Rule of the Australian Rednecks

This is the story of a rural community where blacks live in fear of men in white robes. Welcome to Casino, the KKK capital of Australia. KATHY MARKS reports.

CASINO - Light had fallen by the time Alex Green returned from the park, but as he wheeled his bicycle towards the block of flats in Laburnum Ave, the street lights illuminated a curious sight. A figure in a white hooded cloak was standing in the next-door yard, waving a baton in a menacing fashion.

Green, a 26-year-old Aboriginal student, recognised the man as Colin Houston, his white neighbour on a housing estate in Casino - a country town in northern New South Wales. Houston told him: "I'm Ku Klux Klan, and I'm going to clean up this street and I'm going to take care of all the black niggers."

Green urged him to go inside and get changed. Houston refused, warning: "You lay a finger on me, and I'll have more people like me here tomorrow night." There was a scuffle; Houston's robe was ripped and police were called.

It transpired that Houston, a delivery driver, had been parading up and down the street for two hours, watched by frightened Aboriginal families barricaded in their homes. He was convicted of offensive behaviour and possession of a weapon and fined $NZ940.

Houston, aged 51, told police that he belonged to the Ku Klux Klan; according to local rumour, he kept a black doll in his house with a noose around its neck. He has since moved to Queensland, but the estate's black residents remain profoundly troubled.

"I never thought I would ever come across anything like this," says Delo Duncan, who lives near Green. "My eyes have been opened."

Aborigines used to regard the Klan, the American white supremacist group, as a joke. There were enough racist nutters to worry about closer to home, and the Klan was just a group of bogeymen from Hollywood movies. But the Klan claims to have recruited thousands of members here in recent years, and Casino - also the site of Australia's largest abattoir - is reputed to be the location of a thriving "klavern," or cell.

Several black families have received threatening letters, racist graffiti has appeared and three teenagers say they stumbled across a band of men in white robes standing around a fire in a Casino park, holding hands. In one disturbing episode, 13 charred wooden crosses were driven into the ground in front of an Aboriginal community at Coraki, 19km east of town.

Similar incidents linked to the Klan have been reported in Queensland. In Mossman three black locals claim to have been beaten up by men in white hoods. In Ingham, a young Aborigine told police that a carload of white men tried to run him over in a park. A study by two Queensland universities found a "worrying pattern of racialised vigilantism."

Racism is never far from the surface in Australia's rural hinterland, and far-right extremists - including white supremacists, conspiracy theorists, gun fanatics and self-styled militias - have always attracted support.

There have been isolated reports of Klan activity since the late 1970s, but it is only in the past two years that the organisation is believed to have gained a significant foothold in country towns and rural regions, aided by the internet - a major recruiting tool - and by the rise of Pauline Hanson's One Nation party.

While most Australians abhor Hanson's policies, One Nation - which denounces Asian immigration and Aboriginal welfare schemes - is credited with making racism respectable and creating a climate in which far-right fringe groups can prosper.

The party, which is experiencing a resurgence following success in state elections in Western Australia and Queensland, has been forced to expel at least three members because of their associations with the Klan. One was Peter Coleman, Australian organiser of the Imperial Klans of America, who claims to have used One Nation branch meetings to recruit his followers.

Coleman's outfit is closely affiliated with the Kentucky-based American group, one of numerous Klan factions in the US. Another leading light of the far right, David Palmer, runs a home-grown version called the Australian Knights of the Ku Klux Klan, which claims to have klaverns in Victoria, Queensland and New South Wales.

Coleman owns a mail-order business selling military regalia and is said to burn crosses in the backyard of his suburban bungalow in western Sydney. A former leader of the Australian Nationalist Movement, which was responsible for firebombing Asian restaurants in Perth, he has refused to give interviews since briefly going public in 1999.

Palmer, a chubby former electrician, has no such qualms. An affable, white-haired 61-year-old who sports a black beret and a tiny swastika on the lapel of his military-style black jacket, he is thoroughly delighted by the opportunity to expound his views on the perils facing the Aryan race as a result of cross-breeding.

An admirer of Adolf Hitler, Palmer has many hats. "I'm Fuhrer of the Australian National Socialist Defence of Aryan People Movement," he says. "I'm Imperial Wizard of the Invisible Australian Empire of the Knights of the Ku Klux Klan. I'm also a qualified chef de cuisine." Phew.

