This may have made for an emptiness at Sydney’s heart, a moral and structural vacuum which laid the city open to attack by the cancerous corruption it would become famous for. By the late 1970s the spread of that cancer was so advanced that key elements of the city’s power structure and economy had drifted under the influence of a criminal counterstate; a dark alliance of corrupt police, businessmen, politicians and the underworld. Dr Al McCoy, an American specialist in the crosscultural analysis of crime, declared that ‘no city in the world could rival Sydney’s tolerance for organised crime’. So integrated was the system that the organised criminal milieu even began to take on political allegiances mirroring those of the legitimate world, and the political developments of the postwar era can be as easily read in its bloody, periodic realignments as in any volume of Hansard.
The war itself started the ball rolling. Just as the Second World War finally jump-started Sydney’s economy out of depression, so too did it jolt the city’s underworld out of the small-time pursuits of thieving, sly-grogging and prescription-drug rackets. Suddenly the city was awash with cash – an abundance of wage packets which hadn’t been seen since the Depression hit – and Sydney’s petty crims found themselves loose in a very big lolly shop.
Wartime rationing created an ideal environment for black market rackets – a sudden jump in demand by way of the increased cash circulation corresponded with a restriction of supply. Sydney’s criminal milieu were not slow in nutting out hundreds of ways to insinuate themselves in the distribution chain. Coupon forging, waterfront pilfering and adulteration were the mainstays. A casual glance at the arrest records of any of the standover men of the 1950s and 1960s – infamous ‘gunnies’ like Chow Hayes, Richard Reilly or Johnny Warren – reveals how important the black market rackets were in nurturing the growth of Sydney’s postwar organised crime. Most of them first graduated from petty thieving and thuggery at that time. Chow Hayes, the vicious heavy who later stood over illegal gambling enterprises like Thommo’s two-up school and eventually did time for the murder of one of the school’s bouncers, ripped off naive soldiers and greedy shopkeepers with the ‘cabbage leaf racket’ – selling sealed cartons of black market smokes which were in reality packed with cabbage leaves, the foliage which most closely approximated real tobacco weight. Richard Reilly, a strongarm king of the underground baccarat games in the Cross during the early sixties, whose 1967 murder threatened to expose the underworld connections of hundreds of society and political figures recorded in his contact books, ran a wartime racket printing forged clothing ration coupons. His killer, the late Johnny Warren, had a petrol coupon rort so profitable it allowed him to finance a phone-order stealing business and attempt to muscle in on the Kings Cross baccarat games with his own clubs. To the modern ear the black market rackets sound quaint, with their cabbage leaves, bodgie coupons and bottles of Scotch half-filled with water and sold to soldiers for a couple of quid profit. But they were the finishing school for a number of violent and fairly odious guys. The huge safari rifle with which Warren blasted a hole in Reilly’s larynx, severing his carotid artery, hadn’t been the upstart heavy’s first choice of weapon. Still in the thrall of his wartime experience, Warren’s original plan had been to kill Reilly by dousing him with petrol and setting him alight. He had only been dissuaded by a friend’s insistence that the plan was impractical.
More important than the opportunities for black market entrepreneurship it created, however, was the effect the Second World War had on the trifecta of ‘social’ crimes that have been the staples of police corruption ever since – drinking, screwing and gambling. Drugs, the modern equivalent, were at that time almost unheard of, except for the relatively minor trade in cocaine to the city’s prostitutes during the 1920s. The era’s razor gangs, lineal descendants of the larrikin pushes, spent a few years frantically slicing and dicing each other in the fight to control that market. But back then grog was the thing. Tight opening hours and licensing restrictions in Sydney after the First World War created a thriving market for ‘black’ liquor vended after hours at exorbitant rates to legions of thirsty customers. Similarly prostitution and gambling were a standing inducement to police corruption.
