Leviathan (54 page)

Prostitution likewise had been boosted by the war. The area around Palmer Street in East Sydney, informally zoned for brothel-keeping by the tacit consensus of police, public and government, soon exhibited a fantastic scene of industrial-age whoring. Hundreds of US servicemen queued outside hastily organised establishments, with MPs detailed to keep lines moving, and special clubs for Negro soldiers. One of these last, the Booker T Washington Club, created special problems for Sydney police; once word got out that black servicemen were paying double the going rates, East Sydney was inundated with women and girls – married, unmarried, some as young as fifteen and many from country areas – all keen to cash in. Confronted with the failure of the Brisbane vice trade to match Sydney's efforts, Prime Minister John Curtin authorised discreet approaches to underworld figures involved in Thommo's two-up school. Soon, writes Hickie, a trainload of ‘warm, attractive females eager to assist the national war effort' was on its way north, with the women's tickets and a low weekly retainer paid for by the government.

Such playfulness was not long to characterise Sydney's vice trade, however. Despite an aversion amongst some status-conscious crims for ‘living off the earnings' – a distaste with a solid basis in pragmatism given heavy jail terms for pimping – the exploding profits of the sex trade during and after the war attracted the city's gunmen and organised crime figures. These profits were not simply a matter of increased activity in the sex trade. A fundamental restructuring of prostitution from a freelance individual pursuit in the nineteenth century to a mass market service industry in the mid-twentieth century massively increased the profits available. Ironically, the cause of this restructuring was a series of laws, such as the Police Offences Amendment Bill of 1908, passed by socially conservative governments who claimed to be leading a moral backlash against vice. But by empowering the police to harass and persecute small-time street level operators, the God botherers simply laid the basis for a takeover by syndicated criminal groups which could organise the trade to be less visible but much larger and more lucrative. Thousands of street walkers were forced into the employ of brothel owners who concentrated their operations in East Sydney and Darlinghurst. Temperance legislation, the early closing laws, provided another income stream as did moves against narcotics in the 1920s. Cocaine was a popular drug amongst prostitutes and it had the added advantage for their controllers that, once addicted, the women would work for overpriced drugs, not money. This echoed the lament of Governors Hunter and Bligh that labourers who had become enslaved to alcohol would work punishing hours for a bottle of spirits which they would consume in a day, rather than taking their pay in grain by which they could support their families for a week.

Judith Allen, who analysed the shift of prostitution from cottage industry to mass production in Kay Daniels'
So Much Hard Work
, characterised the industry as just that, an industry, subject to the same laws and forces as any other. Brothel keepers like Tilly Devine and Kate Leigh were simply capitalists, literally extorting the surplus value of their workers' labour. Encouraging demand for cocaine amongst prostitute employees, writes Allen, could be seen as just another strategy in the more longstanding and central underworld endeavour to appropriate an ever greater share of the profits from this immensely lucrative field. However, as Allen points out, because the coke trade played an ‘internal function among underworld employees', unlike the popular vices of prostitution itself or sly grogging or off-track betting, it did not have the support required to withstand an assault from the state. That attack came when the violent struggle for control of the market, a battle popularly known as the razor gang wars, spun out of control. The multiple slashings were bad enough but when industry principals began placing hidden snipers atop buildings in Darlinghurst, even the Sydney police could no longer stand by. They crushed the trade with repressive consorting laws and aggressive policing.

While narcotics were driven from the sex industry, there was no change in the structure of that industry. The production line system of the brothels was still much more profitable for the criminals who controlled them than returning to the disorganised methods of the previous century. It also meant that with the return of affluence occasioned by the Second World War and the arrival of cashed up American soldiers, there was a system in place ready for massive expansion. Twenty years later another war, this time in Vietnam, would provide a similar growth impetus. But it would also mark a revolutionary and violent change in the underworld.

