We’ll blow up your car. We’ll get you one day. It can happen any time. You could be dead any minute.
Threat to witness in Bond trial, 19941
Fresh from their success in deflecting questions about his business affairs, Bond and his lawyers now tried to give the ill-health argument yet another crack in the hope of getting his trial on the $15 million Manet fraud charges put off a second time, or even for good. And once again, Alan put on a command performance.
When the hearing opened in Perth on 26 May 1994, he arrived at court looking dazed and disorientated and had to be ushered to a private room by his psychiatrist Dr Tannenbaum. An hour later, his lawyer Tony Howard QC told magistrate Ivan Brown that Alan might well collapse if he had to give evidence. He had supposedly vomited on being told he had to come to court and was showing signs of an incipient stroke. As a consequence, his psychiatrist wanted to re-admit him to the Mounts Bay Clinic immediately for observation and treatment. The magistrate had been told initially by Bond’s lawyers that Alan was too ill to come to court, but had insisted on seeing for himself. Now he clearly had no option but to send the entrepreneur off to hospital and continue the hearing without him.
Shortly afterwards, Bond emerged from court to confront the waiting news media looking like a man who had seen a ghost. Supported by his lawyer on one side and his doctor on the other, the once-great dealmaker was apparently unable to walk unaided and had to be helped along step by step. His coat was ill-fitting, his face grey and crumpled. He looked, as he had in Sydney three weeks earlier, like a man laid low by sickness and ill fortune.
Together with the evidence that his doctors would give in his absence, this might well have been enough to send Bond’s Manet trial the same way as his crucial bankruptcy hearings. But unfortunately for him, the scene was being watched on the television news on the other side of Australia by a man who knew Bond well. And when he saw Alan looking so ill he almost fell off his chair in amazement. Lionel Berck had been with the stricken entrepreneur only thirty-six hours earlier in the Whitsunday Islands and had seen absolutely nothing wrong with him. There, in the hot Queensland sun, Bond had been walking, snorkelling, climbing a rocky creek bed, and bouncing around like a five-year-old. And mentally he had been in tip-top shape.
It seemed inconceivable that his health could have deteriorated so dramatically in less than two days. But the only other explanation for Alan’s sudden collapse was that it was an act, and an Oscar-winning one at that. And before long Berck and his partners would be rushed across to Perth to suggest that to the court.
Nine months earlier, Bond had agreed to buy an island called St Bees from Berck’s family for $6.5 million, and they had been deep in discussions ever since. During all that time, when his doctors were swearing on oath that he was seriously brain-damaged and depressed, and incapable of adding two and two to make four, Bond had been nutting out the details of a grandiose plan to turn St Bees into another resort like Hamilton Island.
There was nothing wrong with this as a business proposition, for St Bees had coral reefs and eight or nine fabulous beaches of brilliant white sand, and was well suited to tourist development. But as a bankrupt, Bond wasn’t allowed to run a company or handle millions of dollars, and his doctors and lawyers had sworn many times that he was mentally incapable of doing any such thing.
However, as Lionel Berck, his son Peter, and their business partner John Urch soon testified, the Alan Bond they had dealt with was a very different person from the pathetic brain-damaged specimen that his psychiatrists had been describing.
As each told Perth Magistrates’ Court in June 1994, Bond had first visited the island the previous October, two weeks before Dr John Saunders had pronounced him unfit to brief his lawyers. He had flown into St Bees with Diana Bliss and a Sydney solicitor, Warwick Colbron, arriving by hired helicopter at noon, and within three hours had asked a series of pertinent questions, knocked the price down by $3.5 million and shaken hands on a deal to buy the island. Then without further ado, he had boarded the chopper and headed off again.
So had he appeared brain-damaged, John Urch was asked? Absolutely not, Urch replied. Bond had been as sharp as a tack, taken copious notes, led the negotiations and been in command of large amounts of detail.
Only two days after closing this St Bees deal, Bond had been examined by Tim Watson-Munro and diagnosed as ‘fragile, suicidal and depressed’. The psychologist had also identified a thirty-point fall in Bond’s IQ and had later testified in court that his charge was so badly brain-damaged that he couldn’t run a corner store. So, he was now asked by prosecuting counsel, was this diagnosis consistent with the evidence given by Berck and Urch? Well, no, said Watson-Munro, he had to agree it was not.
In the four months after this first trip to St Bees in October 1993, Bond had met the owners of the island three more times, eventually beating the sale price down further to one-third of what they had been asking. Berck and Urch, who had dealt with Bond on each occasion, told the court that they felt he was not sick at all and had been 100 per cent fit. In fact, he had impressed them as the most formidable businessman they had ever met.
Urch’s evidence in particular was hard to challenge, because he had kept a diary of his every meeting and phone conversation with Bond, in which he had also recorded the daily weather report and exchange rate for the Australian dollar. In the magistrate’s view, he was ‘a gem of a witness’ whose evidence and diaries could be relied on.
