Back to Essays


Australian Porn Mafia

Porn stars from an Australian background include Gerry Pike, Diedre Holland, Sunny McKay, Kelly Blue and Alice Springs. The two most famous, Pike and Holland, have spent at least half their lives in other countries. Of the remaining three, Sunny McKay lasted the longest in porn, showing up frequently in early '90s productions.

John T. Bone discovered Sunny MacKay during his 1989 trip down under for Parliament Video. Her first video was 1989's Behind Blue Eyes 3. She turns in a great performance with Rocco Siffredi in Buttman's European Vacation. She features in about 100 videos including Buttman's Ultimate Workout and Diedre in Danger.

It is not legal in any of Australia's seven states to sell porn, though the two federal territories offer it and do a thriving business via the mail. Many sex shops in the bigger cities also offer hardcore tapes without much harassment from police.

Carl Brewer wrote: "You can only _legally_ sell X rated material from the ACT or the Northern "Territory. The rules about mail-order are ambiguous and thus exploited. It is possible (quite easy ...) to buy X videos in most states too, even though it's technically illegal. The police probably realize that the law's bullshit, and that it's only there to placate the loony fringers.

"After a decent round of legalisation of videos and books (but not prostitution) in the 1970s, X-rated videos were made illegal again in the 1980s in all the six Australian States. The trend started in Western Australia - the politician responsible has since been gaoled, but not for this particular crime - and spread to the other five quickly (Queensland - under one of the world's most insane right-wing Government in the 1970s and 1980s never had legalised them). Prostitution, however, has been legalised in most States; and books and mags have not been banned (except in Queensland). So it is all right to watch still pictures of it, and all right to do it, but not all right to watch videos! Sheer madness." (RAME)

Auburngirl wrote on RAME: "I think we're a lot luckier in Australia than you might think! I've been to a few U.S. cities and I was amazed at how restrictive somethings are. Like table top dancing is a big deal and prostitution is often disguised as "massage". Any Aussie that wants XXX vids can usually go to a local "adult" store and rent them over the counter, (certainly in Melbourne, Sydney, Brisbane and the other big cities). Brothels are legal, licensed and pretty clean, safe places. Most forms of sexual entertainment are fairly easily available. Which is just to say the legal situation may look a mess, but it works pretty well in allowing most things without condoning the worst corollaries of adult entertainment such as child porn, violence, STDs etc."

Pat Riley replied: "As an expatriate Australian who last lived there in 1973 (I went back for a couple of weeks in 1992) I'm very disapointed to hear this. Have they really abandoned all hope of having the girls see sex like males see sex and put out just because they enjoy it?

"What kind of society are you (we if some of the people here have their way) headed for? A group of females dispassionately f--- for short term money (hookers) and another for long-term support (married women) with no one in between. Males used as drones in both cases. Not a society I want to live in."

On April 28, 1991, the Sydney Sun Herald published this recent speech by Independent MP (Member of Parliament) Dennis Stevenson before the ACT Legislative Assembly (Australia's capitol city of Canberra):

THE X-rated video industry, though most obvious in the ACT, is a problem which confronts all Australians .. .

I intend to show that vast profits are made from pornography, that its huge cash flow is highly attractive to organised crime figures, that there is an inter-linking web of companies and identities throughout Australia that are strongly connected to organised crime, particularly in the areas of drugs, prostitution and pornography.

I intend to show that the X-rated video pornographic industry is strongly linked with drugs, violence, fraud and corruption and that criminals have been protected and have been allowed to prosper because we have maintained the ACT as a safe house from which they can thumb their noses at the State laws which make their activities illegal.

I intend to show that much of the impetus for the porn industry in Australia has come from leading Mafia figures in the US and that further there is a direct connection between the video trade in the ACT and organised crime in the US.

The question that remains unanswered for many people throughout Australia is: Why have X-rated pornographic videos not been banned in the ACT when they are illegal in every single one of the States in Australia?

It is a question that, I believe, will not be asked for very much longer. I want to now describe the US organised crime connection .. .

THE first version of the private video market in Australia began in the 1970s with legal Betamax copies of porn videos being purchased in the US, sent to Australia and subsequently copied illegally and sold furtively in limited quantities throughout Australia.

