Rakhimov v John Fairfax Publications Pty Limited & Anor

COUNSEL : W H Nicholas Q.C. (First Defendant)

J S Wheelhouse (Second Defendant) Gilbert & Tobin (Plaintiff)

SOLICITORS : Freehills (First Defendant)

Minter Ellison (Second Defendant) CATCHWORDS : Imputations - capacity - form - separate pleading of two articles in one newspaper Burrows v Knightley [1987] 10 NSWLR 651 CASES CITED : Drummoyne Municipal Council v Australian Broadcasting Corporation (1990 21 NSWLR 135 Lucas v John Fairfax Publications Pty Ltd [2000] NSWSC 950 Monte v Mirror Newspapers [1979] 2 NSWLR 663 DECISION : See paragraph 37

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST No. 20494 of 2000

JOHN FAIRFAX PUBLICATIONS PTY LIMITED (First Defendant)

Judgment (Imputations - capacity - form - separate pleading of two articles in one newspaper)

1 The plaintiff, by way of Further Amended Statement of Claim filed on 8 December 2000, sues in respect of three matters. 2 The first matter complained of is an article entitled "Russian Mobsters Coming to Games" by Ellen Connelly, published in The Sydney Morning Herald on Saturday 15 July 2000. The text is Appendix A hereto. A photocopy of the article handed up in the course of argument discloses it to have been published on page 15. 3 The second matter complained of was published on pages 1 and 6 of the "Spectrum" section of The Sydney Morning Herald on the same date. Its text is Appendix B. It bears the headline "Fraud of the Rings … Mafia Shadows, Drug Running, Money Laundering … Andrew Jennings Unravels the Dark Side of the Olympic Family". The foot of the article describes it as the first of three edited extracts from Andrew Jennings' book, "The Great Olympic Swindle". 4 The third matter complained of (Appendix C hereto) was published in The Sydney Morning Herald on 26 July 2000. It bears the headline "Efforts to Stop Mafia May Prove Fruitless" and has the by-line of Ellen Connelly. 5 It is to be observed that in the Further Amended Statement of Claim the first defendant (Fairfax) and the second defendant (Jennings) are both sued as publishers of the first and second matter complained of. Fairfax only is sued as publisher of the third matter complained of. 6 The imputations pleaded in respect of the first matter complained of are as follows: "5(a) The Plaintiff is a member of the Russian Mafia;

5(c) The Plaintiff is a person prepared to influence the results of Olympic events so that medals therefore would not be awarded on merit;

5(d) The Plaintiff, while at the Atlanta Games, had positioned himself to take control of international amateur boxing intending to use that control for his criminal purposes;

5(e) The Plaintiff had positioned himself so as to misappropriate the International Amateur Boxing Federation's share of profits from the Sydney Olympic Games;

5(f) The Plaintiff subverted the Olympic ideal by linking the Olympic Games and the Olympic movement to fearsome and evil criminal gangs;

5(g) The Plaintiff was prepared to enrich himself by corrupting the Olympic movement by misappropriating its money to finance the illegal activities of some of the most fearsome criminal gangs the world has ever seen;

5(h) The Plaintiff was so dangerous a criminal that it was undesirable for him to be permitted to enter Australia". 7 The imputations pleaded in respect of the second matter complained of are as follows: "7(a) The Plaintiff is a major international drug dealer;

7(b) The Plaintiff is a leader of a syndicate of international drug dealers;

7(d) The Plaintiff is so evil and destructive a criminal as to pose a grave threat to the public safety of France and the French people;

7(e) The Plaintiff is a criminal who engages in drug dealing, fraud, prostitution, assassination, extortion, gun running and plutonium smuggling.

7(f) The Plaintiff is a person prepared to influence the results of Olympic events so that medals therefore would not be awarded on merit;

7(g) The Plaintiff, while at the Atlanta Games, had positioned himself to take control of international amateur boxing intending to use that control for his criminal purposes;

7(h) The Plaintiff had positioned himself so as to misappropriate the International Amateur Boxing Federation's share of profits from the Sydney Olympic Games;

7(i) The Plaintiff subverted the Olympic ideal by linking the Olympic Games and the Olympic movement to fearsome and evil criminal gangs;

7(j) The Plaintiff was prepared to enrich himself by corrupting the Olympic movement by misappropriating its money to finance the illegal activities of some of the most fearsome criminal gangs the world has ever seen;

7(k) The Plaintiff is a gangster in the Soviet black economy". 8 The imputations pleaded in respect of the third matter complained of are as follows: "9(a) The Plaintiff is a member of the Russian Mafia;

9(b) The Plaintiff is a person prepared to influence the results of Olympic events so that medals therefore would not be awarded on merit;

9(c) The Plaintiff subverted the Olympic ideal by linking the Olympic Games and the Olympic movement to criminal gangs;

9(d) The Plaintiff was so dangerous a criminal that it was undesirable for him to be permitted to enter Australia". 9 In compliance with SCR Pt 67 r 12(e) in the Further Amended Statement of Claim the plaintiff has given full particulars of the part or parts of the respective matters complained of upon which reliance is placed as giving rise to the pleaded imputations. 10 Objection has been taken to the imputations as to form and capacity. By consent a separate trial as to the latter issue has been conducted pursuant to SCR Pt 31 r 2. Further, in respect of the first and second matters complained of, it is argued that the relevant paragraphs (4,5, 6 and 7) in the Further Amended Statement of Claim pleading them separately should be struck out as embarrassing. 11 I shall deal first with the imputations issue.

