As winter’s shutters came down on the city of Adelaide last year, an extraordinary farce was being played out on the heavily guarded 12th floor of the glass and concrete tower that houses the local branch of Australia’s most secret law enforcement agency.
Gerard Dempsey, a Sydney barrister and the newly appointed South Australian branch chief of the National Crime Authority, was demanding – with his voice rising to a shriek, according to one witness – to know who had leaked to the media some tidbit about the authority’s latest investigation.
On the other end of the telephone, in Melbourne, was the branch’s chief investigator – the former Victoria Police assistant commissioner Carl Mengler, one of Australia’s most experienced and respected detectives. Dempsey(according to a defamation writ filed last month in the South Australian District Court) was accusing Mengler of being the Deep Throat and demanding he hand over the combination of his safe.
When Mengler refused, Dempsey obtained the combination from NCA records, opened the safe in his absence and ransacked its contents. The feud escalated when Mengler returned to Adelaide and at one stage the NCA’s entire staff of 40 was threatening industrial action, Dempsey’s car was incinerated by a Molotov cocktail and Mengler resigned to take a top job with Queensland’s Criminal Justice Commission.
This is just one of the extraordinary stories leaking out in recent months from the previously hermetically sealed offices of Australia’s FBI – stories of personal feuds, bungled investigations, allegations of scandal and cover-up, and outbreaks of mysterious sicknesses.
All of this is being played out against a background of the first full-scale investigation into the operations and effectiveness of the NCA, an investigation which will decide whether to recommend the Government scrap the 400-strong authority and reallocate its $30 million-a-year budget to other law enforcement agencies.
But back to that building, above the Commonwealth Public Service Credit Union not far from the centre of Adelaide. While the scrapping was going on, the NCA was supposed to be concentrating on the most expensive and extensive investigation in its seven-year history – an investigation that would cost more than the one that put the notorious Abe Saffron in jail for tax fraud, and take longer than the extradition and imprisonment of the heroin smuggler Bruce “Snapper” Cornwell.
Two years and $4 million to $5 million later, Australia learnt this week what the results were of this top-priority operation codenamed Hydra: no, the South Australian Attorney-General, Mr Chris Sumner, had not been in the habit of crawling around his lounge room floor with a naked prostitute on his back wielding a whip. It was another Chris Sumner, or someone who looked like him.
And thus came to a bathetic end an investigation that had consumed “all available resources” of one of the three branches of Australia’s FBI, the”super sleuths” charged with fighting organised crime. Crimes involving drugs, corporate fraud and other national priorities were pushed onto the back-burner while teams of lawyers, accountants and investigators explored the seedy underside of Adelaide low-life.
The whiff of corruption had been hanging over the State Government since media reports in the early 1980s. In 1981, 60 Minutes carried a program called The Unhappy Hooker. The ABC had several bites at the story, featuring the usual anonymous backlit whores claiming they had videotaped their clients in compromising positions. In 1988 Chris Masters, doyen of TV investigative reporters, gave the story his imprimatur with a documentary Suppression City.
Finally, with Attorney-General Sumner identifying himself as the person who was being smeared in the media and collapsing with a nervous breakdown, the SA Government in February 1989 asked the NCA to see whether there was any truth in claims that “senior public officials, including politicians, are reluctant to tackle the issue of public corruption because they are being blackmailed”.
And so, while drug barons and corporate crooks had a field day, laundering”hundreds of millions of dollars” in ill-gotten gains (according to former Royal Commissioner Mr Frank Costigan, QC), South Australia’s finest were snooping around such salubrious establishments as Bluebeard’s and the Sportsman’s Leisure Club, interviewing pimps and prostitutes given Greek noms de guerre such as Andromeda, Hades, Daphne and Calliope. There was even one called Stormy Summers, which she said was her real name.
Statistically it was a staggering exercise. No mattress was left unturned. Six thousand computer entries were checked, 1,300 files of documents, 313 people were interviewed and 88 interrogated in what has been described as the NCA’s Star Chamber – a secret interrogation in which the witness has to stand and bow to an inquisitor seated on a dais and has no right to refuse to answer his questions. Chris Sumner was grilled over a Gulag-like 14-hour period.
At the end of the day, the only charges to be laid will be one against a witness who refused to give evidence, and another involving a completely unrelated extortion attempt. Sumner was comprehensively cleared. The journalists, said the report, “have perhaps been too ready to provide a forum for people of dubious credibility”.
