Underbelly

by John Silvester

  He once told corrupt cop Trevor Haken he would kill anyone who got in his way or exposed his drug dealing. Then he would kill their families.

  He used threats, renowned hard man Danny Karam and gun play to get rid of opposition dealers and would buy off police who posed interference.

  To the end, though, Billy Bayeh remained mystifying. Despite having no defence against charges of bribing police and drug dealing earning him millions, Billy had trouble grasping the seriousness of the situation. Even when he was caught on a secret camera cutting up drugs with KX11, he thought it might all go away.

  Billy said all he wanted to do was sell his Cosmopolitan coffee shop at Kings Cross and leave Sydney to begin a new life with his pregnant wife when the Commission ended.

  Counsel assisting the Commission John Agius confronted him, asking: ‘Has the reality of your situation dawned on you? When you woke up this morning and saw the sun did it also dawn on you that you would be in jail before this year is out.’

  Puzzled, Bayeh replied: ‘I don’t see why.’

  Perhaps it finally dawned when he was arrested outside the Commission rooms and subsequently jailed for twelve years.

  – WITH RAY CHESTERTON

  10

  GET LOUIE

  Hearing whispers on the street that he shouldn’t be buying any green bananas, Louie started asking well-informed people’s opinions about his life expectancy. The answers weren’t reassuring.

  LIKE his namesake Louie the Fly, Louie Bayeh was bad and mean and mighty unclean but at the end of the day, he was just a crook who got lucky … for a while. For a long time, he was worried there was trouble ahead and he was right.

  The notorious criminal and standover man had more minders than Madonna for his rare public appearances because of death threats he claimed corrupt New South Wales police officers had made against him. He said the threats had been confirmed by a senior policeman – and by the infamously psychotic and violent Lennie McPherson, Sydney’s Mr Big.

  Corrupt police wanted Louie dead because, like other allegedly tough guys on the streets – including his brother, the drug czar Billy Bayeh – he had cracked under pressure, telling an Independent Commission Against Corruption (ICAC) hearing in the early 1990s the names of officers he paid and how much he paid them.

  Hearing whispers on the street that he shouldn’t be buying any green bananas, Louie started asking well-informed people’s opinions about his life expectancy. The answers weren’t reassuring. McPherson, his former partner in crime, sent a chill down his spine by telling him he was the target of a proposed assassination attempt by an alleged drug dealer who was facing charges.

  McPherson said the deal bent police were offering was that in return for killing Bayeh they would drop the charges. It was a ‘win-win’ for everyone in the game – except for the now rather rattled Louie. The planned hit was confirmed by senior policeman Merv Schloeffel, who was then working in internal security. The alleged dealer was again named as the likely assassin.

  Bayeh contacted the would be assassin to get it from the horse’s mouth. The man confirmed the deal. His reward for knocking Bayeh, he explained, would be to walk away from charges scot free. Bayeh didn’t like the answer but couldn’t fault the logic. He’d do exactly the same thing if the boot were on the other foot.

  It was a stunning turnabout for Bayeh: to go from being predator to being the prey, a reversal of the role he had made for himself since arriving in Australia from Lebanon in 1953, aged fourteen. He’d been in trouble ever since as he worked his way up the criminal career ladder.

  An ICAC report from the mid-1990s said Bayeh had been convicted of five offences, mostly involving violence, but had never been sent to jail. Probably the closest he came to imprisonment was being found guilty of malicious wounding in 1980. He was ordered to pay fines and compensation of $3000 and put on a good behaviour bond for four years.

  In 1990 he was ordered to perform 300 hours of community service for discharging a firearm near a public place. They were minor offences compared to the criminal heights he would reach as he created an empire built on selling violence and brutality to protect drug dealers, sleaze merchants, brothels, strip joints and pornography outlets.

  Louie was also treacherous, manipulative and self-serving. Attempted murder and using guns, violence and bashing to maintain control were routine for him.