The First Matter complained of 12 Imputations 5(a) and 5(b), it was submitted, do not differ in substance and thus contravene SCR Pt 67 r 11(3). 13 For the defendants it was argued that the gist of each imputation, the defamatory impact or statement concerning the plaintiff's conduct is the same. Further, in the context of the article itself, "Russian Mafia" and "Criminal Racketeer" are interchangeable. The plaintiff argued that the difference in substance arises from the difference between a "foot soldier" (5(a)) and "the boss" (5(b)) - low level member and a major racketeer. This "hierarchical" distinction is a "nice" one, but unrealistic. Viewing the imputations in terms of the gist or impact referred to, they are clearly substantially the same. Viewing them both against the whole article each captures, but using different words only, the same notion of the plaintiff being "big time" not "small fry". 14 Imputations 5(a) and 5(b) do not differ in substance and will be struck out with leave to re-plead. 15 No objection is to taken to imputation 5(c) which will go to the jury. 16 Imputations 5(d) to 5(g) were attacked individually as to form on several bases: unnecessary verbiage in 5(d) "while at the Atlanta games"; uncertainty as to meaning of "positioning" and "control"; potential for ambiguity in the use of the word "misappropriate". Imputation 5(g), it was submitted, offends the principles in Monte v Mirror Newspapers [1979] 2 NSWLR 663 at 677B as to "rolled-up" imputations. It does so offend, in my view, by involving at least two separate notions "corrupting" and by "misappropriation" (whatever that means) and "financing illegal activities". I have no difficulty with the use of the words "while at the Atlanta games" - I think they are important in the attempt to capture the sting. Nor do I have difficulty with "positioning" as a reasonably understood concept. However the importation into imputations of expressions such as "Olympic ideals" and "Olympic movement" is unwarranted by reference to the text and conducive to uncertainty, at least, as to the meaning of the imputation in question. 17 These four imputations are flawed for the reasons advanced for the defendants. They appear to be pointing to essentially the same thing - the positioning of the plaintiff (at the Atlanta games) vis-a-vis the IBF to enable him to channel/direct/appropriate its share of Olympic money to criminal gangs/enterprises. It is instructive to consider the abandoned original imputation 5(d): "that the plaintiff took control of international amateur boxing so as to enable him to use its share of profits from the Olympic games for criminal purposes". That imputation, arguably, gets close to articulating the sting. 18 Imputations 5(d), (e), (f) and (g) will be struck out as bad in form and not differing in substance with leave to re-plead.

The second matter complained of. 19 The defendants submitted imputations 7(a), (b) and (c) do not differ in substance. The particularised parts of the matter complained of in support of 7(c) (lines 12-13, 42-43, 71, 74-75) cannot, in my view, isolate smuggling heroin and cocaine to a lesser or different extent to the large scale conduct reflected in imputation 7(a) and (b). These imputations will be struck out with leave to re-plead. 20 Imputation 7(d) is quite florid and really should be rendered less Dantonesque. An imputation that states that the plaintiff was so dangerous a criminal as to be a threat to public safety in France may suffice. I decline however at this stage to strike this imputation out. It is capable of arising and of being defamatory. The pleader might reconsider its wording and the present extravagance of it when exercising the right to re-plead generally. 21 Lines 11 to 13 and 25 to 26 provide the basis for imputation 7(e). Seven separate forms of criminal conduct are stated. Either seven separate imputations are required or one which captures (but not in a rolled-up way), the quality of a person so multi-faceted or versatile in his criminal behaviour. Imputation 7(e) will be stuck out with leave to re-plead, care being taken with respect to r 11(3) and imputation 7(k) (below). 22 Imputation 7(f) is not challenged and will go to the jury. 23 Imputations 7(g) - 7(j) will be struck out with leave to re-plead on the same bases as attended imputations 5(d) - (g). 24 With respect to imputation 7(k) the defendants argued that it was bad in form. The phrase "in the Soviet black economy" is totally non-specific and is a meaningless addition. It was suggested that some extraneous materials or facts would have to be known to the reader to permit an understanding of any defamatory impact of any statement to this effect. A fortiori, when it was submitted, as I understand it, no act or conduct or condition is ascribed to the plaintiff. The words of the imputations are to be found in lines 48-50 of the text of Appendix B. Contrary to the submissions for the defendant I am of the view that there would be no uncertainty as to what the imputation is stating by its terms; that no extraneous knowledge in the jury would be required and that conformably with what was stated by Gleeson CJ in Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 at 137B, this is an instance where practical justice permits the adoption of the language of the matter complained of. That adoption leads to an imputation proper in form, capable of arising and capable of being defamatory. It shall go to the jury.

