Drug Masterminds

If the opium-heroin warlords of the Golden Triangle can maintain armies of thousands of men, and marihuana growers of Griffith can build grass castles, the man in the street has cause to shudder at the mind-boggling profits amassing in the hands of the hidden masterminds of Australia’s illicit drug trade.

A veritable pyramid of greed and death, it’s a menacing empire now turning over $2000 million dollars a year. In fact, nearly two and a half times the entire government budget for the State of Tasmania.

At the top of the pyramid, in the hills of Thailand, $1000 buys ten kilograms of opium that makes one kilogram of heroin. At the bottom of the pyramid, on the streets of Sydney, one kilogram brings more than $1 million.

Likewise, marihuana yielding $33000 a tonne at Griffith fetches over $1 million in the hands of users.

In such a shadowy trade, profits are generally tax free. Untaxed, every dollar of profit represents the equivalent of two dollars of taxed company earnings.

For heroin merchants, it’s very much a trade in death. At least two addicts die each week somewhere in Australia. Other people are murdered.

Throughout Australia, there are an estimated 20000 heroin users, mostly in their teens and early twenties. In pursuit of heroin euphoria, they become prisoners of a health-destroying habit. Since heroin trafficking has mushroomed only over the past decade or so, the scale of death will skyrocket in the crisis years still ahead.

As heroin addiction continues to grow, so too will Australia’s crime rate.

Addicts simply have to turn to armed robbery, burglary, shoplifting, mugging and prostitution to get the sort of money needed to buy drugs. No ordinary job can support a heroin habit. A regular user hits up $120 to $150 a day. Most hardcore addicts use a deal a day, costing $300. Some, especially street prostitutes and massage parlour girls, use up to $1000 a day.

On average, based on usage figures analysed by the Woodward Royal Commission, an addict can be expected to use $150 worth a day . . . in other words, over $1000 a week, or $54600 a year. Not even the Prime Minister earns that much, after tax.

The only alternative is for addicts to rob others, sell themselves, or resell drugs — creating more crime and ensnaring more and more people into the spreading base of the drug pyramid.

Addicts finance most of their habit from crime, or from dealing in drugs themselves. The cost to the community in drug-related crime is disturbing, particularly since a desperate druggie is more likely to maim or kill.

On the Woodward Commission figures, 1000 kilograms of heroin per year are needed to support the addict population. Estimates by the Williams Commission ranged from 900 to 1300 kilograms. The more recent Stewart Commission came up with an average of 1100 kilograms.

At $1 million a kilogram, at street level, that’s an annual turnover of $1100 million for heroin alone.

In another context, 20000 addicts using $150 worth a day adds up to about the same figure —$1095 million.

The implications are frightening.

Much attention has been focused on the trail of wealth and death characterised by the Mr Asia drug syndicate, responsible for at least six murders and reputed to have been one of the biggest heroin organisations in the country.

Yet, in reality, according to calculations by the Stewart Commission, the Mr Asia syndicate handled 85 kilograms of heroin in 1977 and 1978. In street terms, that amounted to $85 million — or less than five per cent of Australia’s annual consumption for the two years of its reign.


The international hullabaloo that ensued over the Bangkok arrest in October 1978 of William Sinclair (since cleared), Warren Fellows and Paul Hayward, resulted from a seizure of 8.4 kilograms of heroin-enough really for just two and a half days’ supply for the Australian market.

A seizure of nearly twice as much, within Australia itself, almost a year later in September 1979, when 13.5 kilograms was recovered from a secret compartment in the merchant ship Kota Bali at Fremantle, Western Australia, rated relatively scant attention.

In Sydney in July 1983, customs officers checking another merchant vessel stumbled across a consignment of forty kilograms, almost half as much as all shipments by the Mr Asia syndicate.

That one seizure represented nearly double the amount of twenty-three kilograms from all seizures by customs and police for the whole of 1981-82.

As acknowledged by all drug commissions, no seizure or series of seizures have had an impact on continuity of heroin supplies. Which can only mean that there is still an entrenched, mainstay supply that remains untouched.

Although literally hundreds of traffickers and dealers have been arrested, both overseas and in Australia, there has not been a day when addicts have not been able to buy heroin on the streets, in Sydney and other capital cities, or in key country localities.

A study carried out by a Sydney economist, Dr John Donovan, of W. D. Scott and Co., disclosed that drug trafficking has been creating enormous discrepancies in Australia’s national accounts. His study found that in the year to June 1977 the bulk of an expenditure discrepancy of $1276 million could be put down to the illegal drug trade. The following year the discrepancy dropped $200 million to $1071 million (probably attributable to the crackdown on the marihuana trade following the disappearance of Griffith anti-drug campaigner Donald Mackay on 15 July 1977).

No up-dating of the analysis has been done. Dr Donovan says the Australian Bureau of Statistics has since changed the method of recording deficiencies. The discrepancies represent the amount of money required to balance up income and expenditure in the national accounts.

As Dr Donovan sees it, profits from drugs and other rackets are laundered and then included as legitimate income for tax purposes, with nothing recorded on the expenditure side to balance it up.

