Australia PM orders investigation after gunman dropped off watch list

Australian Prime Minister Tony Abbott on Wednesday ordered a sweeping investigation into a deadly hostage crisis after new security laws and the courts failed to stop a convicted felon from walking into a Sydney cafe with a concealed shotgun.

Three people were killed, including hostage-taker Man Haron Monis, when police stormed a Sydney cafe early on Tuesday morning to free hostages held at gunpoint for 16 hours. Police are investigating whether the two captives were killed by Monis or died in crossfire.

Monis, a self-styled sheikh who received political asylum from Iran in 2001, was well known to Australian authorities, having been charged as an accessory to murder and with dozens of counts of sexual and indecent assault. He had been free on bail.

Australia passed sweeping security laws in October aimed at stopping people from becoming radicalized and going to fight in conflicts such as those in Iraq and Syria, where scores of Australians have joined militant groups, as well as preventing attacks at home.

Despite those new powers, Abbott said Wednesday Monis was once on the national security agency's watch list — but dropped off it years ago for reasons that remain unclear.

 Monis was not on any security watch list and managed to walk undetected into the Lindt Chocolate Cafe with a legally obtained shotgun on a busy workday morning.

New South Wales state police later contradicted Abbott's assertion, telling Reuters in a statement that there was no record of Monis having a gun license.

Monis was convicted in 2012 of sending hate mail to the families of Australian soldiers killed in Afghanistan.

Abbott said the national and state governments would conduct an urgent review to identify where the system had failed in order to understand how attacks could be stopped in future.

"We do need to know why the perpetrator of this horrible outrage got permanent residency. We do need to know how he could've been on welfare for so many years. We do need to know what this individual was doing with a gun license," Abbott told reporters in Canberra.

"We particularly need to know how someone with such a long record of violence, such a long record of mental instability, was out on bail after his involvement in a particularly horrific crime. And we do need to know why he seems to have fallen off our security agencies' watch list, back in about 2009."

The justice system in New South Wales, Australia's most populous state, was also under fire.

"We were concerned this man got bail from the very beginning," said state Police Commissioner Andrew Scipione.

Police had requested courts refuse Monis bail but were not paying special attention to him because his charges were not linked to political violence and he was not on any watch list, he said. Abbott also raised concern about the bail system.

Funding for the state's criminal justice system fell 11 percent in 2012/13, according to a government report, while delays in hearing criminal matters in the state Supreme Court grew to 6.5 months in 2013 from 1.5 months in 2010, according to its annual report.

New, tougher bail laws have already been passed in the state but delays caused by the need to train police, courts and lawyers mean they do not come into force until late January.

Police said Iran tried to have Monis extradited from Australia in 2000, but that it didn't happen because Iran and Australia don't have an extradition agreement.

Police also said on Wednesday a man had been charged with making threatening phone calls to a mosque in western Sydney, one of the few confirmed reports of what was feared could be a wave of anti-Muslim sentiment in the wake of the violence.

On Wednesday, people were still laying flowers and signing condolence books in Martin Place, a pedestrian mall near the scene of the cafe siege.

Small boxes of Lindt chocolates were left among the candles, flowers and cards, and a steady stream of mourners signed memory books for the victims. A wooden cross with the words "I'll ride with you!" lay nearby, referring to the hashtag #IllRideWithYou, which was tweeted tens of thousands of times by Australians offering to accompany people dressed in Muslim clothes who were afraid of a backlash.

Wire services