The third matter complained of 25 With respect to this publication, objection is taken to 9(c) both as to form and capacity. I have already dealt with the issue as to form in the equivalent imputations 5(f) and 7(i). Imputation 9(c) will be struck out as bad in form importing, particularly in respect of this article, unavailable notions. Leave to re-plead will be granted however. The matter of capacity having been raised acutely on this issue, I can indicate that even if held to be proper in form, it would be my view that the article as a whole cannot nor lines 6-8 give rise to such a meaning.

The Pleading of the First & Second Matters/Issue 26 It is argued for the defendants in respect of the first and second matters complained of that pleading them separately is vexatious and embarrassing. The plaintiff has chosen to sue the same defendants in the one action in respect of two publications giving rise, for all intents and purposes, to the same imputations - the same causes of action (Defamation Act 1974 s 9(2)). The articles contain material in common and the first indicates or directs the reader to the second. Thus, it was submitted, by virtue of s 9(3) and SCR Pt 67 r 11(3) - see s 9(4) - imputations (the causes of action) must differ in substance. 27 The defendants did not dispute that there may be occasions for a plaintiff to take the course which he has done but, importantly having sued two defendants in respect of the "separate publications published on the same day and in the same newspaper conveying the same imputations" it is vexatious and an attempt to "double dip" on the question of damages. 28 Assuming for the moment the question of propriety of the course adopted by the plaintiff, the question of damages is really not so serious a one, it is really a matter for the trial judge and ss 46A and 48 will apply as will the general principles as to the award of an appropriate amount of compensation to the plaintiff for having been damaged in his reputation by the publications complained of and the imputation sued upon as carried thereby. 29 It was not submitted for the defendants that anything said by Hunt J in Burrows v Knightley [1987] 10 NSWLR 651 supports the contention. It was litigation of an entirely different structure to which this case can be contrasted. In Lucas v John Fairfax Publications Pty Limited [2000] NSWSC 950 (13 October 2000) I considered Burrows v Knightley (paras 11 and following) in the context of a case yet again of a different structure. I permitted the pleading separately of two matters complained of; one defamatory by itself and that same article with a juxtaposed second article (not defamatory) where the "physical connection" was closer than applies here. 30 If the two articles can be viewed as separate publications and be understood to be so - notwithstanding links - I am of the view that the pleading here is proper. It was submitted for the plaintiff that I had no evidence. In the strict sense that is correct. I was however provided with photocopies (not marked as exhibits) and can apply in an interlocutory Defamation List dispute of this kind, my common sense and knowledge of the world, as-it-were. 31 The first matter complained of fairly can be described as a news report on page 15 of The Sydney Morning Herald. The second is in the separate section, "Spectrum" (pages 1 and 6) - a commentary/analysis/review component of the Saturday Herald. I cannot come to the conclusion that readers would read both and understand the existence of an objective intention in the defendant that both articles were to be read. The distinct nature of the publications, although in the one newspaper, is such as to preclude a conclusion that the separate pleading is vexatious and embarrassing. As I have already remarked the matter of damages is subject to statutory and common law principles that would obviate a plaintiff being entitled to "double dip". 32 I decline to strike out paragraphs 4, 5, 6 and 7 of the Further Amended Statement of Claim. 33 I will not remark upon, at this stage, the propriety of the defendant pleading a defence under s 16 of the Act (contextual imputations) in respect of one article by reference to the content of the other. 34 The issue of "re-publication" was raised in the course of submissions. This arises acutely in relation to the second defendant. The plaintiff pleads that the second defendant is the author of a book entitled "The Great Olympic Swindle" (see paragraph 3). The second matter complained of is clearly an extract from that book. The first matter complained of reports, inter alia, the fact that the book exists and refers to some of its contents. The second defendant is sought to be made liable for the publication of both matters complained of. Arguably paragraph 3 of the Further Amended Statement of Claim pleads no material fact. As was submitted, the plaintiff having made the statement in that paragraph, it could be anticipated that the liability of the second defendant would rest in re-publication. As I have remarked this applies particularly in respect of the second matter complained of which has been identified as being published by the first defendant as an extract from the second defendant's book. 35 It is to be borne in mind that under s 7A(4) of the Defamation Act 1974 "publication" is an issue to be determined by the jury. The pleading is presently quite unclear as to the foundation of liability in the second defendant in respect of each matter complained of. The plaintiff's reconsideration of his position vis-a-vis the second defendant as a "publisher" will be crystallised by striking out paragraph 3 of the Further Amended Statement of Claim as containing no material averment. 36 The defendants have succeeded overall in relation to the imputation issues: the defendants failed on the separate pleading points. The appropriate order for costs is that the plaintiff pay two-thirds of the defendants' costs. 37 Accordingly, the formal orders are:

1. Imputations 5(a) and (b) are struck out with leave to re-plead.

3. Imputations 5(d), (e), (f) and (g) are struck out with leave to re-plead.

4. Imputations 7(a), (b) and (c) are struck out with leave to re-plead.

6. Imputation 7(e) is struck out with leave to re-plead.

8. Imputations 7(g), (h), (i) and (j) are struck out with leave to re-plead.

Imputations 9(a), (b) and (d) will go to the jury.