US organised crime figures visited Australia in the 1970s and several times in 1980 and 1981 to set up an organised pornography industry here in Australia.

In the 1980s the representatives were Norman Arno and Theodore Gaswirth, both of whom were leading identities in organised crime in the US.

The activities of Arno and Gaswirth in the US are most relevant, particularly their involvement in a pornography racket, turning over some$US4billion a year, a figure estimated by the Federal Bureau of Investigation.. .

In the US in February 1980, the largest-ever crackdown on pornographers was undertaken by a special force of 400 agents from the Federal Bureau of Investigation .. .

Over a dozen warehouses were raided and literally tonnes of pornographic material was seized ... 54 arrests were made in Los Angeles, Miami and other places.

Norman Arno was arrested as one of the ringleaders of the porn racket. Arno was the president of the North Hollywood-based VCX Incorporated, a US Mafia -linked porn company which in 1985 controlled 40 per cent of the US porn market which has been estimated to be worth $US9billion a year.

Ed Krasnof, who was vice- president of VCX Incorporated, was named as being another organised crime figure during the Los Angeles investigation by the FBI.

Norman Arno, together with his associate Theodore Gaswirth, were named by the Organised Crime Control Commission of California as organised crime figures connected with a number of pornography operations in southern California. In that report, Arno was described as the business partner of Michael Zaffarano, a member of the New York Mafia . The Californian commission named Zaffarano as the main link between porn operations in California and Mafia groups on the East Coast of America .. .

Theodore Gaswirth, who was also named as a Mafia association of Michael Zaffarano, made three trips to Australia in 1981. The first was for five days in late January, the second for another five days in June, and the third for eight days in December.

Like Arno and earlier Mafia visitors to Australia, Gaswirth did not come to put another shrimp on the barbie, but rather to set up criminal connections and operations.

Another of Gaswirth's partners in his US pornography operations was Jacob Molinas, a Californian organised crime figure who was murdered.

Shortly after Arno's arrest, Arno applied to the court to have bail conditions relaxed so that he could visit Australia. Arno subsequently flew into Australia on 21 May 1980. During his stay of 15 days, Arno held meetings with Australian associates in Melbourne, Sydney and Perth.

INITIAL corporate connections between Australian identities and the Mafia were made by Daniel M Stein, an associate of Meyer Lansky. Lansky was one of the US Mafia leaders who was responsible for much of the overall direction of the Mafia .

The investigative reporter Bob Bottom, in reporting the Stein connection in his book Connections II, wrote that Stein visited Australia a number of times between March 1971 and April 1976, and had dealings with that well-known Sydney criminal George Freeman .. .

To give a summary of the US connection so far, we have seen that Norman Arno and his associate Theodore Gaswirth were recognised by the FBI as leading organised crime figures in the US and members of the Colombo Family, one of five Mafia families controlling crime in New York. We have seen that Arno and Gaswirth had recently been arrested for illegal porn operations and that they then came to Australia to set up operations distributing pornography.

I have here Norman Arno's signature on a licence agreement with a company now operating in Fyshwick. But let me state it more clearly: it clearly shows a connection between Arno, the US Mafia racketeer, and our own ACT .. .

THE main contact in Australia for Arno and Gaswirth was Alexander Gajic, who, together with his father Todor Gajic, were directors of Sienna Pty Ltd, a company formed in South Australia and now operating at Fyshwick in the ACT in association with the businesses Australian United Videos and Private Screenings Home Video.

Private Screenings Home Video were run by Gajic and Barry Taylor. This was admitted on a Four Corners television program called X-rated. Taylor had been arrested in Asia for crimes connected with drugs and had escaped initially to Hong Kong.

Alexander Gajic was named by Justice Woodward during the 1980 NSW Royal Commission on Drugs as a major player in the drug ring established by Bruce"Snapper" Cornwell and Barry Bull.

Gajic also traded with Adivi Trading Nominees Pty Limited, one of its directors being Bruce "Snapper" Cornwell. Cornwell was described as a drug baron by Justice Stewart at the Australian inquiry into drugs in 1985 and was convicted in 1988 ... Cornwell is currently serving a long jail sentence ..

