‘It was stupid and the blokes who did it were so foolish they made the Three Stooges look like High Court judges.’
MONEY talks. In racing, sometimes it shouts, which is why bookmakers around Australia were alarmed about Brisbane racing well before George Brown was tortured and killed in April 1984.
Something stunk in Queensland, and the stench reached Sydney. Money poured onto Brisbane horses that showed fantastic form reversals. Among the ‘smarties’ in on the racket were some who plotted their moves in the pubs, clubs and coffee joints in the Kings Cross strip. People whispered that Sydney gangsters and racing identities like Mick Sayers and George Freeman had inside knowledge about the Brisbane connection.
‘The same guys keep backing the right ones – and they always won,’ said swashbuckling bookie (and betting plunge specialist) Mark Read about the strange events north of the border.
Then came the Fine Cotton debacle. The ‘ring-in’ (secret switch of a quality racehorse for the battling bush horse Fine Cotton) might have won a fortune for those in on the rort, if the original plan had been followed. But by the time the race was run in the Spring of 1984, the plot had turned into a farce that disgraced not only the obvious perpetrators but two of Sydney’s biggest racing identities – father and son bookies ‘Big Bill’ and Robbie Waterhouse.
The Waterhouses never got jailed – as two of the hands-on organisers did – but they (and others) were disqualified from racing for life for ‘prior knowledge’ of the ring-in, a penalty later reduced on appeal. Speculation about the two Waterhouses’ alleged role in the rort has never faded despite their claim they were just ‘following the money’ by backing the horse.
This is how it happened, though some details – and some players’ identities – remain cloudy.
ON Saturday 18 August 1984, local apprentice jockey Gus Philpott was legged on a runner in the Second Commerce Novice at Eagle Farm. It was an ordinary race and, as far as Philpott knew, he was on a very ordinary horse: an eight-year-old plugger from the backblocks that should have been around 40-1 in a city race. But for reasons Philpott couldn’t fathom, the horse with no form had been backed off the map. As he cantered to the start the cash flooded in for Fine Cotton all over Australia – and in betting shops in Vanuatu, Fiji and Papua New Guinea. The coast to coast plunge was worth pay-outs of around $2 million – enough to buy a street of houses in 1984.
The dogs were barking that something dodgy was on and so even the sleepy Queensland stewards were watching hard, aware that their already-tattered reputations were under the microscope. Philpott rode the now hot favourite (backed from 33-1 to 6-4) perfectly, winning in a photo finish. What he didn’t know yet – but the world was soon to find out – was that his mount was really a multiple city winner called Bold Personality, crudely dyed and painted to look more like the country cousin, Fine Cotton. It was a lousy disguise, even if the lunatic betting hadn’t raised suspicion.
Even before the horse got back to the winner’s stall, the crowd was jeering ‘Ring in!’ and the dye was starting to run down the imposter’s legs. By then a worried steward was asking the trainer, shifty small timer Hayden Haitana, for the horse’s registration papers. Haitana, as much a con man as a trainer, went through the motions of searching for the papers then expressed surprise that they were ‘missing’. The steward obligingly suggested checking with the owners for the papers and reporting back to the stewards’ room. Haitana knew a chance when he was given it: he gulped down a beer at the bar then walked off the course – and vanished.
To the embarrassment of police in several states, he wasn’t seen again until he came out of hiding to appear on 60 Minutes many days later to plead he had acted under duress.
It was an obvious line of defence and the chatty Haitana was no stranger to telling lies – but that didn’t mean he wasn’t genuinely frightened. Even if he hadn’t raised the spectre of George Brown’s torture and death five months before, it loomed large. And he did raise it – claiming a standover man had threatened him and his family: ‘He showed me his gun and then he said “Look at this here – do you want to end up like the trainer Brown?” ’
The case made headlines right up until Fine Cotton finally died in early 2009 in suburban Brisbane, aged 32. It was a notorious debacle. As an anonymous ‘insider’ told a Coffs Harbour reporter many years later: ‘It was stupid and the blokes who did it were so foolish they made the Three Stooges look like High Court judges.’
But the funny thing is that the plotters might have got away with it but for a stray kangaroo.
Maybe.
AS HORSES go, Fine Cotton was an unlikely celebrity. A plodding bush galloper with neither flash pedigree nor performance, he was only one step ahead of the knacker’s van most of his career.
So when a stranger offered to buy the eight-year-old at a country meeting in early 1984, his owners jumped at it. They couldn’t have guessed the gelding would be at the centre of a scandal that would haunt racing and bemuse Australians for a quarter century.