  Trevor Haken, the self-confessed corrupt detective, never denied his hunger for graft from any source but made an exception for Bayeh. Haken says he never took slings from Bayeh because he despised him, saying he acted like a cartoon replica of a tough guy. Whenever possible, notably at a well-regarded Kings Cross restaurant called Pinocchio’s, Haken went out of his way to make Louie’s life miserable.

  Bayeh would park his Mercedes with its blacked-out windows in the no-standing zone in front of the restaurant to emphasise his importance and contempt for the law. This was too tempting for Haken.

  ‘He acted like some Mafioso boss wanting everyone to see him so I’d wait until his food was served and then tell him to piss off out of there,’ Haken says in his biography.

  ‘He didn’t like it. It was a like a contest of importance. He was showing everyone how important he was so I’d show him he wasn’t. I couldn’t do business with him. He was so heavily involved with others I thought he was dangerous and that proved to be the case.’

  During the 1980s Louie Bayeh discovered the real relationship between criminals and coppers at the Cross. He claimed he was framed by then detective Nelson Chad on a stealing charge and had asked what could be ‘done about it’. What would it cost to make it go away?

  Chad asked for $200 a week and got it. Bayeh continued to pay Chad’s replacement, John Brown – and paid more and more money to more and more police after that. When his business partner, Con Kontorinakis, complained that two police – Paul Brown and Ian Wally – had closed down the Love Machine drug outlet, Bayeh rang Chad.

  A meeting was arranged in a restaurant and the two policemen said the place could re-open if weekly payments were made. ‘It all started from there,’ Bayeh said.

  The cosy arrangements came drastically unstuck when Bayeh was charged with drug offences in 1990. After years of watching the law enforced only against other people, Louie suddenly found himself arrested on drug charges that he naturally claimed were false. For once he might have been telling the truth.

  Given the extensive police contacts he had bought and paid for, Bayeh was furious that he had been loaded up without warning. He wanted answers. Every businessman wants a return on investment.

  He claimed he’d paid a total of $12,000 to officers Ken McKnight (in two exchanges), $500 to Arnie Tees and another $500 to a third policeman to find out what was behind the frame-up. He never did find out – and retaliated by going to the ICAC in 1990 to complain about what had happened to him. After that, he claimed, he feared angry police would try to kill him in revenge.

  At a meeting with Inspector Arnie Tees, Louie wore a wire to get evidence and told the ICAC that corrupt officers had offered him the names of the police responsible for the set-up – and the reason for it. This information would cost him $10,000.

  He told the Commission the police who made the offer could be set up for a raid by anti-corruption forces at a lunch he would organise. Under surveillance, Bayeh was seen lunching with half a dozen men known to be police. He was also seen leaving the restaurant to withdraw $12,000 from a nearby bank and then returning to the restaurant. Then it all got murky, in typical Bayeh double-dealing style.

  He claimed he passed the $10,000 to a policeman or police in the restaurant toilet. The surveillance crew outside said they saw nothing. An account of the stake-out was passed to the Department of Public Prosecutions, who ruled there was not enough evidence for criminal proceedings.

  And the original charges against Bayeh that started the interest in corrupt police allegations? They were part heard at the time of Bayeh’s $10,000 bribe revelation. An
d they were subsequently dismissed.

  The ICAC, which had to explain its performance to a Parliamentary Joint Committee, refused to have any further dealings with Bayeh after he demanded, in addition to the usual protection arrangements, payment of three million dollars if he gave further evidence.

  That was part of the intriguing backdrop to Bayeh’s appearance before the Royal Commission in 1995. Although Bayeh claimed he no longer paid protection money, he said he still feared for his life because of his revelations about police corruption to the ICAC.

  He also had grave concerns about the attitude and unpredictability of Lennie McPherson, whose reputation as a standover man, thief, armed gangster and robber, drug dealer and killer – and ‘fixer’ – was unmatched in the Australian underworld.

  At one stage McPherson and Louie Bayeh were partners in selling their protection services to brothels, strip joints, massage parlours and night clubs, forming as intimidating an association as the Sydney underworld had ever known.

