How veteran journalist Steve Barrett was framed with blackmail

Veteran crime journalist Steve Barrett’s life was turned upside down with an AFP investigation – that was sensationally dropped. It can now be revealed how prosecutors got it wrong.

After extortion charges against veteran crime journalist Steve Barrett were sensationally dropped, it can now be revealed how police got it so wrong. Picture: NCA NewsWire/Joel Carrett

Crucial telephone intercepts went missing. Exculpatory text messages were not disclosed and the star witness was a self-confessed cocaine-sniffing, heavy-drinking property developer who told so many lies, police gave up taking a statement from him.

Right from the start the shock criminal case alleging veteran journalist Steve Barrett was involved in a blackmail conspiracy was full of holes, inconsistencies, and lacking credibility — and the Australian Federal Police knew it.

Steve Barrett (right) pictured talking to his supporter outside Supreme Court Sydney Picture: Monique Harmer

After 17 attempts to take a statement the AFP stopped trying, with an officer saying in internal emails “the biggest issue I had was Hausman’s (the star witness’s) truthfulness.”

Another agent said “Taking the statement (from Hausman) would compromise the credibility and reputation of the AFP and place the investigators who take the statement in a vulnerable and untenable position in the witness box….”

Daniel Hausman outside court in Sydney. Picture: NCA NewsWire/Joel Carrett

They concluded that if they had to give evidence, the officers AFP would have to say they still considered Hausman “not to be a witness of truth”.

But despite the serious misgivings of the AFP, the prosecution of the former News Corp, Seven and 60 Minutes reporter continued for six years and the twists and turns became stranger and stranger.

Steve Barrett pictured with his brother Peter arrive to hear the charge will finally be dropped after five years. Picture: NCA NewsWIRE, Monique Harmer.

It is only now that the case was formally abandoned by the Commonwealth Director of Public Prosecutions (CDPP) and suppression orders lifted, that the truth can be told.

Barrett’s prosecution came in an era in which the AFP went on to conduct a series of raids on other journalists including then News Corp political reporter Annika Smethurst, and the offices of the ABC.

Barrett has been an award-winning crime reporter for almost 40 years. He has helped police numerous times crack cases, including assisting the AFP to hunt down one of Australia worst paedophiles, the fugitive Dolly Dunn.

Steve Barrett helped the AFP find paedophile Dolly Dunn. Picture: Supplied

And before he was charged, he was hot on the trail of a story about Australia’s biggest tax fraud — the Plutus payroll fraud.

While Barrett was pursuing leads, the police were also watching and before Barrett could break the story, police swooped and arrested a string of business associates and lawyers.

Barrett’s house was also raided and documents he obtained in the course of his investigation were seized.

Journalist Steve Barrett, third from left, with former AFP Deputy Commissioner John Lawler, celebrating in Honduras after Barrett helped with the arrest of paedophile Dolly Dunn. Picture: Supplied

It can now be revealed that ten months after that raid, the AFP formally wrote to Barrett and his solicitor, Andrew O’Brien, saying they did not consider Barrett was a “co-conspirator” they just wanted him to tell them everything he knew about the crooks, which Mr Barrett agreed to do.

Then in an apparent about face, AFP officers arrived at Barrett’s front door, 13 months after the raid, telling him was being charged with conspiracy to blackmail, even though they knew he was a working journalist. The AFP had not even conducted an interview with him.

Police officers Kristie Cressy, Ron Knighton, Angy Polic and Rod Ramilo from Operation Elbrus posed for pictures in Surry Hills after busting the Plutis Payroll Tax Office scam.

Mr O’Brien said they have always maintained this charge made “no sense”.

That seemed to be born out when the CDPP told Barrett’s defence team and Supreme Court Judge Elizabeth Fullerton, Hausman would no longer be used as a co-operating witness.

It was assumed the case would be dropped. But it wasn’t and just months out from the trial, AFP internal emails reveal the CDPP wanted to “conference” Hausman themselves. The AFP anticipated they would be asked to take a statement which Detective Sergeant Morgan Blunden recommended be “rejected”.

The AFP wrote to Steve Barrett saying he was not a co-conspirator. Then they did a backflip and charged him. Picture: supplied

Then out of the blue, the CDPP decided Hausman was a witness of truth.

A long and expensive trial was conducted, but the jury, which ended up in turmoil itself, resulting in the forewoman leaving because she felt unsafe, was hung.

During the trial Hausman admitted to telling lies. The AFP were unable to produce crucial telephone intercepts which would have backed Mr Barrett’s version of events, claiming a technical glitch, and crucially — Hausman told the court he did not tell Mr Barrett about the blackmail plan, because he knew Mr Barrett would not be a part of it.

The Australian Federal Police assessed Daniel Hausman "not to be a witness of truth". Yet he became the star witness in the case against journalist Steve Barrett. Picture supplied.

Steve Barrett’s legal team former District Court Judge, Dr Greg Woods KC, left and solicitor Andrew Andrew O’Brien. Picture: Natalie O’Brien

Former District Court Judge and barrister for Mr Barrett, Dr Greg Woods KC later wrote in a blistering submission arguing for a stay of proceedings, that Hausman’s concession should have been the end of the matter.

Then in May last year in a separate trial of another related case of lawyer Sevag Chalabian, Hausman admitted telling even more lies about his contact with Mr Barrett.

And in yet another separate hearing, Hausman was forced to concede flagrant breaches of Supreme Court orders when he was supposed to be truthful.

Steve Barrett (right) and his lawyer Andrew O’Brien speaking to the media outside the Supreme Court Sydney Picture: NCA NewsWIRE, Monique Harmer

In a scathing assessment, Dr Woods, wrote that the only so-called “evidence” against Mr Barrett came from the lips of a fraudster and a mendacious liar whose stories rivalled Baron Munchausen, the renowned fictionalist.

Dr Woods argued that “the prosecution allegations are utterly inconsistent with his (Barrett’s) genuine history as an investigative journalist” and to continue with such a mendacious liar would be an “affront to justice”.

The CDPP capitulated and dropped the charge. But questions need to be asked about how it ever got this far.

Only under subpoena were the damning internal AFP emails revealed admitting Hausman was such liar police did not want any part of using him as a witness.

And only under subpoena – when it should have been revealed in discovery – was a text message from Hausman which said it all.

“I am calling the shots on this now and both lawyer and partner doing as I say. I’m loading all relevant items so Journo finishes this thing just like I engineered it. That’s the way home….”

Natalie O’Brien and Steve Barrett worked together in the investigations team for The Australian Newspaper.

Originally published as How veteran journalist Steve Barrett was framed with blackmail