Leigh Johns … Australian Building and Construction Commissioner. Photo: Josh Robenstone

BUILDING industry watchdog staff will be subject to a wide-ranging inquiry after the destruction of evidence by inspectors led to the collapse of a criminal case last week.

The Australian Building and Construction Commissioner, Leigh Johns, said he had asked the Australian Government Solicitor to undertake the inquiry after the case against unionists John Setka and Matt Hudson fell apart.

”I am adamant of the need to be open and honest about any deficiencies in our work,” Mr Johns said. A report of the findings and recommendations will be published, he said.

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But the national secretary of the Construction, Forestry, Mining and Energy Union, Dave Noonan, questioned the independence of the inquiry and said the ABCC was a client of the government solicitor.

Mr Noonan said a broader inquiry was needed to look at ”bias” at the ABCC and that in other cases its inspectors had also been criticised from the bench for their conduct.

Last week Magistrate William O’Day said there had been ”significant conflicts in some of the evidence the court has heard” as prosecutors dropped 13 of 15 charges against Mr Setka and Mr Hudson over a 2009 incident on a Carlton building site. Mr Setka and Mr Hudson agreed to each plead guilty to a minor offensive behaviour charge.

During the committal hearing, an ABCC inspector, Matthew Keene – who still works for the commission – admitted he had destroyed his original notes and not kept sunglasses that he claimed had been forcefully removed from his head. Under questioning, Mr Keene said he did not recall being told it was important to keep the original notes as evidence.

Mr Keene also signed a ”debriefing” statement soon after the 2009 incident claiming Mr Setka headbutted him. But in a later signed police statement he alleged it was Mr Hudson.

A second inspector, Shaun Hardwick, now with the Federal Police, also apologised to the court after Robert Richter, QC, said he had perjured himself during evidence.

Mr Hardwick said he did not witness the alleged headbutt but was told about it by Mr Keene. Mr Hardwick’s original debriefing statement alleged it was Mr Setka but he changed that to Mr Hudson in his police statement.

The hearing heard that a senior executive of the ABCC, Murray Gregor, who was present at the debriefings, at first told police that Mr Setka was responsible for the headbutt.

Mr Richter, representing Mr Setka, argued there was an attempt by the commission to target the ”militant” Mr Setka, an assistant state secretary in the CFMEU.

Mr Johns said the events took place before he became commissioner and he took ”matters of evidentiary integrity to be of the utmost seriousness”. ”It is important to me that we develop a clear understanding of what happened, why it happened and the context in which it occurred.”

The inquiry has been asked to look at whether the conduct of ABCC officers was ”in accordance with professional standards” expected of them. Staff have been told to provide ”full assistance” to the inquiry.

The collapse of the case comes at an embarrassing time for the ABCC, with its future being debated by Parliament.

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The AFP’s mistakes occurred during its 2007 arrest and questioning of Arumugam Rajeevan, one of three men who will be sentenced in the Victorian Supreme Court today for providing money to a terrorist organisation.

Federal agents arrested Rajeevan at gunpoint despite having no legal basis to do so, refused requests from a barrister and lawyer to speak to him during his five-hour voluntary interview, and subjected him to questioning described by the Victorian Supreme Court’s Justice Paul Coghlan as ”really well over the top” and ”outrageous”.

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The AFP, which sustained heavy criticism over its handling of another terrorist investigation into the Indian doctor Mohamed Haneef, said it could not comment on the case until the men had been sentenced.

However, it is believed the AFP has already made changes to deal with the problems that arose during the Tamil Tigers investigation.

Last year Australian prosecutors withdraw all terrorism charges against Rajeevan, Aruran Vinayagamoorthy and Sivarajah Yathavan.

In December they pleaded guilty to a lesser charge under the charter of the United Nations Act, a federal law that makes it a criminal offence to provide an asset to a terrorist organisation proscribed by either the UN or the Australian government.

In pre-trial comments in January last year – which could not be reported at the time – Justice Coghlan said federal agents had ”abused” the rights of Rajeevan.

He said the manner in which Rajeevan was questioned by a federal agent, Patricia Reynolds, was ”beyond any training a proper investigator can have” and a ”fundamental departure from the [proper] principles”.

After his criticism, the prosecution decided not to use Rajeevan’s interview as part of its case.

Justice Coghlan queried why the AFP did not give Rajeevan access to lawyers while police were questioning him. He also described as ”frighteningly high-handed” Rajeevan’s arrest at gunpoint in 2007 by federal agents and warned police they risked incriminating themselves by testifying about the potentially unlawful arrest.

