October 7, 2015

The Turnbull files

By Andrew Fowler
The Turnbull files
In business and in politics, the prime minister has a long record of playing hard with the media

With the possibility of a change in media laws that would tear up former Prime Minister Paul Keating’s division between print and TV ownership, understanding Malcolm Turnbull’s role in the murky business of media politics has a new urgency. Much has been written about how Turnbull saved Fairfax from destruction at the hands of the late Kerry Packer. But that is only part of the story of how the new prime minister plays hardball politics. Drawing on extracts from his latest book, The War on Journalism, Andrew Fowler gives a less flattering picture.

 In September 1984, the now defunct National Times reported an amazing story sourced from a Royal Commission set up to investigate possible corruption in the Federated Ship Painters and Dockers Union. There’s no doubt the union had some questions to answer, since some of its members had ended up being shot dead at close range or otherwise disposed of, but the investigation had not gone according to plan. Kerry Packer was the publisher of the Bulletin magazine, which had first raised the corruption issue. But when the investigation expanded to follow up the union’s links to drug trafficking, money laundering, tax evasion, murder and pornography, Packer’s name bobbed up; it appeared he had been mixing in bad company. The Bulletin story had boomeranged on its own proprietor.

Aware of the extreme sensitivity of the information it was gathering, the Royal Commission – headed by QC Frank Costigan, noted for his fairness and fearlessness – disguised Packer’s identity, calling him “The Squirrel” instead. The National Times replaced this with the reptilian name “The Goanna”, but otherwise published the Royal Commission documents in full.

Several days after the National Times story appeared, anyone driving into the city from what was then the increasingly gentrified suburb of Balmain in Sydney’s inner west could see a big painted sign. “The Goanna = Kerry Packer”, it said in metre-high white lettering. It wasn’t long before Packer’s lawyer, the brilliant and often unpredictable Malcolm Turnbull, was threatening legal action – not against the obvious target, the National Times and its publisher Fairfax, but against Douglas Meagher, counsel assisting the Royal Commission. Turnbull claimed defamation on the grounds that

Meagher and Costigan have conducted themselves most reprehensively in failing to stop an unauthorised and illegal leak of information which was inevitably going to do immense or irreparable damage to the reputation of Kerry Packer.

It was a novel approach, but Justice Hunt in the NSW Supreme Court wasn’t impressed. His court wasn’t going to be party to an attempt to bully a Royal Commission, and Justice Hunt was scathing about Turnbull’s conduct.

His dominant motive in commencing the proceedings was to enable him to investigate the conduct of the Royal Commission conducted by Mr Costigan, whom the defendant had been appointed to assist … All of these matters lead me to infer that the plaintiff [Packer] never did have a case against the defendant in relation to the allegation … there may indeed have been a vindictive desire on the part of the plaintiff to make the defendant as uncomfortable as possible, for as long as possible, by having these proceedings hanging over his head in order to punish him for his part in assisting in the compilation of the report of the Royal Commission.

Justice Hunt said that Turnbull’s statement “managed effectively thereby to poison the fountain of justice immediately before the commencement of the present proceedings”. Turnbull had overplayed his hand. Justice Hunt struck the case out as an abuse of process.

Much of the Goanna material was, as Packer described it in an 8000-word statement crafted by Turnbull and issued in 1984, “grotesque, ludicrous and malicious”. But the tax findings were not lightly based, nor easily dismissed. Even though the then attorney-general Lionel Bowen declared that Packer had been cleared of all allegations against him, Meagher later revealed that briefs for prosecution were prepared against Packer in relation to tax evasion after the commission was wound up. Costigan had told him three “very senior counsel” based in Sydney “each looked at them independently and recommended prosecution”, but it didn’t occur.

“Packer was a man of great influence,” Meagher said. “He wasn’t cleared. Not at all.”

In 1987, three years after the National Times story, the Labor government’s treasurer, Paul Keating, introduced a system which restricted how many newspapers and television stations any one person could own in Australia. Known as the cross-media ownership rules, it allowed media proprietors to make a choice between either controlling a TV station or a newspaper in any given geographical market.