In addition, he is vice-president of the Australian branch of the London-based British Israel World Federation, a virulently anti-Semitic group in whose bookshop we meet in central Sydney. There is a photograph of the Queen on the wall and an Australian flag hanging from the ceiling.

The federation shares members and ideals with like-minded organisations such as the Klan and Christian Identity. Identity, which has been linked with racial violence in the US, has set up branches in Australia, including one near Casino.

Palmer calls himself "a racist first, but a humanist second," and he advocates that a piece of land be set aside for Aborigines: a sort of desert ghetto. His sidekick, George Gori, is less magnanimous. Gori, "Exalted Cyclops" of a klavern in western Sydney, describes Palmer as a "candyfloss fuhrer" and says he wants a "definitive solution" to the Jewish Question.

There is an awkward silence when I mention that I am Jewish. "Well, that just proves that Jews control the mass media," declares Gori, a strident 29-year-old with an anorak and greasy hair. Palmer shuffles his feet and looks embarrassed. "I mean, you can't blame the Jews for everything," he says. "But all we hear about all the time is the Ollycost, the Ollycost. Every night there's another Ollycost film on TV."

It is tempting to dismiss the duo as buffoons and their supporters as crackpots. Certainly, the Klan and other extremist groups operate on the outer periphery of Australian society, with no more than a few thousand members between them. (Palmer declines to discuss figures; "Look, it's an invisible empire," he insists.) But on the other hand, they are capable of making life decidedly unpleasant in the areas where they are active.

In Dubbo in New South Wales, a Jewish family engaged in human rights campaigns received a death threat earlier this year; a few days later, their house was broken into and KKK sprayed over the walls and furniture.

In Casino, which has a sizeable black population and a history of political conservatism, Aboriginal elders recently met senior police officers to express concern about a rise in racist attacks. Last month, a racial insult hurled at some Aborigines triggered a street battle involving 100 people; soon afterwards, a magistrate warned that race riots were brewing on Chequerboard Hill.

Casino, which proudly markets itself as "one of the friendliest towns in the state," does not appear to be living up to its reputation.

A Casino post-office box is one of six Australian contact addresses given by the Imperial Klans of America. In Queen Elizabeth Park, a large KKK symbol - a circle surrounding a cross - has been carved into the grass. On a sunny afternoon it is an eerie sight.

It was at this spot, near a fig tree, that local teenagers say they witnessed a Klan ceremony last month. When police arrived, the place was deserted, but a rubbish bin in which the fire had reportedly been lit was still hot.

One of the boys, 15-year-old Josh Southern, dived into long grass by the nearby Richmond River to hide. "I was petrified," he says. His friend, Kade Minns, also 15, says, "It spun me out. I thought they were going to go on a rampage through the town."

Racial tensions are high on Chequerboard Hill, a dismal cluster of single-storey brick-and-fibro houses on a parched hillside. The local bus operator has threatened to withdraw services, because its vehicles are frequently stoned by children. The milkman carries a big iron bar.

White residents are unashamedly racist about their black neighbours. "If I had half a chance, I'd get a gun and shoot them all," says a middle-aged man in Acacia Ave. "They're lazy, they don't give a damn and they think we owe them everything." But most people shudder at the idea of the Klan. "We don't want those clowns around here, stirring things up," says one woman, picking broken glass off her front lawn after another lively night on the estate.

Several Aboriginal families have been sent letters informing them that "the Knights of the Ku Klux Klan are watching you, and we don't like what we see." The notepaper has Klan letterhead with a Kentucky address. One young family were so shaken that they have gone to stay with relatives.

Inspector Dave Driver of Casino police says of the Klan, "It's hard to gauge the level of the problem. Are they just playing around, or are they fair dinkum? Do we take them seriously or not? That's a very difficult question."

But Graham Randall, an Aboriginal elder, says dismissively, "It's just a handful of idiots acting out their fantasies. They should get out of their funny clothes and get back to reality."

In Laburnum Ave, residents are still horrified by recent events. Green says he no longer walks around by himself at night. Duncan's 17-year-old daughter, Michelle, is a nervous wreck, scared even to go to school.

Duncan is at her wits' end. "What will it be like for our children, being Aboriginal around here?" she asks. "We tell our kids to be proud of who they are and walk with their heads held high. How can they do that with all these terrible things going on?"