GANGLAND POLICE INFORMER LEAK STARTS AUSTRALIAN CORRUPTION PROBE

The state of Victoria is bracing itself for an investigation with the
potential to expose corruption in its police force and reveal links to
organised crime and an underworld war that has claimed 26 lives.

Under intense pressure, a reluctant state Labor Government has appointed
Queens Counsel Tony Fitzgerald to inquire into the leaking of a
confidential police report detailing the activities of Melbourne gangland
informer Terrence Hodson, 56.

Hodson and his wife, Christine, both linked to leading gangland figures,
were murdered in their suburban home last month, allegedly soon after the
leaked document began circulating in the Melbourne underworld.

Fitzgerald's brief is limited to the leaked document at present, but
Premier Steve Bracks' resistance to a wider inquiry yesterday appeared to
be crumbling in the face of growing demands for a royal commission into
corruption.

Pressure has grown since the appointment of Fitzgerald, the man whose
238-day inquiry in the late 1980s brought down the previously unshakeable
Queensland Government of Sir Joh Bjelke-Petersen.

Fitzgerald's royal commission led to the jailing of prominent
Queenslanders, including police commissioner Terence Lewis, who was also
stripped of his knighthood.

Fitzgerald's report, ghost-written by journalist and author Margaret
Simons, ushered in a reforming Labor administration and led to the creation
of the corruption-busting Criminal Justice Commission and other measures.

Now charging A$5000 ($5620) a day in private practice, Fitzgerald was
appointed to the Victorian inquiry on the initiative of the State
Ombudsman, George Brouwer, who on Tuesday gained new corruption-busting
powers conferred because of the continuing saga of gangland killings and
police corruption.

These powers, including the ability to compel witnesses to give even
self-incriminating evidence and the right of search and seizure, will be
available to Fitzgerald.

The State Government has rejected calls for a wider inquiry or a royal
commission, saying such an investigation would endanger court cases already
being heard.

But yesterday, Bracks conceded that the Fitzgerald inquiry might lead to
much broader issues.

"If other matters are revealed and discovered in the process of his work,
that is good, that is excellent," he said.

"That's exactly why we want someone of his calibre, his expertise and his
track record."

Fitzgerald has been told to investigate the leaking to gangland figures of
a report that spelled out the activities of Hodson as a police informer,
and which was this week seen - but not retained - by the Australian
Broadcasting Corporation.

The killings of Hodson and his wife exposed direct links to corrupt police,
including two officers involved in his informing and who allegedly joined
Hodson to steal large amounts of drugs the day before a drug raid was to
take place.

Last year, Victorian police set up two separate taskforces to investigate
the gangland slayings that have eliminated some of the key figures of the
Melbourne underworld, and to probe police corruption after the exposure of
dirty cops and the disbanding of the state drug force.

But there have been increasing indications that the two inquiries are
covering much of the same ground, sparking calls for a royal commission
with wide powers of investigation.