Source – constantinereport.com
– “…Most well-developed heroin networks very quickly move towards a complementation of interests between the narcotics traffickers and corrupt elements of the enforcement agencies responsible for the suppression of the illicit drug trade. — Alfred McCoy”
The Secret History of Rupert Murdoch: CIA/Mafia Drug & Murder Ties, Cover-Ups in Australia -By Michael Barker
However, for those wishing to delve beneath the mass media’s obscurations of the politics of drug trafficking, Australian-based researcher John Jiggens provides a breath of fresh air in his recent book, The Killer Cop and the Murder of Donald Mackay (Network to Investigate the Mackay Murder, 2009). (2) In his book, Jiggens weaves an enthralling story that links institutionalized police corruption to the infamous CIA front-group the Nugan Hand Bank and in turn to the controversial murder of Donald Mackay. Given the media blackout surrounding the publication of this critical book, this article will review its main thesis in an attempt to undermine elite support for the widely publicized and officially sanctioned version of Mackay’s murder: a murder that Jiggens suggests most surely announced the criminal takeover of the Australian drug scene. (3)
Egan estimated that, in the last ten years, 50 per cent of the narcotics sold in New York had been handled by serving members of the police force. He cited the scandal that erupted when it was discovered that 70 per cent of the elite Special Squad of the New York Narcotics Bureau were dealing in narcotics. (p.47)
Here it is fitting to note that Admiral Earl Yates, who around this time served as the president of the now infamous CIA front group the Nugan Hand Bank, said he accepted the position as Nugan Hand president [in 1977] on the advice of Sir Robert Askin. (10) Thus Riley, after having disappeared underground during Justice Athol Moffitt’s Royal Commission into Organised Crime in Clubs (which began in 1973), reappeared in Sydney the following year, a day after the commission was finalised. In 1975, Riley then became involved in drug trafficking with the soon to collapse Moylan group, and subsequently met Frank Nugan (of Nugan Hand Bank fame), which aided Riley’s smooth transition from the vice scene to the drugs scene.
At first, Frank Nugan managed the Nugan Hand [Bank’s] relationship with Riley, but when Michael Hand returned in March 1976, he took over the relationship. Perhaps not surprisingly, it was during the period when he was close to Hand when Riley moved into Southeast Asian heroin.
The drug related activities of Murray Riley and the Nugan Hand group were investigated by the Commonwealth-New South Wales Joint Task Force on Drug Trafficking, which concluded that Riley organised five shipments of heroin into Australia in April, June, August, September-October, and November-December 1976, mostly in false bottom suitcases. For each importation the facilities of the Nugan Hand group of companies were used to transfer the purchase money from Sydney to Hong Kong. Over one hundred pounds of heroin was involved, and much of this was shipped on to the US. Riley was also involved in two heroin importations in July and September 1977. (p.66)
To fill in some details, Frank Nugan who was born in Griffith, was the Australian partner in the Nugan Hand Bank, a bank that was set up to hide money made from arms smuggling, drug trafficking, money laundering and tax avoidance. “By 1977, Nugan Hand and its associates dominated the Australian drug trade in a way that had never been achieved before.” (11) Dirty money was then laundered through a dizzying array of shelf companies from the Bank to the Nugan Group, which was Frank Nugan‘s vegetable and fruit packing company.
The Nugan Group, it is important to emphasize, was intimately connected to the Mackay story as they “operated a major 5-acre factory complex in Griffith,” and in 1977 “an independent audit turned up secret accounts in the group’s books in the names of local pot growers with the cheques for thousands of dollars made out to member of the Trimboli and Sergi families.” In light of this troubling turn of events (for the Nugan Group), Frank Nugan set out to remove the auditors, and hired ex-NSW detective Fred Krahe to intimidate irksome members of their board of directors. Although ultimately unsuccessful in forcing the auditors to resign, this was the type of task that Fred Krahe excelled in, as his “reputation as an underworld enforcer and hit man [had] earned him the nickname of the ‘Killer Cop.'” (12)
Later in 1978, “[w]ith assistance from the US embassy, Frank Nugan succeeded in closing down” an investigation of Nugan Hand Bank that was set up by the Narcotics Bureau. (13) Similarly, Frank has also worked hard to stave off a NSW Corporate Affairs investigation in the Nugan Group, however, eventually…
… conspiracy charges over the secret accounts were laid against Frank Nugan, Ken Nugan, several Nugan Group employees, and ex-detectives Fred Krahe and Keith Kelly. After a committal hearing before Clarrie Briese SM, the charges against Krahe and Kelly were dismissed and they were awarded costs. The other defendants were committed for trial, a fate that Frank Nugan avoided by suicide. (p.114)
Fortunately for the criminal underworld the Nugan Groups secret accounts “were never given to the Woodward royal commission, nor to the Joint Task Force,” (14) yet as Jiggens notes, these accounts are critical to understanding the assassination of Mackay.