Sydney police were unusually vulnerable to the corrupting influence of proscribed but publicly tolerated crimes. The peculiarities of Sydney’s social and legal structure – the long shadow of her convict past – multiplied the points of temptation. The New South Wales criminal law encompassed an extraordinarily wide range of behaviour, equalled nowhere else in the Anglo-Saxon world. Drunkenness was a case in point. By 1948, fifty-five per cent of all arrests were for Inebriates Act violations. One Legislative Assembly member complained it was no longer safe for his constituents to frequent their local pubs due to the raids of the police ‘trawler’, which sometimes netted 800 arrests in a single weekend. The hangover of attitudes from the penal past can also be seen in the terminology of the pre-1970 versions of the Summary Offences Act. References to ‘rogues’, ‘vagabonds’ and ‘incorrigible rogues’ abound. What it all added up to was an unusually broad range of unenforceable laws unsupported by the general public but which the establishment expected to be policed.
Aggravating the equation was the heightened public disavowal of any control of the so-called ‘social’ or ‘victimless’ crimes. Drinking, whoring and gambling which, along with profanity, preoccupied the minds of that rabble disgorged from the First Fleet had, over the two centuries, indelibly stained the soul of the new city. This was the dynamic behind Sydney’s unrivalled tolerance of organised crime, manifested in the peculiar spectacle of the city’s postwar elite embracing the criminal element. Outside observers like McCoy were constantly amazed at the complacency with which political figures and high-ranking police not only associated with underworld figures but allowed themselves to be seen doing so. Fred Hanson, for example, Police Commissioner from 1972 to 1977, was fond of duck shooting with ‘Aussie’ Bob Trimbole, principal of the Calabrese marijuana operation in the Riverina district and a suspected conspirator in the murder of antidrugs campaigner Donald Mackay. Chief Stipendiary Magistrate Murray Farquhar stayed cool and hung loose when photographed with SP-betting operator George Freeman in the members’ enclosure of Randwick Racecourse. And as David Hickie relates in his 1986 study of the New South Wales criminal milieu, The Prince and the Premier, one Labor premier even found himself elbowed out of his own home when partying crims, taking advantage of his hospitality, took to turning up with armloads of women for late-night roisters. The hapless leader was reduced to sitting out the night, alone on a park bench across the road, until the parties burned themselves out. Only when he complained personally to the Police Commissioner was a squad of detectives organised to turf out the heavies. United in the bonhomie of the track, the pub and the sly-grog dens, these establishment figures were simply playing out the national mythology of social crime. There was nothing wrong with it and only constipated wowsers and needledicks said otherwise.
Richard Hall, in his 1986 study of Australian ‘disorganised’ crime, argues that a political schism exaggerated the city’s burden of unenforceable social legislation. At the turn of the century the newly formed Labor Party, uniting the numerically dominant working class behind it, had become a serious threat to the established political order. It was imperative middle-class opinion be mobilised, but the key to its support lay with those punishers and straighteners for whom drinking and gambling ranked alongside mixed marriages and goat fucking as threats to the nation. Their impost for averting a red takeover was a raft of laws to curb the debauchery of the lower orders. Pub closing time was cut from eleven p.m. to six p.m. and off-course betting was outlawed entirely. The Labor Party, smeared as the ‘publican’s party’, bitterly decried the class bias of the movement, pointing out that none of the restrictions applied to the toffs in their racing clubs. Enduring political rancour in the racing world can be glimpsed in the 1976 complaint of Cliff Mallam MLA that racing in New South Wales wa
s run by ‘a bunch of amateurs and blue bloods who treat people in the industry like serfs’.
