June 07, 2008 12:00AM
INSIDE STORY: Michael McKenna and Natalie O'Brien
Like the Roman god, a mythological gatekeeper, Standen had two personas: one was the competitive, effective and highly decorated investigator; the other was the shadowy alter-ego of an addicted gambler, who managed to evade paying the debts for his sometimes questionable professional methods and friends.The Monday arrest of the assistant director of the secretive NSW Crime Commission over an alleged $120 million drug importation plot sent shockwaves, at least publicly, through the ranks of the law and order community. But for many investigators, Standen's fall from grace was a long time coming and raises serious questions about who is policing the police.
In the days since Standen's arrest by AFP officers at his Sydney desk, there has been a steady flow of revelations of how the 33-year veteran of five law enforcement agencies has been adversely named in royal commissions, faced accusations of destroying evidence and managed to overcome a ban on his entry into the AFP several decades ago.
Even NSW Crime Commission head Philip Bradley surprised reporters this week by confirming he had been aware that his right-hand man - who oversaw major drug and anti-terrorism investigations - had had a gambling problem.
Bradley, in the tightly protected loop of the 18-month AFP investigation into Standen, is now paying the price with his all-powerful organisation's activities facing ongoing scrutiny, for the first time, by the NSW Police Integrity Commission.
The ramifications of Australia's highest-level police corruption investigation has spread rapidly across the length and breadth of the country.
State police forces and corruption watchdogs have launched reviews into all joint investigations with the NSW crime commission. Defence lawyers have warned that convictions, made on the back of Standen's work, may now be jeopardy.
And the NSW Government has, so far, rebutted calls for a royal commission into the affair.
It is a startling and, given the alleged plot to manufacture $120 million of ice - the scourge of Australia's youth - heinous stain on Standen's chequered career.
Standen has also enjoyed a paradoxical reputation as an investigator with an encyclopedic memory who got the bad guys.
One former AFP colleague, who worked with him in Sydney during the 1980s, said Standen, 51, had always been earmarked for greatness.
"In the early days after the formation of the AFP, he and guys like (now-AFP commissioner) Mick Keelty were viewed as the new breed of commonwealth copper on the rise," the veteran drug investigator, now retired, told The Weekend Australian. "They were smart, forensic in their methods and played the part. They were well-groomed, fit and knew how to talk to the bosses."
But Standen, who grew up in the inner-west Sydney suburb of Burwood and started his career in June 1975 on the wharves with the Australian Customs Service, should never have been allowed into the AFP soon after it was formed in 1979.
In 1982, the Stewart Royal Commission into Drug Trafficking heard that Standen had worked for the Federal Narcotics Bureau, then an arm of Customs and which later amalgamated with the AFP.
The commission heard that in May 1979, Standen and two other "narco" agents had raided a Bondi house of a man called Udy, where they found 18 silver foils of hashish. Standen later told the royal commission he and his colleagues had, weeks later, flushed the hash down a toilet, falsified entries into the bureau's log book that nothing was found in the raid and then destroyed a signed statement from Udy confessing to his ownership of the drugs - effectively removing any trace of the bust.
"I do not actually specifically remember the incident - I feel fairly certain I would have destroyed it by shredding," Standen told the commission about this confession.
Asked by the commissioner if the men were "really trying to obliterate all traces of this incident", Standen responded: "That is correct."
Standen told the royal commission they destroyed the hashish and paperwork because the amounts of drugs was less than 500g and charges could not be brought under federal laws.
But a policeman - AFP chief superintendent John Reilly - who investigated the matter after a complaint was made by NSW police, offered a different version of how the agents explained their actions.
According to Reilly, the agents claimed there had been problems with charging Udy because of a lack of co-operation from local police and that they then became embarrassed about having held on to the hashish for more than two weeks. Phillips said that Standen's answers during the investigation "'reflected on either his honesty or his quality as an investigator".
Standen was then charged under the Public Service Act and recommendations made that he and another agent were to be barred from joining the AFP when the Narcotic's Bureau merged into the new commonwealth force later that year.
But the royal commission heard that the charge and AFP ban were dropped because of "indecision by members of the Department of Administrative Services and what was then Business and Consumer Affairs".