The suggestion is that shortly after the secret accounts at the Nugan Group became a public scandal in the first weeks of July 1977, someone who suspected that marijuana growing might be the explanation behind the secret accounts went to Donald Mackay with this information, but Fred Krahe learned of this. As we have seen, Frank Nugan had many reasons to kill to prevent exposure, and in Fred Krahe he had the perfect assassin. Up until this point, Donald Mackay knew only of the growers in their grass castles. The secret accounts would have given him the clue that led to the man with the mansion in Vaucluse. As many suspected, Mackay was murdered to protect the financiers and distributors, those higher up the chain of this enormous drug-smuggling network. In a twist worthy of a thriller, the boys from Homicide couldn’t find the killer because he was a former top homicide investigator. (p.131)
Importantly, the murder of Mackay also served to cover up the potential exposure of Frank Nugan‘s CIA connections, which was particularly critical given that in April, May and June 1977, the Australian media and Parliament were awash with allegations of CIA activities in Australia, caused by the allegations of Christopher Boyce and Gough Whitlam. (15) Other evidence to support Jiggens’s theory comes from Tony Reeve’s book Mr Sin: The Abe Saffron Dossier (Allen & Unwin, 2007). Reeves provided evidence of how Frank Nugan had distributed marijuana from his Griffith packing shed, and how Sir Peter Abele’s trucking company, Thomas Nationwide Transport (TNT), was used “to move — along with huge volumes of legitimate cargoes — large quantities of illegal drugs around Australia and the world.” Reeves also drew attention to the close relations that existed between Abeles and the Nugan Hand Bank: information which is particularly significant because “Bela Csidei, Murray Riley’s partner in the trans-Pacific drug trade, was well known as a front man for Abeles.” (16)
As one might expect, the mainstream media fulfilled a critical function in shielding the police force and the Nugans from critical public scrutiny, and so it is fitting that Frank Nugan‘s henchman, Fred Krahe, was employed at the time of the murder with The Sun newspaper in Sydney. Moreover the tight relationship between the mainstream media and the criminal underworld was no anomaly, as prior to leaving the police force, Krahe had “carefully cultivated” the support of leading NSW crime reporters like Bill Jenkins, whose “frequent scoops were breathlessly splashed across the… front pages” of Rupert Murdoch’s now defunct Sydney paper The Daily Mirror. Thus while under normal circumstances one might expect that structural factors alone are enough to ensure that the mainstream media manufactures consent for elite interests, in the case of Krahe, it is apparent that individual journalists, like Jenkins, facilitated this process by covering up for the key movers in Australia’s organized crime scene. (17)
Likewise, the Royal Commission of Inquiry into Drug Trafficking (1980-83) served to manufacture consent for elite interests. “Justice Donald Stewart –‘crime fighter extraordinaire’ as the Sydney Morning Herald billed him in 1998 — was the man selected by the conservative Fraser government to chair the royal commission into the can of worms that was Nugan Hand.” Jiggens points out that:
Many investigators regard Stewart’s report on the affairs of Nugan Hand as a whitewash, not so much of Nugan and Hand (who Stewart conveniently blamed for everything), but of the US government. … Not surprisingly, journalists like [Marian] Wilkinson, [Brian] Toohey, [Jonathan] Kwitny, [Wendy] Bacon and [Alfred] McCoy felt that Stewart inverted Nugan Hand’s real chain of command. (p.165) (18)
Later, as is to be expected, the media acted in concert with the legal system:
Stewart’s conclusion that there was no evidence of links with the CIA was headlined in [Rupert] Murdoch’s Australian as “CIA Link Disproved.” As Brian Toohey commented in the National Times: “Far from being disproved, the extent of the links was not even investigated by Justice Stewart in any normal sense of the world.” (p.170)
This brings my brief review of The Killer Cop and the Murder of Donald Mackay to an end. Unfortunately, beyond superficial political reforms, little has changed since the dark days that saw the murder of Donald Mackay. The mass media that keep the public misinformed about the true criminality of capitalism have more power than ever, while official government whitewashes of crime continue to protect deep politics from critical scrutiny. John Jiggens penetrates the myopic drug-fuelled hallucinations that emanate from the mainstream media, and provides the necessary context to wake us (the public) from our addiction to the real drug of the nation, the corporate media.
