Under Bjelke-Petersen, corruption in the state was further entrenched. A gerrymandered electoral system, along with the appeal of the premier’s folksy, right-wing populism in a conservative state, made it virtually impossible for the Labor Party to win government. Political ‘donations’ to the government were handed over in brown paper bags and the police force was politicised.

  In 1976 Bjelke-Petersen engineered the rise of Terry Lewis to the post of police commissioner, leapfrogging him ahead of 122 better-credentialled candidates. The newly installed commissioner and the premier formed a pact: Lewis agreed to turn the police into the premier’s private army, while Bjelke-Petersen turned a blind eye to the Joke; he was later found to have been corrupt himself.96 Senior police enjoyed open access to the cabinet, and Lewis and Bjelke-Petersen were on close terms.97

  During his long tenure as premier from 1968 to 1987, Bjelke-Petersen staunchly defended the police as incorruptible and refused to countenance any inquiry into the force.98 Two senior cabinet ministers in his government, Russell Hinze and Don Lane, were alleged in the Fitzgerald Inquiry to have been paid bribes.99 And both, along with Terry Lewis, were alleged to have frequented a Brisbane brothel. Lewis was said to have been known to the brothel’s owner as ‘Big Daddy’, while Hinze, it was claimed, had his pick of the prostitutes.100

  Russ Hinze was one of the most corrupt politicians ever to have sat in an Australian parliament. The obese and garrulous former dairy farmer, who had only a primary school education, spoke the language of the battlers while extorting largesse from all the ministerial portfolios he held: racing, local government, main roads and police.101

  With the Joke in full swing, organised crime expanded in Brisbane and on the Gold Coast during the 1980s.102 Otherwise dull, provincial Brisbane had a raunchy – some would say seedy – assortment of brothels, strip clubs, massage parlours, illegal casinos and SP betting operations. Fortitude Valley housed Brisbane’s darker side. It was the sort of place where, along with the gaudy entertainment, murders happened.

  Together, the police and the Bjelke-Petersen government made the farcical contention that there was no illegal gambling in Queensland. The government maintained this fiction to curry favour with its conservative base. In 1981 Russ Hinze declared: ‘I don’t know of any illegal gambling. If there’s any going on, well then of course I don’t know where it is.’103 He made the statement just after he’d been taken on a tour of illegal casinos by a police officer.104 For their part, corrupt police simply ‘accepted the scene as it was’, as one corrupt officer told the Fitzgerald Inquiry.105

  The vice empire

  The godfather of illegal gambling in Brisbane during the 1970s and ’80s was the son of a Sicilian migrant family. Dubbed the city’s ‘corruption kingpin’, Geraldo Bellino went into partnership with another Italian migrant, Vittorio ‘Vic’ Conte, to run illegal casinos along with brothels and massage parlours. Some of their ventures combined all three services. The infamous Bubbles Bathhouse also housed an illegal gaming room.

  Theirs became a million-dollar ‘vice empire’, which paid the Rat Pack up to $20 000 a month to continue business unhindered from police raids.106 To shore up the protection, Bellino donated $50 000 to the Labor and Country parties on at least one occasion in the lead-up to the 1983 election. The money was paid to ensure that, whichever party won the election, everything would be ‘sweet’ with their illegal casino operations.107

  So popular were the Bellino-run casinos that they entertained everyone from politicians to celebrities to journalists. Witnesses to the Fitzgerald Inquiry swore that Russ Hinze was a frequent customer.108

  Geraldo was an Al Pacino lookalike, with his oiled black hair swept off his face, square jaw, olive skin and dark eyes adorned with Ray-Ban sunglasses. And there was no doubting his menacing air. A jack of all trades before partnering with Conte, the barrel-chested and fleshy-faced ‘Gerry’ was reputedly ‘the most powerful and ferocious bareknuckle fighter in Brisbane. Nobody came away unscathed from a tangle with Bellino,’ Matt Condon wrote.109