  McPherson, who died in 1996 in jail, was a psychopath linked to at least half a dozen murders. His brutality and sadism were almost beyond belief.

  Author Tony Reeves recounts in his biography of McPherson that he had been estranged from his mother for some years but decided to pay an unannounced visit on the day of her 70th birthday, carrying a white rabbit.

  McPherson demanded to know why he had not been invited to the party the rest of the family had held for her earlier that day. When his mother admitted it was because of his criminal activities, McPherson ripped off the rabbit’s head and threw its twitching body at her feet before storming off. In fact, at her foot – the mother-of-ten had had one leg amputated.

  With a partner like McPherson it was no wonder Bayeh would tell the Royal Commission that he suffered from depression and chronic intestinal problems.

  ‘I have been to see at least 50 doctors,’ he said.

  With two giant bodyguards flanking him and a third leading the way, Bayeh’s protection detail looked like a scene from a B-grade Hollywood gangster movie as they walked through Sydney’s business district toward the Royal Commission hearing. The only interest Bayeh and his minders generated – the media aside – was from impatient pedestrians on their way to work.

  In the witness box, Louie did a Bradman. He became the first crim turned police informer ever to score a century of corrupt police on his pay roll. Having rolled over and agreed to the novel concept of telling the truth, Bayeh admitted publicly to bribing ‘at least’ 100 police over a couple of decades, paying hundreds of thousands of dollars to protect his brothels and strip clubs from raids.

  As a kingpin of the slimy flesh peddling industry centred in Kings Cross and extending to Parramatta in the west, Louie was earning millions of dollars. With his younger brother Billy set up as the heroin and cocaine king of the same area, the Bayehs were pulling in money like Saudi Arabian oil princes.

  At one stage Louie was asked to explain the origin of more than a million dollars that Royal Commission investigators found hidden in various bank accounts while claiming his taxable income was $347,000.

  ‘I don’t recall whether I put money in bank. I can’t explain that. I don’t know,’ he stumbled, bunging on a thick accent.

  Louie did admit to having a financial interest in the Love Machine club at Kings Cross and being paid $2500 a week from its profits and for looking after two other drug dealing nightclubs Stripperama and Porky’s.

  With his brother Billy living a millionaire-lifestyle from drug sales while offering a taxable income of only $35,000 a year, the money overflowed for everyone.

  The obese Pandelis Karipis, alias ‘Fat George’, had a brothel called The Pink Flamingo. It and another business, called the Battlers Inn, were both drug-dealing outlets raking in the cash and providing a genuine insight into the riches available peddling heroin and cocaine to desperate people.

  A former barrister down on his luck and in the grip of a self-inflicted nightmare ended up working for Fat George. He told the Royal Commission that on New Year’s Eve 1993 around 150 hits of heroin were sold at $80 each and 300 deals of cocaine at $300 each – around $42,000 on the night. And that was just a couple of outlets.

  Billy Bayeh told Haken on a secretly-recorded tape that feared muscle man Russell Townsend was making $100,000 a week selling drugs in Kings Cross, including 250 half caps of rock heroin a day at various venues. Townsend was said to be acting on behalf of McPherson, who was in jail.

  It was massive money and dealers and sellers, especially in Chinatown, must have been delighted to buy drugs cheaply from bent police with limited foresight and imagination. A free feed, a few bottles of scotch or a few dollars was enough to turn most police into drooling poodles.

  Selling their integrity was inexcusable but selling it so cheaply was just plain stupid. Police were too dense to see they were risking their entire careers and reputations for chicken feed while the criminals were making millions.

  It was not without risks. Occupations like Louie’s in areas like Kings Cross are always volatile. Challenges come from other ambitious employees and rival gangs. Only the police can be neutered by paying bribes. Other problem people were not so docile.

  No one was better at buying his way out of trouble than Louie Bayeh. But he wasn’t sure if the vendetta waged by police he had exposed to ICAC two years earlier had ended when he got his summons to appear before the Wood Royal Commission.