1. Alfred McCoy, Drug Traffic: Narcotics and Organised Crime in Australia (Harper & Row, 1980), p.30. (back)
2. This book draws upon the research undertaken in John Jiggens‘s PhD thesis, Marijuana Australiana: Cannabis Use, Popular Culture and the Americanisation of Drugs Policy in Australia 1938-1988 (Queensland University of Technology, 2004). Some of the book’s content has been published online in a three-art series in StickyPoint magazine, see “In a Time of Murder” (Issue 2, 2007), “The Banker and The Killer Kop” (Issue 3, 2007), and “The Mystery of Nugan Hand Bank” (Issue 4, 2008). (back)
3. Jiggens, The Killer Cop and the Murder of Donald Mackay, p.22. After the murder of MacKay, there was a marijuana drought, and so with “pot unavailable, heroin sales went through the roof.” (pp.18-9)
The officially sanctioned version of Mackay’s murder resulted in the jailing of Jimmy Bazely, a small-time crim” who had escaped police custody “after one particularly unsuccessful bank robbery where he was caught by a one-legged man.” (pp.174-5) “This is the official version of the murder of Donald Mackay to be found in Underbelly 2, TV documentaries like The Donald Mackay Disappearance and books like [Bob] Bottom’s Shadow of Shame and [Keith] Moor’s Crims in Grass Castles.” (p.180) (back)
4. Jiggens, The Killer Cop and the Murder of Donald Mackay, p.23. The detective on duty in Griffith on the night of Mackay’s assassination, Graham Lawrence Keech, spent almost the entire shift on what has been described as ‘an extended pub crawl’ with Tony Sergi and Domenic Sergi, two of the principals suspected of ordering Mackay’s murder. Brian Borthwick had also met them for dinner that night, and with no irony the following morning Keech went on to “play a key role in the investigation of the murder.” (p.31) Later, in 1994, “John Hatton MP blamed the failure of the police investigation on John Whelan, who was appointed second-in-charge of the police assisting the Woodward Royal Commission and then took over as chief investigator. In 1994, Hatton said it was frightening that Whelan, who he called a crook and a member of the “Black Knights,” was the chief investigator into the Mackay murder.” (p.32) Justice Philip Woodward also “fell” for the police generated propaganda and “put all the blame [for the murder] on the Italian-Australians,” a situation that was bound to happen given his “over-concentration on Griffith.” “It was not,” Jiggens continues, “until his Further Report that Woodward investigated the Sydney drug scene and looked at Murray Riley and his gang.” Moreover even then: “At the end of his commission in 1980, Woodward left his outstanding investigations (Murray Riley, Bela Csidei and Nugan Hand!) to the Joint Police Task Force.” (p.33, p.35)
In 2009, in addition to Jiggens’s publication, another book relating to crime in Australia is Clive Small and Tom Gilling’s Smack Express: How Organised Crime Got Hooked on Drugs (Allen & Unwin, 2009). This well-received book is significant because Gilling, a former New South Wales police officer, was an investigator for the Woodward Commission from 1977 until 1980, and then spent the next three years on the Commonwealth-state Joint Task Force which investigated the Nugan Hand Bank. No surprise then that Small’s book whitewashes the historical roots of organized crime in Australia. (back)
5. Jiggens, The Killer Cop and the Murder of Donald Mackay, p.25. (back)
6. Jiggens, The Killer Cop and the Murder of Donald Mackay, p.28. (back)
7. The use of an “export” theory to explain the murder of Mackay was initially followed by Bob Bottom in The Godfather in Australia: Organised Crime’s Australian Connections (Reed, 1979). Jiggens estimates that “the size of the Australian cannabis market in 1975 was about 50 tonnes, indicating that Coleambally alone was bigger than the entire annual Australian cannabis market.” (p.39) Additionally, the seizure should have produced a marijuana drought the following year, but “the Australian marijuana market was healthy right up to July 1977,” which indicates that the Coleambally crop was probably grown for the US market, “the one market that could absorb such a large quantity of cannabis.” (p.42) “The marijuana drought was caused by the murder of Donald Mackay, which was carried out to cover-up Frank Nugan‘s role in Griffith. Other factors contributed, such as the launch of the War on Drugs and the massive cannabis seizures, but it was the Mackay murder, and the subsequent police investigations and royal commissions, that created the drought.” (p.192)
“Although this Americanisation of Sydney’s crime scene in the 1960s and 1970s, its penetration by US mobsters and the Mafia, went largely unnoticed by Australian authorities, it formed the subject of books like Bob Bottom‘s The Godfather in Australia, Athol Moffitt’s A Quarter to Midnight and Alfred McCoy‘s Drug Traffic.” (p.188) In addition, Jiggens observes that: “Although the prevailing wisdom remains that the export or trans-shipment of drugs via Australia is something that ‘can’t happen here,’ it clearly does; and even some members of the Australian Federal Police have begun to admit this following the seizure of four tonnes of ecstasy, valued at $400 million in 2007.” (back)
8. Jiggens, The Killer Cop and the Murder of Donald Mackay, p.46. For a brief review of the CIA’s global involvement in drug trafficking, see William Blum, “The CIA, Contras, Gangs, and Crack,” (pdf) Foreign Policy in Focus, November 1996.