Alexander Gajic confessed to dealing in both marijuana and heroin in testimony to the Woodward Commission. Gajic was not charged for drug-dealing offences as a result of his admissions. Evidence given before a royal commission cannot be used to convict the witness giving it.

Together with Joseph David Shellim, Gajic operated a web of companies which dealt in pornography across Australia. These companies included Curbydex Pty Ltd, Mr X-Video, and Hollywood House Video.

Joseph Shellim and his brother Freddie initially operated Hollywood House Video in Melbourne, but now they and Hollywood House Video are based in Sydney.

The Victorian office of Curbydex Pty Ltd, which, as we have seen, was operated by Gajic and Shellim, was located in Bay Street, Brighton, at premises owned by Esmond Mooseek. Mooseek is serving a life sentence as a major drug-runner.

Gajic's companies spread until TAG Video, a company named after the initial letters of Todor and Alexander Gajic, was used to distribute pornographic videos supplied by the Mafia -operated video company VCX, the president of which, as we have seen, was Norman Arno.

ORGANISED crime figures in the US and Australia have been able to put on a face of respectability by using the proceeds of criminal activities to buy into legitimate businesses.

This gives them the opportunity to launder money and also to hide illegal activities behind a facade of legitimacy.

Organised crime in Australia has created an interlocking series of companies to provide a corporate shell to dispose of illegal money by shuffling it backwards and forwards, through fake invoices and borrowings, until it gets lost in the paper trail.

This is outlined by Mr Douglas Meagher, senior counsel assisting the Costigan Royal Commission, when he spoke at the Law Reform Commission Conference in Perth .. .

In attempting to expand his pornographic dealings and US connections, Alexander Gajic instructed Melbourne solicitor Leon Zwier to travel to the US to buy porn titles for Gajic to distribute in Australia. Among Gajic's written instructions to Zwier was a report on Al Tapper, the president of CPLC.

In his instructions to Zwier, Gajic wrote:

"Speak to him, he's a top bloke, who virtually controls the West Coast market in pornographic books and accessories. I will be importing books, etc, from him as well, as soon as I get more cash together. He knows Australia well, being a friend of Abe Saffron. His attitude is always cash up front."

Leon Zwier was a partner in the firm of solicitors in Melbourne, Harding, Brereton and Shiff, which has since ceased to operate. Expenses in the US and Zwier's fees were paid by Gajic.

It was reported in The National Times newspaper of 6 October 1983 that TAG Video distributed pornographic videos in Australia in connection with Unicorn Video, one of a large network of companies operated by Gerald Gold in Melbourne. The Australian Tax Office yesterday petitioned for Gold's bankruptcy in the Federal Court.

Gold was associated with Mark Arthur Clarkson. Clarkson was charged with murder after it was alleged that he hired former stand-over man Christopher Dale Flannery to murder Melbourne barrister Roger Wilson.

Clarkson was acquitted of murder, but convicted of fraud in connection with the collapse of the Athena Building Society in Victoria and given a 10-year sentence from which he has recently been paroled. These very people are linked with the X-video trade in the ACT.

Clarkson was an associate of Gerald Arthur Hercus, operator of the Canberra- based companies involved in pornography, Leisure Moments International and Leisuremail. In a brief to counsel for the Clarkson trial Hercus said he had regularly lent amounts of money totalling some $100,000 to Clarkson and that he, Hercus, was also a business acquaintance of Gerry Gold.

Gerry Gold made use of a corrupt accountant Charles Maxwell McCready to assist in Gold's money laundering activities. This was revealed in evidence to the Costigan Royal Commission and continued until McCready was arrested for conspiring to free two drug offenders from Pentridge Jail with a helicopter.

The plan involved landing a helicopter on the tennis courts one Sunday lunchtime and departing with criminals on board. McCready was convicted and sentenced to seven years in Pentridge Jail .. .

The parent company for the Shellim/Gajic network was Trishon Nominees Pty Ltd. One of its directors being Amos Kormornick, who was connected to another trust which had as a director, Esmond Mooseek, who as was mentioned earlier, owned the building in which Gajic and Shellim operated Curbydex Pty Ltd.

Mooseek was extradited from Thailand in 1989 and convicted on charges relating to importing $A20million worth of drugs to Australia. Mooseek is currently serving 25 years in jail.

