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$2.50 RRP SUNDAY NEWSPAPER OF THE YEAR OCTOBER 14, 2012

EXCLUSIVE RACINGS UNDERBELLY

Damien Olivers $10,000 secret bet

Top jockey Damien Oliver, and below, winning the Melbourne Cup on Media Puzzle in 2002.
PICTURES: JENNY EVANS, SHARON SMITH

$13m payout for top cops and lawyers

EXCLUSIVE
CAMERON HOUSTON
THE Baillieu government made $13 million in secret compensation payouts to several top police and justice officials who were forced to resign in controversial circumstances last year, with former Director of Public Prosecutions Jeremy Rapke, QC, believed to have been paid about $8 million. Former Victoria Police chief commissioner Simon Overland is believed to have walked away with more than $2 million following his shock resignation last year. The former director of the Office of Police Integrity, Michael Strong, is also understood to have received a substantial ex-gratia payment. The massive severance packages are expected to intensify criticism of the Baillieu governments handling of the law and order leadership purge, particularly the role played by Police Minister Peter Ryan in the resignations of Mr Overland and Mr Rapke. Opposition spokesman for government scrutiny Martin Pakula said the magnitude of the taxpayer-funded settlements would make corporate Australia blush. The governments disclosure of the $12.9 million payments appeared in a one-paragraph statement under the heading ex-gratia payments on page 151 of the Department of Justice annual report for 2011/12, which was tabled in Parliament on Thursday. While the report does not identify the recipients or the amounts they received, a source with knowledge of the payments has provided additional information to The Sunday Age. In the previous financial year the Department of Justice made payouts totalling $194,000 to former staff. Yesterday, a spokesman for the Baillieu government defended the size of the payouts, but refused to say how many public servants had been paid. All termination arrangements were reasonable and appropriate in the circumstances having regard to the individuals years of service and entitlements, the spokesman said. The spokesman did not deny that Mr Rapke had been paid $8 million or that Mr Overland had received $2 million. He also refused to comment when asked by The Sunday Age if large payments had been made to avoid litigation or a political backlash. A spokeswoman for the Office of Public Prosecutions would not discuss why Mr Rapkes severance payout had not been disclosed in the departments annual report, which was also tabled in Parliament last week. Mr Rapke was paid an annual salary of about $380,000 for his role as Director of Public Prosecutions. His termination package is believed to have been negotiated by Melbourne law firm, Arnold Bloch Leibler. Last night, Mr Pakula called for greater transparency of all ex-gratia payments made to prominent public servants. The undermining of the OPP and the sabotage of the chief commissioner were sordid episodes run from the heart of the Baillieu government. We already know what that interference has cost in terms of the administration of justice and now we know what it has cost taxpayers, Mr Pakula said. Mr Rapke resigned as Director of Public Prosecutions in May last year following a report that found he had made an error of judgment by recommending the promotion of three relatively junior lawyers to highly paid roles as associate crown prosecutors. Mr Rapke was forced to deny allegations he was involved in a sexual relationship with one of the lawyers, Diana Karamicov, but the appointments sparked a bitter internal feud between Mr Rapke and his then deputy, chief Crown Prosecutor Gavin Silbert, SC. OPP solicitor Stephen Payne was also named in Parliament as a central figure in the campaign to undermine Mr Rapke.

NICK McKENZIE RICHARD BAKER

LEADING Australian jockey Damien Oliver allegedly bet around $10,000 on a rival horse to beat a horse he was riding in the same race, in an apparent flagrant breach of the rules of racing. Information that reveals Oliver wagered on Miss Octopussy in late 2010 was uncovered by authorities investigating the racing industry as part of a probe centring on alleged race fixing involving controversial jockey Danny Nikolic and a horse called Smoking Aces. It is understood that Oliver used a middleman to place his bet on Miss Octopussy, which won the race. As part of an ongoing investigation into the racing industry, The Sunday Age can also reveal that:

Champion jockey Mark Zahra was offered a $5000 kickback but was ultimately paid only $3000 to ride his horse to advantage Danny Nikolics ultimately winning ride on Smoking Aces at Cranbourne in April last year. Nikolic attempted to pressure a small number of figures who work at Caulfield race track to train Smoking Aces in a certain fashion in the months before the April race. Federal police detected leading jockey Craig Newitt giving tips to a major drug trafficker around 2006. A prominent underworld informer in Melbournes gangland wars told police he had once been drug dealer Tony Mokbels racing bagman and had made improper payments to jockey Jim Cassidy. The informer, who was convicted and agreed to testify over the 2003 killings of Jason Moran and Pasquale Barbaro, told federal law enforcement