These diaries, which Urch had been keeping since the age of fifteen, laid out the negotiations blow by blow, day by day and week by week, and showed Bond to be a man who asked a lot of good questions, who appreciated the financial, legal and technical issues involved and who could redraft a sale agreement to order. This Bond was no sorry, shambling nervous wreck who could not remember the names of his ocean racers. He was an energetic, aggressive businessman and the toughest talker John Urch had ever encountered.
The negotiations to buy St Bees had continued throughout the period in which Bond was limping in and out of court and breaking down in doctors’ surgeries. And the climax in February 1994 had come when he was supposedly at his psychological nadir, just before he was rushed into the Mounts Bay Clinic for six days of treatment. On this occasion he had met Urch in Sydney and rewritten the sale contract on two sheets of foolscap paper. Thereafter, he had continued to deal with legal matters concerning St Bees from his hospital bed in Perth, when he wasn’t busy phoning Switzerland, Austria and Russia. In other words, he had continued to do business with the Bercks and others, while swearing on oath that he was suicidally depressed and so brain-damaged that he couldn’t brief his lawyers or remember his offshore millions.
Alan had also left a physical record of his activity on St Bees in the shape of a huge phone bill. The Bercks’ normal telephone account ran to two pages and could be paid from petty cash, but after Bond had been there they received a demand for $3,000 with a list of sixteen pages of mainly international calls, to Southeast Asia, England, Canada, America, Russia and other places besides.
This account of course, had only covered those times that Bond and his fellow visitors had used the Bercks’ phone instead of the mobiles they all had brought with them. Diana Bliss had apparently been on a mobile phone constantly, both on her own account and, according to Lionel Berck, for Alan.
A:
At one stage I think there was nine people there and something like thirteen or fourteen phones. She kept phoning and passing the phone on to Alan and then she’d be off with another one calling somebody else and then that one would go off to Alan. She was organising.
Q:
So she’d get people on the phone for Alan?
A:
Yep.2
Lionel Berck’s son Peter also gave important evidence about Bond’s physical and mental state before his vaudeville appearance on the first day of the Manet hearing, when he had apparently been so unwell that he had had to be carried off to hospital. Bond had bushwalked, snorkelled, jogged along the beach and helped launch a metal dinghy on the island only two days earlier, said Berck. He had then asked Peter to book him a 6.00am flight back to Perth for 25 May, saying that he had to appear in court the day after. According to Berck, he had not been in the least bothered by the prospect of appearing.
There was no question that this first-hand evidence was dynamite, for the court had been subjected to a week of mind-boggling detail about MRI scans, ECGs and cerebral blood flows, and to teams of experts asserting that Bond was either perfectly well or shockingly sick. And this was hard evidence that there was nothing wrong with the man.
Up to this point, Bond might well have escaped facing trial. Now the magistrate Ivan Brown had no hesitation in deciding that the entrepreneur was fit enough to take the stand. The evidence of Berck and Urch had been crucial, he said.
Sadly, however, he did not go the next step to rule on whether Bond was faking his ailments to avoid facing justice. The best he could say was that he found the evidence of the medical experts ‘conflicting’ and ‘indecisive’ and was glad he did not have to make a diagnosis. He was prepared to accept that Bond probably had minor brain damage, though not to the extent that he or his doctors had suggested, and was inclined to believe that Bond was suffering from ‘reactive depression’, which in simple language meant only that he got upset when he came near a courtroom. But he was not prepared to take Bond to task.
And so another great opportunity was lost. If one believed the evidence of Urch and Berck, as the magistrate did, one could hardly avoid the conclusion that Bond had wasted court time, treated the law with contempt and made fools of a string of medical experts. But once again, he was not to be punished for it, nor even warned. Even a tongue-lashing would have been something, but instead there was silence.
There was also silence at the time about the fact that one of these vital witnesses received death threats. On Urch’s second day in the witness box, his son had fielded a phone call at his Sydney home in which a man threatened to kill Urch and his family if he continued to give evidence against Bond. And John himself later received similar threats.
A:
They’d say, ‘We’ll blow up your car. We’ll get you one day. It can happen at any time. You could be dead any minute’. My wife left the house for a while. I went down to the police station … they would drive up and down my street and check.
Q:
So they never found out who made the calls, never traced them?
A:
No, no. My son who does security work around town he said he thought he knew the voice.3
The police discovered where one of these calls had come from. Modern technology makes it a snack to do a trace, unlike in the old black-and-white movies where the caller needed to be held on the line. But it had come from a phone in a public place to which any number of people might have had access, so they were never able to track down the culprit.
However, it is hard to see how anybody unconnected with the hearings could have known Urch’s name. He had been flown over to Perth by the police in conditions of great secrecy, and his name had been suppressed by order of the court.
Death threats apart, the story of how Urch and Berck came to give evidence at all is quite extraordinary. Essentially it came down to the enterprise of a man who was then in charge of a team called the Bond Task Force.