  Geraldo had impeccable connections to the Rat Pack. The Fitzgerald Inquiry heard evidence that several high-ranking Queensland police were ‘Bellino’s boys’; Geraldo was even able to have officers transferred on his recommendation.110

  Importantly, Geraldo and Conte were able to control any raid on their casinos. The Fitzgerald Inquiry was told about one confected ‘raid’ carried out in October 1985. The raid, the inquiry was told, was arranged by ‘corrupt senior police who were duping younger officers into believing that an authentic raid was being carried out’. It was a way for new police officers to be blooded into the Joke.111

  Geraldo Bellino was eventually charged, convicted and jailed for handing over to Jack Herbert hundreds of thousands of dollars in bribes.112

  Herbert played his hand one last time before going on the run. In 1974 he was transferred out of the Licensing Branch, and he soon after retired. But he was still the controlling force in the Joke, through his contacts and his alliance with Terry Lewis. Meanwhile, Jack Rooklyn was sacked from Bally Manufacturing, only to emerge as a major player in the pinball machine business – a competitor to poker machines in the leisure market. When the Bjelke-Petersen government considered legalising pokies, Rooklyn went into action to prevent their introduction in Queensland. The man who’d made millions out of the devices now wanted them stopped, all in order to protect his new business model. Rooklyn enlisted Herbert and Lewis to his side and pokies were kept out of Queensland.113 The rats were still in charge.

  How not to approve a casino

  While Gerry Bellino and Vic Conte raked in fortunes, along with Jack Herbert and Terry Lewis, the Bjelke-Petersen government kept up the farcical position that illegal casinos didn’t exist. The premier went so far as to declare that legal casinos would never be allowed in Queensland while he was in charge.114 But economics and politics eventually trumped Joh’s moralising stance. A slump in tourism in the late 1970s, along with the continual drift of Queenslanders across the border to New South Wales to play the pokies in clubs, forced the government’s hand.

  Queensland government agencies started to prepare for the arrival of casinos. Treasury established a casino security division and undertook an exhaustive study of overseas legislation, which informed the bill to establish casinos introduced to the parliament in 1981. Dubbed the best such legislation in the world, it was designed specifically to prevent the infiltration of organised crime.115 On Bjelke-Petersen’s insistence, no poker machines would be allowed in the casino, or in Queensland.

  A cabinet committee was established to examine the issue and decide whether to grant a licence. It brought together two unlikely colleagues: Deputy Premier and Treasurer Llew Edwards, who headed the Liberal Party in the Bjelke-Petersen coalition government, and Russ Hinze, the Minister for Local Government, Racing and Police. Edwards had an unsullied reputation for honesty and integrity, while Hinze was an old hand at shady political practice. Despite assurances that the review and selection process would be of ‘the highest standing’ and would not countenance any lobbying by prospective licence holders, behind the scenes the process was a sham.116 Edwards was completely outplayed by the wily Hinze.

  In private, Hinze was acting for an old friend, Polish-born Gold Coast property developer Eddie Kornhauser. Leading up to the committee’s deliberations, Kornhauser believed that he’d secured the support of the premier and Hinze to give him the licence.117 It was the way things had always been done in Joh’s Queensland. But Kornhauser had to keep hidden a secret – his dodgy business background. He’d had links to Abe Saffron in the late 1950s, and there were business figures who alleged that Kornhauser had laundered ‘dirty money’.118 The businessman’s career evoked the old adage that the Gold Coast was a sunny place for shady people.

  But with Hinze in your corner, a shady background was little more than an inconvenience. Big Russ went into bat for Kornhauser. He pushed special legislation through the Queensland parliament to ensure that Kornhauser’s Paradise Centre development – which was to house his proposed casino – would be approved according to the businessman’s specifications. The same day the bill went to state parliament, Kornhauser put $250 000 into Hinze’s business bank accounts. It looked like a reward for political favours – in other words, corruption.119 Kornhauser would later be charged for this offence but was acquitted at trial. Hinze was charged with multiple corruption offences but died from cancer before facing justice.