Like King Phillip II of Spain and modern day antidrug campaigners, no experience of the failure of the moral crusaders’ prohibition policy could shake their belief in its essential excellence. In spite of the clampdown, sly-grogging was a steady earner for basement dives like the Ziegfeld Cafe in King Street. According to one Maxwell Liquor Royal Commission informer, prostitutes, male perverts, sly-grog and dope were all to be had at the Ziegfeld, along with the ‘band and hot meal for six shillings six pence’ the owner claimed to provide. The money was in after-hours sales; the commission heard of streets where hotels on one side followed the six o’clock close, while those on the other were inexplicably able to trade until late into the night. The situation changed with the outbreak of war. With hundreds of thousands of thirsty servicemen thronging the city, beer and liquor were in such demand that a quota system was introduced. The pubs, whose licences entitled them to a fixed ration every week, found themselves sitting on liquid gold. Liquor quotas quickly disappeared out the back door and onto the black market, where they were snapped up by unlicensed American-style nightclubs like Abe Saffron’s Roosevelt Club or Sammy Lee’s eponymous club (‘If there’s a girl you want to please, take her along to Sammy Lee’s’) in Woollahra Street. A frantic trade in bogus hotel licensees ensued – the Maxwell Commission stated flatly that, despite his denials, Saffron had ‘a beneficial interest in a number of hotels using different persons as dummies’. Corruption of the vice squad accelerated. One of David Hickie’s informants, a senior officer who joined the force in the early forties, confessed that one night-shift radio patrol car team was occupied full time touring the city’s sly-grog, vice and gambling dens to collect kickbacks. Justice Maxwell expressed his displeasure that the Metropolitan Superintendent of Police, James Sweeney, should hold his retirement testimonial at Sammy Lee’s, ‘one of the most notorious offenders against the liquor laws’, collecting £600 from the two or three hundred guests present ‘in circumstances which lend themselves quite readily to suspicion and criticism’. Inevitably the dens began to attract the attention of standover merchants.
Prostitution likewise had been boosted by the war. The area around Palmer Street in East Sydney, informally zoned for brothel-keeping by the tacit consensus of police, public and government, soon exhibited a fantastic scene of industrial-age whoring. Hundreds of US servicemen queued outside hastily organised establishments, with MPs detailed to keep lines moving, and special clubs for Negro soldiers. One of these last, the Booker T Washington Club, created special problems for Sydney police; once word got out that black servicemen were paying double the going rates, East Sydney was inundated with women and girls – married, unmarried, some as young as fifteen and many from country areas – all keen to cash in. Confronted with the failure of the Brisbane vice trade to match Sydney’s efforts, Prime Minister John Curtin authorised discreet approaches to underworld figures involved in Thommo’s two-up school. Soon, writes Hickie, a trainload of ‘warm, attractive females eager to assist the national war effort’ was on its way north, with the women’s tickets and a low weekly retainer paid for by the government.
Such playfulness was not long to characterise Sydney’s vice trade, however. Despite an aversion amongst some status-conscious crims for ‘living off the earnings’ – a distaste with a solid basis in pragmatism given heavy jail terms for pimping – the exploding profits of the sex trade during and after the war attracted the city’s gunmen and organised crime figures. These profits were not simply a matter of increased activity in the sex trade. A fundamental restructuring of prostitution from a freelance individual pursuit in the nineteenth century to a mass market service industry in the mid-twentieth century massively increased the profits available. Ironically, the cause of this restructuring was a series of laws, such as the Police Offences Amendment Bill of 1908, passed by socially conservative governments who claimed to be leading a moral backlash against vice. But by empowering the police to harass and persecute small-time street level operators, the God botherers simply laid the basis for a takeover by syndicated criminal groups which could organise the trade to be less visible but much larger and more lucrative. Thousands of street walkers were forced into the employ of brothel owners who concentrated their operations in East Sydney and Darlinghurst. Temperance legislation, the early closing laws, provided another income stream as did moves against narcotics in the 1920s. Cocaine was a popular drug amongst prostitutes and it had the added advantage for their controllers that, once addicted, the women would work for overpriced drugs, not money. This echoed the lament of Governors Hunter and Bligh that labourers who had become enslaved to alcohol would work punishing hours for a bottle of spirits which they would consume in a day, rather than taking their pay in grain by which they could support their families for a week.