Kormornick operated a business which imported figurines in Thailand. Kormornick will be remembered as the person who used the hollow figurines to smuggle heroin and hashish oil into Australia. As a result of this activity, Kormornick was convicted for drug offences in 1988 and is currently in jail.

THE biggest group in the pornographic video industry in Australia was the video and publishing empire run by Joseph Shellim, Alexander Gajic and Gerald Gold, all named as eastern States organised crime figures at the Costigan Royal Commission in 1983.

Royal Commissioner Costigan warned us about them, but we haven't yet taken the action necessary to close down their activities in the ACT .. .

This contract was made between the Australian company Sienna Pty Ltd and the US organised crime company, VCX for Sienna to pay $30,000 for the rights to duplicate and sell pornographic X-rated videos.

This contract was for 12 videos and it granted Sienna the right to operate as agents for VCX in Australia, New Zealand, Papua New Guinea and an area including Antarctica. The three-year contract, dated 1 October 1985, was signed for Sienna by Todor Gajic under the name Tom Gadjic and for VCX by Norman Arno .. .

I mention the New Zealand connection. Using the licensing rights granted by the Mafia , Gajic sold video copying rights to a New Zealand company, Pro Equity Entertainments Pty Ltd, based at Herne Bay in Auckland.

A major organised crime syndicate in Australia headed by a group of businessmen was identified in 1983 by Mr Douglas Meagher, counsel assisting Painters and Dockers Royal Commissioner Frank Costigan, QC.

Mr Meagher said the group was "untouched by law enforcement agencies". Why?One reason is that organised criminals cover their underhand dealings by laundering money through legal businesses. If we are to be serious in attempting to control organised crime and its insidious undermining of judges, police and politicians, then we must take the actions necessary to limit or stamp out one of their favoured activities, the trade in X-rated video pornography .. .

Pornography in the US is controlled by organised crime. We have learnt of the identities of some of the major crime figures in America who profit from pornography. We can see that Norman Arno and Theodore Gaswirth came to Australia with the intention of setting up similar contacts and operations as those they run in the US.

We have learnt of the connections that Arno and Gaswirth made with criminals in Australia. These criminals, like their US counterparts, are also involved in drugs, prostitution, fraud, money laundering, tax evasion and control of both the legal and illegal porn video trade. Does anyone doubt that these same people control the illegal porn trade in Australia?

These Canberra identities have once more proven by their actions of advertising illegal material in each and every State that has outlawed X-rated videos, that they hold nothing but contempt for the law.

We have seen the web of interlinking criminals in Australia that might make one ask: Why are all these criminals so closely associated with each other? I believe the answer is: That is why it is called organised crime.

These criminals are organised. What we need to do, as lawmakers, is to organise against them. We need to put aside party affiliations or personal conflicts and do our utmost to act in the best interests of all Australians and ban these X-rated videos that are currently protected in the ACT .. .


By Sheryle Bagwell


Australian Financial Review

Page 5

Copyright of John Fairfax Group Pty Ltd

DR DICK Klugman has watched more blue movies than he cares to remember. "I must admit I don't watch the whole film any more, I just can't be bothered,"he says. "Maybe it has to do with my medical background, but actually seeing penises and vaginas doesn't add or subtract anything as far as I'm concerned."

As chairman of the Federal Joint Select Committee on Video Material, the NSW Labor MP has also sat through hours of R-rated violence and obscenities of the kind that would never make it past the Commonwealth Film Censor.

Since the committee was formed in March 1985 after the States (except the ACT and the Northern Territory) banned the sale and exhibition of X-rated videos, it has amassed more than 3,000 pages of evidence from 24 public hearings.

The questions under investigation are the perennial ones of censorship: Should adults be allowed to watch what they like? To what extent are children at risk? And which poses the greater threat: violence or explicit sex?

The debate has set Labor committee member against Labor committee member, Liberal against Liberal - which largely explains why the committee of nine has sat for so long.

The final report is unlikely to be tabled before February despite a "hurry up" from the Prime Minister. The addition of three new members this year has meant some last-minute, late-night sessions at the Film Censorship Board "to watch a bit of porno, as my daughter likes to put it," said Dr Klugman.