  Bayeh, like his little brother Billy, had initially been sparing in his public statements about police corruption and the officers involved. Then they both rolled over. After giving his evidence privately, Louie worked feverishly with his legal advisers to stop it ever becoming public.

  But Justice James Wood ruled that while Louie might have fears for his safety as a consequence, the tapes should be released as a way to keep the public informed about the Commission’s progress and entice more people to come forward with evidence.

  So into the witness box went Louie, saying in English so heavily accented that Merrylands (the Sydney suburb) was taken down as ‘ambulance’, that he could not understand why police were so keen to see him dead that they were prepared to use a hired killer. In this he was ignoring the incriminating evidence he’d given in private to ICAC investigators, naming dozens of police to whom he had paid bribes.

  ‘Still up to today I got no idea why New South Wales police they want me killed and I know I’ll be killed anyhow,’ he said haltingly. ‘If what I said in public, if what I said in court now…if all these guys know I named these names … if I go outside I don’t believe I’ll last a week.’

  To make his point about the uncertainty of his life, Bayeh brought up the fate of former Melbourne hit man Christopher Dale Flannery, who had come to Sydney in the 1980s and launched a murderous wave of terror and panic among the criminal set before disappearing in circumstances suggesting he’d been murdered by corrupt police.

  ‘I believe what is going to happen to Chris is going to happen to me,’ he said. It was garbled but everyone knew what he meant. ‘One day the police will pick me up, I will never come back, same thing happened, you know nobody will find my body – same as what happened to Chris.’

  Asked how many police he’d paid off over the years, he played a numbers game with the Commission.

  ‘Was the number twenty?’ asked the Commission counsel.

  ‘More,’ Louie said.

  ‘How many more?’

  ‘Up to 100.’

  His business principle ‘number one’ was to pay police ‘money to stay away from my places,’ he said. He could even rattle off the names and positions of officers he paid, including squad commanders.

  ‘I was paying $300 to the consorting squad, $300 to the armed hold-up, $300 to Kings Cross station,’ he said. Sometimes there would be $400 for ‘police bosses’ as well.

  Louie at least seemed convinced that Flannery was shot dead on 9 May 1985. All anyone else unconnected to Flannery’s disappearance
knows is that the hit man went to his car in the garage of his apartment block, the Connaught, near CIB headquarters in Sydney and found it would not start.

  It is said that when Flannery went outside to hail a cab to take him to George Freeman’s house, two policemen he knew stopped and offered him a lift. He was never seen again.

  One rumour is that two more policemen got in – one on either side of Flannery – when the car stopped at traffic lights. Before he could react, and with his arms pinned to his side by the bulky police on either side, an officer in the front seat turned and shot him, the story goes. Flannery’s body has never been found and no one has ever been charged.

  In 1997 New South Wales coroner Greg Glass gave a finding that Flannery was murdered, probably on 9 May 1985. Glass also found that the secret to what happened rests with disgraced former detective Roger Rogerson.

  Rogerson denies any knowledge but conceded on the Sunday television program that: ‘Flannery was a complete pest. The guys up here in Sydney tried to settle him down. They tried to look after him as best they could, but he was, I believe, out of control.

  ‘Maybe it was the Melbourne instinct coming out of him. He didn’t want to do what he was told, he was out of control. Having overstepped the line, well I suppose they said he had to go. But I can assure you I had nothing to do with it.’

  Rogerson offered one other insight on Flannery on a newspaper blog when he questioned the hit man’s supposed prowess with a pistol.

  ‘Neddy Smith (a notorious gangster doing life for murder) called Flannery Mr Rent-A-Kill. He was laughing at him because he was such a crook shot.’

  Wayward shooting certainly featured in one of Flannery’s earlier hits in Melbourne. He missed his target at his first attempt, with a non-lethal head shot. In a frenzy, he then emptied his gun into the head and back of the escaping man.

  Death interfered with Flannery’s ambitions to be a heavyweight figure in the Sydney underworld as rival forces lined up violently against each other in the 1980s to decide who would control the lucrative crime scene.