Key aspects of the Fine Cotton affair are still a mystery – a fact that galls some authorities. Most intriguing is the question of who masterminded the nation-wide plunge on the horse that raced as Fine Cotton at Eagle Farm that day. It is almost certain the same people were connected with the previous series of ‘form reversals’ that made Brisbane racing stink of corruption in the early 1980s.
The generally-agreed facts of the case are these: in early 1984, a smart Sydney galloper, Dashing Soltaire, was bought for $10,000 and sent to Queensland, where two men began combing country tracks for a cheap, slow horse that resembled him. They found Fine Cotton. Like Dashing Soltaire, he was a brown, had similar white markings and was foaled the same year (1976) so would have at least a partly correct brand on his shoulder. He had won a few bush races but was well past his limited best.
The two horses were kept in training and, in August, Fine Cotton was given several starts within a few days to ensure Brisbane stewards were used to seeing him race and so would make only a cursory check at a later date.
Meanwhile, both horses were transferred to Hayden Haitana, a transient Coffs Harbour trainer. Why him? It appears that his brother, jockey Pat Haitana, had met an inveterate hustler and horse dealer called John ‘The Phantom’ Gillespie while having a ‘holiday’ in Boggo Road jail in Brisbane some months before. Inevitably, Gillespie spruiked a ‘foolproof’ way to make money by substituting a high-quality horse for a poorly performed one in a weak race, then betting up big.
Pat Haitana suggested his brother Hayden – then training a small string in Coffs Harbour – as the man to prepare the plunge horse. Within weeks, the jailhouse scheme was turning into reality, with the purchase of Dashing Soltaire and Fine Cotton.
Fine Cotton was entered for the Second Commerce Novice at Eagle Farm on 18 August. So far, for the bad guys, so good. But in racing, disaster is only ever a hoofbeat away, and the scheme was derailed not only by the lunatic leaking of the ‘mail’ about the sting, but by the sort of accident that makes racing the ultimate game of chance.
With only days to go, the horses were being trained from a paddock on an isolated property near some bush, and a kangaroo startled Dashing Soltaire, which galloped away and hurt itself. Had Fine Cotton been hurt, it wouldn’t have mattered. But, as usual in racing, good horses get hurt and slow ones don’t.
Haitana knew the plan was now a disaster in the making but when he tried to pull out he was told it was too late – and he was assured that stewards, police and even racing writers had been ‘fixed’. Haitana would later say he would rather risk being caught than anger those he said were acting for the scheme’s backers. Already the tip had been leaked to far too many people, which would mean an avalanche of money on race day.
It meant he and his helpers had to find another substitute – quickly. Apparently desperate to appease ‘heavy’ people involved, they bought Bold Personality, a city winner with ability – but the wrong colour and markings. He was a bay, not a brown, and did not have white on his legs in the same places as Fine Cotton. He was also foaled in 1977, not 1976, which meant every identifying brand on him was different from Fine Cotton’s. Added to which was the fact that too many people were by this time a party to the plot, not only because Haitana talked too much when he was drinking, which was most of the time. An anonymous racing source told a reporter years later: ‘Hayden was notorious for being a bullshit artist, particularly when he’d been drinking, which was pretty frequent. He could have sat around the bar and described the plan down to the tiniest detail and not a single person would have believed a word.’
The black comedy just got worse, according to the same source. Stand-in strapper Tommaso Di Luzio was despatched to Coffs Harbour to pick up Bold Personality. But Di Luzio reportedly left the horse sweltering in a heavy rug for the hot six-hour float trip north, ensuring it arrived in Queensland distressed, severely dehydrated and in no condition to race.
Panicky, Haitana decided to drench the horse to overcome the dehydration but while he went to find the necessary gear, some ‘helper’ stupidly forced a tube down the horse’s nostrils, causing it to bleed.
In a scene a sitcom writer could hardly make up, the bumbling crew attempted to dye Bold Personality’s coat to make it look more like Fine Cotton. Clairol hair colouring failed and whitewash wouldn’t stick to the horse hair.
In desperation, they spray painted white socks on him. In the end, the horse was such a mess that Haitana bandaged its legs to cover them and hoped for the best. It was ridiculous, and doomed to failure, but he didn’t fancy the alternative. Even after he and con man John Gillespie were jailed over the scam, and other associates were warned off racing for life, they never blew the whistle on the masterminds they tacitly implied were behind it.
Persistent allegations that Robbie and Bill Waterhouse were behind the Fine Cotton ring-in surfaced within days. Both Waterhouses denied planning the sting but could not deny heavy betting on Fine Cotton and were subsequently outed for life. Fingers were pointed at racing and public officials, politicians and police – even a Catholic priest, Father Edward O’Dwyer, who was sprung leading a plunge on Fine Cotton at Kempsey dog races.
