POLICE TARGET NEW MP'S 'DRUG HOUSE'

Sydney's newest MP Alex McTaggart owns and operates a Darlinghurst
boarding house which is being investigated by police targeting the
supply of illicit drugs.

Mr McTaggart secured a victory last Saturday, wrestling the
blue-ribbon seat of Pittwater from the Liberals with a record 26 per
cent swing.

But as he was preparing for life in full-time politics yesterday, his
business premises were being watched by uniformed and undercover
police as part of an ongoing crackdown on drug dealing in Sydney's
Kings Cross red-light district, The Sun-Herald can reveal.

Mr McTaggart and his wife Denise Ann are looking to sell the Palmer
Guest House in Palmer Street which they have owned for seven years.

During that time, the 30-room property has proved a goldmine for the
couple, attracting annual revenue of about $200,000. A Sun-Herald
investigation has uncovered evidence that shows drug peddlers are
also profiting from the same address - often while one of the
McTaggarts is sitting in the office downstairs.

Police intelligence files confirm that the property sits on a "top
10" list of Kings Cross locations being targeted for drugs and street crime.

Senior police sources have also described the boarding house as being
of "significant interest".

"It's a focus of the [Kings Cross] intelligence unit and both
uniformed and plain-clothed officers are being sent out on a daily
basis to monitor the place," said one detective.

"When you consider how big a shithole the Cross is, looking at the
place as a priority shows that it's obviously a problem."

Neighbours confirmed that during the past 18 months they had written
to police, Sydney Lord Mayor Clover Moore and Mr McTaggart to
complain about problems with the premises.

One of Mr McTaggart's tenants arranged to meet an undercover
Sun-Herald journalist on Friday to sell him marijuana.

"Meet me down the laneway that runs behind the Oxford Hotel in Oxford
Street . . . I'll be there in 10 minutes," he said, adding: "I can do
you a $50 bag, no problem."

While there is no suggestion the McTaggarts themselves are involved
in the drug dealing, police sources said that if the address was
proven to be a drug house and Mr McTaggart was aware of his tenant's
activities without taking action, he could be prosecuted.

"He'd be declared as being knowingly concerned with the commission of
an indictable offence, namely supplying a prohibited drug, and held
liable," a source said.

Mr McTaggart said "nothing surprises me" when confronted with the
allegations relating to his boarding house yesterday. Speaking at his
first official public engagement as an MP, he said: "I was unaware
that police had an ongoing investigation but look, I accept we've got
problems down there all the time. It's the nature of the business -
and the tenants. It's low-cost accommodation. A lot of these people
are in some form of rehab."

He faces a testing time tomorrow night when he chairs the next
Pittwater Council meeting.

Mr McTaggart confirmed he knew the tenant who had earlier negotiated
a drug deal with the The Sun-Herald.

"We've had trouble with him over a period of time. But now I know
about it, he'll be served his notice immediately."

Last year Mr McTaggart, 56, was elected independent Mayor of
Pittwater. But on the opposite side of Sydney, his lodgers know him
simply as "the landlord".

Rooms in the no-frills boarding house are rented for between $125 and
$140 a week. Former homeless people occupy the building, as do
convicted criminals, straight out of jail, who are forwarded on to
the McTaggarts by community welfare groups.

The building appears tired and rundown from the front. Inside,
lodgers have erected makeshift clothes lines across windows.

One room remained vacant last week, with Mrs McTaggart fielding
inquiries from prospective tenants.

A lodger, who spoke to The Sun-Herald said: "Alex pops by a couple of
times each week. He's an all right sort of bloke. His wife takes care
of a lot of the daily stuff.

Mr McTaggart has been keen to sell the boarding house since entering
politics. But he failed to secure a $2.5 million asking price when it
came up for auction in June.

After speaking to her husband, Mrs McTaggart contacted The Sun-Herald
and added: "We have a zero tolerance on drugs and alcohol in the
house. But these people are existing day to day without a penny and
some will do anything to put food on the table. We bring these boys
in . . . I take them all at face value. I give them a good talking to
and read them the riot act."

She added: "We don't kick them out straight away if they go off the
rails. We try to work with them and sort them out."