authorities around 2006 that he was once given $25,000 by Mokbel to give to jockey Cassidy in return for inside information on his races. The rules of racing prohibit jockeys betting on races they ride in and ban the selling of inside information about their races. The informer said he flew to Sydney with the money and handed Cassidy the cash. Earlier this year, The Age reported that state authorities had also uncovered information that showed that Cassidy had received at least $90,000 from Mokbel in return for inside information. Cassidy, who has publicly denied receiving the money or giving tips to Mokbel, has never been held to account over this conduct, despite at least three policing agencies having evidence showing it occurred. It is understood Damien Oliver, who

has twice ridden the Melbourne Cup winner, bet via a third party on favourite Miss Octopussy to win a night race at Moonee Valley on October 1, 2010. Oliver was riding in the same race on the second favourite, a horse called Europa Point. It is likely Oliver would have doubled his money with his bet, depending on the exact odds given. The Sunday Age has no evidence and is not suggesting that Oliver altered his own riding behaviour to favour his wager. When The Sunday Age asked Oliver several questions about his alleged bet on Miss Octopussy, he repeatedly said: No comment. Asked if he was prepared to deny betting on the horse, Oliver said: No comment. Oliver is only one of several jockeys who have come to the attention of police or stewards in the last few years.

Continued PAGE 2

Ex-gratia payments

2012 12,953,000 0

2011 1 194,000

The amount for 2012 relates to compensation payments under various legal settlements including those related to a number of former statutory ofce holders

Continued PAGE 4

Developer: team Doyle wanted cash-for-access

EXCLUSIVE
ROYCE MILLAR MELISSA FYFE
A KEY member of lord mayor Robert Doyles election team organised a series of meetings with city developers in which they were asked for tens of thousands of dollars each for the Doyle campaign in return for Town Hall access. One developer, who attended one of the meetings organised by Cr Doyles No. 1 council candidate Kevin Louey, told The Sunday Age he was surprised at the sum of money requested as a donation between $50,000 and

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$100,000. The source said he felt uncomfortable when it was made clear that a donation would open doors in Town Hall, if Cr Doyle was re-elected. The developer, a significant player in Melbournes property market, does not want to be named, but wants the meetings, held mid this year, made public because their cash-for-access message seemed inappropriate.

It was clear the money would be used for Mr Doyles re-election, the source said. It was clearly about those matters of access. A preliminary, small meeting of prominent developers was held over drinks at a Collins Street venue; a larger dinner meeting of developers was planned soon after. The Sunday Age understands that among those invited were prominent Shanghai developers active in the central city: Jeff Xu of the Golden Age group and Richard Gu of the AXF Group. Mr Louey has refused repeated requests for an interview. The public relations company running Cr Doyles campaign, the Civic Group, advised

The Sunday Age to put questions in writing to Cr Louey. Cr Louey did not answer those written questions. Instead, The Sunday Age received a letter from his lawyer. Nor did Cr Doyle respond to written questions about his reasons for having Cr Louey at No. 1 on his councillor ticket for the election. Mr Xu has denied being asked to donate to the Doyle campaign or having promised financial support for the Doyle team. Kevin didnt ask for this [a donation]. I dont know where this is from. Mr Xu said he would consider buying a table at a public fund-raiser if asked by candidates supportive of

developers, but that he would not attend a private fund-raising function. Efforts made to speak to Mr Gu, who is overseas, were unsuccessful. Revelation of the requests for large donations raises questions for Cr Doyle about who is bankrolling his campaign, and on what basis. Of the nine main teams seeking election, Team Doyle is the only one refusing to disclose the amount and source of funds during the campaign as part of a transparency campaign by The Age. Last week, Cr Doyle said he was not receiving any political party funding but refused to rule out backing from developers and corporates. He stressed that he would fully

comply with local government laws which require that all campaign gifts totalling $500 or more are disclosed within 40 days after the poll. One of Cr Doyles team, councillor Carl Jetter, told The Age last week he expected his team to spend up to $500,000 on the campaign. The city council has planning authority over all development projects under 25,000 square metres. It has an important advisory role to the state government on larger projects. The council also plays a key role in liquor licensing in the city. With MIKI PERKINS

