roles to play in reducing drug abuse. The

po licy required that:-

"*

*

*

the supply of drugs for illegal use

should be reduced if not eliminated;

the user, even if

pedlar, should be

treatment; and

he is

pressed also a

towards

the community as a whole should be

educated on the dangers of drug

dependence --- not just the dangers

of dependence on illegal' drugs."

(Williams, 1980, Dl4)

The Commission was convinced, as must any rational assessor of the problem, that the elimination of drug abuse in

Australian society was an unattainable goal.

society could hope for was containment. The best

7 .002 Stated in its simplest form, then, the

objective is to contain the problem of drug abuse. That

simplicity of purpose is not really very helpful, however. Given that there needs to be a multi-disciplined attack on drug abuse I will concentrate on that which deals with law

enforcement and, in particular, with the signi.ficant drug of fender.

7.003 The objectives

opera ting a drug squad and a

trafficking may appear to

of an orthodox police force

joint force investigating drug be totally different. But

u l timately the perceived success of either body will depend

Volume 5 Chapter 7

Objectives & Solutions

on its arrests and convictions (and query whether arrests

which do not lead to convictions should count at a 11 in

terms of the statistics and success rates). It is "heads"

which count. Thus, on 7 September 1984 the Commonwealth

Attorney-Genera 1 described the work of the Commonwealth/New South Wales Joint Task Force as a "success story in the

fight against organised crime". The JTF was reported as

having broken 14 rna jor and 7 minor drug trafficking groups. Since its establishment in 1979 there had been 315 charges laid. In the 1983/84 financial year there had been 30

arrests and 90 charges. Of the people convicted pursuant to its operations, 40 had received sentences of more than 5

years. The success of the JTF was therefore seen in terms

of its arrests and charges- not in relation to its impact

on the overall drug problem. The JTF's annual report to

Government substantia 1 was not

amount of

released because it contained

confidential information. That a

in

itself is a matter which justifies some further comment. I

hasten to say that I applaud the work of the JTF, but its

"success" should be measured in terms of its objectives. It had been set up in 1979 as a response to recommendations of

the Woodward and Williams Commissions. Its main aim was to conduct extensive of people identified by those

Commissions and other suspects in the drug industry. It has consisted of some 25 Federa 1 and State police officers.

Media reports of 19 .July 1984 refer to its involvement in

the arrest of 175 alleged offenders (presumably at any one time a number of matters were oustanding in the courts)

which no doubt reflect the "315 charges" stated by the

Attorney. It mu$t be remembered that the work of the JTF

was confined basically- although not exclusively- to the State of New South Wales.

Volume 5 -127- Chapter 7

Objectives & Solutions

7.004 An interesting implication from the Annual

Report is that there has been some liaison with the Taxation Office. It is claimed that tax investigators, in

association with the work of the JTF, had led to the

recovery of $4.7M in unpaid tax. That is a significant

rna tter and one which requires further consideration.

7.005 therefore · in preoccupation

A difficulty in defining objectives (and

finding the appropriate solution) has been a with conviction rates and the like. This

carries with it costing factors - which dominate the minds

of the bureaucratic agencies. It is suggested:-

"The prime target in a strategy to reduce

the quantity of illegal drugs available in Australia should be the drug

trafficker."

(Williams, 1980, D29)

There can be little argument with that statement. But too

often the successful targetting of that trafficker is seen as requiring his arrest, charging and conviction ·on a drug related offence followed by a term of imprisonment. It is

true that the ancillary sanctions of heavy fines and

confiscations of property are recommended put that is what they are -ancillary.

Volume 5

"To sum up, recognition of major drug

trafficking as a lucrative money making commercial venture requires that the

criminal law adopt appropriate measures which wi 11 place convicted rna jor drug

traffickers at risk of severe financia 1

penalties which attack their acquired

capital and profits. Accordingly, in the light of evidence received by me as to

the enormous profits which can be

generated by major drug trafficking,

lifting of the maximum fine for

indictable offences under the Poisons Act from $50,000 to $200,000 is clearly

-128- Chapter 7

7.006

Objectives & Solutions

justified. In order to make the

imposition and recovery of fines more

effective it would be possible to provide for means inquiries to investigate the

financial position of convicted major

drug traffickers, and also to supplement this procedure by judicial powers to

prevent concealment or disposal of assets to evade the impact of a potentia 1 fine.

However, both the cost and delay involved in such procedures, and the doubtfu 1

benefits which could be expected to

result, scarcely compel the conclusion that means inquiries are either a

desirable or essential feature of the

crimina 1 justice system. Accordinj?lY I

do not recommend their introduction.

(Woodward, 1979, 1896-1897)

The public emphasis remains on conviction.

The Williams Commission acknowledges this, arguing that more convictions of traffickers (as opposed to greater penalties) should be the aim.

Volume 5

"The Commission has little doubt that law enforcement with regard to drugs will be much more successful if people breaking the prohibitions on illegal drugs are

faced with a high risk of detection than

if they feel comparatively little risk of detection although penalties upon

conviction are very high. In this

connection the Commission must state that the frequent calls by some community

leaders f6r higher penalties on

conviction seem to be in the nature of a

palliative offered to the public because too few law breakers are being detected. Law enforcement agencies should be given wider powers to assist them in detecting

the larger traffickers. It is a far

greater deterrent that nine traffickers go to gaol for five years each than that

one is sentenced to gaol for life."

(Williams, 1980, Dl2)

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Objectives & Solutions

I have been aware of similar responses to the work of my

Commission.

11 And f ina 11 y , i f we a r e s e r i ou s a b ou t

catching crooks, give more money to the

police rather than Costigan Royal

Commissions and crime authorities.

Apart from tax evaders who would have

been caught by the tax commissioner

eventually in any case, the Costigan

commission hasn't led to one conviction.

If the Federal Police had had the $17

million tota 1 cost of the Costigan

commission added to the $100 million in

their budget this year, there could have been a significant increase in police­

resources and convictions. 11

(Kenneth Davidson in The Age, 6 September 1984)

I have corrected elsewhere in my Report the incorrect

premise on which Mr. Davidson's argument was based.

7.007 There is also the preoccupation

effectiveness which I have referred to earlier. there is considerable justification for it.

with cost

I. must say

The cost of

rna in ta in ing fu 11-time surveillance on any one ta rgetted

individual is immense. A minimum number of men required to carry out surveillance for one 24 hour period is nine.

Those nine men must have access between them to six motor

vehicles the motor vehicles can be reused during the

course of the day but not at changeover times. And it must

be remembered that each drug syndicate itself will have more than one member. If the particular target being followed

meets with another person it is impossible then to carry out surveillance separately on that other person after they

part. Superintendent Winchester of the Criminal

Investigation Division of the Australian Federal Police was reported in the press in the following terms:-

Volume 5 -130- Chapter 7

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Objectives & Solutions

"He said that some of the drug importing

syndicates were sophisticated and

particularly cunning. They booked in and out of hotels

regularly in one case Federal Police

had watched a suspect change hotels four times in a few days. This posed problems

for police, not only because of

surveillance difficulties, but because police had to assess why the couriers

were moving and who was telling them to

move.

In some cases, syndicates had used

children to wander the corridors of

hotels to see if there were any 'strange

men' (police) in the vicinity.

Superintendent Winchester said that it was the experience of the Federa 1 Police that it was very difficult to get to the

top people in the syndicates as they

always distanced themselves from the

actual operation. Federa 1 Police often preferred to follow couriers or shipments when they arrived in the hope of finding some of the

principals but this was not always

possible because of the cost of police

operations. 'In one operation I had 60 men employed

on surveillance. It was costing $10,000 a day in overtime and we had to put the

lid on it. They the (traffickers) can

afford to leave a consignment of drugs

sitting there for weeks and weeks. We

have known them to wait three months

before coming back. He said police had

to make decisions on how long they could. keep up surveillance. It is not just

police who employ ·surveillance tactics. Most of the syndicates are employing

counter surveillance to see if we are

watching the load and they are very good at it. The security of consignment is,

of course, of paramount concern. Whether it be the resu 1t of counter surveillance or of some chance factor, the loss of a

in this mode is a n acute

embarrassment to the responsible

enforcement authority.'

-131- Chapter 7

Objectives & Solutions

Superintendent Winchester said that the Mr Asia syndicate headed by Terry Clark

had to some extent been clumsy but still

managed to a void arrest for a long time.