Imputation 9(c) is struck out with leave to re-plead.

Paragraph 3 of the Further Amended Statement of Claim is struck out with leave to amend.

The plaintiff has leave to file a Second Further Amended Statement of Claim within 21 days.

The plaintiff is to pay the two-thirds of the defendants' costs.

The matter is listed for mention in the Defamation List on 2 March 2001.

Appendix A Russian mobsters 'coming to Games'

Sports officials believed to be members or associates of the Russian mafia are on their way to Sydney for the Olympic Games, posing a dilemma for Australian immigration and security officials, a new book claims.

The Great Olympic Swindle , by investigative writer Andrew Jennings, includes exclusive secret intelligence reports from the United States, Russia and France which show that one of Moscow's most powerful mobsters, Gafur Rakhimov, is a player in Olympic politics who could influence who wins medals.

Today the Herald publishes the first of three extracts from the book.

Jennings details how Rakhimov, a senior official of the scandal-plagued International Amateur Boxing Federation, returned home from the Atlanta Games to a "hero's welcome", having positioned himself to take control of international amateur boxing "and the destiny of the boxing federation's share of profits from the Sydney Games".

"Rakhimov had come a long way in the few years since the collapse of the Soviet empire. Now there was nothing to hold back his spirit of enterprise, which would link the Olympic money machine to some of the most fearsome criminal gangs the world has ever seen, with a little help from one of Juan Antonio Samaranch's closest associates," Jennings writes.

Jennings says Australian immigration and intelligence officials will have to decide whether they admit Rakhimov, as well as most of the other officials who control the federation - all of whom were approved by Rakhimov.

It may be wide to deny Major-General Francis Nyangweso of Uganda a visa for Australia - along with boxing officials from Turkey, the United States and Latin America, who have demonstrated their strong support for Rakhimov, Jennings writes.

Known associates of mobsters are usually excluded from most countries. Rakhimov has already been barred from Western Europe.

Jennings says there are also concerns regarding the federation's Pakistani president, Anwar Chowdhry, whose family enjoy cordial relations with Rakhimov and visit him in Tashkent.

A spokesman for the Department of Immigration said yesterday that he could not comment on the cases of individuals requesting entry into Australia for the Games because it was classified information.

A spokesman for the Minister for Immigration, Mr Ruddock, would not say whether Rakhimov was on an "alert list for people considered undesirable".

Jennings says the leaders of amateur boxing are close and willing associates of Rakhimov and any sensible country would not dream of admitting them.

ANDREW JENNINGS unravels the dark side of the Olympic family. Gafur Rakhimov returned home from the Atlanta Games to a hero's reception at Tashkent airport. He'd made major steps up the Olympic power ladder and was positioning himself to take control of international amateur boxing and power over who won medals - and the destiny of the boxing federation's share of profits from the Sydney Games. Within two years he'd achieved that aim.

Rakhimov was "welcomed back with great ceremony by officials who had come to meet him off the plane in a fleet of black limousines", reported a source whose account quickly found its way into drugs intelligence files across Western Europe.

Rakhimov had good news for Uzbek sports officials and the government. Juan Antonio Samaranch, president of the International Olympic Committee, would visit in a month's time. This would bring glory to everybody and transform Rakhimov's own fortunes.

Fifteen months earlier his progress up the ranks of the Russian Mob had taken a humiliating knock. When the Russian godfathers take time off from drugs, fraud, assassination, prostitution, extortion, gun-running and smuggling plutonium, they like to have fun. Mob bosses' birthdays are occasions for special celebration. And so it was on the night of May 31, 1995, when the crime chiefs of the new Evil Empire flew into Prague for a night of debauchery.

They gathered at the Black & White, one of a chain of strip clubs owned by the godfather of Russian godfathers, Ukrainian-born, Israeli-naturalised Semion Mogilevich. A podgy, charmless chain-smoker - "the most powerful mobster in the world", according to the FBI - Mogilevich controls a fortune estimated at $US100 million ($170 million).

It was a great night to remember, full of surprises. A cheery chap nobody recalled seeing before videoed near-naked girls cavorting around the banqueting tables. To close the night, a bunch of guys in black uniforms and balaclava helmets, packing mock submachine-guns, abseiled down ropes slung from the upper floor and jovially clapped the whole bunch in handcuffs. How richly comic. They looked just like a Prague SWAT team.

Gafur Rakhimov laughed as much as anyone, though weren't the actors going a bit far, cuffing the girls, too? The joke was turning sour. These hooded characters didn't know when to stop. They hauled the gangsters and lap-dancers out onto the street, lined them against a wall and continued videoing them, one at a time, full face. Then the commander stepped forward and said something along the lines of, "Good evening, gentlemen. We are the Prague organised crime squad. We've recorded your faces, but you're not seeing ours. These are real guns. You get a free one-way ride to the airport and don't ever, ever come back."