After the arrest, police realised they did not have enough evidence to arrest him and told him he would be ”unarrested”, a notion which Justice Coghlan described as ”bizarre”.

The prosecution described the arrest of Rajeevan as ”a fairly grave mistake”.

In two extreme matters complainants had to wait 1000 days for their problems to be resolved.

A report by the Commonwealth Ombudsman on complaints handling by the federal police also said the public had only a 7 per cent chance of having a complaint upheld, and even less if it related to physical force.

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The most common complaint related to discourtesy. Other claims included excessive physical force and corruption.

The acting Ombudsman, Alison Larkins, said the complaints process ”continues to deteriorate – particularly in relation to the most serious complaints”. The issue had been raised in previous reviews. ”But to date the measures the AFP has taken to address the issue have not proven to be effective,” Ms Larkins said.

She did not make any formal recommendations in her report, which was tabled in Parliament just before Christmas. No complaint made about excessive physical force from 2007 to 2010 was upheld. But 60 per cent of complaints made internally, including where officers reported themselves, were upheld.

”We continue to see cases where an AFP member’s version of events is preferred over that of the member of the public in circumstances where the record does not disclose substantive justification or where corroborating evidence has not been sought,” Ms Larkins said.

The federal police aims to resolve minor complaints within 21 days and the most serious complaints within 180 days. But the Ombudsman found it reached this standard in only 6 per cent of cases. Ms Larkins examined 311 cases in which the complaints had still not been resolved after more than a year.

The police received 358 complaints from the public in 2010-11, according to its annual report.

A federal police spokeswoman said a new complaints handling system was in place. ”The AFP does recognise that there have been excessive delays in finalising some complaints,” she said.

Yesterday the Federal Government urged travellers going to the United States to be at airports an hour earlier than normal to allow for body searches, following the attempted bombing of a Northwest Airlines flight on Christmas Day.

The federal Transport Minister, Anthony Albanese, said he would not change the recent decision to ease restrictions on carry-on items, despite tighter security on flights to the US. Passengers can now take knitting needles, nail clippers and tennis racquets into the cabin.

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The decision to hand control of airport security to federal police was made before the botched attack on the Northwest Airlines flight and followed an independent audit of the agency by a former senior public servant, Roger Beale.

The change is expected to lead to greater visibility of police at airports and end variations in security procedures.

At present the task is shared between state and federal police under a controversial arrangement in which the Commonwealth provides the funding and protective service officers while states provide the bulk of the sworn police.

The Federal Opposition transport spokesman, Warren Truss, questioned whether the Government had exactly followed security advice when changing the rules for carry-on luggage.

”What was the advice from the security agencies, and has the Government followed it to the letter?” he said.

Mr Truss said the Coalition was concerned about cutbacks to security. ”They’ve been cutting Customs resource and staff numbers, and they’ve been cutting a lot of little things behind the scenes that you don’t notice until something goes wrong.”

The Minister for Home Affairs, Brendan O’Connor, said that under the changes protective service officers would be upgraded to fully sworn police.

The changes will take place at airports in Sydney, Adelaide, Melbourne, Brisbane, Canberra, Darwin, Hobart, Perth, Cairns, Alice Springs and the Gold Coast.

Jim Torr, chief executive of the AFP Association, said the move would improve security. ”We were always dubious about bringing state agencies in to police interstate airports.” At present, he said, eight agencies were charged with performing the same functions, so the changes were appropriate.

The Beale audit, published two weeks ago, said some state police agencies were opposed to the move.

”Even with generous Commonwealth support, not all states have been either willing or able to provide the pledged level of staffing,” it said.

”The audit has reluctantly concluded – acknowledging it is a view not shared by a number of chief police officers – the [Commonwealth] model is likely to be more sustainable in the long run.”

On Saturday, the US Transport Security Administration introduced new security for all flights into the US until at least tomorrow, including pat-down searches at airport gates, physical inspection of all bags and a requirement that passengers stay seated for the hour before landing.

The Attorney-General’s Department has released figures showing federal and state agencies accessed telecommunications data and internet logs more than 250,000 times during criminal and revenue investigations in 2010-11.

Greens senator Scott Ludlam has called for tighter controls.

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”We’ve already taken some pretty dangerous steps in this country towards the surveillance state,” Senator Ludlam told a recent conference on internet privacy, ”and not that many of us are either interested or aware that it’s going on, including people like me who should know better.”

Data available to police, security and other government agencies under federal telecommunications law includes phone and internet account information, outwards and inwards call details, phone and internet access location data, and details of Internet Protocol addresses visited, though not the actual content of communications. Access is authorised by senior police officers or officials rather than by judicial warrant.