The Bureau of Statistics has acknowledged the problem, listing not only drug trafficking but illegal gambling and prostitution as areas of understatement on the expenditure side of the accounts.

Apart from spasmodic supplies from Afghanistan, Pakistan, India and Lebanon, the great bulk of heroin for Australia comes from the Golden Triangle, encompassing border highlands of Thailand, Burma and Laos. Hill tribes grow enough opium poppies to produce 100 tonnes of heroin each year under the tutelage of a drug warlord called Khun Sa, who maintains a 3000-strong renegade army.

Hill tribes receive $1000 for ten kilograms of raw opium which makes one kilogram of heroin. Once converted to heroin in jungle laboratories, it can be bought for $4000 a kilo in the northern city of Chiang Mai, gateway to the Golden Triangle. In the capital of Bangkok, now the heroin marketplace for the world, the price doubles to $8000.

Landed in Australia, it immediately becomes worth $40000. At that stage 80 per cent pure heroin, it is then cut, the white powder being mixed with glucose, lactose or aspirin, until it is only twenty per cent heroin, the original kilogram now weighing four kilograms, and worth $160000 wholesale. It is then broken down into 10-gram bags, at $2500 each, or ‘street deals’, at $300 each, or ‘street grams’ at $150 each. Pedlars and addicts often split some of it further into tiny foil capsules to resell to finance their own purchases.

In Thailand, there are 500000 addicts, twenty-five times the number in Australia. As well as supplying them, the Golden Triangle meets 70 per cent of world supplies. As devastating as they may be, Australia’s heroin imports represent only one per cent of Golden Triangle output.

NSW not only accounts for half of Australia’s 20000 addicts, but Sydney is the undisputed drug capital. No matter how drugs are brought into Australia, or where they are landed, they invariably go to the apex of the pyramid in Sydney. There has been evidence of drugs landing in Melbourne but being transhipped to Sydney for redistribution back to Melbourne.

3.3 Pic Language

This prompted Mr Justice Williams to surmise that ‘someone big enough in Sydney is able to get the whole thing under his or her wing and pay the necessary money to get it there’. Although he subsequently accepted police evidence that there was not one Mr Big, he concluded there were ‘plenty of Mr Big-Enoughs’.

Rarely are any of them caught. As Mr Justice Williams observed, the hidden financiers and controllers have ‘seemingly impeccable lifestyles, who go to great pains to maintain strictly legitimate appearances and legitimate businesses to account for income’.

Only when their masquerade has been punctured will authorities have any real chance of curbing the heroin trade.

In comparison with legitimate business, the busting of a Mr Asia-type syndicate is like an independent outlet going bankrupt while Woolworths and Coles remain. And, unlike ordinary consumer products, heroin merchants control an addicted, captive market.

Users of softer drugs, like cannabis, may be more of a take-it-or-leave-it proposition. Nevertheless, all told, the cannabis market, at street level, adds up to $979 million.

According to the Williams Commission, Australia imports a minimum of 655 kilograms of concentrated cannabis oil, with a street value of $32 million, 16 tonnes of less concentrated cannabis resin worth $400 million, and 35 tonnes of buddha sticks bringing $367.75 million.

Though more regularly in the headlines, local production of marihuana rates less than imports, with an estimated street turnover of $180 million.

Half a million Australians are estimated to use marihuana at least once a month.

The Griffith marihuana trade is a classic example of the conspicuous but unexposed role of the invisible middle men of the drug trade.

Marihuana growers at Griffith, immigrants from Calabria, a poor Mafia-ridden province of Italy, were paid $33000 a tonne for the marihuana they produced. But once it reached Sydney wholesalers, it was suddenly worth $660000 a tonne. When split into 28-gram deals at $30 each, it assumed a street value of $1.1 million.

Even at their price, ringleaders among the Griffith growers were able to afford to build elaborate homes that have become known as grass castles. Royal Commissions have focused on them, but neglected to pinpoint the biggest racketeers for whom they grew the marihuana. As well as looking at grass castles, perhaps commission investigators should have looked at mansions around Sydney Harbour.

The reality of the disparity in returns between ethnic growers at Griffith and the Mr Big-Enoughs of Sydney is illustrated by the actual assets traced to Italians identified at the grower level at Griffith. The Woodward Commission, totting up all amounts of money that passed through their hands, came up with a total of $3150318. Significantly, taking all known marihuana crops at Griffith for the period investigated, amounting to 54.3 acres at two tonnes per acre, multiplied by $33000 per tonne, it works out at $3 583800 . . . a difference of only $433 482 that the commission must have missed.

None of the middle men, who may have paid $3.5 million to Griffith growers, but resold for twenty times that sum, making nearly $60 million profit, was ever identified. And the trade goes on, with marihuana plantations linked to the same grower clan being detected elsewhere in NSW, Victoria, Queensland, South Australia and Western Australia.

In fact, coupled with even greater profits from cannabis and heroin, hundreds upon hundreds of millions of dollars are being made each year by the yet-untouched masterminds.


from Connections 1 by Bob Bottom

Illustration by Michael Fitzjames