The picture they had taken of Rakhimov smiling earlier in the evening was pasted into the file the FBI opened on him 10 weeks later. It was headed "Russian Organised Crime/Racketeering Enterprises", numbered 033, and held in the bureau's office in Miami. The Feds had his date of birth, July 22, 1951, description - black hair and black eyes - and a list of associates that put him in the premier league of the new eastern mafia.

Topping the list was Sergei Mikhailov, boss of the Solntsevo crime syndicate. Also named was Vyacheslav Ivankov, head of the Russian mafia's operations in America until he was jailed in 1996.

The Feds said Rakhimov worked with Ivankov's lieutenants, the Kandov brothers, Mark and Boris, fronting one of their operations, a Vienna-based company called Agrotek. It was alleged he had been involved in distributing counterfeit US dollars in Poland and might be connected with "major cocaine smuggling operations".

Rakhimov had come a long way in the few years since the collapse of the Soviet empire. Now there was nothing to hold back his spirit of enterprise, which would link the Olympic money machine to some of the most fearsome criminal gangs the world has ever seen, with a little help from one of Juan Antonio Samaranch's closest associates.

The next dossier on Gafur Rakhimov was opened in the Moscow office of the Chief Directorate for Fighting Economic Crime, a division of the Russian Ministry of Internal Affairs, which has access to KGB files on the long-time gangsters of the Soviet black economy. It paints a broader and darker picture than the FBI file. Few, it seems, are richer or more powerful in Central Asia than Rakhimov. And, the Moscow crime fighters warn, Rakhimov has gone international. He operates in Moscow and London and spends long periods in America. "He is a personal adviser to the Uzbek President, Islam Karimov," they say, "and performs his special, delicate tasks, including the relationships with the Russian leadership."

Rakhimov has his own Moscow office and "enjoys unique influence in the Uzbek embassy, whose employees refer to him with fear. He has very strong influence in the economic and political leadership of Uzbekistan and is also influential in other Central Asian countries of the former Soviet Union. Without his unofficial sanction no single major economic project starts in Uzbekistan."

The crime fighters traced his extraordinary links to the Moscow powerbrokers. As well as having influence in the Kremlin, through Pavel Borodin, Yeltsin's administration chief, Rakhimov was well connected to Yeltsin's rivals in the camp of Moscow's mayor, Yuri Luzhkov.

The front for Rakhimov's illegal operations, they say, is the Uzbek cotton trade. He's a global player, claiming to buy - and sell - the entire Uzbek cotton harvest, the world's third largest. In secret, according to his Moscow file, "Gafur Rakhimov is one of the leaders of Uzbek organised crime and his main speciality is the organised production of drugs in the countries of Central Asia." He is "a major figure in an international drug syndicate. He keeps very close connections with Afghan traders of drugs."

The dossier claims Rakhimov exports his heroin through Turkey, Chechnya and the Balkans.

Rakhimov's reputation went global in the autumn of 1997 when researchers at the Paris-based Geopolitical Drugs Watch flushed him out in their annual report on world narcotics distribution - and posted it on the Internet. They named Rakhimov as one of Uzbekistan's top three mafia bosses, heavily involved in the drugs trade.

Rakhimov was already operating in Paris. In the year of the Atlanta Games he'd set up an import-export business in Avenue Hoche. In January 1998 Rakhimov flew into Le Bourget airport, near Paris, in a private jet owned by the charter company Air Entreprise. He arrived from Zurich with a 90-day visa for the Schengen (open border) countries of the European Union, travelling with eight companions, several of them Russian-born emigrants to Israel. They were waved through by immigration officers: maybe it helped that Rakhimov's ninth travelling companion was Georges de Charette de la Contrie, whose cousin, Herve de Charette, was France's Foreign Minister.

It was only after the party had left the airport in an "immaculate" black Rolls-Royce, a Volvo and a Renault Safrane that immigration officers looked in their files and discovered they had three different sets of records on Rakhimov, all warning that he was considered "a leading member of the Uzbek mafia and posed a grave threat to public safety".

The happy party glided comfortably into Paris and during the following week Rakhimov and his business partner, Artur Martirossian, were photographed with two men who planned to build a new business with them in Tashkent. One was Georges de Charette, a director of Air Entreprise. Standing next to Rakhimov, bespectacled and serious, and also a director of the charter company, was Prince Jean of Luxembourg, son of IOC member Grand Duke Jean, and younger brother of Prince Henri who in four weeks, at the Nagano winter games, would be appointed to take over papa's seat on the Olympic committee.

Prince Jean has not responded to my attempts to ask him about his dealings with Rakhimov, but de Charette was most helpful. "We were planning to set up an air charter company, similar to our own, in Tashkent, providing air limousines for whoever needed them," he told me.

"At one stage Rakh-imov told us that he was short of money because he had just purchased the entire Uzbek cotton crop - he was playing the commodity markets. After this very damaging picture was published in France - we had known nothing about what was being said about him - we had no more to do with him."

Did Rakhimov ever talk about sport? I asked. "Oh yes," said de Charette. "He said everything is dishonest, even in sport."

And what do you remember of him? "He has freezing eyes." To the relief of immigration officers Rakhimov returned to Le Bourget a week later and flew home.