Legislation covering the sale of videos was introduced in 1984. It created an additional rating above restricted called extra-restricted or X to cover explicit sex while relegating straight "classifiable" violence and soft-core sex to the R rating. But the sight of blue movie "classics" like Debbie Does Dallas II and Lust on the Orient Express on the shelves of corner video stores was relatively short-lived.

Within months, the State Attorneys-General facing elections and public campaigns mounted by the National Party and the Festival of Light-sponsored visit by Britain's Mary Whitehouse, banned the sale and public exhibition of X-rated videos - although this might be news to those who frequent peep show videos in the various establishments along Darlinghurst Road, Kings Cross, and Fitzroy Street, St Kilda.

However, since the bans did not extend to the ACT or the Northern Territory, the industry simply changed address and boosted its already thriving mail order business, giving Canberra the title of the X-rated capital of Australia.

The Federal inquiry was set up to look at the effectiveness of the legislation, the adequacy of the present classification system and the lucrative ACT trade. Among other things, it will recommend either an absolute ban on the sale of X-rated videos or a relaxation of the classification system (although it cannot force changes to State laws).

Most submissions to the committee have dealt with the question of the effect on children of exposure to pornography and violence. But the hearings have also provided a window into the sex industry generally which, despite the vigilance of the Mary Whitehouses and Fred Niles, is as up-front as ever.

Estimates vary widely but, according to importer and wholesaler John Lark, spokesman for the Adult Video Industry Association (AVIA), annual turnover in Australia from the sale of sex "paraphernalia" such as videos, sex aids, books, literature and lingerie would be close to $50 million - of which at least half comes from the sale and hire of blue movies.

There are 100 or more retail outlets selling sex products around Australia as well as the mail order trade which uses certain low-brow newspapers and magazines to advertise its wares.

Sex shops change hands regularly but certain names linger on. The Venus adult shops, six in Sydney and eight in Melbourne, are perhaps the best-known, although owners come and go. A spokesman for the present owner said the group never talks to the press.

Another name, which has been around long enough to establish significant community recognition and is not so reticent, is the West Australian-based Barbarellas group. The chain, now 12 years old, operates 10 sex shops mostly in Perth and markets the Barbarellas line of lingerie which is also sold direct to women through Tupperware-style parties.

Managing director Peter Hennessy would not reveal turnover or profit margins, only that Barbarellas was now a "multi-million-dollar" operation. He says Barbarellas no longer strictly caters for the seedier clientele, the bread and butter of shops like Venus, and has found a niche as a supplier of fantasy products to the middle classes.

As many as 50,000 women attended Barbarellas lingerie parties last year, he said, and the company's in-house surveys claim that between 20 and 30 per cent of the WA population enter a Barbarellas sex shop every year. According to Mr Hennessy, the Barbarellas' style of marketing has changed public attitudes to sex shops in WA.

He says he was the first to market sex paraphernalia to the general community and the first to advertise on Australian television. The group now sponsors three Australian Rules teams in Perth as part of its broad-based marketing strategy.

"We try to adopt a fun rather than sleazy image," said Mr Hennessy. "Our shops are well-lit, carpeted with piped music. Our ladies are dressed in the kind of uniforms you'd find on shop assistants in George's. The raincoat brigade won't come anywhere near us."

So respectable and well-known is the group in Perth, claims Mr Hennessy, that he is considering floating his company on the Perth second board to raise capital for expansion beyond WA. He foresees no trouble attracting investors. The stockmarket crash has delayed his plans, but he believes the float will go ahead next financial year.

To round off the float, Mr Hennessy is negotiating a possible merger with John Lark's wholesale and import business, Radox Caballero Holdings Pty Ltd, which has an annual turnover of nearly $5 million.

Public listing would give the business a level of respectability and credibility not normally associated with the trade of porn videos and sex aids.

A leading accountancy firm hired by Radox Caballero to investigate the prospect says the businesses are viable, although a spokesman would not venture a prediction on its likely success as a public company. "But the launch (of the prospectus) would certainly be a lively affair," he said.

However, this is Australia, not Sweden or Denmark. Regulations and legislation abound at both State and Federal level - and where there are restrictions on free trade, illegal activity generally rears its ugly head. The blue movie business is definitely no exception.