In Keating’s words, they could either be “Princes of Print or Queens of the Screen”. If it meant to increase media diversity, it didn’t work out that way. The changes to the laws allowed Rupert Murdoch to gain the Herald and Weekly Times newspaper group in Victoria as its owners, Fairfax – forced to choose between giving up its print presence or divesting itself of its Channel Seven TV interest in Victoria – chose to stay in television. It also gave Packer the opportunity to sell Channel Nine as a network, including the prime Sydney and Melbourne stations. It’s been estimated that if he had sold them separately they’d have fetched around $400 million, but together they were worth more than a billion. Packer cashed in a huge windfall profit.

What no one foresaw was the bonus that the economic crash of 1987 would deliver Packer. In 1990 an insolvent Alan Bond, who’d purchased the Nine TV Network from Packer, was forced to sell. Kerry Packer bought it back for a song.

Other business moguls might have rested and enjoyed the win but Packer was a driven man. He still had his nemesis, Fairfax, in his sights. Under the cross-media laws Packer couldn’t own the newspaper group outright or even have a controlling interest, but as part of a consortium he might be able to bend the rules. That was when Packer dreamed up the plan he hoped would outsmart the regulators, linking up with Canadian Conrad Black, among others, to form a group called Tourang. Packer’s friend and legal adviser Malcolm Turnbull brought along some US junk-bond holders who were hoping to get at least some of their money back after a catastrophic attempt at privatising the Fairfax group by “Young” Warwick, the headstrong son of the late company owner, Sir Warwick Fairfax. It was the botched financing of the privatisation by Young Warwick which had forced Fairfax into receivership, making it prey to Packer and his Tourang group.

When Packer fronted a parliamentary inquiry set up to investigate the possible takeover of Fairfax, he was asked by the chairperson, “You have made it clear that it is your intention not to exercise any control over the Tourang group if it is successful in the John Fairfax bid. Is that correct?” Packer: “Will I not exercise any control? I can’t. It’s a combination of won’t, can’t and don’t want to.” Packer added he didn’t want to “have any contact with the management. I don’t have any access to the editors. I don’t have any method of talking to people. Mr Black on the other hand as a board member and deputy chairman has the capacity to talk to the management.”

Packer said he accepted “from day one” that he could not have control over both TV and newspaper. “I have made my decision. My decision was to stay in news … television and I do not have [an] agreement with anyone that contravenes the law.” In a fleeting moment of humility, he revealed to the committee, “Last year I suffered a major heart attack and died. I didn’t die for long, but it was long enough for me. I didn’t come back to control John Fairfax. I didn’t come back to break the law.”

Nevertheless Packer was treading in dangerous territory. A few days later, in November 1991, Malcolm Turnbull – now out of all Packer dealings – arranged to meet the head of the Australian Broadcasting Authority, Peter Westaway, the person responsible for overseeing the cross-media ownership provisions. Turnbull took the kind of precautions for the meeting more akin to a character from the Spycatcher book he’d defended than one of the country’s most celebrated lawyers. As evening fell, Westaway parked his car close to his office in a North Sydney laneway and waited. When Turnbull opened the passenger door and got in, he handed over copies of notes written by one of the consortium members, Trevor Kennedy. He had kept a record of many of his conversations with Packer, which revealed was the latter’s true intention for Fairfax.

According to Professor Rodney Tiffen, who was the first to reveal that Turnbull was the leaker, Kennedy’s notes recorded that Packer did intend to exercise control of Fairfax. Tiffen, from the Department of Government and International Relations at Sydney University and an acclaimed expert on the Australian media, said the notes also showed Packer had had “warehousing arrangements” regarding some shares that would have taken him over the limit prescribed by the cross-media laws.

It was damning evidence against Kerry Packer. It gave the lie to Packer’s response to committee member John Langmore, Labor MP for Fraser, who had asked him, “You are saying there is no arrangement formal or informal between you and Mr Black over the control of Fairfax?”

Packer: “It’s exactly what I’m saying. It’s what I have said ad nauseam in that document. You are either going to have to believe me or call me a liar. I am telling you there is no arrangement and I’m sick of telling people there is no arrangement.”

Kennedy’s notes proved the opposite. Within a few days Westaway informed the parliamentary committee of his intention to investigate the Tourang bid. He sent the group a demand for specific documents, including Kennedy’s diary notes. Two days later Packer withdrew from the Tourang consortium. The Sydney Morning Herald, the Age and the Australian Financial Review would now fall into the hands of Tourang, without Packer.