To some extent, Clark, who died in jail

in Eng land last year, had got away from

Australian police because of a lack of

intelligence rna teria 1 and also because law enforcement agencies had been more

fragmented at that time."

(Sydney Morning Herald, 24 March 1984)

7.008 The "rapid growth of organised crime and the

need for extensive police task forces" was the basis of a

19 84 Victorian submission to the Commonwealth Grants

Commission for special consideration at the next Premier's conference.

Volume 5

"The State's submission to the Grants

Commission said the sharp rise in drug

offences in Victoria's high-density

population was putting extra financial strains on the State Budget .•. The ·submission said drug investigations were protracted and expensive. There was a backlog of 550 substances requ1r1ng

analysis by the national herbarium of the State forensic laboratory before

investigations could proceed. Because rna jor drug dealers were becoming more sophisticated, had large amounts of money and could travel widely,

investigators had to travel interstate

and overseas.

Organised crime flourished prostitution, protection, fraud, SP bookmaking, union loan sharking, pornography, drugs.

in theft,

arson, tax

rackteering, gambling and

The ability of criminals to cross borders and travel overseas meant special task

forces would become more necessary.

These required extensive systems of

secure communications, transport,

surveillance equipment, secure

accommodation and recoraing equipment.

-132- Chapter 7

7.009

Objectives & Solutions

Their operations also required extra

staff whose departure from other

organisations created further problems. The submission said 'Large but

unpredictable amounts of money and

resources' would have to be spent to

fight the growing crime rate.' 'The public, media and Government must

accept the fact that an extensive and

concentrated effort will not necessarily quickly or easily lead to the

identification and conviction of major figures' involved in drug rackets. 'Relatively higher-cost police operations should be regarded as essential services

required to deal effectively with the

special type of problems in Victoria,

rather than as indica tors of

above-average services.' the submission said." (The Age, 27 June 1984)

The joint task force concept is regarded as an

e xpensive opt ion.

Police stated : -In its 1981 Annual Report the Victorian

"The problems of organised crime are

becoming increasingly apparent. Coping with organised crime will require greater emphasis on task force operations in the

future. These are expensive in terms of

manpower and ancillary services but, on performance, highly effective."

Is the criteria to be the number of convictions? Or the

cost per conviction? (Or, as I have hinted before , should

"nrrest" or "charge" be sufficient?) Should the aim be to

at tack the generals of drug operations or, merely, the foot soldiers. The view of the Woodward Commission was:-

Volume 5 -133- Chapter 7

Objectives & Solutions

" .•. Without the powers of a Royal

Commissioner to secure the attendance of witnesses for questioning and the

production of documents, the task force

is sti 11 capable of doing valuable work. However, it must be conventional work and can be directed against only lower level

drug traffickers. It cannot be expected, without considerable luck, to be

successfu 1 against the high level

traffickers." (Woodward, 1979, 1654)

The Woodward Commission believed that it was necessary for success against the drug generals for the police agencies to have greater powers: in particular powers enabling a

pursuit of the money:-

Volume 5

"The pi lot Joint Task Force has now been

established ..•

It is indeed a significant step forward

in this regard and may well have

significant success principally because of

the ex tent of the sharing of·

resources proposed;

the task force approach towards one area of crime- drug trafficking; and

concentration traffickers as crime.

on high

opposed to

level street

However, it will not have available to it

the one resource which I believe should

be available and that is power to

investigate by way of the 'paper trail'

technique which was used by my Commission under the powers available to me as a

Royal Commissioner. I believe that it

will become necessary, eventually, to

provide such a power to reinforce the

effort and provide an additiona 1

operating t echn iqu e."

(Woodward, 1979, 1650-1651)

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Objectives & Solutions

Although the Woodward Commission saw the concentration on high level traffickers as a significant step forward, it

doubted its likelihood of success. The JTF in its Annual

Report claimed to have broken 14 major drug trafficking

groups. It is not clear how many of the principals of those

g r ou p s were brought to ju s t ice - i f t ha t i s a rna t t e r of any

significance. Is the smashing of the syndicates not the

ultimate objective? Certainly it is unfortunate if the

principal miscreant has not been punished. If he has been

isolated sufficiently, and is not allowed to re-enter the

drug industry, perhaps there has been a result sufficient to categorise the operation as a success.

7.010 The Woodward Commission doubted the likelihood

of a joint task force being successful against top echelon

drug operators "without considerable luck". Nevertheless,

"It is a great piece of ski 11 to know

how your luck even while waiting

for 1t.

Baltasar Gracian,

The Art of Wordly Wisdom (1647)

And police officers, although hoping for some good fortune in their work, as in every human endeavour, apply their

abilities to the job in hand. It is true to say that a good

deal of the information on which police rely in operational activities comes to them from informants - either cultivated as such or anonymous. The "tip off" may be one of the

biggest single factors leading to arrests of offenders.

Police have to rely on "information" and "intelligence". They can then carry out surveillance to confirm movements, contacts and the like and, possibly, catch criminals red

handed. All of this is time and money consuming. The

objective of this work is to put the criminal under pressure - whether known to him or not - and hopefully force him into

desperate action. This kind of police work is pro-active in that it pre-dates the actual offence in the course of which

Volume 5 -135- Chapter 7

Objectives & Solutions

it is hoped to apprehend the villa in "in the act". It

pre-supposes, once again, the rna jor objective as being one of apprehension and charging. The surveillance is not

carried out for its own sake but rather to build up a data

bank. That surveillance can only be part-time for reasons a dvanced earlier unless both the task force and the

criminals go into the "operational phase". It is just not

possible to watch every drug trafficker, to "tap" every

relevant telephone. People involved in criminal activities do suffer from paranoia. They believe their telephones are tapped and every movement is watched. But, one of the most

va luable policing aids may be this fear of being watched.

Perhaps this is the key to the dilemma. That is, to provide

the criminal element with sufficient evidence that they will be almost inevitably "captured" because of the extent of the police surveillance and other activity.

7 .Oll Let me say something about ta rgetting. One of

the concerns experienced by all Royal Commissions into the dru g s area was that there be a coordinated and national

approach to, inter alia, law enforcement. There needs to be a mutual exchange of intelligence and some ra tiona lisa tion

of the targetting process. That, to my knowledge, has not

yet eventuated. There is still substantial overlapping

occurring . "Turfdom" as described by Special Prosecutor Redlich, continues to exist.

7 . 012 The problem with a 11 the selected operational

ta rgets is that they are (or become) too big. And,

Parkinson 's (several) laws apply to them. They absorb

ma npower and churn out further demands for information and

reports. All the information obtained must be verified­ with a view to the eventual "big bust" and the presentation of the admissible evidence. This routine is followed

because of the existing attitudes to object i ves.

appear to include:-

These

Volume 5 -136- Chapter 7

1.

2.

7.013

Objectives & Solutions

The desire to achieve

publicity for the arrest. The need to present the

court and successfully

(i.e. to conviction).

These two

maximum

person in

prosecute

the overall strategy

criminals an awareness

objectives are seen to be crucial to which is to give other would-be

that the system is working, and to

deter them from trying the same routine. Of course, all it

really does is highlight - to the criminals involved in the

industry- the many, many, cases which have eluded thorough police investigation and/or surveillance.

7.014 What is required is to re-define the

objective. The objectives set out above are appropriate

only if resources allow their attainment. Certainly, the

aim should be to discourage people from becoming involved in the illicit drug industry but can this be accomplished in

some less resource - consuming manner?

7.015 There has been a great deal of criticism,

during the debate on the introduction of the Crime

Commission/Authority, on examination of witnesses. the publicity attaching to

This criticism is applied

the in

respect of witnesses appearing before my Commission and also, in anticipation, of those appearing before the new

body. The complaint is that people are exposed in a public

manner but without there being any certainty that evidence admissible in a court of law will be available sufficient to put them on their trial. The complaint is their characters

are blackened - by the public examination - but they are not

sent to tria 1 and gaol. The community accepts that every

man is innocent unti 1 proven guilty hence the effort

required on the part of policing agencies to "produce the

goods", or "put up or shut up". Once again, the theory that

"convictions" are necessary.