Even the NCA conceded that it was hardly its greatest triumph. “In retrospect, we would have to say that the entire investigation was an unfortunate diversion of investigative resources away from the NCA’s true role, that is combating organised crime … ” concluded the hugely entertaining 191-page report tabled in Parliament on Tuesday by a relieved-looking Premier John Bannon.
As for Mr Dempsey, after spending much of the year reclining ill on his office couch, he took sick leave and then left the authority last month. His father said he was too ill to come to the telephone – he was suffering from toxoplasmosis, a virus which he caught from a cat.
It is perhaps not so unusual that sleepy South Australia should be the only State to have its own regional NCA office (the others, in Sydney and Melbourne, deal with national crime). Its population has always taken a perverse pride in providing the venue for some of Australia’s most ghastly and baffling crimes – the three little Beaumont children who vanished from a football match 25 years ago and have never been seen since; the murder of gay university lecturer George Duncan, allegedly ambushed by police on a beat and flung into the River Torrens to drown; the hideous child mutilation murders attributed to the mysterious organisation known as The Family.
Reference Number Two to the NCA was up to standard. In November 1988, the SA Deputy Premier Don Hopgood, in great secrecy, signed the reference, authorising the NCA to investigate “bribery or corruption of or by police officers … illegal gambling, extortion and prostitution … drug trafficking … murder and attempted murder”. All told, a list of 56 people, including a number of police officers and public servants, was attached to the reference as named targets.
To give credit on one of the rare occasions when it is due, this operation did lead to the conviction of one corrupt officer, the former head of the drug squad, Detective Inspector Barry Moyse, jailed for 20 years for his involvement in large-scale marijuana growing and trafficking. But was Moyse acting alone, or was he part of a corrupt cabal that had infiltrated the South Australian police?
This was the question that led to the NCA launching another of its colourfully named investigations, Operation Ark – an operation that would split the NCA into bitterly opposed camps, destroy the reputations of long-serving police and lead to a state of total warfare between the Adelaide branch of the NCA and the local police force.
Operation Ark was the sequel to Operation Noah (geddit? |), the annual anonymous telethon in which police appeal to the public for information about drugs. In March 1989, among the 1,000-odd calls, were a number which should have set alarm bells off all over police headquarters – calls which identified no fewer than 13 South Australian police alleged to be dealing in drugs or protecting dealers.
These reports were never passed on to the Police Commissioner, David Hunt, who, to his fury, first heard about them a month later on the radio. Nor were they properly investigated by police – a leaked copy of the NCA’s top-secret report quotes an assistant commissioner of the South Australian Police as saying “the public could be forgiven for thinking it is Disneyland”.
If the SA police investigation was Disneyland, the script unfolding within the NCA’s offices in Melbourne and Adelaide was Monty Python. The report on Operation Ark was to be the last hurrah for the NCA’s inaugural chairman, Justice Donald Stewart, who was retiring mid-year after five years in the job.
Stewart’s surprise replacement was to be a 49-year-old Melbourne barrister Peter Faris, a man not known to most of the 400 employees and co-opted police working for the authority. He joined the authority in June for a transition period in which he would work alongside Stewart before taking over the reins. But then came a bombshell.
In a telephone conversation between two criminals, described as “prime targets” of the NCA, the intercept picked up Faris’s name. Stewart decided to hold an investigation which eventually cleared Faris of all allegations … but, according to NCA insiders, Faris was smouldering at the way he had been treated.
It was against this background that Justice Stewart completed his report on Operation Ark, a 139-page report which – although it concludes that it was largely through a cock-up than a cover-up that the allegations against police were not properly investigated – was nevertheless highly critical of police procedures and named two superintendents and a senior sergeant in the drug squad and the internal investigations branch, whose “suitability should be reviewed”.
Stewart signed a letter to send the report to the SA Government on July 31, the last day of his chairmanship. But it never arrived. Some six months later, a much shorter report, stripped of most of the critical comments and signed by Faris, was delivered to the Government – a “deliberate attempt to suppress”and to “conceal” the original report from the parliamentary committee, according to South Australia’s shadow Attorney-General, Trevor Griffin, who has been hounding the NCA over the issue.
Faris refused to comment on Operation Ark and on the circumstances of his appointment to the NCA when contacted by the Herald at his barrister’s chambers in Melbourne this week. Nor would he say anything about the still-controversial circumstances of his resignation in February last year, only seven months after he was appointed.
