Time and again, drug money corrupts even our finest

Date August 25, 2011

Malcolm Brown

Christine Nixon ...

In February 1992, officers in the Major Crime Squad North arrived at work to find between $50 and $200 in cash stuffed into their duty books. It had been skimmed off from more than $50,000 taken from a stash of drug money. Most took it, and the operation, Let's Dance, became the subject of hilarity.

Years later, when the Police Integrity Commission began its Operation Florida, it became less of a joke. Operation Florida found all manner of misdeeds, fabricating evidence, verballing witnesses, perjury. Ultimately, most of what it exposed came down to drugs and the money that came with them. It was said at the time that there was too much money involved when a detective, with an ordinary wage, came across big-time drug dealers who were dealing in millions of dollars. A police officer might confront a dealer carrying $30,000 in cash and two ounces of heroin. The officer takes the cash, the criminal the drug. In a narcotics industry valued at some $400 billion worldwide in 1988, corruption was inevitable.

So many, many times have I seen seemingly fine, outstanding officers come to grief. Bill Duff was a CIB detective with whom I went to Moree years ago to report a homicide case. When his name appeared in the paper arrested for conspiracy to fly in a planeload of hashish to Australia, I could not believe it. I thought: ''It must be Jim Duff, or Michael Duff, anyone but Bill!'' But it was Bill, and he lost his job in 1986, and then got himself arrested again for a drug offence.

When drug couriers Douglas and Isobel Wilson told Queensland police all about the Clark drug syndicate, they were betrayed by a corrupt officer and in April 1979 they were found murdered.

The Federal Narcotics Bureau, a supposedly elite agency set up to attack the drug menace at its highest level, did have some success, including the interception of a buddha sticks boat, Anoa, in 1978. It became so corrupted that its officers were reselling seized drugs. It provided, according to a former member, ''a good grounding in corruption''. In 1979, the Williams royal commission into drugs found the only option was to disband it.

Also in 1979, a joint federal-state task force, comprising 11 elite NSW detectives and 10 federal police officers, was formed and The Sun-Herald reported it was ''probably the most effective force against big-time drug dealing that has existed in NSW''. It, too, went bad after a drug bust on New Year's Eve, 1983, when about $180,000 was found. The plan was to skim the top off and ''divvy it up'', giving $13,000 each to some members who had been on duty that night and $1000 each to some of those who were not. That created tension. Detective Sergeant Trevor Haken, who handled the divvying-up, was called a ''lying, lashing c---'' by a senior officer who missed the big share.

In Victoria, the police established a Chemical Diversion Desk in 1995 to allow police to trace pseudoephedrine to the laboratories that made it. The problem was that the pseudoephedrine could be bought for $170 a kilogram and sold on the blackmarket for $10,000 a kilogram. The operation became so corrupted that it was, as Victoria's ombudsman later said, ''an unmitigated and foreseeable disaster''.

So Christine Nixon, soon to become the Victorian police commissioner, did what police administrators have done the world over. She revamped drug law enforcement by establishing a new, clean, accountable body. The Major Drug Investigation Division would replace the Drug Squad, which had overseen the Chemical Diversion Desk. For a time it appeared to live up to its promise. Then a member of the division and an ''informant'' were arrested for trying to steal $1.3 million worth of drugs and another police officer was charged with conspiracy.

Here in NSW, the NSW government formed the State Drug Crime Commission, later to become the State Crime Commission, in 1985, to operate separately from NSW police, secretly and efficiently.
In 1988, the NSW Police Drug Enforcement Agency was also set up under the authority of the Police Commissioner. In 1990 it smashed an international heroin trade worth $600 million involving allegedly corrupt diplomats. Once again corruption intruded. The NSW Police Royal Commission was to hear numerous allegations, involving senior officers such as Chief Superintendent Bob Lysaught, touted as a future police commissioner, whose career ended in disgrace.

Standing in the shadows, secretively and presumed to be untouchable, was the NSW State Crime Commission. At least this, it was thought, might be the ultimate untouchable. It was not to be.

Malcolm Brown has covered seven royal commissions, including the NSW Police Royal Commission from 1994 to 1997, and numerous inquiries in a 39-year reporting career.