Big hugs, kisses and hearty handshakes followed seven weeks later when Rakhimov was welcomed in Lausanne, where he arrived with an Uzbek Olympic delegation. Such visitors may expect a warm embrace from Samaranch at the Chateau de Vidy. Maybe little presents were handed out. What else happened? Try asking the avowedly new, transparent IOC. My questions about Samaranch, Rakhimov and Uzbekistan have been treated with all the enthusiasm you'd expect if you asked them for a picture of Samaranch giving his straight-arm salute.

As Rakhimov had arrived in Lausanne for his meeting with Samaranch, he was under attack in Denmark. The same day the respected Copenhagen daily Politiken disclosed, under the headline "Beer giant co-operates with mafia in corrupt country", that for the previous 18 months Carlsberg had been negotiating with Rakhimov to take over and modernise an aging Uzbek brewery. Journalist Bjorn Lambek was first to report a series of anonymous faxes to the media, claimed by Rakhimov to have originated at a rival company, another big European brewery.

Carlsberg's beer had sold well in Uzbekistan since the country opened to the West. Then the Karimov government killed the business with an import ban. Hello boys, said Rakhimov, who just happened to have a sizeable share of the old brewery at Kibrai and was looking for investment partners.

According to the faxes, Rakhimov was dealing with the cream of Western capitalism. The European Bank for Reconstruction and Development (EBRD) was considering putting up money but when I called it to check, an agitated press officer refused to admit there had been any meetings. "We don't keep minutes of these sort of meetings, if they happened at all," she said.

It seems they did happen. I have a letter from Rakhimov to amateur boxing's president, Anwar Chowdhry, dated January 1997, in which he wrote: "I have programmed a meeting with representatives of the European banks in Tashkent." Eventually the European Commission con-firmed EBRD involvement but warned it would "continuously evaluate whether the necessary prudence is employed". Then the EBRD pulled out.

Six months later French television's Le Vrai Journal revealed Rakhimov had been doing business in Paris and was eventually refused permission to enter the country because of his alleged mob connections. Producers Pascal Henry and Stefan Ravion had acquired the reports of the French, Russian and American governments. To their astonishment Rakhimov sued.

Of all the lawyers in France he chose the high-profile Jacques Verges, defender of Carlos the Jackal and Klaus Barbie, the wartime Butcher of Lyons. Rakhimov, wrote the lawyer, was most upset. His honour had been questioned. He was sitting at home in Apartment 13, 9 Chimkentskaya Street, Tash-kent, feeling deeply wounded.

In August last year, after further allegations in the French media, Rakhimov's lawyer filed papers abandoning the case. Four months later BBC Television's Panorama named him as a mafia boss. He demanded compensation for the damage to his reputation, which he valued at $20 million.

When I contacted Rakhimov's Tashkent office in (northern) summer last year I got a call back from a gravel-voiced aide who told me, "Mr Rakhimov, 'e say 'e don't want you to write this story." Er, well, I put to him, it was going to be written and I'd be most appreciative if he would answer some questions. Off went my fax and back came Rakhimov's.

In bold type, and underlined, he asked me to "hold to the answers and not to interpret them to the best for your advantage. Moreover, I reserve my right to claim for libel if any hints about connections between mafia and drug trafficking take place." He wanted me to know that his lawyers were taking action against his critics in France. Three days later he withdrew his Paris libel case.

I asked about his dealings with Carlsberg, and did he pay for the re-election of Anwar Chowdhry at a boxing convention in 1998 - when Rakhimov had also levered himself into shadowy control of the boxing federation? No, he didn't, and when it came to cheating in boxing, "I always come out and condemn." He sent me a letter about himself, written by M. T. Khaitov, director of the National Central Bureau of Interpol in the Republic of Uzbekistan. "Please be informed," announced Khaitov, "there is no data about above mentioned person in our criminal records."

I called amateur boxing's general secretary, Loring Baker, at his home in Atlanta, Georgia, and asked what he thought about the FBI having a file on the chairman of boxing's business commission. "A man is innocent until he's been proved guilty. I would not make it an issue myself," ruminated Baker. "I don't have the highest regard for the FBI as far as ethics and so forth goes, anyway. So the fact they would have him on a list would not have any weight whatsoever. I put no credence in it whatsoever."

When Gafur Rakhimov, on his way from Olympic discussions in Lausanne to business in Paris, accepted a free flight on March 20, 1998, his pilot was Andre Guelfi, a close associate of Samaranch. They'd met before, at the Atlanta games in 1996. Within months of their touchdown in Paris, Rakhimov's generous pilot crashed into the headlines as Europe's most notorious money launderer. Guelfi knew the secrets of Europe's most powerful politicians. He knew where the money came from to win elections; he knew enough to spark Europe's biggest political scandal since the end of the World War II.

French investigators picked up the trail in the mid-1990s. At first Guelfi wouldn't talk, but he was a man in his seventies and a few weeks in jail changed his mind. He reportedly talked about dirty money being laundered through Olympic bank accounts, about pay-offs to politicians in Africa and Latin America, about channelling at least $US40 million in bribes from the late French president Francois Mitterrand to the former German chancellor Helmut Kohl.

