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Cabinet papers echo drugs/corruption ‘Underbelly’

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Vast Underworld exposed

by Damien Murphy, SMH

January1,  2011

THERE were so many bodies being found and stories about drugs and corruption in circulation that royal commissions galore started up as Australia turned into an early real-life draft of Underbelly.

The tone was set early in the year when Justice Philip Woodward’s New South Wales Royal Commission into Drug Trafficking, looking in part at the murder of Griffith businessman Donald Mackay, was attacked by colourful former Whitlam government minister Al Grassby, another Griffith local and community relations commissioner.

He tagged it ”ethnic slander”.

Meanwhile, the tide came in when the final report of Justice Edward Williams’s Royal Commission into Drugs identified Sydney as the centre of a $59 million heroin trade. It also found weakness in coastal surveillance and customs.

Frank Nugan, a merchant banker facing stock fraud charges, was found dead in his Mercedes-Benz outside Lithgow, NSW, in January 1980. His partner, Michael Hand, a former US soldier with links to the CIA, gave evidence that the bank was broke, and left the country.

Finally, journalist Bob Bottom’s pieces on painters and dockers in January’s Bulletin magazine – alleging fraud, standover tactics, violence and intimidation – raised cabinet concerns. The Federated Ship Painters and Dockers Union, especially in Victoria, had a mean reputation – partly because it was one of the few organisations likely to employ men finishing sentences at Pentridge Prison.

The union’s nefarious activities fitted happily with the Fraser government’s campaign against industrial unrest. Of course, the union’s thuggish hierarchy did little to ease the public’s alarm.

Union secretary Jack ”Putty Nose” Nicholls said: ”We catch and kill our own.”

Within a year he too was dead. Nicholls’s body was discovered in his car outside Wangaratta after he had fled to Brisbane with the union’s membership roll. He purportedly left a suicide note:

”To my members and executive, I tried very hard but the rotten Fraser government did not want me to survive. Do not think I have taken the easy way out but the rotten system has cut me life short. I had big ideas for advancement but these were chopped short. Farewell Comrades. Jack Nicholls XX.”

Another colourful union member, Billy ”The Texan” Longley, toldThe Bulletin he could name 30 people who had been ”knocked off” by the P&Ds. ”They have either been killed for money or simply their mouths. This is not just in Melbourne, but in Sydney, Brisbane, Perth.”

A memo to cabinet warned that the union was fleecing the navy and ANL shipping. One shipping line staff member blew the gaff, telling The Bulletin, ”I cannot see any problem employing criminals when we know they are criminals”.

Cabinet decided that only a royal commission could settle the question of what was happening in the union.

Frank Costigan, QC, was picked to head a joint federal-Victorian royal commission.

He started hearings at Williamstown Court on October 1, 1980, just down the road from the naval dockyard.

Nugan Hand bank was linked with money laundering and drugs as investigations continued through the year.

Cabinet’s interest had been sparked by the findings of the Woodward inquiries in NSW and the discovery, near a Victorian surf beach, of the bodies of two Sydney operatives of the Mr Asia drug syndicate, Douglas and Isobel Wilson.

Attorney-general Peter Durack and administrative services minister John McLeay recommended a joint federal-state inquiry into the syndicate. ”Due to the great public concern an announcement of the government’s intention is urgently required,” they said.

Donald Stewart was appointed commissioner and eventually had his terms of reference extended to take in the Nugan Hand matter.

In the years to come, the various royal commissions exposed a world of corruption few Australians realised existed. The late Kerry Packer was enmeshed in the P&D inquiry. Another result was the introduction of legislation, the Crimes (Taxation Offences) Act 1980, which put an end to ”bottom of the harbour” schemes.


Written by nuganhand

January 23, 2011 at 12:45 am

Posted in Uncategorized

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