Australian Dictionary of Biography

Lawrence Robert Connell (1946–1996), entrepreneur and racehorse owner, was born on 2 April 1946 in Perth, only child of Cecil Connell, shop manager, and Sarah May Adams, both Western Australian born. Laurie’s Irish-born paternal grandfather, Robert, had a distinguished career in the Western Australian Police Force, rising to commissioner in 1913, a position he held for twenty years. At the time of his son’s birth, Cecil was married to Alice Maude, née Eldridge (d. 1948), mother of their three daughters and two sons. He married Sarah in 1950. Growing up in South Perth, Connell left school early and worked as a clerk (1962–68) at the State Department of Industrial Development. After a short period in the accountancy office of the camp management and catering company Poon Brothers, in 1968 he gained employment with the Sydney-based merchant bank Martin Corporation Ltd. According to the West Australian, he had learned that ‘money is power’ and set about ‘amassing as much of both as he could’ (1996, 14).

On 28 July 1969 Connell married Elizabeth Joan Willmott, daughter of the long-serving (1955–74) member of the Legislative Council, Francis Drake Willmott. After a period as Martin Corp’s Perth manager, in 1974 Connell established a finance company, L. R. Connell and Partners, and, around the same time, a family company, Oakhill Pty Ltd. With an estimated personal wealth of $20–30 million, the operating style for which he would become infamous was evolving: substantial consultancy and management fees, short-term lending at high interest rates, and acting as a lender of last resort. Such practices later brought him the nicknames ‘Earn’ and ‘Last Resort Laurie.’ From his earliest days in business, he showed a liking for ‘the quick profitable deal’ (McGlue 1996, 13) and was prepared to tolerate high levels of risk in his investments and loans. His physical presence reflected his brash business persona, ‘his bull neck, balding pate, and brusque manner’ more akin to ‘the bare-fisted fighters who slugged it out before the gentlemanly glove became mandatory in the sport of boxing’ (Cash 1994, 45).

Horse-racing was a pastime and later a business for Connell; he became one of Australia’s major racehorse owners, and developed substantial interests in equestrian sports and polo. His penchant for wagering large sums brought him notoriety early in his career. He was banned from Australian racecourses for two years in 1975 for the ‘Kalgoorlie Sting,’ when he utilised radio station contacts to delay a relayed broadcast to Kalgoorlie of a Melbourne race on which he had bet a substantial amount. In the 1983 Bunbury Cup he paid a nineteen-year-old apprentice jockey, Danny Hobby, $5,000 to fall off his mount in what turned out to be an unsuccessful attempt to allow Connell’s horse Saratoga Express to win. When Connell was implicated, he paid the jockey to flee the country and live overseas. Two years later Connell’s horse Brash Son returned a positive test for etorphine (‘elephant juice’) after winning at Ascot in Perth, and the trainer, George Way, was disqualified for twenty years. More spectacularly, at the 1987 Perth Cup Connell’s stallion Rocket Racer won by about nine lengths and continued galloping for nearly another lap before almost collapsing. Such was the horse’s dehydrated condition that it was not tested for etorphine and no charges were laid. Connell had placed a large bet on the horse and claimed to have won a six-figure sum in addition to prize money. Despite his several nefarious racing exploits, he had been manager of the national equestrian team that competed at the 1984 Los Angeles Olympic Games.

