Initially appointed for only two months, the Moffitt Royal Commission into Organized Crime broadened its terms of reference and eventually sat for seven months in 1973-4. After questioning almost all of the relevant witnesses and compiling nearly two thousand pages of tightly printed transcript, Mr Justice Moffitt produced no indictable evidence but did uncover convincing evidence of organized crime activity in New South Wales. Mr Justice Moffitt tried to account for Premier Askin’s contradictory statements on organized crime and found they simply reflected the conclusions of N.S.W. police assigned to the club investigation.
While Askin was innocent of a cover-up, the three senior detectives who produced the reports were not. ‘The police reports’, wrote Moffitt, ‘particularly the first and the last, cannot be reconciled. Moreover, the last report does not fairly and accurately state what had been discovered. . . In fact, to a serious degree it covers up the true position concerning Bally, as it ought to have been reported if the police had made . . . the inquiries concerning that organization . . . which ought to have been made.’
In a manner characteristic of his profession, Mr Justice Moffitt understated what can only be called the remarkable contradiction among the three police assessments of the Bally Manufacturing Company. Basing their initial conclusions almost entirely on the original Commonwealth police summary, something they failed to acknowledge, the N.S.W. detectives compiled a report dated 1 July 1973 which concluded that: ‘The Bally Manufacturing Corporation of America and its subsidiaries are clearly Mafia controlled’.
Pursuing their own independent investigations over the next four months, Detective Sergeant McNeill’s team filed two intermediary reports on Bally in August and a final one in November which amounted to a progressive retraction of the original report. While earlier reports had referred extensively to the alleged associations of Bally Australia’s president, Jack Rooklyn, with the American Mafia, the final report had nothing but praise for Mr Rooklyn and Bally. McNeill and his assistant Detective Sergeant D. Knight had interviewed Jack Rooklyn on 23 and 24 October: ‘Mr Rooklyn concluded by saying he felt it must be most obvious to any sane, clear-thinking person that the net result of this investigation could only prove that all the allegations concerning his company were baseless. . . We are inclined to agree with him’. Moving beyond Bally to the organized crime problem as a whole, the detectives concluded: ‘We have not found any evidence at all to indicate that the club industry of this State is being controlled by criminals of any type or that there is any move by foreign syndicated crime figures to take over in the industry’.
Finding that the conclusions of the November report sharply contradicted the available evidence, Mr Justice Moffitt determined that Detective Sergeant McNeill and his two aides were involved in a ‘deliberate or corrupt’ attempt to cover-up Bally’s links to organized crime. Sometime after the N.S.W. police submitted their first report in July and Premier Askin raised the issue in Parliament, Bally’s Jack Rooklyn had approached an influential business associate, Abraham Saffron, and asked him ‘to see somebody in authority to take the heat out of the inquiry’. As Mr Justice Moffitt noted, there was some time later a marked decline of police interest in the enquiry. Other conversations with a more direct bearing on the investigation took place sometime before 7 November when Rooklyn met with McNeill and Knight at a solicitor’s office and offered the two ‘some business partnership’. While McNeill expressed no interest, Knight’s solicitor, Mr J.W. Sadler, subsequently registered a new company on 7 November called Metropolitan Club Services with himself and Bally’s Jack Rooklyn as proprietors. The Commission concluded that the solicitor Sadler was ‘a dummy for Knight’, and reported that the sergeant was observed during the next two months visiting Sydney clubs in the company of a Bally employee to discuss the operations of the new company. Mr Justice Moffitt described the incident as ‘an alarming spectacle’, condemned Knight for his ‘dishonesty’ in testimony about the matter before the Royal Commission, and concluded that it raised ‘grave suspicion against Knight’.
Despite his suspicions, Mr Justice Moffitt found that the details of the transactions between Rooklyn and the police had been ‘smothered by the participants’ making it impossible for him to determine if corruption had occurred. Although unable to recommend indictment of individual officers, the Commissioner reserved some damning criticism of police performance in this case for the introduction to his report: ‘If the police inquiry is a fair indication of the police capacity to meet the problems of organized crime, the intelligence and investigation processes of the police are not adequate to alert governments to or initiate serious action against organized crime from abroad.
Mr Justice Moffitt was extremely critical of the leniency of police investigations into the organized crime activities of Murray Riley. The final police report by Knight and McNeill dismissed all allegations against Riley as unfounded and even had words of high praise for him, his activities and his associates. The police found that Arcadia Top Artists bookings had produced considerable savings for South Sydney Juniors, and Riley’s partners were ‘highly respected members of the community without any blemish on their reputations’.
Disagreeing sharply with the police assessments, Mr Justice Moffitt concluded that they had ‘treated Riley with undue favour’ and stated that he ‘may well have to be classified as one connected with organized crime’. The Commissioner was particularly dismayed by the police failure to probe Riley’s relation with Raymond Smith. ‘It is significant’, said Moffitt, ‘that both disappeared during the currency of my inquiry, and obviously did so to avoid being questioned’. Riley tried to give the impression that he had fled to New Zealand, but had in fact remained in New South Wales. Twenty-four hours after the Moffitt Royal Commission tabled its report, Murray Riley reappeared at South Sydney Juniors driving his flashy Buick Le Sabre and threatened to smash the camera of a Sydney Morning Herald journalist who tried to interview him.
