When the good guys go bad

MINUS the sound, the federal police surveillance video reveals a seemingly innocuous scene - just two friends chatting in a Sydney street. But restore the volume and you can hear two men with the distinctive Australian accents plotting what they hoped would be an extremely lucrative drug importing operation.

The shorter man, Craig Nicholson, wears an oversized red jumper draped over his middle-aged paunch. His companion, Wayne Cleveland, is taller, with muscle-bound shoulders broadened by years of paddling out at his home break of Maroubra in Sydney's inner south-east.

As a member of the "Bra Boys" - a gang of teenagers and adult men bonded through surfing, booze, drugs and petty crime - Cleveland has a typical rap sheet, including prior convictions for cannabis possession and carrying an unlicensed pistol. But he had always aspired to bigger things. As a man more partial to surfing than working, but who wanted his children to attend private schools, he had turned to one of the most profitable commodities in Australia.

Cleveland had connections in California's surfing scene - and they could get him cocaine. The trick was bringing it in, which was why he was meeting Nicholson on a grey winter's day in August 2009.

Nicholson had only recently been made redundant as an operations manager for the airline catering and cleaning firm, Gate Gourmet. A few years earlier he had arranged for several of his former colleagues to go on his mate Cleveland's payroll.

In return for payments of up to $25,000 each, they smuggled blocks of cocaine through Sydney airport that had been hidden in airplane toilets by drug couriers posing as international passengers. Not far into the AFP surveillance recording, Cleveland asks Nicholson "how much are you comfortable carrying?" aboard a flight from Los Angeles to Sydney.

"Whatever I've got to," he replies.

WITH $20 million worth of cocaine in an adidas sports bag on his lap, crime boss Mohamad Jomaa thought it would be a perfect time to play a joke on his square-jawed companion. "Oh f---! . . . there's a tape recorder down there," he warned Brian Blackman, a fully patched member of the Lone Wolf outlaw motorcycle gang. "There's a f---ing tape recorder."

Jomaa paused, then erupted into laughter. A few minutes later, when his car was surrounded by the red and blue of flashing police lights, the irony may have occurred to him.

During the 48 hours before Jomaa's arrest in September 2010 - a period in which he'd arranged for bags full of drugs to be removed from a shipping container at Port Botany - he and his associates had been watched by the very audience he had hoped to avoid. There actually was a police listening device in the grey Holden Calais carrying their precious cargo. It recorded Blackman unzipping the sports bag to look at the cocaine and exclaiming: "f--- yes, that's it." Next it had recorded Jomaa's ill-timed attempt at humour. A few minutes after that came the sound of his arrest.

It had been a long time coming. Since at least 2005, the Mohamad Jomaa syndicate had been linked by NSW police and federal law enforcement agencies to multiple drug and tobacco imports that moved undetected through Sydney's wharves.

At the time of his arrest, Jomaa's network included two suspected corrupt customs officials, a relative who worked in a customs broker's business and an array of contacts on the waterfront. To get to the cocaine-filled sports bags, Jomaa's associate Blackman had arranged for a corrupt maritime worker to get access to a shipping container before customs officers could x-ray it.

Jomaa's suspected contacts inside customs were, according to NSW police sources, most valuable because they could tip off his syndicate if law enforcement agencies began sniffing around Jomaa's importing activities. As a result, many in Sydney's underworld considered Mohamad Jomaa untouchable.

WHILE they had never met, Jomaa and Cleveland's importing schemes shared some notable features. For years, both had been run under the noses of law enforcement authorities. Both also relied on corrupt waterfront or airport insiders. Cleveland's scheme was pioneered in the early 1990s by Sydney private school teacher tuned drug trafficker Kevin Geraghty.

After Geraghty's arrest for importing cocaine in 2000, Cleveland assumed control over his enterprise, steering it through some of the biggest airport security shake-ups in Australian history. This included new laws that required all maritime and aviation workers to undergo background checks before being issued government security cards. But even with the increased vetting, Cleveland's corrupt Gate Gourmet contacts all passed muster.

Nicholson, who had criminal associations and convictions for assaulting a police officer, was granted his Aviation Security Identity Card, as was another corrupt Gate Gourmet employee, Matthew Hay, who had convictions for dishonesty and assault. (Both Nicholson and Hay were later charged alongside Cleveland with drug smuggling).

Mohamad Jomaa's network, however, went deeper than Cleveland's - into the customsagency itself. When members of the syndicate were raided over illegal tobacco imports in 2010, police discovered confidential customs documents, including photographs from inside the highly restricted Customs Examination Facility at Port Botany.