 

On the 28 May 1968 a Maltese man called Joe Borg turned the ignition key in his Holden ute and was just about ripped in half by the detonation of a nine-stick gelignite bomb. His right leg was severed and his car turned into a tangled heap of smoking metal. The attack was an opening salvo in the savage shake-up of the Darlinghurst vice rackets. Borg, sometimes tagged the King of Palmer Street, had been running girls from a stable of twenty houses in the labyrinthine laneways of the Doors area. Police estimated he was taking in $8000 to $10 000 per week at the time of his death. An orgy of beatings, stabbings, shootings and fire-bombings quickly followed, with even the veteran ‘colourful identity' Tilly Devine burned out of her Palmer Street terrace. One of Borg's associates was car-bombed in Malta after fleeing there. The demise of Borg's contemporary, Stewart Johnny Regan, was even more illustrative of the anarchic feuding. Regan was running a string of girls and standing over a number of the city's SP bookies and illegal casinos when he inexplicably allowed himself to be lured to a killing ground in Marrickville. Trapped in Chapel Street, between a foundry and the Marrickville Infants' School, without his customary four bodyguards, Regan was dropped from behind by a single shot to the back. Three gunmen drove a patchily painted white car up to the dying hoodlum, alighted and popped another seven bullets into him.

What Regan and the other wanna-be vice lords who lost their lives failed to take into account was that there was already a gang of standover men operating in Sydney. They carried their weapons legally and enjoyed the atomic-powered advantage of legal sanction – problematic competitors could be loaded up or even murdered ‘legitimately' in the course of an arrest. The gang which emerged as the heaviest, most ruthless criminal outfit in the city after the Second World War was not the mafia or the triads but the police force itself, and specifically the Criminal Investigations Branch. The accepted wisdom about Regan's death is that it was a police-inspired execution, carried out with police revolvers and organised by the legendary detective Ray ‘the Gunner' Kelly, whom we first met beating seven kinds of hell out of Newtown anti-eviction protesters. Kelly had put his massive frame and hardened heart to good use in the intervening years. Working his way up through the CIB, he was appointed head of the prestigious Safe-Breaking Squad in the early 1950s – safe-crackers being considered the top of the criminal tree in those pre-narcotic days. In this position, Kelly created a fearsome reputation for himself, running down, and sometimes killing, some of Sydney's most infamous criminals – Darcy Dugan, Chow Hayes, James Hackett and Ronald Ryan among them. He also rose, along with his confederate bent copper, Frederick ‘Froggy' Krahe, into a controlling position in the Sydney rackets.

Most observers agree the 1950s and 1960s saw the real flowering of police corruption in Sydney. McCoy, comparing the city with New York, Hong Kong and Marseilles, posited a five-stage growth cycle for corruption in police services culminating in criminal entrepreneurship on the part of police in stage four, and total syndication of all organised crime under a tight group of senior police officers in stage five. Though McCoy believes Sydney never made it to join Hong Kong in stage five, he was on firm ground in asserting that by the late 1970s the city's police were firmly locked into stage four – criminal entrepreneurship.

A snapshot of the transition from stage three – accepting regular retainers in exchange for failing to enforce the law – to four exists in a 1965 hearing of the bankruptcy court. The case, reported by Hickie, involved Aileen Donaldson, a Darlinghurst madam who was trying to conceal her interest in a number of brothels. The court was told that girls working the area commonly handed over substantial amounts to local police for the privilege of suffering only one arrest per week – stage three corruption in its pure form. But the court also heard allegations that the head of the Darlinghurst Vice Squad, Detective-Sergeant Harry Giles, had gone further, entering into a silent partnership with Donaldson in a Palmer Street brothel which he protected while police action drove other operators out of business. Giles's denials had suffered when his embittered wife filed for divorce, claiming he had lied about his relations with Donaldson and that his safe at home had at one stage held £10 500.

Froggy Krahe personified the commercialisation of official corruption. Celebrated as the king of the crooked cops, Krahe was described by one contemporary as ‘a big brooding bastard with an aura of power and evil about him'. In photos he presents as an archetypal heavy-drinking, hard-charging blood-and-guts horror pig, which he was, with his eyes narrowed to slits and sandblasted skin folding around craggy features. Krahe was a stage four man through and through. His involvement in prostitution was just a one line item on an impressive portfolio of corrupt business dealings. With Gunner Kelly, Krahe ran Sydney's underworld as a personal fiefdom, raking in profits from abortion rackets, bribery, and ‘green lighted' armed robberies. In 1970 he and Kelly even took a progressive interest in the emerging narcotics trade, reputedly leading to the death of their heir apparent, Superintendent Don Fergusson, who is supposed to have killed himself rather than follow his mentors over the abyss.