Tim Phillipps had spent fifteen years working for the fraud squad and the Australian Securities Commission (ASC), but with his close-cropped hair, wire-rimmed glasses and sharp suits he looked less like a cop than a high-powered political adviser. At the tender age of thirty-five, he was in charge of a team of around twenty investigators trying to bring charges against Bond for the biggest fraud in Australian history, in which some $1,200 million had been removed from Robert Holmes à Court’s old flagship company, Bell Resources.
Back in 1988, as Bond Corporation and Dallhold had lurched towards insolvency, Alan and his head honchos had gained control of Bell on the cheap, appointed themselves directors and siphoned off the cash from its coffers in a vain attempt to keep the Bond empire afloat. These millions had then been lost when the Bond ship inevitably sank with all hands.
Since then, various teams of investigators from the Australian Federal Police (AFP) and the Australian Securities Commission had spent almost six years trying to bring Bond to trial. And Alan’s alleged ill health, come May 1994, threatened to put all this work at risk, for if his lawyers were able to persuade the court that he was too sick to answer the Manet charges, there was every possibility he would also avoid a far longer and more complicated trial on fraud charges relating to Bell.
Around this time, the Bond Task Force was being bombarded with phone calls from people claiming to have seen Bond in sparkling good health in cafés, restaurants and on the beach, or to have driven him round town in a taxi. And while none of these fifty-odd witnesses could really be used in court, Phillipps was encouraged to believe that it was worth following Bond’s movements to see if they could prove that his illness was a sham. So for three weeks a team of twelve people from the Australian Federal Police kept Bond under twenty-four-hour surveillance while five members of the Bond Task Force chased up the leads. And before long they stumbled upon St Bees.
Phillipps won’t say exactly how they got the information, but they had an informant whose identity they wished to protect, so their discovery presented them with a terrible dilemma. If they rushed Berck and Urch into court they would burn the informant and blow the surveillance operation. On the other hand, if the court did not hear their evidence, Bond might escape trial, and six years work would be wasted. Luckily, at the last moment, Tim Watson-Munro spared them the choice by telling the court that Bond had been to St Bees Island to rest on doctors’ advice. This gave them the excuse they needed to follow the lead, and Phillipps himself jumped on a plane to Queensland, hired a helicopter to fly to St Bees, and took statements from the Bercks and Urch.4 The witnesses were then rushed across to Perth and hustled into court, which allowed two twelve-hour hearing days so that they could complete their evidence.
According to Phillipps, the AFP’s surveillance operation turned up a lot of other information suggesting Bond was not sick, which the police felt unable to use in court. One such suggestion was that Bond’s shambling state had been induced by drugs that he was taking.
Strangely enough, this explanation was remarkably similar to the one that Bond used to London’s Daily Telegraph Magazine in November 1994, when asked to account for his dramatic recovery, which allowed him to look ‘sparkling’ almost as soon as the bankruptcy examination finished. Bond told the Telegraph’s aptly named Paul Spike that it was the drugs he had been prescribed that made him look so ill. As soon as he stopped taking them, he said, he had instantly got better.
By the time he spoke to the Telegraph, Bond was openly in great form, showing no signs of either sickness or brain damage. ‘During the three days I spent in Perth in Bond’s company, I saw no evidence of memory loss,’ Spike told Telegraph readers. ‘He was able to cite many exact sums, including what his parents paid for their first house back in 1953.’5
But even in July 1994, when Bond finally faced the start of committal proceedings on the Manet fraud charges, which was only a month after his collapse in court, his health appeared to have undergone quite remarkable improvement. As the Sydney Morning Herald eagerly observed:
The former America’s Cup hero strode into court, vigorously reorganised the Bar table furniture and engaged his solicitor, Mr Andrew Fraser, in busy discussion. While waiting for the case to start, Bond read documents and made notes.6
So had Bond’s doctors been duped all along?
Tim Watson-Munro was asked in June 1995 about Bond’s return to health and said that he could quite understand why someone should raise the question of whether Bond had really been ill. ‘All I can say is I stand by my opinion,’ he told the Bulletin, ‘I don’t resile from it at all.’7
Alan’s friend John Saunders was also quite confident that he had made the right call, even though he had said in December 1993 that there was no doubt that Bond had suffered brain damage, and even though he had specifically told Bond’s lawyers, ‘There seems to be no improvement in these problems and no likelihood of any improvement in the foreseeable future’.8
Seven months later, Saunders apparently had enough faith in his mate’s mental abilities to consider engaging in a speculative gold deal with Bond. Asked whether it was possible for a friend to give unbiased evidence, he replied, ‘It’s difficult, but it’s possible’, adding that it all came down to honesty.9
Whether it was his or Alan’s honesty he was talking about wasn’t clear. But truthfulness had never been Bond’s long suit, and he had never cared much about the rules either—which was why, in 1994, he was defying the law by continuing to do business while still a bankrupt.