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4 OCTOBER 14, 2012

T H E S U N DA Y A G E

NEWS

Stumbling onto the tip of an iceberg

It was luck that uncovered a betting scandal, write Nick McKenzie and Richard Baker.
THE betting agencies never suspected a thing. Why would they? It was only relatively small bets placed in Queensland, Victoria and Western Australia on Smoking Aces. For instance, in Perth, one lucky punter collected around $70,000 off the back of two five-grand wagers. But had the betting companies involved known the identity of some of the punters, their suspicions would more than likely have been aroused. The Gold Coast punter who placed a winning bet on Danny Nikolics ride Smoking Aces at Cranbourne on April 27 last year was a good mate of Dannys Gold Coast-based brother, John. He won at least $60,000. In Melbourne, a punter who was a close associate of Danny Nikolic bet a couple of thousand on Nikolics ride and won around $25,000. Another punter who pocketed a few grand after Smoking Aces win was Tommy Nikolic, Dannys younger brother. The Perth punter was millionaire businessman and convicted cannabis trafficker Peter Jones, who not only owned several horses that Nikolic had ridden successfully interstate, but was known for joining the champion jockey at his infamous post racing carnival celebrations, events that started at pubs and often continued in nightclubs and hotel suites. All up, these four men closely tied to Danny Nikolic Peter Jones, Tommy Nikolic, the Melbourne punter and the Gold Coast punter, collected around $200,000, a tenfold return on their wagering. So was it just good luck? Or had they been told by an insider that Smoking Aces was a strong prospect? It is these questions that Australias most serious racing corruption inquiry is seeking answers to. In the process it is uncovering a wide range of dubious associations and behaviour involving Australias leading jockeys. The inquiry by the Victoria Police is not only examining information suggesting that Nikolic was tipping inside information to these four men about the prospects of Smoking Aces, but whether he tried to engineer the outcome of the Cranbourne race in concert trained. Sources say jockey Mark Pegus, who was doing trackwork for Cozamanis, also argued with Nikolic about Pegus availability to ride certain horses. (Nikolic was later charged by police with assaulting Pegus, in a matter still before the courts). To several observers, Nikolic appeared to have an unusually large say in the Smoking Aces pre-race preparation as the horse was moved from the Cozamanis stable to new trainers. Nikolic also wanted to influence how at least one other jockey would ride their mount on April 27. It is understood that jockey Mark Zahra was offered a $5000 kickback for riding his horse in a way which would favour Nikolics ride. Zahra agreed to help out, effectively becoming part of a conspiracy to secretly shorten Smoking Aces chances of winning. The only thing left to do was punt. And so, in the hours before the race, the bets were laid. In the last few months, Perths Peter Jones, the Melbourne punter and the Gold Coast punter and Tommy Nikolic have been approached by authorities about their successful betting on Nikolics horse. Peter [Jones] was up at St Kilda Road [police crime department headquarters]. And he was shitting himself, says one source. Which leads to the next question on everybodys lips in Australian racing: did police conducting an investigation into the murder of Samba inadvertently capture conversations that will prove Nikolic engaged in race fixing? And if this corruption was only uncovered because police stumbled onto it, how widespread is it? And, perhaps most importantly, will racing authorities (who have no police powers) or police (who only recently began directing resources to fighting racing corruption) get to the bottom of it?

Assault probe at Villawood

NATALIE OBRIEN
TWO guards from the private company running Australian detention centres have been stood down pending an investigation into allegations that they assaulted a mentally disabled man at the Villawood centre, just days after he arrived. The Australian Federal Police are believed to be reviewing CCTV footage from the detention centre as part of an investigation into the incident involving guards from the company Serco. The Sunday Age has been told that the assault was on a 29-year-old Kurdish asylum seeker, who suffers from a mental condition that psychiatrists have warned is exacerbated by incarceration without specialist mental-health services. The Department of Immigration confirmed an incident took place on October 2 and a police investigation was under way. The department took action very quickly to instigate an independent investigation, a spokeswoman said. The mentally disabled man arrived in Australia in August 2010 and has been in detention for two years. His case was taken to the Federal Court in June in an attempt to get him released and give him psychiatric care. During the court hearing in June, Professor Louise Newman, the director of the Centre for Developmental Psychiatry and Psychology at Monash University, revealed that the man had previously suffered assaults while in detention. He has experienced trauma whilst in detention, including sexual assault, aggression and tormenting interactions, she said in a report to the court. Professor Newmans report criticised the way he had been managed and warned his condition was likely to deteriorate if he continued to be subjected to such a strict regime and isolation. She recommended his release into the community with appropriate mental-health care. He was released into community detention in Melbourne in July, and was a client of Foundation House, the Victorian Foundation for Survivors of Torture headed by Paris Aristotle, a member of the federal governments expert panel on asylum seekers. But advocates for the man say he was left alone and not given the psychiatric care that federal government health services were supposed to provide to him. Late last month his release was revoked because of alleged violent and threatening behaviour and he was taken back into detention. The man was then transferred to Villawood and within two days of his arrival the alleged assault took place.