Volume 5 -137- Chapter 7

Objectives & Solutions

7.016 During the course of my Commission's work,

there has been much use of computer facilities. A great

dea 1 of publicity has been given to the techniques and

methods of criminal investigation using those resources (they are dealt with extensively in Volume 2 of this

Report). Whether rightly or wrongly, an air of

invincibility has developed about the computers powers. Fittingly enough, I suppose, in the year 1984 there is some

suggestion of the "big brother" syndrome operating. Many times the lawyers working with the Commission have been

confronted by their professiona 1 counter-parts appearing for witnesses with the flattering assertion that the Commission "knows everything". Of course, it did not and has not but

the assertion was not surprising bearing in mind the public awareness of the use made of the computer. I mention this

matter here to indicate that a criminal's awareness that his activities are being monitored by a body using sophisticated technica 1 a ids may prove a substantia 1 disincentive to his continuation of those activities.

7.017 Complementing the computer, the power of a

records gives the To have banking

Commission to obtain banking (and other) criminally-minded person occasion to pause. activities subjected to close scrutiny- in a capitalistic society which demands some transfer of real funds in return

for goods - is unpleasant. This Commission has from time to time gone to some lengths to ensure the secrecy of its

enquiries of particular bank accounts. Ultimately a concept of making a target aware that he is the subject of

investigation may be one of some assistance in reducing a particular crime. The concept is rather like a publicised

saturation of police road

announced on holiday weekends. that many people will be caught

traffic activity which is

The hope is not necessarily offending but that many more

people will thereby be careful not to offend.

Volume 5 -138- Chapter 7

Objectives & Solutions

7 . 0 18 Th i s r a i s e s the i s s u e of the access i b i lit y of

law enforcement agencies to banking records, taxation

records and the like. It is universally accepted, I would

think, that the destruction of the financia 1 viability of

the drug operation should be a major objective. But is this

to be achieved by fines or confiscation which follow a

conviction or by tax coordinated investigations?

Volume 5

" ... It is widely accepted in the United

States that the Achilles Heel of the

illicit drug trafficking business is its financing and its huge illegal, taxable, and largely unreported profits. Many

rna jor drug traffickers insulate

themselves from the daily operations of the drug traffic by acting through

intermediaries, thus making it most

difficult for law enforcement officers to connect them directly with drugs, and

successfully to charge them with

substantive drug offences. However,

while the high level trafficker may avoid handling the drugs, he cannot avoid

contact with the flow of money. Alternatively, the taxation authorities may rna ke substantia 1 assessments,

frequently arbitrarily, made on a net

worth or assets accrual basis, after

conducting systematic tax investigations of suspected middle and upper echelon

drug traffickers, smugglers or

financiers."

(Woodward, 1979, 1880)

-139- Chapter 7

Objectives & Solutions

Ta x programs specifically aimed at US drug traffickers have b een praised as "the single most effective tool in disabling

rna jor na rcotics violators" in the hearings of a US Senate

Sub-Committee on Federal drug enforcements.

7.019 The Williams Commission agreed with those

v i ews a nd recommended that continued and increased attention

be g iven to:-

" the financia 1 implications of

i llega 1 importation, production trafficking of drugs; the and

the utilisation of existing

resources with in the Au s tra 1 ian

Taxation Office and the Foreign

Exchange Control Section of the

Reserve Bank of Australia in

assisting in law enforcement; and further endeavours to identify and develop new resources in this area."

(Williams, 1980, C375)

Th e Internal Revenue Service in the United States "is a much more "public" organisation than its Australian counterpart.

It has played a very positive role in law enforc ement

(witness the "Capone" solution). But even it has received

cr i ticism for not being more positive.

Volume 5

"The Interna 1 Revenue Service (IRS),

created in 1862 and known then as the

Office of the Commissioner of Interna 1

Revenue, is a part of the Treasury

Department; it is also one of the largest

federal enforcers. The mission of the

IRS is to administer and enforce the

revenue laws of this country. The

Intelligence Division (ID) of the IRS is

charged with identifying and bringing to prosecution tax evasion schemes.

Organised criminal activity that involves a violation of the federa 1 tax laws falls

under the jurisdiction of the ID. These

tax laws allow the IRS to play a key role

-140- Chapter 7

Objectives & Solutions

in the war against organised crime.

Attempts to evade the tax laws could

result in fines of up to $10,000 and

prison terms of up to five years.

Willful failure to file a tax return,

supply the IRS with requested

information, or pay taxes can bring fines of up to $10,000 and prison terms of up

to twelve months. However, the

coordination with other federal and state agencies needed to enforce these laws is

lacking. The IRS itself has come under

attack for its failure to take a more

aggresive posture against organised

crime."

(Bequai, 1979, 210)

7.020 But the Australian view of the part to be

played by Tax Authorities is quite different. Attitudes of Australians to authority in general are uniformly hostile.

"The Englishman has a natural respect

for law and authority; the Australian

resents authority and regards a policeman as his natura 1 enemey."

John Pringle, Australian Accent (1959)

The Tax Department is regarded by the Australian community as just a little lower in its estimation than the police

force. These are sociolog ica 1 factors which operate

adversely on the tax collector. He becomes more secretive and more determined to avoid confrontation. He is entitled to be circumspect in dealing at all in the affairs of drug

traffickers. They are nasty people. It has been

recommended by Spec ia 1 Prosecutor Redlich that there be a greater flow of information about criminals from taxation investigators, with a "liberal" view being taken of the

otherwise restrictive provisions of Section 16 of the Income Ta x Assessment Act. The Commonwealth Attorney-Genera 1

replying to this criticism said he had been assured by the

Tax Department that there was a proper flow of information

to, for example, the Australian Federal Police. Such a

I Volume 5 -141- Chapter 7

Objectives & Solutions

"flow" would be contrary to Section 16 unless it dealt with matters requiring offences. There is

AFP

no

investigation, being tax-related provision similar to , Section 6P of

the Royal Commissions Act pursuant to which information

about crimes committed can be transmitted to appropriate authorities. If it does happen then it occurs illegally.

Tax investigators should not be put in such a position. The

coordinated approach to tax and criminal investigations requires a direct involvement of the taxation officer. To enable the police investigator to obtain the maximum benefit from the "coordinated" approach he must have access to the

information obtained by the tax man. I am not aware of

direct coordination between, for example, the Joint Task

Force and the Tax Department. I had to fight for access to

documents and information from the Tax Department. The war apparently continues.

7.021 The Woodward Commission considered the

desirability of a new body with specialised responsibility for drug laws (this view being in respect of New South Wales

a lone, of course).

Volume 5

"The alternative to a police department unable to free itself from a traditiona 1

form of administration is to devise

something of the order of a crime

commission or a drug commission or bureau a specialised agency facing specia 1

problems of law enforcement. · However, I do not recommend establishment of a

specialised drug oriented agency1 nor the establishment ot something in tne nature of a crime commission to be used to combat all forms of organised crime, together with significant changes in inter-agency co-operation, central intelligence, and other measures of a more tactical nature. That is, to my mind, a decision which must wait until the Police Department has been given an opportunity to implement these suggested procedures and the results have been evaluated." (Williams, 1980, 1965) -142- Chapter 7

Objectives & Solutions

The Commission did not recommend the establishment of such a body. Five years have since passed and although the Joint

Task Force will be extended, further consideration may now be given to the views expressed in that earlier report. The

Commission saw the value of such a body subject to the

further opportunity being given to the New South Wales

Police and the Joint Task Force to operate in the meantime.

7.022 These problems are not restricted

Australia. The United States has struggled for a

longer period. They do not yet seem to have found

solutions : -"The U.S. drug policy of the last half

century has failed. Although the intent of the early reformers may have been to

preserve the welfare of society, the

United States now has a criminal class of addicts that easily numbers more than

half a million. Drug-related crimes

absorb much of the manpower and funds of law enforcement agencies, as well as the courts. One third of all U.S. prisoners

are there because of some drug-related

crime. In passing the Harrison Act,

Congress knew that many Americans neither supported it nor understood it. The U.S. narcotics strategy has entangled the

country in the domestic affairs of many

foreign countries. Thus the United

States is supplying helicopters to

intercept dtugs, but the helicopters are in fact used to quell policita 1

opposition. This is a strange quagmire

with no simple solutions. As a result of

this unfortunate and ineffective process, we have enriched beyond belief the

coffers of organised crime." (Bequa i, 1979, 149)

the

to

much

right

A need for "new ·tools" was seen by Bequai but, apart from

stating that need, none were suggested:-

Volume 5 -143- Chapter 7

Objectives & Solutions

"Better training and more funds have been suggested as the answers to curtailing

organized criminal activities. Billions of federal dollars have been spent in the

last several years, yet

syndicate-controlled activities have become more aggressive. Academics, law enforcement sources, and many studies

have suggested that making the

investigatory apparatus less political and giving it new techological tools will improve its performance. Inc rea sed use

of electronic surveillance, it is said,

will do much to curtail organised

crimina 1 activity. Granting recalcitrant witnesses greater protection and

immunity, we are told, will also assist

in the battle against organised crime.