Guelfi's disclosures have disgraced Kohl and shattered the Christian Democratic Union, which ruled Germany for 16 years. Many politicians and business people wait nervously to discover if their pasts will catch up with them and send them to jail.

The scandal was born out of Mitterrand's fear that, if Kohl's Christian Democrats failed to wrest control of eastern Germany from the left-wing parties, reunification's pace would slow, damaging both leaders' standing. Money would help. The evidence is growing that Mitterrand instructed the French state-owned Elf oil company to buy a dilapidated refinery in former East Germany for a hugely inflated price. This created a slush fund that Kohl could deploy secretly to fund his electoral machine.

The story began unravelling last year and into this year, and Guelfi, having tasted jail, could not stop talking about his exploits. He said a lot about how his Geneva-based companies were used to launder the political bribes, and began to talk about his intimate business and personal relationship with Samaranch.

In the early 1990s Elf, casting around for new oilfields, learned that rich reserves might be found in the new republic of Uzbekistan. Acquiring drilling rights would be tricky. The man they chose to smooth their path to a deal with President Karimov was the flamboyant Moroccan-born French entrepreneur Guelfi, who handled their negotiations with Boris Yeltsin in the Kremlin. Fifty years earlier, Guelfi, in his twenties, had made his first fortune, running a fishing fleet off the Atlantic coast of Africa and earning the nickname "Dede the Sardine". He became a friend of the chief of the French intelligence service, competed in the Le Mans 24 Hour race, flew his private jet around the world, acquired a sports company and sponsored Tour de France winner Bernard Hinault and tennis player Arthur Ashe. Life was wonderful.

Guelfi bought himself a Lausanne villa overlooking Lake Geneva in the early 1970s, just as Samaranch was plotting his rise to take control of the IOC. They were introduced by a man who became their close personal friend, Horst Dassler, owner of Adidas and the most influential businessman in sport. Guelfi had earned a reputation for turning round ailing companies and the French government invited him to rescue the sports-clothing manufacturer Le Coq Sportif.

Soon after moving into the company in 1977, he discovered a remarkable asset, the commercial rights to exploit the Adidas trefoil logo and three stripes within France. He talked to Dassler and a business relationship evolved. Dassler acquired Le Coq Sportif and then, together, they branched into sports marketing, selling rights to the 1980 Moscow Olympics.

Guelfi supplied funds to launch Dassler's International Sport and Leisure Company, ISL. Through Dassler's contacts with sports leaders, ISL went on to acquire the marketing rights to the Olympics, to soccer and world track and field.

Guelfi said Dassler introduced him to Samaranch in the late 1970s when the latter was Spain's ambassador to the Soviet Union and that they worked together to make the Moscow games a success. And, Guelfi said, he and Dassler collaborated to help line up votes behind Samaranch in his successful bid for the IOC presidency in Moscow in 1980. Last year, when Guelfi's name became a byword for scandal, Samaranch insisted to The Wall Street Journal that he didn't meet the entrepreneur until well into the 1980s.

Another valuable contact was a close Samaranch ally, Russian IOC member Vitaly Smirnov. "We've known each other for nearly 30 years," said Guelfi. "Vitaly has been a faithful friend." When Guelfi was jailed for 36 days in 1997 by magistrate Madame Eva Joly, who was investigating the Elf affair, Smirnov wrote to her, pleading that what-ever Guelfi might have done, he did it for France.

When Samaranch gazed along the lake shore from his Olympic headquarters at Chateau de Vidy in the mid-1980s, he must have liked the view. At Ouchy, beyond the yacht marina, was the perfect site for the Olympic Museum that would be his memorial. Unfortunately somebody had already built a villa there. Fortunately the owner was his friend Andre Guelfi and $US4 million from Olympic funds eased him out and the builders in.

Guelfi could see opportunities for himself where others saw only disaster. He'd cut his teeth on Olympic bidding a couple of years earlier when he'd promoted the silliest candidate ever. Straightfaced, he backed Tashkent for the 2000 summer games. The bookmakers wouldn't offer odds on success. "The Tashkent bid was a joke, a publicity stunt," Guelfi later admitted. "You have to be crazy to think you could have the Olympic Games there."

It was just a favour he'd done for President Karimov, helping to raise his and Tashkent's profile in the world. Guelfi claims he'd become a trusted adviser to Karimov, introducing not just Elf but also the French aerospace giant Thomson-CSF and many other businesses.

Guelfi's private jet, a 13-seat Falcon 900, was just what Samaranch needed to help him do business with his new friends in Central Asia. Samaranch had bestowed his official recognition on the new Uzbek national Olympic committee and seemed keen to meet them, again and again and again. Guelfi flew frequently to Tashkent for Elf, lured by the promise of fabulous commissions. He said that on at least three occasions he flew Samaranch into the arms of the welcoming Uzbeks.

Samaranch, he insisted protectively, "never knew what I was going to ask heads of state when I had meetings with them".