  Before these events came out into the open via the Fitzgerald Inquiry, Hinze had kept inching forward Kornhauser’s application for a licence through the cabinet subcommittee, withholding from it the unsavoury allegations about Kornhauser’s background. All looked to be going sweetly until Kornhauser suddenly withdrew his application, accusing Treasury of changing the rules governing the licence.120 The winning bid was that of Jupiter Industries Ltd, which was chaired by a doyen of Queensland business circles, Sir Roderick Procter, who also happened to be a trustee of the National Party (as the Country Party was renamed in 1975).

  Claims about Queensland having the ‘best casino legislation in the world’ quickly came under scrutiny. Jupiter’s, which had a bevy of Queensland establishment figures on its board, contracted the management of the casino to Conrad International, a subsidiary of Hilton Hotels. Senior executives at Hilton were found to have longstanding connections to well-known organised crime figures in the United States. In fact, the New Jersey Casino Control Commission had recommended that Hilton not be licensed in that state, saying that Hilton executives had ‘failed to demonstrate the good character, honesty and integrity’ required for licensing.121 Jupiter’s board members were aware of these findings when they contracted Conrad International. But Sir Roderick, who was ‘the essence of Queensland conservatism’, thought the matter was ‘just a storm in a teacup’.122

  While these events played out, the game was up for Queensland’s corrupt and debauched system of politics.

  Immediately following the establishment of the Fitzgerald Inquiry in May 1987, Jack Herbert fled the country; he was later arrested in London. He was offered immunity in return for giving a full and truthful account of corruption in Queensland. Over 13 days of testimony, during which he broke down and wept three times, Herbert denounced Terry Lewis and broke down the wall erected around the Rat Pack and the Joke. Spewing out from the evidence of Herbert and many others was the toxic politics of Queensland.

  The experiences of Tasmania, New South Wales and Queensland in relation to casinos demonstrate several critical things about Australian politics and society. Firstly, so embedded was corruption in each state around the presence of casinos that it’s possible to speak of an Australian culture of corruption, one that was underestimated at the time and since. Secondly, all the expert advice showed that if casinos were to be introduced, they should be small, standalone and discrete operations with a high level of political transparency. Thirdly, the introduction of casinos needed to be accompanied by a strong policy framework that limited social and political harm.

  Unfortunately, these lessons have not been heeded.

  4 MONEY, MATESHIP AND POWER

  Trouble was brewing but no one could see it happening. In a secret meeting held on a boat in Sydney Harbour sometime in early 1979, criminal figures discussed the prospect of developing illegal casino-type venues in various Victorian centres. Although details of the meeting were sketchy, its existence was regarded as credible by respected investigative crime journalist Bob Bottom. He reported that Melbourne had ‘prided itself on being free of the more organised crime rackets and corruption so familiar to Sydney’. Now, Bottom believed, Victoria had become a ‘prize target’ for illegal gambling, and the state government’s resistance to legalising both casinos and poker machines meant that ‘organised crime stands to profit more from illegal than legal gambling’.1

  The discussion about whether to legalise casinos in Victoria thus began in the shadow of a potential mafia infiltration into the state. The debate was as protracted and rocky as it was in other states, with pro-and anti-casino forces taking up their familiar battle lines. An inquiry held in 1983 came out against a casino.

  Against this background, then, what occurred in little more than a decade was truly remarkable: by the mid 1990s Melbourne had a mega-casino with its own designated precinct, the Crown Southbank entertainment complex. And poker machines had proliferated through the community. In this way the longstanding Victorian political consensus against Big Gambling interests was broken.