Many other forth, but

another.

recommendations have been they differ little from

put one

A greater commitment of funds and

manpower will not turn the tide against

organised crime. We need to streamline

our present investigatory tools. We need to depoliticize the federal regulatory agencies and disband those that are

obsta c 1 e s . Few can ju s t if y the law

enforcement value of outdated agencies like the ICC and the Federal Maritime

Administration. · There are too many

obsolete police agencies and too many

laws that work at cross-purposes. The

problem is · not too few means but poor use

o f tho s e t ha t ex is t • "

(Bequai, 1979, 213-214)

7.023 The development of the argument that some new

techniques should be found may be stated in these terms:-

*

*

*

Volume 5

There is a large market for illicit drugs.

There are available many people who are

willing to service this market . The market is met partly by drugs being

SUf?plied in parcels of small volume

(disregarding, for the sake of argument, huge container loads).

-144- Chapter 7

7.024

Objectives & Solutions

* This allows many different means to be ado pted

to smuggle the drugs into the country.

*

*

Those servicing the market are sufficiently intelligent to devise innumerable methods of smuggling.

The Customs procedures for detection for drugs in small volume are ineffective. The use of police (whether by Ta sk Force or

otherwise) to track down distribution networks in Australia is too costly.

Experience of criminal prosecution of drug

offenders shows that it does not significantly diminish the flow of drugs.

Some other course need be taken to suppress

the trade. An integral part of the strategy should involve

public exposure of, in particular, the financial empires

built upon trafficking in drugs. I will develop these

ma tters in the next chapter.

Volume 5 -145- Chapter 7

CHAPTER 8 - PUBLICITY

8.001

"At no time are people so sedulously

careful to keep their trifling

appointments, attend to their ordinary

occupations, and thus put a commonplace aspect on life, as when conscious of some secret that if suspected would make them look monstrous in the genera 1 eye."

Nathaniel Hawthorne, The Marble Faun (1860)

I have referred in earlier parts of this

section of my Report to the anathema with which the

community regards the trafficker in drugs. Criminals of all kinds likewise are anxious to avoid the label of "drug

trafficker". Bob Bottom the journalist gave evidence to the Moffit Royal Commission into Organised Crime in clubs in New South Wales. He had written an article in the Sydney Sunday Telegraph which was published in July 1973. It implied that Leonard McPherson (also known as Leonard Murray) was a

crimina 1. McPherson rang Bottom, who gave the following

evidence of their conversation:-

Volume 5

"When I answered, the caller said: 'Is

that Mr Bob Bottoms?' When I replied

' Yes ' he sa i d : ' I ha v e a few words to

say to you ...• you are the man who wrote a

story about me in the Sunday Telegraph.' I asked, 'What story?' and he said, 'That

story about me taking over the clubs.

This is Lennie McPherson here - you know

who I am.'

My immediate reaction was to play it

cool, so I promptly interrupted and

asked, 'I know the story you are

referring to but how do you know I wrote

it?' He answered, 'I know. I have been

told. I am a man who gets upset, and

that story has upset me. I'm upset about

it and that's why I am calling you' ...

He ended the conversation on that note,

but before ringing off, mentioned that he

-146- Chapter 8

8.002

wanted us to know that he was not

involved in drug trafficking. He said,

'I've heard some people are saying I'm

involved in drugs. That's one thing I

won't have. When it comes to drugs, I'm

100 per cent against them ... I wouldn't

have anything to do with it."

(As cited in McCoy, 1980)

Publicity

The effect of publicity on offenders has been given very little analysis in academic

media's role in fighting crime and

writings. The

the consequent

publicity so provided - was the subject of a paper presented at a congress held in May 1984. A report of that meeting

included the following matters:-

Volume 5

"The media brings many benefits to the

examination of crime and criminals but

journalists would do an even more useful job if they were not hamstrung by such

rigid and archaic defamation laws, the

congress was told yesterday.

Mr Colin Bevan, assistant director of

training at the Australian Institute of

Criminology, said most royal commissions were set up to examine evidence of

corruption in high places, tax avoidance and organised crime 'unearthed and

fearlessly brought to light by

journalists.' The recent spate of inquiries and royal

commissions .and the establishment of

offices such as special prosecutor and

director of public prosecutions were the result of media exposure of rumours and

substantive evidence of misbehaviour at high levels, he said.

These are likely to result in

diminution of such behaviour, temporarily."

a

at

sudden least

(Sydney Morning Herald, May, 1984)

-147- Chapter 8

Publicity

The claim that the various enquiries and subsequent events were the result of media exposure is true to the extent that

those matters were first conveyed to the public through the media . It is drawing a long bow to give the media credit

for a 11 of the consequent action taken by Governments and

others once the investigations themselves were commenced.

8.003 In the course of his report on drug

trafficking, Mr Justice Stewart dealt extensively with

proposals for a National Crimes Commission. He investigated the powers of various crimes commissions in the United

States. He explored the criticism rna de of some Commissions that they were using their coercive powers to eliminate

criminal activities. Furthermore, exposure of the criminals was seen as a valuable weapon in campaigns against organised crime figures - a form of lega 1 ha rra ssment, in effect.

Volume 5

"It is both an advantage and a cause for

criticism that state commissions have

used their compulsive powers to require testimony or production of documents and to prosecute for refusal to testify,

perjury or contempt in order to put an

organised crime figure out of action.

Prosecution for rna jar crime may not be

possible because of technical problems with evidence or because key witnesses

are unwilling to testify. Crime

commission action for contempt or perjury is criticised as a 'back door' method to

imprisoning known or suspected organised crime figures for relatively short

periods of time. On the other hand it

can be argued that any lawfu 1 means of

curtailing the activities of a member of a crime syndicate is justifiable in view

of the magnitude of losses inflicted upon society by such people. The Pennsylvania and New Jersey Commissions have

apparently successfully used their powers to compel attendance and production of

documents in campaigns against organised crime figures. Both Commissions claim

that their confrontation policies have curtailed organised crime activities. The exposure which is given to these

activities can be valuable for two

-148- Chapter 8

rea sons ; first , it rna y act a s a

detterrent especially where the target is an apparently reputable businessman, and secondly, by inc rea sing public awareness it may reduce the likelihood of

exploitation of the public. Obviously it is not possible to measure the

Commission's success in either of these

a rea s but examination of annua 1 reports

seems to confirm the claim that positive results are obtained. The one

reservation is that it is necessary to

ensure that targets do not just flee

interstate and continue their illegal

activities." • (Stewart, 1983, 762)

Publicity

It was thought, however, that the protection of privilege

would need to be provided to an investigating commission to allow publication of its exposes.