Stripped of his licence when warned off after the Fine Cotton scandal, in 1989 Robbie Waterhouse informed the Australian Jockey Club he ‘did not seek to dispute’ its findings about his involvement and expressed ‘remorse’. In 1992, he was sentenced to eight months of weekend detention for lying to the Racing Appeals Tribunal over the ring-in.
In 1998 he was allowed back onto racecourses and in 2001, after an orchestrated lobbying campaign, he was handed back his bookmaker’s licence, a move cheered by boosters and jeered by those with long memories. But it came at a cost: in the meantime his family had publicly torn itself apart in a feud that began over the Fine Cotton debacle.
THE Waterhouses are bold personalities, but not brave ones.
One advantage of the best private-school education money can buy is that since the days when their forebears ran cockfights, sly-grog and waterfront rackets, they’ve rarely got blood on their own manicured hands.
So, on the morning Robbie Waterhouse dealt his brother David the blow that has plunged the family into the vendetta now threatening to destroy it, he used a telephone, not a dagger.
But the wound went deep, and the public airing of the feud made sure it would not heal for years. Perhaps ever.
The call from Robbie came early on 21 September, 1992, from the house with the million-dollar harbour view in Clifton Gardens that he shares with his wife, the fashionable horse trainer Gai Waterhouse, sometime actor and only daughter of the late champion trainer T.J. Smith.
What his elder brother said that morning devastated David. Just how much was revealed three years later, on the fourth day of the Australian Jockey Club hearing into Robbie Waterhouse’s application to be allowed back onto racecourses, when the tall man let slip his deadpan mask for a few minutes after hours of tough questioning by Robbie’s counsel, Frank McAlary QC.
David’s unblinking croupier’s eyes, which had gazed without expression somewhere above the committeemen’s heads all day as the barrister blustered and bullied, flashed as he recalled a conversation that seems to be seared into what his associates describe as a photographic memory. The soft voice, so often hard to hear, was painfully clear to everyone in the room.
‘Robbie said, ‘You have no redeeming features. Get out of our lives and get on with your own life.’
‘I said to him, ‘What about the money I’ve loaned you?’ He then said to me: ‘We have just used you’.’
The hearing was hushed. Either this was a painful insight into a man’s heart and a family feud, or David Waterhouse is a brilliant dramatic actor. A profession for which, some might say, his family has both the looks and natural aptitude.
Earlier, the lean man with the patrician profile and tortoise-shell glasses had told the hearing he’d lent Robbie $220,000 and their father, Bill Waterhouse, similarly large sums to cover betting debts and legal costs between the Fine Cotton scandal of 1984 and a marathon court case in 1989-1990 (when another branch of the family sued for a share of the multi-million dollar Waterhouse estate).
David, odd-man-out of the three children of ‘Big Bill’ Waterhouse and Suzanne, the former dental nurse he married twice, was never quite the colourful racing identity his father and brother became.
He once tried bookmaking, was a successful professional punter for a while, sharing the Waterhouse taste for gambling, but he turned also to art collecting and the world outside the race track.
When Robbie and his parents turned their backs on David – apparently dismissing him as an accident-prone nuisance – it seems they under-estimated the bitterness of his reaction.
For once, in a family that for generations had done much for gain something meant more than money. Here, among the skyscrapers of tinsel town, was the ancient story of betrayal of brother by brother.
Cain and Abel in Zegna suits.
ACCORDING to a close friend, David Waterhouse was ‘in shock’ after his brother’s rebuff. The friend (afraid of being identified ‘because the family are very spiteful people’) says David had to fly to a country race meeting later on the day he took Robbie’s call. He rang his wife, Jeanette, from Bankstown airport, and said, close to tears: ‘This is it. I’m finished with them. I’m so glad I’ve got you.’
At that point, the relationship with his father and brother could have been patched up, Jeanette later told friends. But, to David’s disappointment, no member of his family contacted him – not even his mother, whom he’d taken on a long trip to Europe some time before, and supported in her strange, fractured marriage to his father. She had famously tolerated the fact that after re-marrying her following a lengthy separation, Bill had maintained his Thai ‘mistress’.
The story is that David has seen Robbie only twice since the telephone call and was fobbed off both times when he asked for payment of the debt. He hasn’t spoken to his father since 1992.
Meanwhile, David was concerned because he suspected his father and brother were selling off assets that were part of a family trust set up in 1962, in which he has an equal third share with Robbie and their sister, Louise Raedler Waterhouse.
