Underbelly (40 page)

The black comedy just got worse, according to the same source. Stand-in strapper Tommaso Di Luzio was despatched to Coffs Harbour to pick up Bold Personality. But Di Luzio reportedly left the horse sweltering in a heavy rug for the hot six-hour float trip north, ensuring it arrived in Queensland distressed, severely dehydrated and in no condition to race.

Panicky, Haitana decided to drench the horse to overcome the dehydration but while he went to find the necessary gear, some ‘helper' stupidly forced a tube down the horse's nostrils, causing it to bleed.

In a scene a sitcom writer could hardly make up, the bumbling crew attempted to dye Bold Personality's coat to make it look more like Fine Cotton. Clairol hair colouring failed and whitewash wouldn't stick to the horse hair.

In desperation, they spray painted white socks on him. In the end, the horse was such a mess that Haitana bandaged its legs to cover them and hoped for the best. It was ridiculous, and doomed to failure, but he didn't fancy the alternative. Even after he and con man John Gillespie were jailed over the scam, and other associates were warned off racing for life, they never blew the whistle on the masterminds they tacitly implied were behind it.

Persistent allegations that Robbie and Bill Waterhouse were behind the Fine Cotton ring-in surfaced within days. Both Waterhouses denied planning the sting but could not
deny heavy betting on Fine Cotton and were subsequently outed for life. Fingers were pointed at racing and public officials, politicians and police – even a Catholic priest, Father Edward O'Dwyer, who was sprung leading a plunge on Fine Cotton at Kempsey dog races.

Stripped of his licence when warned off after the Fine Cotton scandal, in 1989 Robbie Waterhouse informed the Australian Jockey Club he ‘did not seek to dispute' its findings about his involvement and expressed ‘remorse'. In 1992, he was sentenced to eight months of weekend detention for lying to the Racing Appeals Tribunal over the ring-in.

In 1998 he was allowed back onto racecourses and in 2001, after an orchestrated lobbying campaign, he was handed back his bookmaker's licence, a move cheered by boosters and jeered by those with long memories. But it came at a cost: in the meantime his family had publicly torn itself apart in a feud that began over the Fine Cotton debacle.

THE Waterhouses are bold personalities, but not brave ones.

One advantage of the best private-school education money can buy is that since the days when their forebears ran cockfights, sly-grog and waterfront rackets, they've rarely got blood on their own manicured hands.

So, on the morning Robbie Waterhouse dealt his brother David the blow that has plunged the family into the vendetta now threatening to destroy it, he used a telephone, not a dagger.

But the wound went deep, and the public airing of the feud made sure it would not heal for years. Perhaps ever.

The call from Robbie came early on 21 September, 1992, from the house with the million-dollar harbour view in Clifton Gardens that he shares with his wife, the fashionable horse trainer Gai Waterhouse, sometime actor and only daughter of the late champion trainer T.J. Smith.

What his elder brother said that morning devastated David. Just how much was revealed three years later, on the fourth day of the Australian Jockey Club hearing into Robbie Waterhouse's application to be allowed back onto racecourses, when the tall man let slip his deadpan mask for a few minutes after hours of tough questioning by Robbie's counsel, Frank McAlary QC.

David's unblinking croupier's eyes, which had gazed without expression somewhere above the committeemen's heads all day as the barrister blustered and bullied, flashed as he recalled a conversation that seems to be seared into what his associates describe as a photographic memory. The soft voice, so often hard to hear, was painfully clear to everyone in the room.

‘Robbie said, ‘You have no redeeming features. Get out of our lives and get on with your own life.'

‘I said to him, ‘What about the money I've loaned you?' He then said to me: ‘We have just used you'.'

The hearing was hushed. Either this was a painful insight into a man's heart and a family feud, or David Waterhouse is a brilliant dramatic actor. A profession for which, some might say, his family has both the looks and natural aptitude.

Earlier, the lean man with the patrician profile and tortoise-shell glasses had told the hearing he'd lent Robbie $220,000 and their father, Bill Waterhouse, similarly large sums to cover betting debts and legal costs between the Fine Cotton scandal of 1984 and a marathon court case in 1989-1990 (when another branch of the family sued for a share of the multi-million dollar Waterhouse estate).