"One limitation on the success of crime

commissions in exposure of organised

crime and public corruption may be lack

of privilege. A comparison of the New

York Commission (no privilege) with the

New Jersey and Pennsylvania Commissions (absolute privilege) reveals a

significant difference in information

published. It may be that inability to

'name names' severely reduces the impact of commission reports and achieves

neither exposure nor deterrence of the

individuals involved. However it is not

possible to make any authoritative

comment on this on the basis of research

of written materials only. It certainly

seems advisable to provide any

investigating commission with the

protection of privilege. (Stewart, 1983, 765)

Consistent with these views, the Stewart Commission numbered amongst the functions of any proposed (Australian) crimes commission that of exposure of the existence of organised crime and those engaged in it. The functions were set out

as follows :-

Volume 5 -149- Chapter 8

8.004

"(i) to investigate crime especially

organised crime;

(ii)

(iii)

(iv)

(v)

(vi)

(vii)

(viii)

to expose the existence of

organised crime and those

engaged in it;

to expose the role that

organised crime plays in

i llega 1 activities, corrupt ion and improper practice in

government at any level;

to recommend action against

crime especially organised

crime whether by prosecution of its perpetrators or by the

improvement of relevant

legislation and administrative arrangements;

to report annually to

Parliament ;

to report whenever desirable to the executive whether publicly or confidentially; to pass to appropriate

prosecutors and law enforcement agencies for action information or evidence it has obtained; and

to monitor crime especially

organised crime and educate the public on these rna tters." (Stewart, 1983, 785)

Publicity

Those recommendations which emphasised the exposure of the criminal have no place in the operations of the National Crime Authority which came into operation in Australia in July 1984. It is strictly enjoined from

publicly identifying an indi vidua 1. It cannot hold public hearings except in very restricted circumstances the

purpose for which could be effected just as easily by a

press release. In its reports to Parliament it is not to

identify any person who has been or may be charged with an

offence. These provisions were debated before the Senate Standing Committee on Constitutiona 1 and Lega 1 Affairs

Volume 5 -150- Chapter 8

Publicity

during its investigations National Crime Au thor i ty.

of the proposed Bill for the

During the course of his

presentation to that committee the Commonw ea l t h

Attorney-General said:-

"It is the case that the whole thrust of

this legislation gears the exercise

towards private hearings ... What we are

talking about here is an investigative

agency ... of an exploratory kind where it

may not be sure that there is anythin8

hard at all at the end of the rainbow.

The point is that the process of that

exploration or investigation is to that

extent infinitely more liable than the

processes of the courts to bring down,

traduce, people's reputations along the way ... Let it get on with the job of

investigation and exploration. If there is something which emerges which is hard enough then to go to court, by all means

then let normal court procedures apply. But until then ..• do not traduce people's

reputations unnecessarily." (Committee Transcript, 308 - 309)

The Committee accepted this approach and in its Final Report stated:-

Volume 5

"The Committee considers that the

National Crime Authority cannot totally supplant the traditional role of Royal

Commissions, where a public airing of

allegations "is essential durinl? the

process of hearing as much as In the

report. The National Crime Authority

should not be designed to cope with such

situations. It should be designed to

operate as a standing body armed with

appropriate powers and resources to

further the suppression of organised

crime and official corruption."

(Tate e t a l, 198 4, 7 8)

-151- Chapter 8

Publicity

It may be accepted that these views prevailed since the Bill wa s subsequently enacted by deleting the provisions for

public hearings. Therefore it is no part of the NCA ' s

r e s ponsibility to expose an individual's involvement in

criminal activities. Its role is not that of a traditional

boa rd of inquiry or royal commission

t ak es evidence in public because of

i nterest in its investigations.

which, in the rna in,

a legitimate public

8 .005 The Quebec (Canada) Commission of Inquiry on

Or ga nised Crime (CECO) was set up in 1972. I have had

a ccess to several of its reports and to various commentries

u pon its operation. It has maintained a very high public

pr ofile. One of the difficulties perceived in Quebec was a

l ac k o f public awareness of the extent of organised crime.

Hence there was insufficient pressure on Government to do

some thing about it as the public itself did not support the

f i g ht. In its 1976 report, CECO stated:-

"There is nothing new in the idea of

making the public aware of the fight

against organised crime and enlisting its support. This point has been emphasised already on several occasions. If we are to attain this goal however ,

the public must know what is g oing on.

We believed that this was our duty, and

consequently we used whatever means we considered necessary to make the public aware of the actions of certain groups of in d i v i du a 1 s . S inc e i t i s t h e pu b li c who

pays the bill in organised crime, why

should it not be kept completely

up-to-date? Forewarned is forearmed, or at least better armed." (CECO, 1976, 258-259)

Some of the other Canadian provinces have not been as

enthusiastic as CECO in publicising the miscreants. They ha ve not wished to go as far in identifying the individuals

Volume 5 -152- Chapter 8

Publicity

whilst favouring a view that public awareness of criminal

activities generally (specific schemes and the like) should be an aim of Commissions of this kind.

8.006 I have had discussions with the authors of The

Impact of Publicity on Corporate Offenders, Messrs Fisse and Braithwaite. This followed a seminar at the Australian

Institute of Criminology earlier this year.

"This book was animated by the

uncertainty which surrounds the use of

publicity as a means of controlling

corporate crime. On the one hand, many

are quick to agree with Louis Brandeis'

famous dictum that sunlight is 'the best

of disinfectants; electric light the most efficient policeman'. On the other, the

view is prevalent that what happens

within companies is so shrouded in fog

that the glare of pub lie scrutiny quickly is reduced to a flicker."

(Fisse & Braithwaite, 1983, Vii)

The book is obviously concerned with corporations, not

individuals. Nevertheless many of the views are apposite. The point is made that infliction of a loss of prestige by

means of court-ordered adverse publicity conceivably could provide a potent weapon against corporations. Thus, for

example, a company could have an order made against it that it publish an advertisement in the media effectively

branding respect wares) .

its own behaviour or products (for example, in

of false or misleading advertisement or faulty

Unfortunately, the value of publicity as a means of controlling harmful business behaviour has not been explored fully.

Volume 5

" ... only sporadic attempts have been made to explore or harness the power of

publicity as a sanction, whether formally by court order, or informally via

consumer activism, investigative

journalism, and other channels of public redress. This limited attention stems

-153- Chapter 8

8.007

largely from diffidence as to the impacts which publicity is likely to have.

Indeed, the reaction frequently has been pessimism, as illustrated by Herbert

Packer's doubt as to the impact of

stigmatization upon a corporation: "Sociologists ... talk about corporate recidivists, but there is very

little evidence to suggest that the

stigma of criminality means anything very substantia 1 in the life of a

corporation. John Doe has friends

and neighbors; a corporation has

none."

(Fisse & Braithwaite, 3)

Publicity

The key to the individual argument appears in the illustration:-"John Doe has friends and neighbours .. ".

The individua 1 can be isolated by adverse publicity whether of a formal or informal nature. Formal use of publicity as

a punishment has been rare, that is since the abolition of

the stocks. The US National Commission on Reform of Federal Crimina 1 Laws (the Brown Commission) i n a 1970 draft study

put the view that formal publicity as a stigmatising,

prestige lowering sanction be used in crimina 1 proceedings. Section 405 of that draft provided:-

"When an organization is convicted of an offence , the court rna y , in a d d i t ion to or

in lieu of imposing other authorized

sanctions, •.• require the organization to give appropriate publicity to the

conviction by notice to the class or

classes of persons or sector of the

public interested in or affected by the

conviction, by advertising in designated areas · or by designated media, or

otherwise ... "

(Fisse & Braithwaite, 287)

Ultimately, this proposa 1 was dropped from the fina 1 report of the Commission. Nevertheless it obtained substantial

(and continuing) support.

Volume 5 -154- Chapter 8

Publicity

8.008 Improvement in the use of informal publicity

as a means of controlling corporate crime was also the

subject of suggestions:-II (1)

(2)

(3)

(4)

(5)

(6)

increased availability tam suits for

prosecutions;

of qui

private

modification of defamation laws to place more emphasis on

correction orders, and relation of the law bf contempt to allow

good faith press comment on

matter pertinent to trial;

exploitation of immunized

voluntary disclosure as a

genera 1 strategy of corporation regulation;

reorientation of official

enq u i r i e s so a s to r eq u ire

scrutiny of corporate reactions to events giving rise to

scanda 1;

imposition of

corporate disclosure of serious harms; and

mandatory of risks

promotion of international

exposure of irresponsible

corporate practices through

mandatory disclosure,

investigative journalism, and an interna tiona 1 forum of

complaint.

(Fisse & Braithwaite, 283)

It is acknowledged by the authors that legal purists will be repelled by imposition of informa 1 sanctions outside a

structured legal system. But,

Volume 5

"There will never be the resources public sector for adequate

enforcement against corporate Thus, sound policy must encourage as well as public control."

in the

public crime. private

(Fisse & Braithwaite, 283)

-155- Chapter 8

Publicity

This proposition applies with equal strength to the

enfo rcement of laws against individuals involved in

o r ga nised crime, a fortiori those involved in drug

tra fficking. Is there, then, merit in developing a proposal

which has as its rna in thrust the exposure of drug

tra ffickers? This need not be independent of other action

aga inst them (particularly of the financial nature) but

where convictions and imprisonment need not be seen as the ultimate sanction.