The motives of Kennedy and Turnbull remain unclear, but there had earlier been a falling out with Packer. Kennedy had been told he would not be CEO of the company, and Turnbull was not going to get a place on the board. Turnbull had sunk his old boss, but like his creative defence of Packer with a defamation case that went nowhere, this too had limited benefits. It could have been far different. The rules governing lying to parliament are explicit: “A person summoned to appear before a committee but who refuses to attend, or a witness who refuses to answer a question or produce a document, or who lies to or misleads a committee, may be punished for contempt by reprimand, fine or imprisonment.” Yet Packer was never called to account for so grievously misleading parliament.

More than two decades later Turnbull, now as Communications Minister, was again caught up in a leak. This time it involved pleasing the Liberal Party’s right wing. In November 2013, the ABC reported that “Australian intelligence tried to listen in to Indonesian president Susilo Bambang Yudhoyono’s mobile phone, material leaked by NSA whistleblower Edward Snowden reveals.”

Reporter Michael Brissenden said that documents obtained by the ABC and Guardian Australia from material leaked by the former contractor at the US National Security Agency showed Australian intelligence attempted to listen in to Yudhoyono’s telephone conversations “on at least one occasion and tracked activity on his mobile phone for 15 days in August 2009”. Following the revelation that German Chancellor Angela Merkel’s phone had been intercepted, the story bolstered the perception that if the NSA was intercepting the phone calls of the leaders of friendly countries, then no one was safe.

Asked about the spying, Prime Minister Tony Abbott declined to change the “long tradition of governments of both political persuasions” and comment on “specific intelligence matters”. But the long tradition didn’t last long. And Abbott soon criticised the ABC for harming “Australia’s national security and long-term best interests”. It was the slow beginning to what would turn into a concerted campaign against the public broadcaster and the Guardian.

One week after the program, Turnbull telephoned the Mark Scott, the ABC’s managing director and editor-in-chief, and told him he had made an “error of judgement’ in broadcasting the Indonesian intercept story. He did not agree with the ABC teaming with the Guardian and “amplifying” the newspaper’s story. As every politician knows, a rap across the knuckles has more impact with public exposure, but there are problems for ministers interfering in such delicate areas as editorial independence for a public broadcaster.

A few days later Turnbull found the perfect vehicle as he strode into the Tattersalls Club in central Sydney. The Liberal Party was holding a fundraiser, with Turnbull the star attraction. Under the ornate ceiling lights of a club founded by disgruntled bookmakers more than a century earlier, Turnbull revealed to the faithful his call to Mark Scott. In a breathtakingly disingenuous comment, Turnbull said he had not “said this publicly because you know what it’s like as Communications Minister you don’t want to be lecturing the public broadcasters that you’re responsible for”. Yet that is exactly what had happened.

Within 48 hours the full attack on the ABC was leaked to the Liberal Party’s favourite newspaper, the Sydney Daily Telegraph, full of quotes which – perhaps predictably – Turnbull’s office agreed were accurate. Sensing that the Liberal Party’s old adversaries, those questioning journalists from the ABC, were feeling some discomfort, Abbott chimed in with a far more rational assessment of what troubled him. Now the argument wasn’t about giving the Guardian free advertising on the ABC, Abbott was angry at the ABC working with a “left-wing British newspaper”. Abbott had fully adopted the language of the Murdoch press. The repeated attacks by News Corp, from the extreme right, had morphed into government policy.

Two months after the Indonesian spy story, in an act of either strategic brilliance or an odd twist of fate, the ABC linked up with News Corp to produce a story advertised as a joint investigation by Four Corners and the Australian. Given the rabid attacks on the ABC’s last joint venture, bystanders were interested to see how this one would play out. The program told the story of the policy of the Israeli military of targeting children in its attacks on dissent in the occupied West Bank. Reported by the Australian’s Middle East correspondent John Lyons, the editorial arrangement mirrored the relationship between the ABC and the Guardian which had produced the Indonesian spy story.

Although it was a hard-hitting report, this time there was no complaint from the minister for communications, nor from the prime minister about “amplifying” a commercial newspaper’s product or working as an “advertising agent” for a right-wing newspaper. And there was no comment either from Mark Scott to point out both Turnbull’s and Abbott’s hypocrisy. Four months later the government, which had promised there would be “no cuts” to the ABC, slashed its budget, forcing programs to be shut down, and hundreds to lose their jobs. It was a policy supported by Malcolm Turnbull.

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