IT is impossible to estimate accurately the turnover in unclassified and/or pirated blue movies, for example. Some sources claim trafficking in blue movies is now a multi-million-dollar business, with a value at least double the estimated $25 million annual turnover of the strictly legal side of the trade.

Despite tougher fines for offenders, there is no doubt that pornographic videos, which would be refused classification by the Censor and therefore prohibited from sale - films, for example, depicting child sex, coercion, assault or even murder - are still finding their way onto the market.

John Lark maintains that the underground trade in unclassified blue movies is relatively "small and secretive" although the video laws as they stand do not require Customs officials to systematically check luggage for pornographic tapes.

The bulk of the blue movies shown in Australia are made in the United States, with a smattering from the Scandinavian countries. Crime reporter Bob Bottom told the select committee in 1985 that Mafia figures were involved in the production of blue movies in the US and that some of these people had visited the ACT to check out local operations.

"There is obviously an attempt to bring in unclassifiable material," says Ken Barton, chief Commonwealth Film Censor. "But it is very difficult to know whether this is done on a commercial scale."

It seems, however, that the biggest business is in pirating tapes which have been legally imported and submitted for classification. By avoiding copyright payments and classification charges - $245 a tape, says John Lark -these X-rated videos are sold sometimes at nearly half the normal price.

According to AVIA, 50 per cent of X and R-rated master tapes brought into Australia and classified will be copied and sold illegally. "If we release a tape, within a week or two it has been pirated and sold in the marketplace. They just take off our logo," Mr Lark told the select committee.

However, the bans introduced by the States have, in fact, meant increased business for companies like Radox Caballero, one of the largest, if not the largest, importer and wholesale distributor of X and R-rated videos. Previously based in the Sydney suburb of Cammeray, Mr Lark's Radox merely shifted its base to the safe haven of Canberra.

Mr Lark claims his Mature Media Group Club mailing list has grown from 38,000 to 60,000 members since 1985 and says his best customers are Queenslanders.

He is one of only two or three importers who wholesale to sex shops and other mail order houses as well as selling direct to customers. Radox's main competitors in the early stages, the major video distributors such as Roadshow, MGM and Warner Bros, abandoned the X-rated video market after the legislation was implemented and now earn much of their turnover from R-category videos.

Meanwhile, the joint select committee has laboriously been sifting through evidence submitted in camera and at public hearings in an attempt to sort out the legal hotchpotch. As things stand, for example, the law allows residents of the NSW town of Queanbeyan to take a short trip to the Canberra suburb of Fyshwick to buy a blue movie but prevents the sale of the same video at their corner store.

Religious groups and conservative MPs have called for a total ban, arguing that is impossible for Canberra video distributors to stop X-rated videos falling into the hands of under-18-year-olds when blue videos are sent through the mail.

Others have argued that X-rated movies should only be allowed to be shown in designated cinemas where the age of viewers can be more carefully monitored-while keeping X-rated videos out of the home.

Despite the committee's wide terms of reference, it can only recommend legislative changes in the ACT, although it could effectively stop the trade by recommending a ban on the importation of blue movies.

Dr Klugman, who has probably seen more sex scenes than the your average porn purveyor, is not keen to impose further censorship. He says if X was banned, R versions of the same films would take their place which might"titillate more than the hard-core". (Most "big"-budget porn films - those costing around $300,000 - are almost always released with a cut-down R version for more general consumption.

American porn film-makers often shoot two versions simultaneousely - one camera is simply set close-up for the explicit X version, another at a more distant angle for the R version.

Dr Klugman says: "In my view, X-rated films are just boring because they have no story-line. All you get is different episodes of sexual intercourse which aren't all that interesting. My worry is: how much detailed violence should we be allowed to see?"

The video wholesalers, keen to improve profitability, have a big stake now in trying to convince the public that they are legitimate business people.

"The whole industry has changed," argues John Lark. "The people basically involved in this business are marketing people and they are tailoring their business for the market. The underground stuff is not a big market and, besides that, it is highly illegal. We are dealing with the everyday people. Mum and dad, I guess."

He claims there has been a softening in attitudes to hard-core movies. Porn film-makers in the US have taken into account pressure from the feminist lobby, he says, and are increasingly depicting scenes where men and women are both equal and "always willing", partners. And because more women are watching the films - Lark claims 30 per cent of his customers are women and 70 per cent couples - films are incorporating more complex, "more romantic" story-lines.