It was Krahe's connection with the sex industry that brought him undone. The first thread was pulled in 1971, when a prostitute named Shirley Brifman was charged with procuring a fourteen-year-old girl for the purposes of prostitution. Brifman was understandably pissed off – her weekly payments to the vice squad were insurance premiums taken out against just such an eventuality. She retaliated with a sixty-four page statutory declaration, circulated to both the police hierarchy and the press, detailing the business arrangements of her sometime lover and premier police contact, Fred Krahe. It was all there: regular payments to avoid prosecution and to keep the gunnies away, counterfeiting scams, partying with Shirley's hookers and planning robberies whilst at her premises (apparently Krahe had an arrangement with Brisbane detectives to exchange teams of crims for jobs on each other's turf). Fred's health took a dive, allowing him to retire ‘medically unfit' in 1972. Brifman was not long to savour her revenge though. Realising the enormity of her sin, she fled north to escape. According to CIB legend, or myth if you will, Krahe tracked her down in March and, together with a Queensland police officer, forced a lethal dose of pills down her throat with a tube.

Krahe's career is worth studying as a metaphor of corruption. He joined a comparatively clean force in 1940 and progressed through the ranks as it mutated into a subterranean paracriminal fraternity by the 1970s; stage one to four in thirty-odd years. Krahe worked his way to prominence by sheer ability; as a CIB detective he broke some of Sydney's biggest cases – the thallium rat-poison murders and the ‘bodyless' homicide of widow Phyllis Page among them. This was Krahe's Janus face, the mask which allowed him to foster his dark side. He was a genuinely good cop. According to Hickie he inspired such fear in the underworld that not even high-stepping crims like Chow Hayes or Darcy Dugan dared call him anything other than Mr Krahe. He ruled over them and they knew it. But in the anarchic expanding economy of the postwar city, such power was not long to stay within bounds. Krahe slid from curbing crime to managing and then promoting it. He personified the shift to criminal entrepreneurship. Even out of the force, and almost up to his death in 1981, he remained a figure of influence. In 1976 Sydney journalists Tony Reeves and Barry Ward raised his name in connection with the murder of Juanita Neilsen, the department store heiress and publisher of an independent community newspaper which bitterly opposed Frank Theeman's attempt to seize Victoria Street. They claimed Krahe had been one of three men to lure Neilsen to a motel in Kings Cross, where her throat was slit, her body dismembered and the remains fed down a garbage disposal unit. Krahe even figured in the collapse of the fantastically deviant Nugan Hand bank, being named in Parliament for intimidating the bank's auditors and organising bogus shareholders to oust those same auditors at an extraordinary general meeting.

The real engine of police and political corruption in Sydney was gambling which, like sly-grogging and prostitution, waxed fat on the rush of wartime spending. Not that it wasn't already entrenched. Thommo's famous two-up school had been roaring along since its inception in 1910. Just after the First World War its principal, George Guest (his ring name as a boxer had been Thomas, hence Thommo's), was thought to be pulling down £6000 a day. Of the three victimless crimes, gambling probably had the widest acceptance and the least social stigma attached to it. You get a sense of the importance of gambling in the city's democratic culture in a profile of Thommo's patrons published in the
Bulletin
in 1979.

Thommo's was a floating school and moved as token police raids required. Lit by naked, swinging lightbulbs, choked by a fug of smoke and sweat, men of all classes stomped the bare boards and threw their money down to the ratty green coir matting in ten, fifty and hundred pound wads, everything riding on the fall of the two spinning King Edward VII pennies, their heads polished and tails blacked for clearer viewing. It was probably as close as the city has ever come to the spurious fantasy of egalitarian mateship across the classes.