Judith Allen, who analysed the shift of prostitution from cottage industry to mass production in Kay Daniels’ So Much Hard Work, characterised the industry as just that, an industry, subject to the same laws and forces as any other. Brothel keepers like Tilly Devine and Kate Leigh were simply capitalists, literally extorting the surplus value of their workers’ labour. Encouraging demand for cocaine amongst prostitute employees, writes Allen, could be seen as just another strategy in the more longstanding and central underworld endeavour to appropriate an ever greater share of the profits from this immensely lucrative field. However, as Allen points out, because the coke trade played an ‘internal function among underworld employees’, unlike the popular vices of prostitution itself or sly grogging or off-track betting, it did not have the support required to withstand an assault from the state. That attack came when the violent struggle for control of the market, a battle popularly known as the razor gang wars, spun out of control. The multiple slashings were bad enough but when industry principals began placing hidden snipers atop buildings in Darlinghurst, even the Sydney police could no longer stand by. They crushed the trade with repressive consorting laws and aggressive policing.
While narcotics were driven from the sex industry, there was no change in the structure of that industry. The production line system of the brothels was still much more profitable for the criminals who controlled them than returning to the disorganised methods of the previous century. It also meant that with the return of affluence occasioned by the Second World War and the arrival of cashed up American soldiers, there was a system in place ready for massive expansion. Twenty years later another war, this time in Vietnam, would provide a similar growth impetus. But it would also mark a revolutionary and violent change in the underworld.
On the 28 May 1968 a Maltese man called Joe Borg turned the ignition key in his Holden ute and was just about ripped in half by the detonation of a nine-stick gelignite bomb. His right leg was severed and his car turned into a tangled heap of smoking metal. The attack was an opening salvo in the savage shake-up of the Darlinghurst vice rackets. Borg, sometimes tagged the King of Palmer Street, had been running girls from a stable of twenty houses in the labyrinthine laneways of the Doors area. Police estimated he was taking in $8000 to $10 000 per week at the time of his death. An orgy of beatings, stabbings, shootings and fire-bombings quickly followed, with even the veteran ‘colourful identity’ Tilly Devine burned out of her Palmer Street terrace. One of Borg’s associates was car-bombed in Malta after fleeing there. The demise of Borg’s contemporary, Stewart Johnny Regan, was even more illustrative of the anarchic feuding. Regan was running a string of girls and standing over a number of the city’s SP bookies and illegal casinos when he inexplicably allowed himself to be lured to a killing ground in Marrickville. Trapped in Chapel Street, between a foundry and the Marrickville Infants’ School, without his customary four bodyguards, Regan was dropped from behind by a single shot to the back. Three gunmen drove a patchily painted white car up to the dying hoodlum, alighted and popped another seven bullets into him.
What Regan and the other wa
nna-be vice lords who lost their lives failed to take into account was that there was already a gang of standover men operating in Sydney. They carried their weapons legally and enjoyed the atomic-powered advantage of legal sanction – problematic competitors could be loaded up or even murdered ‘legitimately’ in the course of an arrest. The gang which emerged as the heaviest, most ruthless criminal outfit in the city after the Second World War was not the mafia or the triads but the police force itself, and specifically the Criminal Investigations Branch. The accepted wisdom about Regan’s death is that it was a police-inspired execution, carried out with police revolvers and organised by the legendary detective Ray ‘the Gunner’ Kelly, whom we first met beating seven kinds of hell out of Newtown anti-eviction protesters. Kelly had put his massive frame and hardened heart to good use in the intervening years. Working his way up through the CIB, he was appointed head of the prestigious Safe-Breaking Squad in the early 1950s – safe-crackers being considered the top of the criminal tree in those pre-narcotic days. In this position, Kelly created a fearsome reputation for himself, running down, and sometimes killing, some of Sydney’s most infamous criminals – Darcy Dugan, Chow Hayes, James Hackett and Ronald Ryan among them. He also rose, along with his confederate bent copper, Frederick ‘Froggy’ Krahe, into a controlling position in the Sydney rackets.
Leviathan Page 44