Underbelly (23 page)

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.

On one side was Tom Domican, who arrived in Sydney from the United Kingdom where he had served time in jail on two occasions for ten months and then eighteen months for offences ranging from theft of motor cars, burglaries, break and enters, driving without a licence, having an unlicensed pistol and being in breach of a probation order. He also did time for theft of a motor vehicle.

In Australia he was convicted of minor breaches before
being jailed for fourteen years for crimes of violence. The conviction was overturned on appeal.

Then chief superintendent Ken Moroney told the ICAC that Domican had been of considerable interest to police in relation to serious matters for a number of years.

‘It is my understanding, and I'm sure the understanding of my senior colleagues, that his associations extended to and within the criminal underworld, particularly within the Sydney metropolitan area.' Moroney said.

The drug dealing, intimidation and general race to get the next dollar eventually became so intense at the Cross that egos and ambitions of various people collided and things became threatening.

It started with the emergence of a new drug dealer on the scene, Robert Daher, who rose suddenly from being a doorman at the Love Machine nightclub to running the Pink Panther and its drug distribution network with a few known Kings Cross faces.

Haken says he was approached by another officer, Malcolm Bigg, with an offer to share $300 a week from Daher as protection money for his new operation. Already being paid by Billy Bayeh to overlook his drug-selling operations, Haken accepted the new deal after assurances the two deals were mutually exclusive.

Assurances are a fragile currency at the Cross. Daher's people took over the Budget Inn above the Pink Panther nightclub and started their racket. The supposedly harmonious blending of two drug selling outlets did not last long.

Despite Daher's agreement with corrupt Kings Cross police, his premises were raided by officers from a drug
unit outside the Kings Cross region – a drug unit that allegedly had a close relationship with Billie Bayeh.

The payback came when Daher had a man plant drugs in Bayeh's nightclub, Lasers, on a night when co-incidentally Haken and Bigg were both off duty. With the drugs planted, Daher arranged a phone call to Kings Cross station with a tip about where the stash could be found. With Haken and Bigg not around to run interference and no chance of diverting the hastily-arranged raid, the drugs were discovered.

Reactions were predictable. Louie Bayeh, as the principal standover man in the Cross, was responsible for the protection of his little brother Billy's nightclubs and drug centres and was incensed by Daher's audacity. So he gave Daher the mother of all hidings outside the Majestic Coffee Lounge to publicly avenge the loss of face the drug raid had caused him. Commission witness KX11, who went on to serve a jail sentence on a drug charge, would give evidence that Louie pulled a gun at one stage.

The fracas resulted from increasing tension as weekly turnover from Daher's drug-selling outlet at the Budget Hotel grew to $40,000, rivalling the figures Billy Bayeh was generating at his nearby outlet.

KX11 said that before the shooting Billy Bayeh's guard dog Sam Ibrahim had warned him that the Budget Hotel turnover was getting too big. ‘He said Billy's getting a bit upset,' KX11 testified.

‘I was up at the Pink Pussy Cat (another drug selling nightclub which KX11 also ran) and he (Ibrahim) said: “You and your boys fuck off from the Cross. You're not wanted here no more.”

‘I said: “I'm not going anywhere.”

‘Then all of the people started crowding around us and Assif Dib started swearing at Louie and Louie pulled a gun out on him. Assif took off through the back door.'

Gunplay in the Cross raised the stakes dramatically. The same day, Louie's home in peaceful Ermington in western Sydney was sprayed with bullets in a drive-by shooting. Louie's wife and children were in the house at the time. Bullets tore through the walls and windows but no one was hurt.

The attack was poorly received by police and other gangsters as it broke the previously observed tradition of families being sacrosanct no matter how fierce battles between criminals became. Strangely, Bayeh went public with the dispute, claiming police had done the shooting. But the police already had their suspects and the Royal Commission was told the men responsible were Daher's men, Norman Korbage and Assif Dib.

Peace talks were arranged as both sides started to worry about what might happen next. Dib and Korbage, who is now dead, refused a suggestion to meet with Louie Bayeh at his house for fear they would be shot dead by either henchmen or by police, who had the house under surveillance. Daher finally approached Haken and Bigg, offering $5000 to have his men Korbage and Dib arrested to ensure they stayed alive and were not loaded up with false evidence.