8 .009 Not surprisingly perhaps, exposure is seen as

"the key to the war on crime" in some sections of the

media. A recent editoral expressed the argument this way:-

"Many people seem to think, and the

Government has encouraged the belief,

that the purpose of such inquiries as the

Costigan commission and such bodies as

the National Crime Authority is solely to procure the prosecution and conviction of master criminals beyond the reach of the norma 1 processes of crimina 1

investigation and law enforcement. But as the American experience of organised crime has shown, public exposure of crime and corruption, and public awareness of

its corrosive influence and high cost to the community, are essential weapons in the fight against this cancer in society."

(The Age, 6 September, 1984)

I agree with those views. During the course of the

Commission I have expressed similar views. But the

"ex posure" cannot just happen. There needs to be some

structure for it. It cannot be indiscriminate. I believe

tha t a Crime Authority with sufficient powers - and the

obligation to hold the majority of its hearings in public -

ma y well be able to fulfill this function. The argument

tha t such a body would indiscriminately and haphazardly

disseminate information publicly ignores the fact that

Go vernments would , presumably, appoint responsible and

i ntelligent men to lead these bodies.

Volume 5 -156- Chapter 8

Publicity

is now a 8.010 Realistically, of course, there

National Crime Authority which has been given but restricted, powers. No doubt it will be

particular, for it to

recommend any accretion to those powers, including that of public hearings. The recommendations that I make in this

section of my Report in order that they will have some

prospect of receiving a sympathetic consideration, at least - will be independent of the operation of the NCA. They

emanate from an appropriate distillation and mix of the

various solutions discussed already in this volume. They

will give due emphasis to a belief that public exposure is a

valuable weapon in the fight against the illegal drug

industry.

Volume 5

"Public opinion is stronger than the

legislative, and nearly as strong as the

Ten Commandments,"

Charles Douglas Warner, My Summer in a Garden (1871)

-157- Chapter 8

CHAPTER 9 - A NEW APPROACH

9.001

"If you run after two hares, you will

catch neither".

Thomas Fuller MD Gnomologia (1732),

In spite of the success of the joint task

forces, I do not believe that the present law enforcement

effort is sufficient to contain illegal drug trafficking; this being thought to be the only realistic objective by

those who have considered the extent of illegal drug abuse in Australia. A number of recommendations of the previous Royal Commissions have not been taken up; in particular

those which sought a more co-ordinated approach requiring a complete interchange of intelligence. There was to be a

national drug intelligence agency and a uniform Customs

Act. As I have indicated during the course of this volume,

some States have recently introduced new legislation dealing with drug trafficking. Thus the opportunity of taking a

concerted approach has been lost. Likewise the thrust of

the recommendations of the Williams and Woodward Commissions has been ignored - that is, it is not bigger penalties that

are required but better techniques, co-ordination,

intelligence and medical treatment.

9. 002 There has been co-operation at different

levels of law enforcement bodies and at different times.

But that has been haphazard and not pursuant to any strict

guidelines or set agreements between governments and police forces. It appears to be on a "needs" basis, in situations

where assistance is required urgently. In the area of

targetting, co-operation appears to be the exception rather than the rule, leading to duplication of efforts. There are also lost opportunities to pool information. One team may receive information during an investigation but discard it

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because of its iimited value - yet that intelligence may be

of great assistance to another investigator - perhaps one

operating with the same force, possibly even at the next

desk. But policemen are very jealous of their sources,

their informants and their intelligence. It is difficult to persuade them to operate as teams and to pool their

information. The fear of losing control of such information is justified, from time to time, when through negligence or dishonesty the "secret" information is shared with the

criminal opposition.

9. 003 Certainly, in a perfect world of crime

fighting (a contradiction in terms, surely) there would be mutuality of intelligence the national bank of data

envisaged by previous Royal Commissions. It is not

realistic, unfortunately, to expect that to occur in the

near future. I say this even though I am aware of current

attempts by the Australian Bureau of Criminal Intelligence to co-ordinate a national drugs intelligence scheme. In my experience such efforts have not been totally successful to date because of the difficulties of persuading not only

senior officers but officers at all levels of the benefits

of a co-ordinated intelligence approach.

9. 004 It should be clear from the contents of this

section of my Report that, to assist the containment of

illegal drug trafficking in Australia, I favour an approach which hits hard at the financial structures built up by the

drug traffickers. This might even be to the exclusion in

some cases of the imposition of criminal sanctions where

there can be great difficulties in obtaining admissible

evidence and convicting the offenders. With the attack on the finances - which would involve in the forefront the use

of income tax legislation - would be coupled public exposure.

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9.005 It is my

Commonwealth Government view that the

in the field

powers of

of income

the

tax

collection can be utilised to great effect. The successful criminal will have acquired substantial wealth. That wealth necessarily is the product of income illegally obtained. It i s the "unexplained" nature of that income which should be

the focus of the investigation. The acquisition of it needs to be the subject of both tax assessment and public

exposure. The criminal sanctions hitherto applied have

demonstrably failed to contain satisfactorily the

tra fficking in drugs. The importance of following the

"(criminal's) money trail" is often articulated but

sometimes without any clear indication as to what use the

information obtained thereby will be put. The mechanism I describe below, for the dual attack on the criminal and his

money, will provide a useful justification for the money

pursuit.

9.006 criminal who Barry Richard Bull is a

should be the subject

good example of

of the approach

a

I

recommend. He has, in the course of this volume, been the

subject of a detailed financial analysis. The increase in

his assets has been charted. No explanation is available

for the income on which his spending and acquisiton of

property has been based. The original information that he operated bank accounts in false names and appeared to own

property in those names came from a police search of his

property under warrant in 1982. The tax investigation

followed - but fairly slowly. It was eighteen months after

the August 1982 search that the tax investigators were in a

position to interview Bull (although I have not been advised as to when the matter was first referred to the Australian

Taxation Office by the Police). The tax investigation

quickly gained momentum with my interest and the referral by me of the matter to the Office of Special Prosecutor

Redlich. There was little doubt the matter would not have

proceeded as expeditiously without that co-ordinated

approach.

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9.007 If the Eull investigation had proceeded in the

normal way it is likely that Bull would have had much

greater opportunity to devise tactics and schemes to avoid the tax man (whether he would have been finally successful is another matter) but one other factor has now arisen; that is, the public exposure of the action taken against Bull

which is contained in this Report. This would not have been possible for me had I not obtained the Accountant's file.

Of course, the subsequent civil action in the Supreme Court was in the public domain and I am entitled as much as any

other member of the public to receive and report on that

information. Bull' s taxation difficulties otherwise would have justified two or three lines in the Commissioner of

Taxation's annual list of defaulters. He would have lost

his properties but would not have been subject to any

lasting public odium. He should be. It is only because his activities have become the subject of a Royal Commission's interest that his affairs will now have to accept the fate of public revelation.

9.008 There are many men like Bull, who are known to

the tax department, but whose activities are never

publicised except possibly for the annual defaulter's

list. Police do give information to the Australian Taxation Office but it is usually when all else has failed. Police

are interested in arrests the tax man in assessments·

Unless there is a joint purpose for their co-operation, they will not work together. Indeed, as far as the tax man · is

concerned, he cannot. The solution appears to be one which allows a Bull - type investigation, with an assessment and a subsequent exposure. Certainly the co-ordination aspect can occur under the auspices of the NCA. There is still a query

in those circumstances whether the tax investigator can

freely relay all information obtained by him to the police and other joint team members. But the exposure of the tax

defaulter - and his unexplained income and assets - cannot

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be affected by the NCA which is unable to identify publicly individuals investigated by it. Some other means must

therefore be obtained for the exposure element of the joint approach.

9.009 In some ways, the power of the Commissioner of

Taxation is greater than that of law enforcement agencies. For example, the burden of proof operates in the opposite

way to the common law. In an appeal to a Supreme Court

against the disallowance by the Commissioner of an objection against an assessment (or in a reference to a Board of

Review)-

"(b) the burden of proving

assessment is excessive upon the taxpayer".

that shall the lie

(Section 190, Income Tax Assessment Act)

It is a powerful provision. It enables the Commissioner to

uphold assessments which, although issued bona fide, may not be capable of proof by the A. T .0. against the taxpayer to

the requisite standard of the Courts. On the other hand in

some areas the tax investigator is not so strong. The

taxpayer will often have expert professional advice and will not provide the information required by the investigator

sufficient to enable him to form a proper view of the

taxpayer's financial position. It may be impossible in

those circumstances to raise any assessment. The

unscrupulous taxpayer has scant regard for the investigator.