Brian Martin in his important book, The Whistleblower’s Handbook: How to Be an Effective Resister (Jon Carpenter, 1999), discusses the role of customs officers in aiding and abetting drug trafficking in Australia. He writes: “Fred was a customs officer who had just moved to a new posting. He began to notice that certain types of goods were always put through on a particular shift involving the same group of officers. He knew from previous experience that these types of goods were. Fred was a customs officer who had just moved to a new posting. He began to notice that certain types of goods were always put through on a particular shift involving the same group of officers. He knew from previous experience that these types of goods were commonly used to smuggle drugs. In the face of much resistance, he managed to get on the shift himself, and uncovered a major drugs shipment. Then he was transferred out to a less desirable job. He went to the media with claims of corruption in customs. But in the face of bland denials by customs officials, nothing could be done.” (p.4) For an account of whistleblowing with regards to police corruption see pp.71-3. (back)
9. Jiggens, The Killer Cop and the Murder of Donald Mackay, p.50, p.51.
On his retirement, in 1975, Askin joined the board of TNT, and was given 110,000 shares in that company. In January 1978, Mike Hand announced that Sir Robert Askin might be joining Nugen Hand as chairman, though nothing seems to have come of this. (p.52) Jiggens writes that:” Tony Reeves claimed in Mr Sin that Krahe [according to an informant and contacts in the Commonwealth Police] was given a position on the board of TNT after he retired”. (p.161) Given Askin’s TNT-CIA connection is it interesting to observe that the current chair of TNT’s supervisory board, Piet Klaver, is a board member of the “environmental” African Parks Foundation — a group whose senior counsellors include former US Secretary of State for Africa, Walter Kansteiner, and Wim Kok, a TNT supervisory board member who is a board member of the “humanitarian” International Crisis Group.
For an exhaustive examination of the “central” role that Askin played in institutionalizing crime in New South Wales, see David Hickie’s The Prince and The Premier: The Story of Perce Galea, Bob Askin and the Others Who Gave Organised Crime Its Start in Australia (Angus & Robertson, 1985).
Jiggens writes: “In New South Wales, the Wood commission was told that an officer wishing to become a detective had to commit at least one corrupt act as a test to see if he was fit to be a detective. Those who refused were blackballed from that elite branch of the force because they were seen as being untrustworthy.” (pp.200-1) “This entrenched network of police corruption had many names. In New South Wales the terms ‘The Laugh’ and ‘The Giggle’ were commonly used. In Queensland it was best known as ‘The Joke.’ The Joke flourished in Queensland in the sixties under the supervision of Police Commissioner Frank Bischof. His bagmen were said to be the Rat Pack of Terry Lewis, Tony Murphy and Glen Halloran. The Rat Pack and their friends were central to the corruption uncovered later by Fitzgerald, by which time Lewis was Commissioner. Bischof’s Joke in the 1960s revolved around SP bookmakers and prostitution. This was the corruption that the Fitzgerald inquiry focused on, while giving only a tantalising glimpse of the Drug Joke. By the time of the Wood commission, almost a decade later, the Drug Joke had become central to police corruption.” (p.201) (back)