The reasons for the family feud spilling into the AJC committee room at Randwick in the mid-1990s go back to the ring-in scandal of 1984. After Fine Cotton, the Waterhouses’ intriguing web of finances and business interests – from Fijian betting shops to Swiss bank accounts and suburban pubs – started to unravel. And so did the family loyalty they’d once prized.
They had problems. Warned off every racecourse in the world, Bill and Robbie weren’t able to operate as licensed bookmakers, choking off a cash supply. Their assets were frozen for several years pending the court case brought in 1989 by Martin Waterhouse, the son of Bill’s brother, Charles, who died in 1954. Then, after paying huge legal fees, Bill and his former bookmaker brother Jack had to settle assets worth millions on Martin, his two brothers, sister and their mother.
The result: Bill and Robbie Waterhouse were two-time losers and, by millionaire standards, short of ready money. They had (and still have) the trappings of wealth: harbour-side homes, luxury cars and overseas trips. But when David asked for his money, they brushed him off.
It may well have been their biggest mistake since Fine Cotton.
THE festering dispute was brought to a head, according to David’s version of events, after publication in 1990 of a book called The Gambling Man, nominally written by Kevin Perkins but allegedly produced by Bill Waterhouse, who in 2009 would produce another questionable piece of biography.
The Perkins book led to defamation actions, and David was incensed when his father and brother implicated him in these by alleging he was a co-author.
It was this, David claims, that prompted him to swear affidavits about the alleged extent of Robbie’s involvement in the Fine Cotton case, an action which made him star witness at the Australian Jockey Club hearing into whether Robbie should be re-licensed.
In the affidavits, and in the AJC hearing, David painted a vivid picture of his brother detailing his part in the ring-in as the pair walked the streets outside Robbie’s house in September, 1984.
‘There were just the two of us,’ David told the hearing.
He said Robbie had told him: ‘I paid all the expenses except for the horse. Gary Clarke (an associate) has been the front for me at the Brisbane end. I have nothing to fear if everyone stays solid.’ Robbie had allegedly added he’d ‘planned the ring-in before he went to England for the Derby’ in June that year.
David said he had lent his father $300,000 soon after the ring-in, money he says was needed to help pay punting debts of almost $1 million plunged on the Fine Cotton ring-in. He said Bill told him two days after the race: ‘We could have made millions if it had come off.’
David, to use his brother’s alleged phrase, ‘stayed solid’ for ten years. The first sign that the estranged brother and son would turn against his family came when his solicitor arrived at the Waterhouses’ North Sydney office in mid-1995 with a message that David had ‘a hot affidavit’ naming Robbie as organiser of the Fine Cotton affair.
The deal was that David would sign and file the affidavits unless certain conditions were met.
But what were they?
Louise Raedler Waterhouse, an elegant, fine-boned woman with a sleek bob of dark hair, sat at her brother Robbie’s side throughout the hearing, and clearly supported him. She testified that the solicitor relayed a demand for $1.5 million – and the message that if it wasn’t paid David would present the affidavit to the authorities.
But David swore that he asked only to be taken out of the defamation proceedings. Asked earlier about his sister’s testimony, he dismissed it as ‘creative accounting’. He confirmed seeking $3 million through the courts from the family trust, but denied the affidavit was an attempt to ‘blackmail’ his family into paying up early.
Either way, Bill Waterhouse’s reported response to the offer was blunt. Asked what her father had said, Louise answered delicately: ‘He said David could go and get something-ed. He used a rude word. My father is old-fashioned in some ways. It is the first time I have heard him say that word.’
If Bill Waterhouse thought he could bluff his youngest son, he was wrong. David had found the nerve to get blood on his hands.
THE younger Waterhouses are Sydney’s Kennedys. Handsome, clever, well-educated and well-dressed – but unable to shake off the shadow of bootlegging forebears and the suggestion that under the glossy exteriors are people who take shortcuts to get what they want.
To see Robbie Waterhouse squirm around the Fine Cotton accusation reminded a watcher of another pretty boy who once had the world at his feet: the late Teddy Kennedy, skewered by Chappaquiddick. In both cases, neither man could allow himself a straight answer.
The truth is, there is an element of voyeurism in the spectacle of a wealthy, well-known family destroying itself. It’s like watching a car crash in slow motion. A sense of grim satisfaction filtered from many onlookers in the AJC hearing room where the drama unfolded at the end of 1995.
If he sensed any antipathy, Robbie didn’t let it show.
His charm is legendary, his voice smooth, his smile quick. One of his in-laws says he studies books on how to project the right body language – to come across as plausible and frank without making any damning admissions.