"People now don't feel upset about watching explicit sexual material," he says. "However, if you bring violence into that category, it becomes offensive.

"The big problem with the video industry at the moment, as far as I am concerned, is the violence aspect which is in the R-rated category. That is a very big marketing product for the majors, Warner Bros, Roadshow and MGM, and is more of a problem for society than explicit sex. Sex never hurt anybody."

Melbourne's Shy And Retiring Moguls Of Porn
Paul Robinson

Sunday Age
Page 9
Copyright of John Fairfax Group Pty Ltd

Looking more like accountants, they are the brains behind the Club X bookshop and cinema chains in Melbourne, Sydney, Adelaide, Canberra and Perth.

The brothers, who grew up in Lilydale, promoted a rock concert featuring the La De Das in the early 1970s. They also owned a chain of drive-ins around Victoria before the advent of color television. Ken, 41, was once a Telecom technician and Eric, 48, a truckie. Both now drive Chevrolet Camaros, wear expensive suits and send their children to private schools. They used to drive Rolls-Royces, but felt the cars attracted too much attention. They are genuinely shy.

The Hills have become Australia's largest suppliers of pornographic videos. They are directors of more than 12 companies, which include real estate investment, cinemas, video sales, book and novelty retail.

They also manufacture safes and security systems. Four of the companies -Calvista, Silken Hall, Club X and Kelly Security - have issued shares valued at nearly $400,000, but both families are estimated to be worth millions.

The Hill brothers travel overseas regularly to buy stock and conduct business. One of the directors of Silken Hall - whose offices are at 58 Riley Street, Sydney - is Arie Van Der Heul, who lives in Zwaluwe, Holland. The group's video distribution is based at Fyshwick in the ACT, but their mail-order business has closed, the result of tax and administrative measures imposed by the ACT Government.

These measures have cut into the Hill group's profitability. The brothers have told politicians keen to curtail their activities that their business costs amount to more than $2million a month, a substantial contribution to local economies.

A spokesman for the group told `The Sunday Age' that the group paid more than $2million in taxes each year.

The brothers have donated more than $100,000 to AIDS research. It was their money that secured the services of the actor Jack Thompson for the anti-AIDS campaign. They invested more than $200,000 in a series of anti-censorship campaigns. They have also been generous in their support of a variety of Rotary-backed causes.

A source close to the family said: ``These guys are very shy, sincere people. They abhor violence. If they were religious people they would be Quakers. They have a commitment to anti-censorship and non- violence. Sure it's their business, but they are committed civil libertarians.''

The principal offices of the cinema, book and video warehousing arms of the Hill empire are listed to a brothel at 77 Racecourse Road, North Melbourne, known as Club 77. Five of the brothers' companies, including Shaft Cinemas, operate from there. The brothel, according to Melbourne City Council records, is run by Joseph Stanley Sobota. Mr Sobota, 38, and his brother George, 41 - who also gives his address as 58 Riley Street, Sydney - are both directors of West Savoy Theatres, a Melbourne-based Hill company.

Joseph Sobota, according to MCC records, used to own a brothel in Anderson Street, West Melbourne. Seen recently assisting the management of that establishment was Peter Gordon Richardson, the proprietor of Melbourne's classiest house of ill repute, the Top of the Town in Flinders Street.

Mr Richardson has been the doyen of the brothel trade for more than 15 years. When running brothels was illegal, he managed seven of them through a company called Carroll Consultancy. He conceded as much in a statement to police about alleged financial demands being made on him for protection by a former vice squad detective. The officer, who has since left the force, was cleared of any wrong-doing at a committal.

Mr Richardson, 44, used to run the Top of the Town brothel in North Melbourne, which closed several years ago for zoning reasons. He has traded successfully in several brothels and has acted on behalf of others in buying and selling businesses.

He is president of the Brothel Owners Association and is reputed to have done more than any industry figure to improve the image of Melbourne brothels. This is despite some damage to his reputation last October when charges that an under-aged girl was found on the premises at the Top of the Town were proved in Brunswick Magistrates Court. No conviction was recorded.