ORGANISED CRIME: THE EVIL ECONOMY

THE HEROIN CAME FROM THE GOLDEN TRIANGLE, hidden in a specific-purpose
vessel - the Belize-registered freighter Uniana. The deal had been
organised by Chinese Thad groups operating out of Hong Kong. They would get
the drugs onto a beach on the NSW North Coast, where Australian-based Triad
affiliates would take over, arranging distribution to yet other affiliated
groups down the chain and around the nation.

Australian Federal Police Commissioner Mick Palmer is chuffed with the
results of last week's operation - 400 kilograms of heroin seized, a
sophisticated mothership impounded and 18 arrests effected, with more to
come. Yet he is also a realist. "Australia is a ripe market," he says.
"There is no question highly organised crime groups are here. They are here
for the money. That shipment was meant for sale, not stockpile. They will
try again."

It begins in the home. First there is the missing change. The portable
radio is lost. Then, the neverending demand for more money. What began as
recreational drug use is now a full-blown habit and another young
Australian has become a victim of - and link in - the organised crime chain.

There is hardly an Australian family that has not directly, or through
friends or relatives, watched a loved ore turn to crime to support a drug
addiction. First they steal from family, then from friends, neighbours, and
the wider community.

Chemical dependency is the reason security guards now protect the suburban
pharmacy and newsagent. It is the reason pensioners in the well-off suburbs
fear break-ins and purse snatchings, why automatic teller machines
everywhere have become targets. Drugs and the crime they spawn are no
longer something that happens to someone else, somewhere else. Every city,
suburb and country town is affected. The hopeless junkie rummaging through
your bedroom is as likely to be the doctor's son from up the road as a
desperado from the city's mean streets.

According to figures from the University of NSW, drug-related property
crime costs the community $1.6 billion a year, and rising. The number of
armed robberies is also rising alarmingly - from banks to service stations
to home invasions. Behind this crime wave is drugs, and behind the drugs is
organised crime. In Australia it is a $9 billion-a-year industry, and it
attracts all the major international players.

In Queensland, the Japanese Yakuza invest in high-rise property. In Western
Australia, crime figures connected to United States and Italian Mafia
families land a multi-million-dollar hashish shipment and truck it east.
Kilograms of heroin are smuggled through Sydney Customs and distributed
through Chinatowns nationwide. Meanwhile, another crate of stolen
Harley-Davidson motorcycles is shipped to outlaw US bike gangs by their
Australian brothers, an Asian tourist connected to the Singapore-based Sing
Mah fraternity carries a package of blank credit cards through Brisbane
Airport, and a group of teenage Thai girls disembark at Sydney, where they
will join an illegal travelling brothel. In western Sydney, Vietnamese gang
members organise who will collect the week's protection money while others
travel to Melbourne for a series of kidnappings and home invasions.

Tax-free: The tax-free contribution of $9 billion-pius a year to
international crime coffers is broken down as: $3.5 billion
(conservatively) from heroin; $1 billion from other drugs; $34 billion from
copyright, credit card, other fraud and money laundering - and $1 billion
through gambling, prostitution, protection rackets and ancillary organised
criminal activities. In contrast, the annual amount spent on the entire
Australian criminal justice system - state and federal police, customs and
other law enforcement agencies, courts and prisons is $6.4 billion. The
National Crime Authority, established in 1984 to co-ordinate and lead the
fight against organised crime, has a staff of 400 and an annual budget of
less than $40 million.

Australia's value to organised crime goes deeper than its profit base. It
is regarded as a safe haven - a place for Yakuza gangsters, Triad big
brothers and Mafia capi to enjoy a spot of rest and recreation while they
visit affiliates, organise enterprises and launder dirty money through
property ventures and legal casinos.

Law enforcement agencies are fighting a rearguard action against organised
crime, their efforts diluted by inter-agency rivalry and the logistical
difficulties inherent in challenging the diverse and secretive criminal
structure. Each state has its own intelligence branch that collects data on
criminal activities, while the Australian Federal Police strategic
intelligence branch, Australian Bureau of Criminal Intelligence and the
Office of Strategic Criminal Assessment collate data on a national level.
The NCA, AFP and customs all have national responsibilities, while each
state operates a drug enforcement agency and/or major crime commission.

Sources say this system is too cumbersome. According to one senior police
intelligence officer who asked not to be named, "There is little sharing of
information and a lot of competition for resources. There is little
co-ordinated effort. The crooks understand 'divide and conquer' - they know
the various agencies compete against each other and they play on that.
Occasionally they will sacrifice somebody to generate some good press for
the law and keep everyone sweet. Most busts you hear about are often the
result of tip-offs rather than good intelligence or detective work."