David, odd-man-out of the three children of ‘Big Bill' Waterhouse and Suzanne, the former dental nurse he married twice, was never quite the colourful racing identity his father and brother became.

He once tried bookmaking, was a successful professional punter for a while, sharing the Waterhouse taste for gambling, but he turned also to art collecting and the world outside the race track.

When Robbie and his parents turned their backs on David – apparently dismissing him as an accident-prone nuisance – it seems they under-estimated the bitterness of his reaction.

For once, in a family that for generations had done much for gain something meant more than money. Here, among the skyscrapers of tinsel town, was the ancient story of betrayal of brother by brother.

Cain and Abel in Zegna suits.

ACCORDING to a close friend, David Waterhouse was ‘in shock' after his brother's rebuff. The friend (afraid of being identified ‘because the family are very spiteful people') says David had to fly to a country race meeting later on the day he took Robbie's call. He rang his wife, Jeanette, from
Bankstown airport, and said, close to tears: ‘This is it. I'm finished with them. I'm so glad I've got you.'

At that point, the relationship with his father and brother could have been patched up, Jeanette later told friends. But, to David's disappointment, no member of his family contacted him – not even his mother, whom he'd taken on a long trip to Europe some time before, and supported in her strange, fractured marriage to his father. She had famously tolerated the fact that after re-marrying her following a lengthy separation, Bill had maintained his Thai ‘mistress'.

The story is that David has seen Robbie only twice since the telephone call and was fobbed off both times when he asked for payment of the debt. He hasn't spoken to his father since 1992.

Meanwhile, David was concerned because he suspected his father and brother were selling off assets that were part of a family trust set up in 1962, in which he has an equal third share with Robbie and their sister, Louise Raedler Waterhouse.

The reasons for the family feud spilling into the AJC committee room at Randwick in the mid-1990s go back to the ring-in scandal of 1984. After Fine Cotton, the Waterhouses' intriguing web of finances and business interests – from Fijian betting shops to Swiss bank accounts and suburban pubs – started to unravel. And so did the family loyalty they'd once prized.

They had problems. Warned off every racecourse in the world, Bill and Robbie weren't able to operate as licensed bookmakers, choking off a cash supply. Their assets were
frozen for several years pending the court case brought in 1989 by Martin Waterhouse, the son of Bill's brother, Charles, who died in 1954. Then, after paying huge legal fees, Bill and his former bookmaker brother Jack had to settle assets worth millions on Martin, his two brothers, sister and their mother.

The result: Bill and Robbie Waterhouse were two-time losers and, by millionaire standards, short of ready money. They had (and still have) the trappings of wealth: harbour-side homes, luxury cars and overseas trips. But when David asked for his money, they brushed him off.

It may well have been their biggest mistake since Fine Cotton.

THE festering dispute was brought to a head, according to David's version of events, after publication in 1990 of a book called
The Gambling Man
, nominally written by Kevin Perkins but allegedly produced by Bill Waterhouse, who in 2009 would produce another questionable piece of biography.

The Perkins book led to defamation actions, and David was incensed when his father and brother implicated him in these by alleging he was a co-author.

It was this, David claims, that prompted him to swear affidavits about the alleged extent of Robbie's involvement in the Fine Cotton case, an action which made him star witness at the Australian Jockey Club hearing into whether Robbie should be re-licensed.

In the affidavits, and in the AJC hearing, David painted a vivid picture of his brother detailing his part in the ring-in
as the pair walked the streets outside Robbie's house in September, 1984.

‘There were just the two of us,' David told the hearing.

He said Robbie had told him: ‘I paid all the expenses except for the horse. Gary Clarke (an associate) has been the front for me at the Brisbane end. I have nothing to fear if everyone stays solid.' Robbie had allegedly added he'd ‘planned the ring-in before he went to England for the Derby' in June that year.

David said he had lent his father $300,000 soon after the ring-in, money he says was needed to help pay punting debts of almost $1 million plunged on the Fine Cotton ring-in. He said Bill told him two days after the race: ‘We could have made millions if it had come off.'