Federal government agencies using telecommunications data include the Australia Federal Police, Australian Crime Commission, the Tax Office, the departments of Defence, Immigration and Citizenship and Health and Ageing, Medicare and Australia Post.

Data was also accessed by state police and anti-corruption bodies, government departments and revenue offices, the RSPCA in Queensland and Victoria, the Victorian Taxi Directorate and Wyndham City Council in Melbourne’s west.

Victoria Police was the largest user of telecommunications data, with 65,703 authorisations in 2010-11. The force has reported a jump of more than 50 per cent in authorisations over two years.

The scale of telecommunications data mining by police and security agencies has also been illustrated by the release under freedom of information of a ”highly protected” report on a single AFP-Defence Department leak investigation in 1999-2001. In an effort to identify the source of leaks to the media of secret intelligence reports on East Timor, the AFP and Defence security investigators accessed phone call records of nearly 14,000 phone services totalling more than 77,000 calls.

The Australian Privacy Foundation recently noted that it was now easy to track a person’s mobile devices, smartphones and tablets ”in real-time, or retrospectively”.

Federal police are to investigate a media report that Defence force employees gave preferential treatment to a company in relation to a deal to supply flights.

The Age newspaper claims two Defence officers gave inside information to a company bidding to provide the $100 million deal to fly Australian troops to the Middle East.

The company won the deal and then employed the two men, according to The Age.

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The Defence department says it has assessed the allegations and determined that if proven they give rise to “a range of potential criminal offences”.

Defence referred the claims to the Australian Federal Police late last week.

Senior sources within the federal police have indicated that guidelines introduced late last year have little effect on operational decisions.

If the Bali situation were repeated today, they say, the federal police could act in the same way and achieve the same result, which would mean Australians facing the death penalty overseas.

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Federal police sources have indicated the rules would not have meant ministerial oversight of their decision to deal with the Indonesians in 2005.

The Home Affairs Minister, Brendan O’Connor, said the guidelines – as well as a ministerial direction that asked the federal police to consider the government’s opposition to the death penalty – laid out a formal process for the federal police.

This ”will result in a more considered and methodical approach to making decisions when dealing with international cases that may involve the death penalty”, he said.

Australian Federal Police will investigate a brawl which broke out among Sri Lankan, Iraqi and Kuwaiti asylum seeker at the Christmas Island detention centre this week.

The Department of Immigration confirmed that in the early hours of Monday morning an altercation broke out between eight Sri Lankan, Iraqi and Kuwaiti detainees at Christmas Island.

A spokesman said at about 1am (local time) staff from the detention centre’s service provider Serco were able to break up the fight without any injuries being sustained.

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However later in the day another fight broke out between the same group of asylum seekers which resulted in one man being seriously injured.

A spokesman said the detainee was treated at the centre’s medical centre for a hand injury he sustained during the brawl at the compound at about 12.30pm (local time) on Monday.

The injured detainee was believed to be a Tamil who had some of his teeth knocked out during the brawl, but refugee advocate Ian Rintoul now said it had been revealed that was not the case.

Three other detainees suffered minor injuries while a Serco staff member was also injured during the altercation and subsequently treated at the Christmas Island hospital.

Following the fight, Serco staff separated the Iraqi and Kuwaiti detainees involved to ensure their safety, a departmental spokesman told AAP.

But the peace didn’t last long when a further altercation broke out between 50 Iraqi, Sri Lankan and Kuwaiti detainees.

Serco staff however managed to de-escalate the situation and no injuries were reported.

A spokesman said the centre remains calm as Serco staff continue to monitor the situation.

Mr Rintoul, from the Refugee Action Coalition, said further altercations are inevitable due to the tension caused by overcrowding at the Christmas Island detention centre.

“It seems that the overcrowding is producing something of a gang culture among some of the detainees inside the detention centre,” he said.

“The overcrowding, the boredom, the delays and the misery is turning the detention centre into a hothouse of frustration.”

A recent report by the Commonwealth Ombudsman found that as of early February, about 2757 asylum seekers were living at the detention facility, well above its contingency accommodation capacity.

“Simply put, there are too many people detained at the Christmas Island immigration detention facilities,” Ombudsman Alan Asher said.

CHEMICALS used by drug gangs to manufacture amphetamines are being imported into Australia because of a loophole in federal legislation.

The ”precursor” chemicals are being legally brought into the country from places such as China and India, even though it is illegal to possess them in most Australian states, where they are banned under a series of local laws and regulations.

The revelation comes a fortnight after NSW police made their largest ever pseudoephedrine bust – a major amphetamine precursor – seizing over half a tonne of the chemical with a street value of as much as $150 million.