Wasted: Debate also rages over whether resources are being wasted fighting
drug crime. Lisa Maher, from the national Drug and Alcohol Research Centre
at the University of NSW, believes drug prohibition has failed: "The
current system isn't working. The more you press down on street-level drug
crime, the more crime you get," she says. "Our research shows addicts
commit $1.6 billion in property crime a year. In addition, 600 addicts are
dying each year - almost two a day - from overdoses. I am not in favour of
anything that makes drugs more available, but prohibition hasn't stopped
anyone taking drugs; in fact the price of heroin has dropped from $40 a .03
gram cap in 1995 to $20 today. The heroin trial was a missed opportunity
[state and federal politicians vetoed a proposal to provide prescribed
heroin to 40 Canberra addicts in an effort to break their cycle of
addiction and crime]. The trial would have given us empirical evidence and
insight into community outcomes, personal health outcomes and market
outcomes. We were not allowed to try and now we will never know."

(Unfortunately, the heroin trial was doomed to fail; the US was furious
when Australia mooted the idea, and sources have told The Bulletin that
local politicians and diplomats were fearful Washington would impose trade,
diplomatic and military sanctions if the trial proceeded.)

Just as six o'clock closing fuelled the growth of organised crime in the
1920s through the spread of sly grog shops, many argue that prohibition has
encouraged the spread of heroin addiction since the '70s. Former Queensland
police officer Mike Enders, a lecturer in law enforcement at Charles Sturt
University in NSW argues decriminalisation is a viable alternative. He says
the Western world's "war on drugs" is largely posturing. "It is a myth that
the United States and other Western governments are waging war on organised
crime and drugs. The rhetoric has it that the US will pursue drug barons,
but the reality is that the CIA is supporting South-East Asian drug lords
because they are anti-Communist.

Flawed: "Australia's position is equally flawed. Australian police largely
focus their efforts on street crime, hammering the bottom out of the
system, and rarely, if ever, get close to the Mr Bigs or Mr Big Enoughs.
The proposed heroin trial was more of a threat to organised crime than any
police action, because by decriminalising heroin you instantly pull the rug
on a large percentage of organised crime's profit base. You also make
heroin is a health issue instead of a law enforcement issue, freeing up
police resources."

There is no doubt police resources are stretched. Organised crime groups
have the advantage, and are now moving to cement their hold on the
potentially highly profitable area of high-tech fraud, especially E-fraud
(electronic fraud). The global nature of communications systems such as the
Internet presents enormous difficulties for law enforcement. How do you
pursue the perpetrators of an E-fraud when their office is in cyberspace?

And new players are poised to enter the game in Australia. The
"violence-prone groups profile" prepared by local intelligence and security
organisations lists 23 international extremist political or religious
groups with a presence in Australia. These include the IRA, the Sri Lankan
Liberation Tigers of Tamil Eelam and Islamic resistance movement HAMAS.

Like their counterparts in organised crime, these groups use Australia for
R&R. They also recruit and raise funds here. What concerns law enforcement
agencies is that some of these groups may turn bad. Enders believes
Australia is facing a growth in the number of organised crime groups
operating on Australian soil. "Political groups use crime to fund their
struggle," he says. "When that struggle is won or lost, elements of the
organisation invariably continue as an organised crime group. Many
terrorist and fringe political groups already have a presence here."

Peter Edwards, manager of the ABCI's intelligence branch, agrees crime
group structures are becoming more complex. "The impact of organised crime
on Australia is affected by new technologies and changing domestic and
international social structures," he says.

NCA chairman John Broome admits the fight is difficult, perhaps even
unwinnable. "We are up against a large mountain with a pretty small
shovel," he says. "Clearly we are not stopping drugs-no one is - and each
kilo of heroin that hits Australia results in a lot of lives being screwed
up. Organised crime is not harmless. It brings with it increased risks of
personal threat and threat to society as a whole. And it isn't just about
who nicked Mrs Smith's video - organised crime inevitably has widespread
social consequences and undermines social cohesion. It leads to corruption
and double standards. The rock has to be turned over."

Money trail: "We are doing better now than we were five years ago. The
fight against organised crime is not necessarily about locking people up.
Crooks don't do crime because they are inherently evil, they do it because
they want to make a great deal of money. The best way to catch them is to
follow the money trail and instil a fear factor - increase the perception
that there is a risk.

Checked-by: Mike Gogulski