David, to use his brother's alleged phrase, ‘stayed solid' for ten years. The first sign that the estranged brother and son would turn against his family came when his solicitor arrived at the Waterhouses' North Sydney office in mid-1995 with a message that David had ‘a hot affidavit' naming Robbie as organiser of the Fine Cotton affair.

The deal was that David would sign and file the affidavits unless certain conditions were met.

But what were they?

Louise Raedler Waterhouse, an elegant, fine-boned woman with a sleek bob of dark hair, sat at her brother Robbie's side throughout the hearing, and clearly supported him. She testified that the solicitor relayed a demand for $1.5 million – and the message that if it wasn't paid David would present the affidavit to the authorities.

But David swore that he asked only to be taken out of the defamation proceedings. Asked earlier about his sister's testimony, he dismissed it as ‘creative accounting'. He confirmed seeking $3 million through the courts from the family trust, but denied the affidavit was an attempt to ‘blackmail' his family into paying up early.

Either way, Bill Waterhouse's reported response to the offer was blunt. Asked what her father had said, Louise answered delicately: ‘He said David could go and get something-ed. He used a rude word. My father is old-fashioned in some ways. It is the first time I have heard him say that word.'

If Bill Waterhouse thought he could bluff his youngest son, he was wrong. David had found the nerve to get blood on his hands.

THE younger Waterhouses are Sydney's Kennedys. Handsome, clever, well-educated and well-dressed – but unable to shake off the shadow of bootlegging forebears and the suggestion that under the glossy exteriors are people who take shortcuts to get what they want.

To see Robbie Waterhouse squirm around the Fine Cotton accusation reminded a watcher of another pretty boy who once had the world at his feet: the late Teddy Kennedy, skewered by Chappaquiddick. In both cases, neither man could allow himself a straight answer.

The truth is, there is an element of voyeurism in the spectacle of a wealthy, well-known family destroying itself. It's like watching a car crash in slow motion. A sense of grim satisfaction filtered from many onlookers in the AJC hearing room where the drama unfolded at the end of 1995.

If he sensed any antipathy, Robbie didn't let it show.

His charm is legendary, his voice smooth, his smile quick. One of his in-laws says he studies books on how to project the right body language – to come across as plausible and frank without making any damning admissions.

He drew well in the genetic lottery; at 41 his boyish good looks and dark hair made him look years younger. In 2009, the hair was grey but he still had the looks inherited by son Tom (also a brash young bookie) and daughter Kate, one of racing's best-known public faces.

The diminutive nickname ‘Robbie' indicates a parental favourite, and hints misleadingly at a softness that few detect in the character of the eldest son of the most ruthless bookmaker in Australian racing's chequered history.

If there is a fault, he looks slightly effete, far more like his small, fine-boned and once-beautiful mother than his stout and imperious father. But Robbie inherited his father's calculating mind, the mind that took a shady publican and small-time bookie's son through law in the 1940s – when other young men were fighting a war – then from the bar table to the betting ring, fame and fortune.

THE Waterhouse history would make a television serial, a sweeping saga of a family on the make, rolling on from the Rum Corps for six generations.

In fact, part of the family history has already become fiction. There is a story – so often repeated in newspapers and at least two books since the 1950s, that it passes as fact – that the Waterhouses are descended from an officer and gentleman, a Lieutenant or Captain Henry Waterhouse,
who arrived with the First Fleet in 1788, and later helped John Macarthur import the first merino sheep.

There was an officer called Henry Waterhouse in the First Fleet, who went home and later returned with the Third Fleet. But a genealogy expert commissioned by Bill Waterhouse in the 1960s to track down this socially-desirable connection wrote a 12-page report stating that after ‘rather exhaustive research … my conclusion is that no legitimate relationship exists to Captain Waterhouse'.

The captain fathered one daughter, Maria, who died childless in England in 1875. The expert stated the racing Waterhouses' real ancestor was one Thomas Waterhouse, an apprentice carpenter at Darling Harbour in 1828, and son of a Windsor farmer of obscure origins.