GANGS MEAN BIG BUSINESS

Gangs have turned away from their traditional patch of turf wars and
violent crime to the lucrative business of drugs. GEOFF CUMMING investigates.

A shooting, molotov cocktails, rock-throwing, eyeballing - scenes in
Palmerston North in the past fortnight as Black Power and Mongrel Mob
members squared off, recall images from the 1970s and 1980s on the streets
of South Auckland, Moerewa, Porirua and Christchurch.

Leather-clad, patched gang members and their Harley Davidsons are still
part of the landscape in most sizeable New Zealand towns. Equally
entrenched are the associations with booze and drugs, intimidation,
burglaries and armed robberies.

But a falloff in confrontations, part of a calculated move by the gangs to
lower their profile, has led to a belief that tougher laws and better
policing have brought them to heel.

In fact, say frontline police, New Zealand's gang problem is worse than
ever - it's just that the nature of the problem has changed.

Gangs have turned their attention from traditional turf wars and violent
crime to the extremely lucrative business of manufacturing and distributing
methamphetamines, mainly speed.

In line with overseas trends, speed is rapidly overtaking cannabis as the
drug of choice of recreational users and gangs have cornered the market.

Gang stalwarts have traded leathers and patches for business suits and
clubbing gear to mingle with middle-class users.

Many own flash houses, fast cars and run businesses - sometimes legitimate,
often to launder profits from drugs.

Gangs that once were bitter enemies have forged nationwide links to
manufacture and distribute speed and share intelligence.

For the first time in New Zealand, we have real organised crime, say
police. And, through methamphetamines, the barriers between gangs and
mainstream society are breaking down.

Northland police chief Viv Rickard says more people than ever are
associated with gangs.

"The difference is we are not physically seeing the damage they are doing
every day in the newspaper or on television. But the effects of the gangs
are more prevalent than ever in terms of the byproducts of what they are
doing."

Those byproducts range from violence stemming from psychotic reactions to
the drugs, to job losses, prostitution, theft and other crimes committed by
addicts feeding $500-a-day habits.

Nine murders in New Zealand have been linked to methamphetamine trading
gone sour.

Police are reluctant to speculate on the lead-up to the Waitangi Day
killing in Palmerston North of 16-year-old Black Power prospect Wallace
Whatuira, which is the subject of an inquiry.

But they warn such disputes could again become common. The extent of gang
involvement in methamphetamine manufacturing and distribution raises the
risk of territorial battles as the market reaches saturation point.

"They are like any business looking to expand," says Detective Sergeant
Sonny Malaulau of the national organised crime unit. "You will always have
some form of conflict with the competition."

The soaring demand for methamphetamines in New Zealand is associated with
young, affluent clubbers who want to dance all night. Speed is seen as
safer and cheaper than other stimulants such as Ecstasy.

But drug squad detectives say its popularity is more widespread than the
dance club set. An undercover operation in Taupo in October exposed
businessmen, housewives and schoolchildren as users.

"People who have come from decent homes and nice neighbourhoods have now
been lured into the use of this drug in epidemic proportions," said the
head of the operation at the time.

Perceptions that speed is a less risky drug with few long-term consequences
are false, say police and health workers. Heightening their concern is the
increasing availability of extremely pure speed, known variously as ice,
crystal, burn or P. Gangs ban their own members from using it for fear they
will become unreliable.

The gangs' grip on the methamphetamine market follows a decade of police
restructuring and political campaigns to combat gang activities with
tougher laws.

Local authorities in 1997 began using powers to force gangs to tear down
walls and fortifications.

In 1998, the Harassment and Criminal Associations Act increased judges'
powers to impose non-association orders and to protect witnesses from
intimidation.

Under the 1991 Proceeds of Crimes Act, the Crown has seized more than $13
million from convicted drug offenders. The figure includes more than $1
million from Auckland chemist William Wallace, jailed for 10 years in 2000
for manufacturing methamphetamine.

But gangs have reacted by, for instance, renting, rather than owning,
headquarters and by becoming more covert in their activities.

In the past 18 months, police have made a series of multi-city raids to
break up major rings. But these busts have only exposed the size of the
drug problem and the extent of cooperation between gangs.

More resources are needed, say frontline police, particularly in Auckland
where they are now uncovering labs at the rate of one a week.

"If we had three times the number of staff working in this area it still
wouldn't be enough," said one detective.

Frustration over budgetary constraints was highlighted by the inquiry into
the December 2000 killing of Damian Povey at Kopu, near Thames. The
detective in charge, Mike Whitehead, threatened to quit the case because of
funding restrictions.

Lenient sentences that often follow police undercover work are causing
dismay. In one case, a hospital worker who stole enough pills to make up to
$2 million of speed was given 200 hours community service.

"There needs to be better awareness across all sectors of society of this
problem and sentences that reflect its seriousness," says Police
Association president Greg O'Connor.

Police want further law changes. A recommendation that methamphetamines be
reclassified under the Misuse of Drugs Act, allowing police to search
without a warrant, is before Associate Health Minister Tariana Turia.

Pressure is also growing for changes to the Proceeds of Crimes Act to place
the onus on suspects to prove their assets are lawfully obtained. But it's
hard not to conclude that gangs have become a law unto themselves.

The old-fashioned standoff between the Mongrel Mob and Black Power in
Palmerston North will be frowned on by motorcycle gangs such as the Hell's
Angels, which won't deal with gangs that attract police attention.

O'Connor says many gangs have codes of conduct and other systems in place
to avoid turf wars.

"They impose fines or taxes if someone is found to have offended against
another gang rather than go out and attack each other."

Some discipline members whose criminal activities draw a police spotlight.

"It gets in the way of business - and that business is making money from
drugs," says Detective Senior Sergeant Mike Wilkinson of Hastings.

Malaulau says traditional rivalries are breaking down as ethnic gangs
cooperate to distribute drugs - following the example of motorcycle gangs
like Hells Angels, Headhunters and Highway 61.

The Auckland Hell's Angels chapter has affiliations with up to 15 gangs
throughout the country to distribute drugs, he says.

Wilkinson says Hawkes Bay gangs are dividing into set areas of vice,
starting protection rackets and "taxing" systems. "The main driving force
is the finance behind the drug money."

Some have eased out of traditional activities like burglaries, car theft
and distribution of stolen property because of the lower risk and greater
profit margins in stimulants.

In Auckland, they have expanded from liquor outlets into nightclubs,
massage parlours and strip clubs to sell drugs and launder money.

"In the old days the ethnic gangs would be fighting it out on the streets
of South Auckland and Porirua," says Malaulau. "To a large degree now they
are cooperating on a business level. That's why we don't see too many of
these scraps out on the streets."

The developing links between gangs and middle-class drug users worry
frontline police who say they lack the resources to fight organised crime.

"The real gang activity is taking place behind the scenes and there's some
very big money being made," says O'Connor. "When these people start to
increase their sphere of influence into mainstream society, New Zealand has
a real problem."

O'Connor and others fear it will lead to more Mafia-style activity, ranging
from blackmail and extortion to murder. He cites chemists subjected to
standover tactics by gangs setting up laboratories to do a "bake" or a "cook."

Police head of crime Bill Bishop says the police found more than 40 labs
last year, compared with 19 in 2000 and "two or three a year" before then.

"The streets of New Zealand are awash with methamphetamines," says
O'Connor, "and the growth of methamphetamines and the growth of gangs are
synonymous."