10. Jiggens, The Killer Cop and the Murder of Donald Mackay, p.103. (back)
11. Jiggens, The Killer Cop and the Murder of Donald Mackay, p.81, p.84.
Black banks are “an import part of… clandestine trade, and the Nugan Hand Bank, like the Castle Bank before it and the Bank of Credit and Commerce International (BCCI) after it, formed an important part in this Cold War network.” When the Castle Bank — which was set up by “Paul Helliwell, a very senior CIA operative” — was investigated by the US Internal Revenue Service in the late 1970s, the CIA blocked the investigation. Subsequently, when the Castle Bank collapsed, the Australian-based Nugan Hand Bank quickly “acquir[ed] Latin American and European structures that had belonged to Castle Bank” and an array of board members from the US intelligence establishment: for example, the new legal counsel of the Bank was the former CIA Director, William Colby. (p.217-8) (back)
12. Jiggens, The Killer Cop and the Murder of Donald Mackay, p.104, p.105. (back)
13. Jiggens, The Killer Cop and the Murder of Donald Mackay, p.112. (back)
14. Jiggens, The Killer Cop and the Murder of Donald Mackay, p.126. (back)
15. Jiggens, The Killer Cop and the Murder of Donald Mackay, p.194.
Head of the Eastern Division of the CIA, Ted Shackley, played a key role in the November 1975 Pine Gap security crisis, which helped lead to the constitutional coup that led to the removal of Labor Prime Minister Gough Whitlam. (p.95) Thus it is noteworthy that Shackley “was very closely associated with Michael Hand… and nearly all the other Nugan Hand players.” (p.91)
Here it is important to point out that while it is widely alleged that Whitlam’s policies provided a serious threat to sanctity of intelligence agencies, in actual fact they did not pose such threat (although this was most likely misinterpreted by the CIA). Jim Jose writes: Whitlam accepted the necessity and desirability of agencies like the [Australian Security Intelligence Organisation] ASIO; he also accepted the assumption which legitimized these groups. Jim Jose, “The Whitlam Years: Illusion and Reality,” in Pat Flanagan (ed.), Big Brother or Democracy: The Case for the Abolition of ASIO(University of Adelaide, 1979), p.40. (back)
16. Tony Reeves, Mr Sin: The Abe Saffron Dossier (Allen & Unwin, 2007), p.84; Jiggens, The Killer Cop and the Murder of Donald Mackay, p.134.
Sir Peter Abeles “belonged to a powerful, right-wing émigré group which included Alexander Barton, Sir Paul Strasser and Sir Ivan Charody who were referred to as ‘the Hungarian Mafia‘ or as ‘Askin’s Knights’ because NSW premier, Sir Robert Askin knighted all of them.” (p.135) David Hickie writes that he was told that knighthoods could be brought “earlier in Askin’s reign at a… modest $20,000 a pop.” He then continues noting that “while such claims are hard to document… a $20,000 cheque from the chief executive of Boral Ltd, Sir Elton Griffin, turned up in the private bank account of Sir Robert Ask in at the time Griffin was knighted.” Boral is now “Australia’s largest building and construction materials supplier”. It is also interesting to note that Bernie Houghton — who played a key role in setting up the Nugan Hand Bank — arranged for Michael Hand to work with Sir Paul Strasser’s Parkes Corporation. Moreover, although little known, in 1969, the Australian Secret Intelligence Service (ASIS) “uncovered the involvement of Lennie [McPherson], Houghton and some NSW police in a massive people-smuggling operation. ASIS had mounted a ‘national security’ exercise to check on illegal immigrants as part of Australia’s Cold War paranoia about communists arriving by stealth and taking over the country. What they found was a massive trade in sex slaves, run by Sydney criminals and back by a local undercover agent of the CIA.” (For a critical analysis of the links between capitalism and modern-day slavery, see “Combating [Some] Slavery.”)
David Hickie, The Premier and the Prince, p.84; Tony Reeves, Mr Big: The True Story of Lennie McPherson and His Life of Crime (Allen & Unwin, 2005), p.152. (back)
17. Jiggens, The Killer Cop and the Murder of Donald Mackay, p.140, p.141, p.146. (back)
18. With regard to the Nugan Hand inquiry, Don Stewart, in his autobiography Recollections of an Unreasonable Man (Allen & Unwin, 2007), writes that it is “probably not the case” that they had CIA connections, adding: “Certainly there was no real evidence that it did.” (p.167) He then reaches the far-fetched conclusion that former CIA director, William Colby, “had been sought out to lend credibility to Nugan’s and Hand’s efforts to make people think they were close to power in the United States. In fact, this was not the case.” (p.172) (back)