  Victoria was different

  Historically, Melbourne and Sydney developed different cultures. Sydney’s reputation was as a brash and edgy place with a tradition of corruption. Melbourne, by contrast, was more conservative, with a noticeable ‘wowser’ strain.2 Writing in 1968, journalist Keith Dunstan summed up staid Melbourne, asking: ‘Where else on earth, with the possible exception of Adelaide, could one find a city where absolutely nothing happened, where the biggest excitement among the citizens on Sunday was to go either to the Botanic Gardens or Essendon Airport?’3

  These are generalisations, of course, and Victoria had its own illegal casinos and accompanying police corruption. But neither was on the same scale as in New South Wales. In particular, the upper echelons of the Victorian police force were regarded as clean.4 These differences were noted by anti-corruption campaigner Dr Bertram Wainer, who, interviewed in 1975, observed that police corruption was stronger and more widespread in New South Wales.5

  Following the retirement of Sir Henry Bolte in 1972, Victoria’s next three premiers – Liberals Rupert ‘Dick’ Hamer and Lindsay Thompson, and Labor’s John Cain – maintained a steadfast opposition to Big Gambling. For the Liberals, the influence of Melbourne’s suburban Bible belt and the power wielded within the party by hoteliers was sufficient to keep poker machines at bay.6 The shadow cast by organised crime, meanwhile, bolstered political opposition to legalising casinos.7

  When John Cain came into power in 1982, he maintained the state’s opposition to legalising casinos and poker machines. Cain’s father, also called John, had had three stints as premier of Victoria in the 1950s. Now the younger Cain had led Labor back into government after languishing on the opposition benches for 27 years, courtesy largely of the bitter split in the Labor Party over communist influence. Cain had a reputation for honesty and integrity, and his suburban-lawyer demeanour masked his progressive, reforming approach to government. He always believed that poker machines exploited the working class.8

  In 1982 Cain established a one-man inquiry into casinos on the back of an active campaign by Melbourne’s church leaders to hold the line against legalisation. Headed by the retired Federal Court judge Xavier Connor QC, the 12-month inquiry came down strongly against legalisation. ‘Organised crime figures have historically been associated with casinos,’ it noted. ‘It is recognised that gambling is a favourite target for their activities and casino gambling in particular because of the vast number of unrecorded cash transactions.’ Connor was especially critical of ‘revenue maximising’ casinos. Cain accepted Connor’s recommendation, and at the end of 1983 resolutely declared that the issue was settled: Victoria would have no casinos.9

  But the issue didn’t remain settled for long. As the 1980s ended and Cain’s tenure as premier came to an end, financial disaster struck the state – and desperate times encouraged desperate measures.

  The rise of Big Gambling in Victoria

  There is a sad irony in the unwitting role that John Cain played in the expansion of gambling in Victoria. The thoroughly decent social reformer, who believed in the power of government to improve people’s lives, was a casualty of the financial scandals that dogged the 1980s, a decade of corporate greed and a fixation with deregulation. By the late 1980s, a series of financial scandals had brought Victoria’s economy to its knees and cost Cain his job. So desperate was the situation that, to many at the time, Melbourne had become ‘Mexico without the sun’.10

  In August 1990 Cain’s successor, Joan Kirner, the state’s first female premier, inherited a political and financial mess. A member of Victorian Labor’s socialist left faction, she was given the task of repairing the damage – which she did by selling the State Bank, privatising the public transport system and increasing taxes and charges. Pilloried by the right-wing press as ‘Mother Russia’11 and regularly ridiculed in sexist cartoons, Kirner embraced Big Gambling as part of her rescue strategy: a licence for a casino and 10 000 poker machines to be spread among the casino and the wider community.

  Kirner had done a complete turnaround. As journalist Matthew Pinkney noted, as a minister in John Cain’s government she had shared his passionate, non-negotiable rejection of poker machines.12 But in 1992 Kirner used the state budget to spend $260 000 on television advertisements promoting poker machines in order to accelerate their rollout from 200 to 300 a week.13

  In taking this approach, Kirner had perpetrated another sad irony: a left-wing politician, whose political heart lay with the ordinary people, had paved the way for the exploitation of these very people. As one commentator explained, the legalisation of pokies and a casino was ‘a strange legacy for a Labor premier’.14 She came to regret her decision.