He drew well in the genetic lottery; at 41 his boyish good looks and dark hair made him look years younger. In 2009, the hair was grey but he still had the looks inherited by son Tom (also a brash young bookie) and daughter Kate, one of racing’s best-known public faces.
The diminutive nickname ‘Robbie’ indicates a parental favourite, and hints misleadingly at a softness that few detect in the character of the eldest son of the most ruthless bookmaker in Australian racing’s chequered history.
If there is a fault, he looks slightly effete, far more like his small, fine-boned and once-beautiful mother than his stout and imperious father. But Robbie inherited his father’s calculating mind, the mind that took a shady publican and small-time bookie’s son through law in the 1940s – when other young men were fighting a war – then from the bar table to the betting ring, fame and fortune.
THE Waterhouse history would make a television serial, a sweeping saga of a family on the make, rolling on from the Rum Corps for six generations.
In fact, part of the family history has already become fiction. There is a story – so often repeated in newspapers and at least two books since the 1950s, that it passes as fact – that the Waterhouses are descended from an officer and gentleman, a Lieutenant or Captain Henry Waterhouse, who arrived with the First Fleet in 1788, and later helped John Macarthur import the first merino sheep.
There was an officer called Henry Waterhouse in the First Fleet, who went home and later returned with the Third Fleet. But a genealogy expert commissioned by Bill Waterhouse in the 1960s to track down this socially-desirable connection wrote a 12-page report stating that after ‘rather exhaustive research … my conclusion is that no legitimate relationship exists to Captain Waterhouse’.
The captain fathered one daughter, Maria, who died childless in England in 1875. The expert stated the racing Waterhouses’ real ancestor was one Thomas Waterhouse, an apprentice carpenter at Darling Harbour in 1828, and son of a Windsor farmer of obscure origins.
This must have disappointed the king of bookmakers, because he allegedly ignored the research he’d asked for – instead citing Captain Henry Waterhouse as a forebear whenever something was being written about the family.
Regardless of pedigree, or lack of it, for almost 200 years Waterhouses have made fortunes as bookmakers, hotel keepers and builders. Those are the official occupations. Stories also abound of smuggling, cock fighting, black marketeering and sly-grogging.
‘Lights were put under the wharves to try to stop them smuggling stuff off the ships at night,’ asserts one longtime observer who has been on first name terms with three generations of the family. ‘They were in everything.’
The taste for fighting cocks goes back to Bill and Jack’s great-grandfather, Thomas Waterhouse, a famed street-fighter who had thirteen children, ran the Greengate Hotel at Killara and most of Sydney’s cockfighting. The blood sport, illegal but still strong in the 1950s, was run for betting, and where there was betting, there were Waterhouses. Preferably with the odds in their favour.
At his peak in the 1960s and 1970s, Bill Waterhouse was one of the biggest and, it seemed, most fearless bookmakers in the world. He took on and beat huge punters like Frank (later Sir Frank) Duval, known as the ‘Hong Kong Tiger’, and Felipe ‘Babe’ Ysmael.
Robbie’s meteoric rise from country racetracks to the rails at Randwick in just seven years, something that took others 25 years, raised eyebrows. His father’s view (‘He’s a genius’) didn’t cut ice with those who pointed to the family’s wealth and influence as a more likely explanation.
Although the Waterhouses’ potent political ‘pull’ in Sydney has waned since Sir Robert Askin was the state’s premier, their name for decades drew a nervous reaction among most who know them and many who don’t. On the record, associates and relatives are tight-lipped about ‘Big Bill’ and Robbie. Off it, they have more to say, little of it complimentary.
Racing people tell black jokes about the family. Says one former bookmaker: ‘They say if Jesus Christ had been a Waterhouse, Pontius Pilate would have been crucified.’
When Robbie married the legendary trainer T. J. Smith’s daughter Gai in 1980 it was hailed in the social pages, rather cloyingly, as a ‘fairytale wedding’ between the ‘prince and princess’ of racing.
Wherein lies a sub-plot to the Waterhouse family war – the falling out between Tommy Smith and his brother, Ernie, over the Waterhouse connection. Ernie Smith’s thinly-veiled distaste for his niece’s choice of husband exploded into acrimony when Gai took over from him as stable foreman – cutting out the prospect of Ernie’s son, Sterling, taking over the Tulloch Lodge empire when Tommy retired.
Once asked his reaction to the Waterhouses’ troubles, Ernie Smith’s retort was short and sharp: ‘I’ve never had anything to do with them. I’ve never mixed with them, and never will.’