From left, Jim Cassidy, Danny Nikolic and Mark Zahra. with another jockey in order to increase the horses chances of winning. As The Sunday Age reveals today, there is, according to numerous racing industry sources, strong circumstantial evidence to support the polices suspicions. The key to understanding the Smoking Aces scandal is what occurred in the months and years before the race. Racing stewards have long suspected Nikolic of tipping to his punting associates and, occasionally, riding to increase their chances of betting success. A major case brought by stewards in 2010 made similar allegations, but was rejected by Victorias racing tribunal because of insufficient evidence. Several racing sources who have had dealings with Nikolic describe a talented but erratic jockey who not only regularly tipped, but played punters off against each other by giving deliberately false information about the chance of his horse winning to lengthen its odds. Nikolic is not alone in tipping policing agencies have information which shows beyond doubt several top jockeys, including Jim Cassidy and Craig Newitt, have tipped. Cassidy has privately told investigators he sees nothing wrong with the practice because most jockeys do it. The practice occupies a grey area but becomes a clear breach of the rules of racing if money is given to a jockey in return for tips on his mount. In most cases, this conduct has been uncovered accidentally as jockeys Danny Nikolic riding Smoking Aces (on left) in Seymour in August.
PICTURE: BRETT HOLBURT

voices have featured unexpectedly on the tapped phone conversations of gangsters. (For example, Newitt gave tips in late 2006 to a major drug trafficker who was convicted this year of Australias biggest ecstasy importation.) Generally, nothing has been done about this because racing authorities cant access or use police information a problem no state government seems eager to confront. In the case of Smoking Aces, trainers and jockeys have privately confirmed that police have recently confronted several industry players about what is suspected to have happened in connection to the Cranbourne race fix. According to some they have sought to speak to, detectives are interested in not only what happened on the day, but in the lead up to the race. The weeks before the April race were stressful for Nikolic. His former fatherin-law, racing identity Les Samba, was murdered and Nikolic was struggling to get regular rides on top horses. Some time before the race, Nikolic fell out with several Caulfield-based racing figures. One, trainer Byron Cozamanis, refused to take directions from Nikolic on how Smoking Aces should be

Damien Olivers secret wager

From PAGE 1
Jockey Craig Newitt and a well-known trainer both had multiple dealings with one or more members of a largely Italian-Australian crime syndicate investigated by the federal police and the Victoria Police between 2004 and 2009 in connection with several alleged drug importations. Two members of this syndicate, who cant be named due to court suppressions, have raced several horses in Victoria over the past five years. When asked by The Sunday Age about his dealings with one syndicate figure, Newitt said he had no idea the man was involved in illegal activity. We only ever talked about horses and how they were going, he said. Last week, Victoria Police which is moving to finalise its investigation into Danny Nikolic over the Smoking Aces race-fixing allegations banned Nikolic, 37, from entering Crown Casino. The Victorian Civil and Administrative Tribunal will on Tuesday hear Nikolics application to have a stay of proceedings in order to return to riding while the tribunal considers his bid to overturn his two-year disqualification. He was disqualified by Victorias racing disciplinary board for threatening chief steward Terry Bailey. Nikolic and Zahra could not be reached for comment.

Baton tool used in detention centres

NATALIE OBRIEN
IMAGES of baton-style implements used by Serco guards have been revealed in a series of government documents on weapons and restraints used in detention centres, which have been obtained by The Sunday Age. The documents also reveal that instruments of restraint have been used more than 100 times in one year for what the Department of Immigration has deemed minor incidents. After an 18-month battle to gain access to the documents using freedom-of-information laws, the pages that were finally released show the baton-style implements torches and metal detectors are being used despite denials from the department that staff had them. The Sunday Age sought the documents after claims by survivors of the Christmas Island shipwreck tragedy that Villawood guards had threatened them with baton-style weapons they feared were electrified cattle prods during their forced transfer to Christmas Island. At the time, the department was questioned about whether guards had baton-style weapons that might have been mistaken for cattle prods. A departmental spokesperson said that batons or Maglite-type torches or other implements that may be confused with cattle prod-like weapons are not part of the standard kit of resources used by Serco staff either in detention centres or during escort activities. But the documents clearly show the implements, although details about their use has been redacted. There are also images of the flexi-cuffs used on detainees. The incident in which the asylum seekers complained they had been threatened with the batons was the subject of an inquiry by the Commonwealth Ombudsman. A review of footage of the incident did not reveal any evidence of the baton-style weapons being used.

Got a tip? Email us at investigations@ theage.com.au

Baton-style implements are being used, despite denials.

The documents that were released included in-confidence statistics showing that instruments of restraint were used for minor incidents 117 times in 2009. The department refused to release any figures for 2010 and 2011. The FOI documents included a trail of internal emails warning that the list of restraints identified in Sercos PPM (policy and procedure manual) is not (we dont think) in accordance with what the Dept has agreed to. An Immigration spokeswoman said: The department is not aware of any inconsistencies between the agreed forms of restraint and Serco policy documentation.

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