During the 1980s Connell became one of the most significant business and financial figures in the State. Along with prominent entrepreneurs such as Alan Bond, Robert Holmes à Court, and a bevy of lesser players, he seemed ubiquitous. With an ostentatious and flamboyant lifestyle—yachts, big betting, parties, and mixing with the rich and famous—together with byzantine business networks, and seemingly untrammelled access to the highest levels of the State government fuelled by generous political donations, he was rarely out of the public eye. Two developments cemented his position of power. In October 1982 his Craybell Pty Ltd acquired a majority share in the long-standing Brisbane-based menswear company Rothwell’s Outfitting Ltd, and transformed it into a merchant bank (Rothwells Ltd). A capital consolidation and the former retail company’s record of paying consistent dividends to shareholders ensured that it was granted trustee status in Western Australia, enabling it to manage funds on behalf of charitable organisations. Adopting a glitzy image, the company relocated to Perth and Connell became chairman and managing director (1984–87). As its balance sheet expanded—in 1983 alone deposits ballooned from $443,000 to $50 million—he nurtured the bank’s reputation as a reliable institution which offered competitive interest rates and was prepared to invest and lend with minimal security. In many cases loans were provided to companies either owned or closely associated with Connell who ‘ruled Rothwells with something of an iron hand’ (Western Australia 1992, pt 1, vol. 4, 13-10), while displaying all the hallmarks of his modus operandi: ‘salesmanship, risk-taking and shiftiness’ (Beresford 2008, 99).

In February 1983, soon after Connell’s acquisition of Rothwells, an Australian Labor Party State government headed by Brian Burke came to power. The premier was interested in ‘a new, entrepreneurial style,’ and was attracted to a relatively youthful breed of ‘four-on-the-floor’ entrepreneurs who were prepared to challenge orthodox business principles. Connell became a trusted adviser who, by his own admission, ‘could call [Burke] when he liked and expect that his call would be taken’ (Western Australia 1992, pt 1, vol. 2, 7–13). After the John Curtin Foundation was established on Burke’s initiative to raise funds for the ALP, Connell donated lavishly—$640,000 between 1982 and 1989, according to one estimate—including a pledge of $250,000 to the Federal party in 1987.

Shortly after its election the Burke government established the Western Australian Development Corporation (WADC) as a vehicle, nominally independent of government and thus from Treasury scrutiny, for attracting capital investment and developing finance markets. Its first venture was to acquire for $42 million Bond’s Northern Mining Corporation N.L., with its 5 per cent stake in the Ashton Joint Venture’s diamond interests at Argyle in the East Kimberley. Connell, acting for the government as broker and adviser, was concurrently acting for the vendor, from which he received a substantial fee. Soon afterwards, the government decided to build a casino, partly to take advantage of the expected influx of cashed-up tourists for the defence of the America’s Cup yacht race off Fremantle in 1987. The tender was awarded to a consortium headed by Connell’s associate Dallas Dempster, with Connell duly pocketing a substantial brokerage fee.

In 1986 the government announced the purchase of the Fremantle Gas & Coke Co. Ltd by the State Energy Commission of Western Australia, a deal that quickly became controversial. Connell had previously charged a large fee to ensure that the utility was first purchased (‘warehoused’) by a party amenable to selling it on to the State. He arranged for Western Continental Co. Ltd, controlled by the entrepreneur Yosse Goldberg, to purchase the company for just under $24 million; twelve months later the government paid $37.7 million for the firm, and Connell and Goldberg enjoyed a substantial profit.

These dealings, as well as a plethora of inner-city and suburban property transactions, earned Connell large fees or a share of profits, many of which were not disclosed by the premier either to parliamentary colleagues or the public. Perhaps his most audacious effort, however, was outside the realm of government. In 1987 he advised the newspaper heir Warwick Fairfax on his buy-back of the 146-year-old John Fairfax and Sons Ltd for a reputed $2.25 billion. Although the financial structure brokered by Connell quickly collapsed, he vigorously pursued his fee of $100 million but was ultimately unsuccessful.

On 20 October 1987 the stock market crash, colloquially known as ‘Black Monday,’ brought a run on Rothwells as many investors withdrew their funds. The Connell empire quickly crumbled. Coordinated by Bond and helped by auditors’ reports that inflated the bank’s financial situation, Burke rushed to mount a rescue without the strategy being approved by cabinet. Aided by government guarantees, a sum of $300 million was initially provided, including a $70 million contribution by Connell which was later revealed to have been a loan from Rothwells. The funds were quickly exhausted and over the next few months the bank’s situation remained dire, despite millions more being tipped in through a series of increasingly complex transactions and the appointment of a new board of management. Connell vacated his role as chair but remained largely in control of the company.

