December 2007 - January 2008

The Nation Reviewed

What a pratt

By James Kirby
Illustration by Jeff Fisher.

The woman on the radio had called to complain. “I want to talk about Richard Pratt,” she said. “I don’t really understand what he did. But I don’t like it.” Nobody, it seems, likes to see very rich people behaving badly - like a double-parked Porsche, it rankles more than it should. Now seven in ten Australians, according to a Roy Morgan survey, want the ‘disgraced billionaire’ jailed.

Pratt is the country’s third-richest person: his fortune, founded on paper packaging, is valued at more than $5 billion. And his career has been stellar and varied: he has been an AFL club president, a strong voice in the water debate, a chairman of the Victorian Arts Centre Trust, a pro-immigration activist and a professional actor (he toured the world in the ‘50s as Johnny Dowd in Summer of the Seventeenth Doll). But more than that, he’s an unapologetic billionaire, a charismatic 73-year-old force of nature, a man who nearly had it all until this year, when a court case many thought would meander along for years suddenly sprung to life after Pratt admitted to his role in a huge price-fixing cartel.

In Pratt’s power base, the packaging market, it was easy, for there are only two companies that matter: his Visy and the stock-exchange-listed Amcor. As the Visy supremo, Pratt had sanctioned a price-fixing deal with Amcor in a meeting with its management. The arrangement became public when the Amcor team decided to plea-bargain with the industry regulator, the ACCC, thereby adroitly avoiding prosecution. The Visy people were left swinging in the breeze, and  Pratt’s confession counted for little when Justice Peter Heerey handed down his decision. No jail sentence was imposed, but then, the law does not allow for jailing price-fixers - not yet, anyway. Visy was fined $36 million, and Pratt copped a blast: “There can not be any doubt that Mr Pratt knew that the cartel to which he gave his approval ... was seriously unlawful,” Heerey said.

The nation clearly abhors a price-fixer, but the collective anger at Richard Pratt has nevertheless been exceptional. And perhaps he asked for it. Law-breaking billionaires must at least exercise contrition. On the day of Pratt’s key appearance at court, he faced the press with a written statement. It should have said, I’m sorry; I won’t do it again. Instead, it hinged on the following, deeply ambiguous line: “I know a lot more now than I knew then.” The statement diluted his public humiliation. It implied he didn’t know everything in the bad old days, that he didn’t always know what was going on in the company he ran like a “benevolent dictator”.

Why did Pratt confess? Because $5-billion family fortunes are meant to last. In Atlanta, Georgia, in the ritzy suburb of Buckhead, the millionaire Conky Whitehead, a Coca-Cola company heir, built himself a mansion in the 1920s. Anthony Pratt, Richard Pratt’s only son, changed things when he took hold of that house. It’s been renovated lavishly, and has been the scene of many company parties. Anthony, the head of Visy’s substantial operation in the US, sleeps with a to-do list on a whiteboard by his bedside, and wakes to a call from his father almost every day. The future of the company is not with the man Justice Heerey berated and belittled; it’s with this big red-haired billionaire’s boy, who is more in thrall to Richard Pratt than anyone else on Earth.

Anthony Pratt tells a story of spending Saturday mornings on the road with his father in Melbourne in the 1970s, when Pratt senior was just another millionaire. One day his dad went inside a little factory, and a man came out to the car and chatted to Anthony. Richard Pratt was the most important man in his life, the man said: he was his best friend; he was everything to him. Anthony sat back, a child pondering a great revelation. Soon after, he and his father drove up the road to visit another customer. He was left alone in the car, and again a man came out of the office and told Anthony that Richard Pratt was his mentor, his greatest influence; he’d do anything for him. And so it has gone, for the rest of Anthony Pratt’s life. Every day the same question is inferred: Can he match the boss?

Down the back of his private jet, among the papers, the pills, the company reports, Richard Pratt keeps a few books. One of his favourites is a history of the Rothschilds: it tells of how the family rose from nothing to create an enormous, unstoppable business that lasted through generations. Through wars, revolutions and scandals, it rolled on. This is the Pratt plan, to roll on for generations.

And now they want him in jail, with no companion, not even his Order of Australia. Richard Pratt, born Richard Przetitzki in the Free City of Danzig, who rose from so little to become Australia’s most generous man. The Pratt Foundation gives $14 million to charity each year. All those parties, all those presents, all those random acts of philanthropy: sending the jet to save stricken sailors, paying to fix a guy’s teeth in one of the factories. And now they compare him to Vizard. Steve Vizard: a college boy, a comedian, a guy who got on the board of Telstra for a while and engineered a little extra cash payment for himself. How can they compare Vizard and a self-made billionaire who taught his parents, Polish Jews, to speak English on the streets of Shepparton?

Yet it’s in places like Shepparton, where the fruit growers have paid artificially inflated prices for their packing boxes, that anger over the local billionaire’s price-fixing will dissipate most slowly. How, they wonder, could he do it?

James Kirby
James Kirby is a financial journalist. He is the author of the book series Business Secrets, and the managing editor of the online Business Spectator and the Eureka Report.

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December 2007 - January 2008

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