Standen moved into the AFP.
Joining him in the AFP was one of Standen's close "narco" colleagues, Allan Gregory McLean, later convicted for importing heroin into Australia.
When the narcotics agents joined the AFP in 1979, Standen went to work in the Sydney office, where, by all accounts, his gambling problems grew.
Federal agents who were his workmates said it was widely known that he had a problem and he was a regular punter on the horses, racking up a debt of about $70,000 at his favourite haunt - a hotel near AFP headquarters.
One recalls how Standen was chased for the money and ended up cashing in his superannuation, ostensibly to pay gambling debts.
His gambling was growing along with his reputation as a "fearsome investigator", and he was given a commendation for his work in the AFP's Drug Targeting Unit. He also met fellow AFP agent Dianne James.
When James met and married Bakhos "Bill" Jalalaty, 45 - who has also been charged in relation to the alleged drug importation - she left the AFP and went to work alongside him in their smallgoods company. But it appears that Standen and Jalalaty kept in touch.
In 1995, Standen took a voluntary redundancy and left the AFP with a clean record. He joined the NSW Crime Commission and was put in charge of what is known as the Gymea Reference, which has responsibility for, among other crimes, investigating organised crime, drug importation, and the manufacture and distribution of drugs.
During his time with the commission, Standen made headlines - for the wrong reasons. In 2006, it emerged that the commission had sanctioned an informant to sell 7kg of cocaine to a suspected drug ring, with links to Qantas baggage handlers. Only 1kg was ever recovered, with 6kg allegedly sold on the streets after the Standen-led investigation.
At the time, a committal hearing heard the "jaw-dropping" claim by Standen that it was justified to allow the drug on the street because it could not seriously endanger anyone's health.
The leader of the drug syndicate, Michael Hurley, escaped the police dragnet - after an alleged tip-off. He was later arrested and died before standing trial.
But Standen alleged in a complaint to AFP Commissioner Mick Keelty that a highly decorated AFP investigator, Gerry Fletcher, was the source of the leak.
Mr Keelty this week confirmed he and Standen had previously both worked out of the current AFP Sydney headquarters in Goulburn Street and might have been involved in some of the same operations.
"It's no more and no less than that," he said.
Fletcher - who years earlier arrested Standen's mate, Allan Gregory McLean - was later sacked, then cleared before being reinstated to the AFP.
AFP sources have told The Weekend Australian it was Standen's intricate knowledge of the police's investigatory methods - and how best to avoid detection - that allegedly armed him with the confidence that he could get away with the alleged plan.
Standen was allegedly even heard in intercepts playing down the abilities of his colleagues to Jalalaty, telling him not to give "them" too much credit and that they were never that good.
It is alleged Standen used his insider knowledge to find out which cargo containers were searched. At the same time, he sat in on high-level police meetings convened to discuss the latest organised crime and illicit drug movements and top secret law enforcement operations.
Police will allege that Standen - facing mounting gambling debts - stood to make $1 million from the plot to import 600kg of pseudoephedrine - the precursor chemical used to get ice - in a container of rice aboard the cargo carrier Sinotrans Shanghai. Standen allegedly has told AFP investigators that Jalalaty had given him large sums of money in recent years.
At one stage, Standen is alleged to have told Jalalaty he would be happy with $100,000 from the plot because "then he would be able to breathe".
In early 2006, Australian police were tipped off by their Dutch counterparts to the plan - which was allegedly being masterminded by Briton James Kinch.
Australian police immediately launched their investigation with round-the-clock surveillance of Standen and Jalalaty. Kinch, 49 - arrested last week in Thailand - had lent Jalalaty $1.7 million to set-up his food business as a cover for the alleged drug plot.
From May 2006, police and investigators - including Standen's own colleagues - intercepted thousands of conversations between the plotters.
Unaware of the around-the-clock surveillance, Standen and Jalalaty pressed on. Last weekend - after Dutch police arrested the plotters at the European end of the alleged scheme - it is believed one of the Australians went to the wharves to pick up the drugs they had arranged to be imported hidden in bags of rice.
It was time for the AFP to make their move.
Additional reading: How elite agents went off the rails
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