It's hard to imagine why the Olympic president should make room in his tightly packed schedule to jet off with Guelfi, time and again, to a distant land on the outer reaches of the Olympic movement. Samaranch's spokesmen found it hard to explain.

"Guelfi made it very difficult in some respects to say no," said IOC media whiz Franklin Servan-Schreiber, offering no evidence for this absurd suggestion. "It was a free plane ticket to a very difficult place to reach. It allowed the president to rope in several new countries."

Servan-Schreiber's boss, Francois Carrard, said: "Guelfi was happy to go to Uzbekistan with Samaranch because Samaranch was treated as a head of state. We have no idea what Guelfi was doing in Uzbekistan."

Carrard should ask the Paris-based intelligence newsletter www.intelligenceonline.com. In June last year, as French media disclosures about Elf and Guelfi reached frenzy point, it reported that Rakhimov had established "close relations" with Samaranch. The newsletter also claimed Guelfi had told investigating magistrate Joly that he had "transferred secret commissions from big French companies through the bank accounts of various Olympic committees in the region".

Samaranch's urge to ingratiate himself with tyrants seems boundless. As the Uzbek jails filled up, living standards for most people slumped and the heroin traffickers flaunted their brash new wealth, he bestowed the Olympic Order on President Karimov. He got a bauble back and on one visit they attended the inauguration of Tashkent's Olympic Hall of Fame which Samaranch described as "undoubtedly one of the best of its kind in the world".

In September 1998 he gave the Olympic Order simultaneously to Helmut Kohl and to Sabirzhan Ruziyev, president of the Uzbek national Olympic committee.

When Guelfi got out of jail, he gave interviews to the media and published a rambling but hugely enjoyable account of his extraordinary life, L'Original. Last year Newsweek magazine, The Wall Street Journal and several German papers published prominent articles linking Samaranch to Guelfi and the Elf scandals, yet IOC members and the board behaved as though nothing had happened. They like to compare themselves with multinational corporations, but in any business whose boss was found courting a money-laundering jailbird, and an alleged mobster, the board would swiftly tell him to clear his desk.

Samaranch appears at ease prostituting Olympic idealism to benefit his friend Guelfi, who fondly remembers their trip to Beijing. Amid the Olympic back-slapping, he secured a meeting with no less than Chinese Prime Minister Li Peng to discuss a joint venture to build passenger airlines. Being an intimate helped. "When I'm with Samaranch, and I request an audience with somebody, I get it ... we are the masters of the universe," said Guelfi.

This is the first of three edited extracts from The Great Olympic Swindle by Andrew Jennings (Simon & Schuster,

$22.95). Part two will appear in The Sun-Herald tomorrow; part three in Monday's Herald.

Appendix C Efforts to stop mafia may prove fruitless

By Ellen Connolly The Olympic security commander, Assistant Commissioner Paul McKinnon, says he does not know whether an alleged Russian mafia member already barred from Western Europe will be granted entry to Australia for the Games.

Gafur Rakhimov, a senior official of the scandal-plagued International Amateur Boxing Federation and a member of the Russian mafia, is believed to be on his way to Sydney for the Games. The investigative reporter Andrew Jennings claims Rakhimov is a big player in Olympic politics who could influence who wins medals and that he has been linked to criminal gangs around the world.

However, neither Mr McKinnon, nor the Department of Immigration nor the Immigration Minister, Mr Ruddock, could confirm or deny whether they will allow Rakhimov or other members of the Russian mafia into Australia.

The Department of Immigration said it has no way of knowing how many people on its person alert list, made up of individuals who could put national security at risk, have applied for visas to come to Australia during the games.

It also does not know how many of the 150,000 on the list, many of whom have substantial criminal records, have already been refused entry.

A spokesman for the department said there were no centrally collated figures and these details, including the nationalities of those people barred from the country, would not be known for up to six months after the Games.

Mr McKinnon said security would be provided for about 60 international VIPs, including heads of government, sports ministers and royalty, during the Games.

"But the bottom-line delivery to Olympic sites will be around the same order as Atlanta, and that was 16 [dignitaries]."

Fifty delegates from 38 countries are attending a three-day conference in Sydney to discuss security arrangements for foreign dignitaries and athletes.

Mr McKinnon said he was not aware of Russian mafia members coming to Sydney.

"I wouldn't have a clue. It all comes back to how honest he [Rakhimov] has been with his people, and invariably a lot of these folks tell fibs.

"[Rakhimov] could well be coming to Sydney, and whether or not he gets in is another story."

Mr McKinnon said he had faith in the Department of Immigration's border control officers, who recently stopped an "international crook on the run" from gaining entry to Australia.

The Opposition spokesman on police, Mr Andrew Tink, said he was concerned that the relevant agencies were not exchanging vital information relating to the security of the country.

The Police Commissioner, Mr Peter Ryan, and the Federal Attorney-General, Mr Williams, played down the issue of guns, repeating that overseas security forces had been informed they were banned from bringing guns into Australia and that none had made any special request.

Mr Ryan said Israel was a special case, but was not exempt from the rules. ***********

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