| Title | Federated Ship Painters and Dockers' Union - Royal Commission (Mr F.X. Costigan, Q.C.) - Report - Final, dated October 1984 - Volume 5 - Drug Trade |
| Source | Senate |
| Date | 21-02-1985 |
| Parliament No. | 34 |
| Tabled in Senate | 21-02-1985 |
| Parliamentary Paper Year | 1984 |
| Parliamentary Paper No. | 288 |
| System Id | publications/tabledpapers/HPP032016007894 |
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 âprivateersâ 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.â 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 sâvlling 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 â¢â¢â¢ "
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
"contributoryâ¢â¢ 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 â¢
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
-25-
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)
-82- Chapter 4
Previous Commissions
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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Previous Commissions
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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Previous Commissions
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
" .â¢. 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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Volume 5
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
-93- Chapter 4
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:-" .â¢. 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 ⢠â¢â¢ 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
Previous Commissions
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
Previous Commissions
"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
-118- Chapter 6
Volume 5
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)
-129- Chapter 7
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 policeÂ
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
Volume 5
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 .â¢. 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
" .â¢. 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 ..â¢
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, â¢.⢠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
Volume 5 -158- Chapter 9
A New Approach
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.
Volume 5 -159- Chapter 9
A New Approach
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.
Volume 5 -160- Chapter 9
A New Approach
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
Volume 5 -161- Chapter 9
A New Approach
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:-
Volume 5
"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.
-163- Chapter 9
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.
Volume 5 -164- Chapter 9
A New Approach
In the second reading speech, the following explanation was given as to part of the Bill's effect:-
Volume 5
"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)
-165- Chapter 9
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).
Volume 5 -166- Chapter 9
A New Approach
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;
-167- Chapter 9
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.
Volume 5 -169- Chapter 9
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
Volume 5 -170- Chapter 9
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):-
Volume 5
"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