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Last Tuesday Victoria Police also broke up a highly sophisticated drug operation, which they said included the most sophisticated clandestine laboratory they had seen in a decade. The methamphetamine was allegedly being ”cooked” using chemicals from overseas.

”As we open our borders to the rest of the world in the trade arena, that brings problems and issues with it, and one of those things is precursor chemicals,” Victoria Police Superintendent Gerry Ryan said.

”We’ve got situations where some precursor chemicals are legal to come in, but once they’re in Victoria and elsewhere, they become illegal because they’re a [banned] drug.”

State law enforcement agencies, the Australian Federal Police and Customs are working on a proposal to put to the federal government that would close the loophole, making the importation of the chemicals illegal.

Drug producers in Australia sometimes order the chemicals – which come in liquid and solid form – but direct them to false addresses, or order them under false names, Superintendent Ryan said.

Another method is for drug gangs to pay students from countries such as China to carry the chemicals on their bodies, a practice known as scatter importation, which relies on the assumption that only a small proportion of drug couriers will be caught.

There are particular concerns at the moment about Chinese students bringing in a cold and flu remedy known as Contac NT, which contains a powerful pseudoephedrine, one of the precursor chemicals for drugs such as ecstasy and ice.

Drug manufacturers have been forced to look for other sources of precursor chemicals since police and other law enforcement agencies combined with Australian companies to choke off the supply here.

”We can’t just limit it to China. There are a number of Asian countries and students become vulnerable in the drug trade, because they’ll do and carry certain items that will put them at risk,” Superintendent Ryan said.

”The majority are fantastic people and law-abiding citizens. We’re talking about a small minority that spoil it for everybody.

”It’s not every student, but there are some students that for whatever reasons need more money than their parents give them, and they end up in a lifestyle they want to keep going.

”So they look at other avenues of obtaining money and some of them will go to the drug trade, no different from Australian students.”

Contac NT has become notorious in New Zealand over the past five years, where it has been used to manufacture a methamphetamine called ”P”, which is notable for the violently unpredictable behaviour of its users.

Last May New Zealand police and Customs officers seized 68 kilograms of Contac NT in Auckland, claiming it could have been used to manufacture between $13 million and $20 million worth of methamphetamine.

Three Chinese men were arrested in connection with the haul, two of whom were in New Zealand on student visas.

New Zealand police have also published an information brochure on Contac NT, warning in Asian languages that students have already been convicted and jailed for bringing the drug in.

with Dylan Welch

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Daniel Tzvetkoff … charged with money laundering. Photo: Glen Hunt

THE Australian Federal Police has been drawn into a US investigation into alleged bank fraud by online poker sites in which the FBI alleges $US540 million ($507 million) was laundered by an Australian payments processor.

Charges laid in New York’s Southern District Court have also put a question mark over lucrative sponsorship deals held by Crown Casino, whose Aussie Millions poker tournament was this year sponsored by Full Tilt Poker, and the Cronulla Sharks, who boast PokerStars as their sleeve sponsor.

”It’s a US investigation, but we’re assisting,” an AFP spokeswoman said.

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The charges, which attract jail sentences of up to 30 years and fines running into the millions of dollars, have also sparked a public rift between Full Tilt and its star player, Phil Ivey, who has filed a lawsuit in Nevada alleging the company owes gamblers more than $US150 million in unpaid winnings.

Public allegations Full Tilt has been implicated in money laundering also caused him ”public ridicule, humiliation, and loss of personal and professional reputation,” Mr Ivey said in a complaint filed with the Clark County District Court on Wednesday.

In April, the FBI unsealed a grand jury indictment charging 11 people, including the founders of Full Tilt, Pokerstars and another large online poker site, Absolute Poker, with bank fraud, money laundering and illegal gambling.

At the same time, US authorities launched a civil suit against the poker sites and some of the companies that processed their payments claiming a total of at least $2 billion.

In its indictment, the FBI alleges Intabill, a British Virgin Islands-registered company associated with bankrupt Australian information technology entrepeneur Daniel Tzvetkoff, ”processed at least $543,210,092 of transactions for the poker companies from mid-2007 through March 2009”.

US authorities charged Mr Tzvetkoff with money-laundering offences last year, but he has since been released on bail and is reported to be one of three confidential witnesses who are co-operating with the FBI investigation.

While Mr Tzvetkoff is not named in the case brought by US authorities, the indictment alleges Intabill had a central role in processing payments for the poker companies.

The FBI alleges ”Intabill disguised the gambling transactions as the transactions of dozens of phony financial service merchants”.