9.010 The Income Tax Assessment Act provides that

the Commissioner may require any

provide information, give evidence documents. Section 264 provides:-

person to

on oath

appear and and produce

"(1) The Commissioner may by notice in

writing require any person, whether taxpayer or not, including any

officer employed in or in connexion with any department of a

Governmentor by any public authority-Volume 5 -162- Chapter 9

.(a) to furnish him

information as he and

A New Approach

with such

may require;

(b) to attend and give evidence

before him or before any

officer authorized by him in

that behalf concerning his or

any other person's income or

assessment, and may require him to produce all books, documents and other papers whatever in

his custody or under his

control relating thereto.

(2) The Commissioner may require the

information or evidence to be given on oath and either verbally or in

writing, and for that purpose he or

the officers so authorized by him

may administer an oath".

However, the penalties for non-compliance with these

requirements as they presently exist are insignificant. The relevant Sections are as follows:-

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"S. 224 Any person who refuses or

neglects to duly attend and give

evidence when required by the

Commissioner or any officer duly

authorized by him, or to truly and

fully answer any questions put to

him by, or to produce any book or

paper required of him by the

Commissioner or any such officer,

shall, unless just cause or excuse

for the refusal or neglect is shown

by be guilty of an offence.

Penalty: Not less than $4 or more

than $200.

8.225 Upon the conviction of any

person for an offence against

section 223 or 224, the Court may

order him within a time specified in the order to do the act which he has

failed or refused or neglected to

do, arid any person who does not duly

comply with such order shall be

guilty of an offence.

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A New Approach

Penalty: Not less than $20 or more

than $1,000 . "

Section 224 contains within it an offence of failing to

"truly and fully answer any questions". Presumably, this

section is intended to cover the field and no separate

charge of perjury would follow an untrue answer under oath. The penalty for what otherwise might be regarded as perjury i s therefore fixed at between $4 and $200.

9 .011 Section 226(1) does provide for the imposition

of up to double taxation on the taxpayer who refuses to

pr ovide information but this is referable to an initial

assessment of tax. It may be impossible to make that

initial assessment without the information that is sought. Furthermore, it only applies to the taxpayer; not to his

a gent, accountant or other person .

9 .01 2 Section 264 cannot be used to compel the

p r oduction of documents covered

privilege (see Baker v Campbell

Lawyers on behalf of their client,

applicability of the privilege

by legal professional

[1983-84] 49 ALR 385).

if in doubt about the

in the particular

circ umstances, would tend to test the matter in court

proceedings. The claim for privilege against

se l f -incrimination also may be available to enable

objections to answering the Commissioner's questions to be t a ken within the terms of the section (see Scanlan LDFC of

TJ v Swan 83 ACT 4112).

9 .013 The Government has introduced legislation in

the Pa rliament on 13 September 1984 (The Taxation Laws

Amendment Bill, 1984) to amend, inter alia, the "offence and prosecution provisions" of the Act.

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A New Approach

In the second reading speech, the following explanation was given as to part of the Bill's effect:-

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"To deal more appropriately with habitual taxation offenders, a tiered penalty

structure will operate for second ana

subsequent offences and will include a

liability to imprisonment. The tiered

penalty structure will apply to existing offences, such as failure to lodge a

return or information or refusing to give evidence when attending before the

Commissioner of Taxation, and also to a

new group of offences to deal with tax

evasion practices in a more complete and certain way than the existing law seeks

to do. Under the new rules, it will be

an offence to make false or misleading

statements or to keep accounting and

other business records that do not

correctly record and explain the matters contained in the record. For such an

offence, the maximum penalty for a first offence will be $2,000. Yet higher

penalties will be imposed where a person recklessly or knowingly makes a false or misleading statement or keeps records

incorrectly. For those kinds of

offences, first offenders will face

maximum penalties of $3,000 and second and subsequent offenders penalties of

$5,000 or 12 months imprisonment, or both. lt will be an express offence to keep

records incorrectly or · conceal them with the intention of deceiving or misleading the Commissioner of Taxation in the

administration of the taxation laws.

Falsifying or concealing the identity,

address, place of residence or business of a per.son with the intention of

deceiving, hindering, obstructing or

defeating the purposes of a taxation law is also to be proscribed. These offences

will be punishable by a fine of $5,000 or

12 months imprisonment or both for first offenders and a fine of $10,000 or two

years for second and subsequent

offenders".

(House of Representatives. Hansard. 13 September 1984, 1280)

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A New Approach

I have not seen as yet a copy of the Bill. From what

appears in the second reading speech, I doubt whether the

existence of claims of privilege or self-incrimination have been limited in any way. It appears that failing to give

true answers is still to be regarded as merely a Section 264

offence and not as perjury.

9. 014 Police investigators have no right unlike

their tax counterparts - to seize or obtain documents except with a warrant. The target is always alerted to their

interest. Police cannot quietly gather, for example,

intelligence about banking transactions unknown to their target. They cannot obtain a warrant, generally, without

well-made grounds. Usually, the offence alleged must have occurred. Tax investigators on the other hand are not able to conduct investigations, and collect intelligence, in the same way as policemen do. The latter's skills and

experience are developed in the area. Each can benefit from the work of the other if they have access to the materials

and information which the other holds. A team effort, but

within the law, is required.

9.015 Ultimately, the main recommendation I make is

one that is a response not just to drug trafficking but to

organised crime generally. The criteria to be satisfied

includes the proper taxation (and financial deprivation) and the exposure of the villain. Whether his income comes from drugs or some other villainy therefore matters not. The

recommendation is that there be established a Taxation

Investigation Tribunal (the name itself is, perhaps, not as felicitously chosen as it might be). This would be a body

which sits, as a general rule, in public to deal with

matters which formerly would have been the subject of

Section 264 notices (see paragraph 9.010 above).

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9.016 The principles on which such a Tribunal would

operate would include the following:-

Volume 5

(a) It would be a Commonwealth body;

(b) The chairman would be a senior

lawyer, but probably not a Judge.

He would hold a limited tenure?.

necessary because of a "sunset'

provision;

(c) Parties would be entitled to legal

representation before the Tribunal;

(d) It would be an inquisitorial body.

It would have the appropriate powers to insist on answers to all

questions put; (e) The right to refuse to answer

questions would be removed. That

is, "self-incrimination" would not

(f)

(g)

justify refusal to answer

questions. On the other hand

evidence could not be given of any

answers in any criminal

proceedings. Evidence could,

be given of those answers

Ln any civil proceedings involving (for example) the recovery of taxes; It would have power to punish

witnesses for contempt, such

Kenalties to include imprisonment. ny such penalties would be the

subject of appeal to a full Federal

Court;

There would also be penalties for

failing to appear, produce

documents, etc;

(h) The Tribunal would be required to

report to Government in general

terms (not in particularity) as to

its operations on a yearly basis.

This would be more a statistical

matter to monitor the needs of the

body as required. The. reporting

function in terms of the criminal

sanction would be in the hands of

the other body which I recommend

below;

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A New Approach

(i) Proceedings would be instituted by

notice before the Tribunal. It

would be a creature of the tax

investigator rather than of the

taxpayers. Thus, the power of the

taxpayer to issue proceedings would be restricted to matters where a

return of documents were sought or

some decision was required as to

whether legal professional privilege applied to various documents being sought. The Tribunal would be

required to rule on such matters;

(j) The Tribunal's function would not

be, in the normal course,. to make

findings on the evidence produced

before it but rather to be the forum

in which the tax investigators could obtain access to documents and

information. Naturally the Tribunal would need to make rulings from time to time on the validity of notices

served and matters of a like

nature. In respect of all such

decisions there would be a right of

appeal to the Federal Court;

(k) There would be a sunset clause

included in any legislation for such a Tribunal. It would operate for a

period of, say, three to five years ·

and then be subject to review by the

Parliament.

