A POLICE taskforce is investigating a dramatic new lead in the murder of Carl Williams that points to Melbourne underworld figures ordering his killing from outside Barwon Prison.
A fellow prisoner, Matthew Johnson, 38, was yesterday convicted yesterday of his murder by a 12-member jury. Johnson showed no emotion as the guilty verdict was delivered.
Taskforce Driver - Victoria police force's highest priority operation - is examining information that criminals plotted the killing of the state's most high profile prisoner inside the highest security jail. The development suggests a huge breach of jail security that allowed underworld figures to plan and implement the murder under the noses of prison authorities.
Police are exploring whether Williams was killed because of his knowledge of historical crimes, or his enmity with crime figures, rather than his decision to talk to police about allegedly corrupt former detective Paul Dale.
The trial heard details of a statement given by Williams to police in which he alleged Dale had paid him $150,000 to organise a hitman to kill police informer Terence Hodson in 2004.
The Herald has also obtained details of a secret briefing paper written in May by the Department of Justice secretary, Penny Armytage, that reveals how she and other senior officials made the fateful decision to move Williams from isolation to a jail unit with two other prisoners, including Johnson.
At the time of Williams' move, Johnson was known as one of the jail's most violent inmates, with more than 150 prior convictions, including armed robbery, aggravated burglary and attacks on other prisoners. He had also been charged in 2007 with the murder of an 18-year-old man but was found not guilty by a jury in 2009.
It was revealed in May that Ms Armytage personally approved that decision. Her briefing is understood to identify the senior police and high-ranking Corrections Victoria officials also involved in the decision. Williams remained in the unit with Johnson and another convicted murderer after it became known to Johnson and other prisoners that Williams was assisting detectives investigating the alleged involvement of Paul Dale in the 2004 gangland murder of Hodson and his wife.
Prisoners who assist police are routinely targeted by other inmates in jail. Increasing the threat to Williams in jail was the fact that he was loathed, or feared, by many in the underworld due to his role organising so many of the murders in the gangland wars and the fact that he knew information about them.
The jury in Johnson's trial was shown CCTV footage of Johnson bashing Williams to death with a metal exercise bike stem.
Johnson's lawyers argued his action were in self defence as he feared Williams was plotting to kill him.
In a statement to police two months before his death, Williams alleged Dale, a former detective sergeant, had paid him to arrange the killing of Hodson, a petty criminal and police informer. Hodson and his wife, Christine, were shot dead in their home in the Melbourne suburb of East Kew in May 2004.
Hodson had been involved in a bungled drug robbery with Dale and another former detective. Hodson was killed before he was due to give evidence against the pair.
Dale was charged with Hodson's murder in 2009 but the prosecution against him was dropped last year after Williams's death.
Senior police have privately expressed concern about how Williams ended up in the same cell block as Johnson.
A Department of Justice unit, the Office of Correctional Services Review, is investigating the circumstances that led to Williams's placement with Johnson at Barwon Prison.
A spokesman for the Victorian Premier, Ted Baillieu, said the government ''retains full confidence'' in Ms Armytage.