In February 1988 Burke resigned as premier. He was replaced by Peter Dowding who maintained his predecessor’s determination to prop up Rothwells. The vehicle for a second rescue attempt was a company jointly owned by Connell and Dempster, Petrochemical Industries Co. Ltd, with assets consisting mainly of a government-issued right to build the State’s first petrochemical plant, and a heavily mortgaged block of land at Kwinana, south of Fremantle. With Bond, the government purchased a half-share in the company so as to retire $300 million of the Rothwells debt. Designed to nullify the looming crisis, the petrochemical plant concept seemed ‘a significant industrial development for the State,’ while quietly defusing ‘the political time-bomb that lay smouldering beneath the shaky edifice’ (Western Australia 1992, pt 1, vol. 5, 21-36). Despite the government continuing to pump funds into Rothwells, by the end of 1988 the company was insolvent and had ceased trading. All the public funds invested were lost.

A much-diminished figure in Perth business circles, Connell sold off many of his assets including his entire bloodstock holdings. At the same time, his legal problems related both to Rothwells and his racing activities grew. In August 1989 he was charged with publishing false accounts, and in March the next year, with conspiring to defraud company investors. In August a report by the eminent lawyer Malcolm McCusker asserted that Connell had engaged in a ‘web of financial deceit’ (West Australian 1996, 11). To add to his woes, Dowding had been replaced as premier in February 1990 by Carmen Lawrence, who became the country’s first woman premier and promised to clean up ‘WA Inc.,’ as the cosy relationship between government and business had come to be called. In November she established a royal commission into the commercial activities of the State government.

In 1992 Connell’s misconduct on the racecourse also caught up with him when Hobby returned to Australia and agreed to testify in relation to the 1983 Bunbury Cup. Although Connell denied all charges, in 1994 a jury found him guilty of conspiring to pervert the course of justice, and he was sentenced to a five-year term. He was released on parole in May the next year. His problems were exacerbated when his Peppermint Grove home was severely damaged by fire while he was incarcerated. Immediately on his release he began to prepare his defence for the imminent Rothwells-related charges, although he claimed he could no longer afford legal counsel. The trial, long delayed first because of surgery on his spine and then his imprisonment, began in October 1995 with Connell representing himself. Opposed by the State’s crown prosecutor, he proved a ‘formidable opponent’ with a ‘remarkable grasp of the law and a keen memory for all the points raised against him’ (Chitty 1996, 10).

Presenting for court each weekday, Connell continued to hold a high community profile and remained actively involved in sport, particularly polo and hockey. He embarked on a vigorous exercise program, including boxing, and was said by observers have ‘never looked fitter’ (Morfesse and Chitty 1996, 1). At the same time, signs of intense stress were clear to his friends. One remarked that his demeanour appeared ‘totally out of character,’ that he seemed to be ‘on something’ (Morfesse and Chitty 1996, 1). Suspicions were also emerging about his involvement with organised crime networks and illicit drug imports. After a particularly harrowing day in court, he died suddenly of a heart attack at his Peppermint Grove home in the early hours of 27 February 1996. Survived by his wife and their son Robert and daughter Joanne, he was cremated.

Connell’s death brought an outpouring of commentary in the Western Australian media, most of it damning. The West Australian proclaimed that ‘our community needs to come to terms honestly with the lessons of Mr Connell’s life.’ He ‘epitomised the greed and lack of ethics that warped WA’s system of business and government and dragged the State’s reputation through the mud’ (1996, 14). Others praised his generous donations to charities, racing and equestrian sports, and educational institutions, his patronage of the arts, and his devotion to family. Burke, who was later imprisoned on charges (subsequently quashed) of misappropriating parliamentary travel expenses and stealing campaign donations, blamed Connell for destroying his reputation and his career. Dowding characterised Rothwells as a cancer which ended not only his own career in politics, but those of other politicians. Connell himself, despite his prominence, mistrusted the media and was intensely private in his family life. What drove him, he once stated, was not money, but power: ‘I’m essentially a deal-doer … that’s what gives me my buzz’ (Cash 1994, 45).