More important than his particular findings within his narrowly defined terms of reference, Mr Justice Moffitt was satisfied that organized crime was operating in New South Wales and did represent a serious potential threat to the society. He argued that one of the key characteristics that distinguished ‘organized crime’ from an ordinary violation was the ability of those involved to ‘insulate’ themselves from the consequences of an offence. Whether by ‘suppression, intimidation or corruption’, evidence of organized crime is eliminated making it difficult to prove through the ordinary methods of investigation and rules of evidence.
Recent efforts to curb the influence of organized crime in the United States had forced the Mafia to shift its assets into foreign countries including Australia. The sudden upsurge in the American Mafia’s foreign investments convinced Mr Justice Moffitt that there was ‘a very real danger that organized crime from overseas will infiltrate this country in a substantial fashion’. The Commissioner’s description of organized crime’s most likely method of penetration was exceptional for its eloquence and insight: ‘Its arrival is unlikely to be signalled by the arrival or activities of armed gangsters with black shirts and white ties. More likely it will arrive with the Trojan horse of legitimate business, fashioned for concealment and apparent respectability by the witting and unwitting aid of expert accountants, lawyers and businessmen.’
Buried in the Report is one section on Bally’s foreign operations which prompted Mr Justice Moffitt to raise a considered warning. The Commissioner pointed out the potentially serious implications for Australia of Bally’s associations with some of the world’s most powerful syndicate leaders and heroin exporters. In essence, he found, to his dismay, that a number of Bally’s investors and associates were also heavily involved in various organized crime activities, notably the narcotics traffic.
Bally’s rise to a multinational corporation holding monopoly on slot machine manufacture everywhere except England and Australia was due, at least in part, to its organized crime contacts at almost every stage in its growth. During the 1950s Bally’s exclusive East Coast distributor was Gerardo Catena who became the surrogate leader of Vito Genovese’s powerful New York Mafia family after Don Vito was sentenced to prison on heroin charges in 1958.Catena became a major secret shareholder in Bally in 1964. The company subsequently gained a 90 per cent share of the Nevada market, the only state in America where slot machines are legal, through a distributorship called Bally Nevada operated by one Michael Wischensky, whose nephew is married to Catena’s daughter. When Bally expanded into the Caribbean and Europe, its distributor was Dino Cellini, an ‘able croupier’ known to have been the ‘right hand’ of Meyer Lansky in his Cuban casino operations of the 1950s.
In the midst of American Mafia penetration of Britain’s casinos and Bally Continental’s expansion in Europe, an incident took place which revealed to Mr Justice Moffitt the sinister side of Bally’s operations. According to the testimony of the ‘amazing’ Herbert Itkin, an American agent who had penetrated the Mafia’s European operations for the CIA and the FBI, a group of investors with alleged organized crime connections met at London’s Dorchester Hotel in November 1966 to discuss a possible consortium for the establishment of Spain’s first gambling casino, then being considered by General Franco. Among those was Alex A. Wilms, who announced that he was representing the ‘Francissi brothers’.
While the Spanish casino proposal collapsed and was of little significance in itself, the presence of one of Bally’s directors and major shareholders, Wilms, on behalf of the Francissi brothers was of considerable import. A nominally respectable Gaullist politician, Marcel Francissi had been identified by the U.S. Congress in 1965 and 1971 as one of the world’s largest heroin dealers.
Mr Justice Moffitt commented that Bally’s European representatives ‘were contemplating some dealing of an illegal nature, with a legitimate front, with the American Mafia and leading narcotics smugglers as parties’. Rejecting Bally’s numerous explanations of Wilm’s alleged presence, the Commissioner pondered: ‘I ask the rhetorical question: If there is, say, one chance in five that Wilms was there as a representative of persons who were leading European narcotics smugglers . . . does not the presence in New South Wales of Bally’s operations of any description . . . offer a real risk that “a piece of the action” or organized criminal activity may be set up here in association with its operations?’
While it was too soon for Justice Moffitt to tell if Bally Australia’s operations would strengthen organized crime in New South Wales, evidence from Europe and America revealed a recurring link between legal gambling and heroin smuggling. In his final remarks the Commissioner made it clear that there was a significant relationship between Bally, casino gambling and heroin:
The operations of Bally anywhere in the world must offer a very grave risk that, when appropriate, there will be organized crime operating under the cloak of Bally’s legitimate business. . . Behind the facade of the swanky Colonial Club in Berkeley Square, London, and in the fashionable Fouquet Restaurant of Francissi in Paris were American gangsters and narcotics smugglers. Whether skimmed cash moneys in operations connected with gambling aids narcotics smuggling operations or whether the two are not connected is not clear, but there is some evidence . . . that criminals in one field are in association with those in the other field. Thus, Catena had a notorious interest in activities connected with gambling while Vito Geno-vese (whom Catena replaced) was deeply involved in narcotics smuggling.
In the future there was a distinct possibility that money generated by skimming from poker machine turnover could be used ‘in aid of illegitimate expansion of the legitimate business, in aid of corruption to conceal what is occurring, in aid of expansion into other fields’. Although Mr Justice Moffitt stated that it was ‘speculation as to what their fields might be’, it does not take a great deal of imagination to realize from the context of his remarks that narcotics must have been in the forefront of the Commissioner’s concerns.
from Drug Traffic by Alfred McCoy