9.017 It would be very difficult to restrict the work

of the Tribunal to that generated by those tax investigators working on cases where criminally-sourced income was

suspected. The answer to this would be to restrict the

class of person who might make application to the Tribunal to those appointed specifically to investigate those matters (plus, naturally, the "targets" and their associated

witnesses).

9.018 In conjunction with the Tribunal, I recommend

there be established an office of the Special Tax

Investigator (Crime). His responsibility would be to

administer a number of small teams or task forces, by

Volume 5 -168- Chapter 9

A New Approach

whatever name, whose responsibility would be to investigate criminally-sourced income with a view to the issue of

assessments on otherwise recalcitrant taxpayers (ultimately, the intention being to collect the taxes avoided by seizure of assets where necessary). Each investigating team would consist of a very small number of experienced tax office

investigators together with permanently seconded officers from the Australian Federal Police and from the police force in the State in which the particular team operated. This

small team would be headed by one or two lawyers whose

responsibility would be to direct the team's activities in a particular State and to make applications and examine

witnesses as appropriate before the Tribunal. No

applications could be made to the Tribunal unless signed by or on behalf the Special Taxation Investigator, except for those made by or on behalf of the witnesses involved.

9.019 There would be a team in each State (or other

geographical area) with the overall direction and leadership coming from a central office. This would be based either in

Sydney or Melbourne to enable close and regular contact with the National Crimes Authority. information generally would Matters for investigation or

be referred to the Special

Taxation Investigator by the Australian Tax Office, law

enforcement bodies, the National Crime Authority or

Government itself. The Investigator could take on targets on his own volition. The Office would not be subject to

targetting directions by Government. There would be fixed terms for the leaders of it. It would work in conjunction

with the National Crime Authority. Liaison would be

established with that body on a permanent basis and

hopefully there could be access to the computer facilities of the NCA.

9. 020 It is essential that Section 16 of the Income

Tax Assessment Act be amended to allow free interchange of information between the officers involved in each task force and in the public report of the Special Tax Investigator.

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A New Approach

This would be an annual document (or more regularly where appropriate) which would detail the individuals investigated and appropriate findings made. The responsibility of this Special Tax Investigator would also include liaison with the Director of Public Prosecutions with a view to effecting the civil recovery aspect of the collection process. This

presumes the DPP has the appropriate powers - this being the subject of recommendations of other bodies and myself - to involve his office effectively in civil recovery work. The report of the Special Tax Investigator would be tabled in

Parliament and would be a public document. It would

identify those individuals (and companies) the affairs of which had been examined.

9.021 The recommendations reflect a departure in

existing procedures. But it should be borne in mind that

similar practices already exist in bankruptcy and company law. The Bankruptcy Act provides for public examination of debtors and other parties before the Deputy-Registrar. What is being recommended therefore has a firm base in our legal

system and, I venture to suggest, it is not a procedure that

in the past has attracted a great deal of criticism.

9.022 The concern with criminal affluence is the

source of the substantial accumulation of assets. The work of the Special Tax Investigator will not necessarily be

restricted to the proceeds of drug trafficking. It will

inevitably involve an investigation of any apparently

unexplained accretion of great wealth. Naturally, some

discretion will need to be applied by the Investigator in

this targetting. If he roamed too freely he would become

the subject of legitimate criticism. Moreover in this

connection he will be subject to the jurisdiction of the

Federal Court so that need not be a major drawback.

9.023 Section 16. I should say one more thing

The scheme I have proposed

in relation to

is completely at

odds with the policy and thrust of the Section. The Section

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A New Approach

is far too restrictive in its effect on the interchange of

information between parties who, in the exercise of their powers on behalf o'f the community, need access to

intelligence. I make no apology for my strong disagreement with both the content and the application of the Section.

It needs re-thinking urgently.

9. 024 The recommendations have not been the subject

of discussion with other interested bodies. They have been developed by me towards the end of my Commission as a

response to the problems I have perceived in the imposition of appropriate sanctions on criminal elements in our

society. They are, as far as I am aware, quite novel

provisions. They are not thereby to be regarded, in my

view, as inappropriate. I believe they may fill a vacuum in

the procedures and strategies available to law enforcement agencies in the fight against the wealthy criminal and, in

particular, the drug trafficker. I commend them to

Government for against illegal their earnest consideration. drug trafficking in Australia

The fight

is of such

importance that any additional weapon that can be utilised -within the bounds of what is acceptable by the community should be.

9. 025 For the sake of convenience I also note here

that among the summaries prepared by me for the National

Crime Authority under the general description of "Relevant Criminal Actitivies" was one which dealt with the activities of Barry Richard Bull and his associates. I have described

some of those activities in detail in Chapter 3 of this

volume. I suggested both a task force and special reference for the consideration of the National Crimes Authority as far as this target was concerned. I repeat that suggestion

here as a recommendation. I believe also that the

activities of Bull and his friends could usefully be made

the subject of a reference to the Special Tax Investigator

recommended by me.

Volume 5 -171- Chapter 9

A New Approach

9.0 26 For completeness, I also repeat my

r e c ommendation that the activities of the solicitor Robert Ca rtwright (of the firm, Power & Cartwright of Noosa,

Queens land) on behalf of his client Bull be referred by the

Co mm onwealth Attorney General to the Queensland Law Society fo r its information and appropriate action (see paragraph 3 .090 above).

9 .027 Finally, I know that these recommendations will

b e viewed critically by some. Included amongst those

c r itics will be the leaders of the Taxation Office. They

see n o role for them in crime prevention. The defenders of

c ivil liberties will also be anxious to protect the rights

o f i ndividuals to receive their income anonymously and

s urrep tiously, without the prying eyes of the police or the taxman. Some police will be unhappy that part of their role is to be taken up by another body. The wealthy criminals

will also be upset, although possibly not as vocally. On

the other hand, there will be other concerned members of the c ommunity, from the Prime Minister down, who will be eager

t o do anything that may stamp out the criminals in this

society. It is to them I mainly

9. 0 28 I have considered carefully the proposals in

this chapter and offer them as a genuine contribution to the s trate gies available in the fight against drug traffickers

and other criminals. The only other matter I put, in

partial expiation, for the tenor of my recommendations,

comes from Thomas Hobbes (with appreciation to Professor Sackville et al who cited it in their Royal Commission

Rep ort to the South Australian Government in 1979):-

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"I know not how the world will receive

it, nor how it may reflect on those that

shall seem to favour it.

that For in a way beset with those

contend, on one side for too great

liberty, and on the other side for too

much authority, 'tis hard to pass between the points of both unwounded".

(In dedication of Leviathan, 1651) -172- Chapter 9

REFERENCES FOR VOLUHE 5

Bequai, August (1979) Organised Crime (Lexington, Mass.; Lexington Books)

State

HcCoy, Alfred (1980) Dru Traffic: Narcotics and in Australia

Artarmon, Harper and Row

Australia Stewart, D.G. i.e., Royal Commission of Inquiry into Drug Trafficking (The Honourable Mr Justice D.G. Stewart - Royal Commissioner). (1983) Report: February (Canberra, AGPS)

Tate, Hichael et al. i.e., Senate. Standing Committee on Constitutional and Legal Affairs (Senator Michael Tate -Chairman). (1984) The Hational Crime Authority Bill 1983 (Canberra, AGPS)

Williams, E.S. i.e., Royal Commission of Inquiry into Drugs (The Honourable Mr Justice E.S. Williams - Royal Commissioner). (1980) Report (Canberra, AGPS)

Australia: New South Wales

Woodward, P.M. i.e., Royal Commission into Drug Trafficking (The Honourable Mr Justice P.M. Woodward - Royal Commissioner). (1979) Report (Sydney, Nsw Government Printer)

inta Dru Traffickin

Australia: South Australia Sackville, R. et al. i.e., Royal Commission on the Non-Hedical Use of Drugs (Professor R. Sackville- Chairman). (1979) Final Report (Adelaide, Government Printer)

Canada: Quebec

CECO. i.e., Quebec Police Commission. Commission of Inquiry into Organised Crime. (1976) The Fight Against Organised Crime in Quebec (Quebec, Government

Volume 5 -173- References

Periodicals

Age (Melbourne)

Au s tra lian (Sydney)

Ca nberra Times (Canberra)

Fo r e ign Report (London, Economist Newspaper Ltd)

Me rcury (Hobart)

Sydney Morning Herald (Sydney)

Volume 5 -174- Referenc:es