The home of the customs officer who was the prime suspect behind the leak was also raided by NSW police, who discovered something troubling. Not only did he know Jomaa, two of his brothers were suspected traffickers. The same customs officer also had multiple phones registered in false names. He resigned quietly from customs in early 2011, but a second customs insider suspected by police to be on Mohamad Jomaa's payroll was never identified.

Confidential police documents reveal that Mohamad Jomaa is not alone in having customs contacts inside customs. Several other alleged tobacco and drug smugglers in NSW have similar reach. Police files seen by Fairfax reveals that members of NSW Middle Eastern crime groups have been especially successful in cultivating contacts in customs.

According to security expert and former government official Neil Fergus, a corrupt customs insider can help organised criminals defeat any security system. "Corrupt customs officers, they know how the system works," he says. If they are in a position "where they can support organised crime . . . [they] are undermining the entire organisation."

In 2005, Fergus was one of three leading security experts (including Sir John Wheeler) who led Australia's biggest review of airport security. The review was prompted by allegations of corruption inside Australian airports, first made in late 2004 by supporters of drug smuggler Schapelle Corby and later, in May 2005, in a leaked customs intelligence report that warned baggage handlers and other workers at Sydney airport were involved in drug trafficking.

Wheeler and Fergus' final report in September 2005 (known as the Wheeler report) was damning. It found that "policing at major airports in Australia is often inadequate and dysfunctional, and security systems are typically unco-ordinated". It also said there was a culture of under-reporting, and tolerance, of theft at airports and cargo areas, and that terminal staff who had "major criminal associations" were gaining access to secure areas, including baggage screening zones. "At its most basic, a culture of lax security or petty criminality can provide opportunities for terrorists to exploit weaknesses in airport security," the report warned.

Not surprisingly, the report led to federal government promises of an immediate overhaul of airport policing, with federal agents to take the lead policing airports role.

The AFP and the Australian Crime Commission (ACC) were put under increasing pressure to identify organised crime activity at airports baggage screening areas and passenger terminals. The ACC responded by summoning airport staff for questioning at secret star-chamber hearings, where suspects were required to answer questions honestly or risk jail. Soon, it was looking at the waterfront as well.

In 2009, the ACC gave state and federal police forces copies of its investigation, the Crime in The Transport Sector inquiry. A public summary of the ACC's confidential findings said they included "a comprehensive picture of control system weaknesses, which provide opportunities for criminal exploitation within these (maritime and aviation) environments".

Confidential crime commission intelligence distributed to state police forces at about the same time went further, identifying specific criminal groups working with corrupt insiders. Among names featured were the Bra Boys and Mohamad Jomaa's syndicate.

Within the next 18 months, in operations by the AFP and NSW police, Cleveland and Jomaa were arrested. But these successful operations- both men have recently been convicted of drug trafficking- only increased mutterings in policing and political circles about serious problems in customs. Much of it was generated by policing agencies, who believed customs had become more of a drug trade facilitator than a drug detector.

But corruption was also a concern. Former NSW Labor senator Steve Hutchins led last year's parliamentary probe into the gaps in aviation and maritime security. He recalls that as his committee prepared its July 2011 report - which again warned that organised crime had deeply infiltrated airports and ports by exploiting security gaps - senior police officials provided private briefings that some customs officers "had compromised their integrity" and needed to be "dealt with quickly and harshly".

A confidential report in February 2012 by a NSW waterfront corruption policing taskforce Polaris left no doubt that this was indeed the case. "Polaris investigations have identified employees of law enforcement and regulatory bodies providing assistance to criminal groups.

"This assistance is less common but of higher consequence than private-sector corruption. The employees have included members of customs and employees of AQIS [the Australian Quarantine and Inspection Service]," it said.

That warning has been realised spectacularly in the past 24 hours, with Fairfax's expose of dozens of corrupt customs staff at Sydney airport and on the waterfront. Seven years after the Wheeler report was completed, Neil Fergus says change is still needed and the reforms his work helped realise have been "less effective than we hoped".

Fergus says that given the "litany" of warnings over the last decade, a commission of inquiry with judicial powers may be needed to deal with the latest revelations. Hutchins is calling for a royal commission, while also pointing to the Gillard government's failure to implement all the recommendations from his parliamentary committee's 2011 inquiry into border security gaps. "We are not talking about a case of whiskey being knocked off the waterfront," says Hutchins. "We are talking about the importation of hundreds of millions of dollars worth of drugs."