His departure came after the revelation that State police had, one night in September 1989, stopped Faris with $170 in his hand, outside a brothel in the red light district of Dudley Street, West Melbourne. Once again, an NCA investigation found that Faris had done nothing wrong and his abrupt departure from the job was put down to another unfortunate illness – a nasty attack of glandular fever. However, the rumours continue to cast a shadow over the NCA.
Although the South Australian branch of the NCA is widely seen to have been a “disaster” (it is being abolished in June and replaced with a “national office”), it is by no means the only black mark against the agency. A series of hearings launched last year by its watchdog Joint Parliamentary Committee -the first public, probing examination of the organisation’s efficiency and effectiveness since it was established – is questioning the very existence of our FBI.
More than 50 submissions have been received by the parliamentary committee from a wide range of organisations and a surprising coalition has been built between the various rival law-enforcement agencies which say the NCA is a bunch of naive and ineffective lawyers claiming credit for other people’s investigations and civil liberties groups who say the authority is too powerful, too secret and too oppressive.
The NCA is a “poor return on investment” and its arrest record “would not have hindered to any substantial degree organised crime in Australia”, says the Law Council of Australia in its submission. Although it may be seen to have an axe to grind, an audit of the NCA’s published data by the Herald bears out claims by rival agencies that they could spend the money better.
Since the NCA began operations, it has arrested around 448 people – 80 or so a year. The conviction rate appears to be around 50 per cent, but that’s another story. The agency’s budget for the six years to mid-1990 has been around $100 million, giving a price of $225,000, nearly a quarter of a million dollars for every collar fingered.
Comparisons are difficult, but without doubt the most successful crime-busting outfit of recent years has been the Fitzgerald royal commission in Queensland and the Criminal Justice Commission which succeeded it, much as the NCA succeeded the Costigan Royal Commission. In four years of operation Fitzgerald/CJC has cost about a third of the NCA budget ($38 million) and has charged 226 people, including a Premier, five Cabinet ministers, a police chief and 20 of his men, a judge, and sundry drug and vice bosses at a cost of something over half of each NCA arrest.
NSW police, with a budget of a little under $1 billion, arrest 110,000 people a year, including around 7,000 for “indictable offences” (serious crime) – again, around half the cost of the NCA. And for those who argue that the NCA is for serious, national crime beyond the reach of State police forces… well, that may have been the charter, but it has not been the practice.
With two exceptions (Cornwell and Saffron), the NCA appears to have been hitting middle- and lower-level crime that would have been well within the scope of local forces. Following “Reference Two”, for example, the NCA took 25 people to court – all except one were for marijuana offences and most of those were small fry charged with simple possession who wound up with bonds or small fines.
“They were monomaniacs about drugs and fetishists about secrecy,” says a source within the Federal Attorney-General’s Department, pointing to the fact that well over half the arrests made by the authority in its first six years were for drug offences – reflecting the interests and expertise of the first chairman, Justice Stewart, the former Mr Asia Royal Commissioner.
As for secrecy, the NCA has claimed that it is not even allowed to talk, in camera, with the committee of MPs that is supposed to be monitoring it. Committee members have been told not to allow their staff to handle any NCA material and have been issued with special Chubb safes in which they are supposed to keep the material locked at all times.
“They are brief bandits who take over criminal investigations when most or all the work has been done by the police and then immediately brace their backs for the patter of accolades,” says another critic, Chris Eaton, national secretary of the Australian Federal Police Association, which is calling for the NCA’s abolition. He says the NCA’s only major drugs king-hit (Cornwell)”was based on original and existing federal police intelligence”.
And here’s another whack: “For a crime-busting unit par excellence, the NCA has an unfortunate propensity for shooting itself in the foot and destroying the careers of professional law enforcement officers,” said the South Australian Police Association in scathing evidence to the committee. It was furious over the failed prosecution of an assistant commissioner and several other officers accused by the NCA of being part of Moyse’s drug ring.
As for the civil libertarians, Ron Merkel, president of the Victorian Council for Civil Liberties, points out that since the NCA was formed, it has amassed a staggering amount of information – it has opened more than 30,000 files, about one for every 600 Australians. Last year alone, the NCA tapped 35 telephones, installed another 57 listening devices and executed 139 search warrants.
“It is an antiquated structure, ineffective and inefficient, which operates as a Star Chamber. There is no longer any place for the sort of role the NCA takes … it should be abolished,” he is telling the committee that will decide on the future of Australia’s flawed FBI.
Pub: Sydney Morning Herald
Pub date: Saturday 9 March 1991
Word count: 2907
Picture: John Krutop
Caption: Justice Phillips … won’t admit the agency’s crime-busting record is poor.