Graeme Samuel's conflicts, Packer and the Camberwell cult

July 16, 2008

Here are Stephen Mayne's four stories from the Crikey edition on Tuesday, 28 February, 2006.

4. Graeme Samuel should publicly disclose his financial interests

By Stephen Mayne

In light of the Howard Government's record in appointing inappropriate regulators (David Flint at the ABA, Jeffrey Carmichael at APRA and John Pascoe as federal chief magistrate) and the poor disclosures of Robert Gerard's tax problems and John Anderson's AWB share trading, we started to wonder about how ACCC chairman Graeme Samuel is managing his family's large investments.

For instance, Samuel was a shareholder in Austexx, the burgeoning developer and retailer that was founded by his close mates David Wieland and David Goldberger – the men who made the BRW Rich List through their success in Solo Oil and then Liberty Oil and who live next door to each other in identical Toorak mansions.

The firm was last week part of the winning Multiplex consortium to build the new $1 billion convention centre for the Bracks government and has also recently unveiled a $100 million DFO outlet in Canberra and another $100 million development at Hobart Airport, which is the size of nine football fields.

These lads are obviously playing with serious dollars and have been in furious conflict with Frank Lowy's Westfield group over DFO developments at Homebush in Sydney and Brisbane Airport. We emailed Samuel to ask about the status of his Austexx investment and he replied as follows:

My family retains an interest in certain Austexx developments that existed prior to my severing connections with the Group last year. That interest, as with all my family's investments, is held in a blind trust managed by individuals who are independent and are not members of my family. I am neither informed nor consulted about any Austexx developments held in this blind trust. Any information I receive concerning the Austexx developments comes from publicly available material such as the media.

Full details of my family's investment interests are disclosed to the Commonwealth Treasurer and a copy is provided to the CEO of the ACCC. My fellow Commissioners have, at all relevant times, been fully aware of my family's interest in the Austexx Group and the severance of that interest.

My family has no interest in any developments more recently announced by the Austexx Group - Hobart or Canberra DFOs - and will have no interest in any future developments undertaken by that Group.

This means that Samuel still presumably has an interest in the 27,000 sq m $200 million development at Spencer Street station in which Austexx will introduce 130 retail premises. Similarly, he has an interest in the original Moorabbin outlet, which was the subject of a six year legal battle with Westfield, plus the 25,000 sq m DFO at Essendon Airport. DFO also had a major victory over Westfield in getting their Brisbane Airport proposal up last year. Could Samuel's approach to any Westfield competition be influenced by personal experience of their bullying?

Given that Samuel is a former Liberal Party Treasurer in Victoria who once ran for preselection in Peter Costello's seat of Higgins and used to share a St Kilda Rd office with Andrew Kroger, the brother of Peter Costello's best friend Michael Kroger, does anyone else think that a full disclosure of his financial interests should be made to someone other than the Federal Treasurer?

After all, Wieland and Goldberger got seriously rich through Liberty Oil on the back of the very generous supply deal that former ACCC chairman Allan Fels negotiated as part of the 1995 merger between Caltex and Ampol. Liberty used their ACTU connections to approach Fels and Samuel sat on the AFL Commission for many years with Bill Kelty.

Similarly, it must have been an interesting experience for Samuel to sit on the board of Victoria's Docklands Authority from 1997 until 2003 whilst Austexx made the final short-list of just two in 2002 for the $700 million Waterfront City project, which eventually went to ING Real Estate and Lewis Land. He naturally left the room during these discussions.

Given the enormous power Samuel wields as ACCC chairman and kingmaker, surely a full public declaration of his family's interests is desirable to ensure maximum transparency. He seems to be a strong and independent ACCC chairman and no pushover for big business, but sunlight is always the best disinfectant in these situations and public disclosure would settle any niggling concerns about the richest regulator in Australian history.

20. Packer and the Sisters – get it right

By Stephen Mayne

Okay, okay, okay. St Vincent's Hospital in Sydney is run by the Sisters of Charity, not the Sisters of Mercy, as I reported yesterday (item 16) about Kerry Packer changing hospital in 1999.

While both Orders are known for their great service, Packer certainly received royal treatment at RPA over the last seven years. The entire hospital was aware when he was in residence, and at one point RPA cardiologist, Dr Mark Adams, flew with him in his private jet to seek specialist treatment in the US.

There also seems to be support for the theory that Packer was simply chasing the best care available. Emailers claim that RPA does have greater depth of specialist care available, and Packer did suffer from a complex array of heart and kidney problems.

On another note, the Packer anecdotes continue to pour in and we particularly like this one:

In April 1989, Sam Chisholm, accompanied by his trusty investment banker Michael Butler from BT and his lawyer Bruce McWilliam, left London for New York having concluded what he thought was the successful recapitalisation of Bond Media. The deal had been done with such luminaries as CBS, Paramount, TVNZ and, of course, boy wonder himself Bruce Gordon who was to be the anchor Australian equity holder with 60% local ownership.

Just prior to the election, Sam had done what he thought was the master stroke in having Keating and Hawke agree to lift the foreign ownership level to 40%. Unfortunately, Sam's confidence grew with each glass of French champagne as he travelled from New York to LA, so he decided to pick up the phone to The AFR to tell them what a wonderful deal had been done. He was now safe from KP.

Unfortunately for Bruce and Sam, KP read the papers and decided to dispatch Peter Barron to see Hawke and Keating and they reneged on the 40% foreign agreement by the time Sam landed, so the deal was dead and Sam's future at Nine was over.

Another subscriber challenges the tales of Packer's generosity as follows:

With all these Packer stories of his great generosity, why has no-one brought up the Graham Kennedy story, where Noelene Brown and her husband went to Kerry for money to help Graham through his treatment, only to be rebuffed. It was then funded by Sam Chisholm. Great treatment for a guy who built the Melbourne Channel Nine station.

Maybe Kerry never forgave the king for the crow call.

Keep the anecdotes and comments coming to smayne@crikey.com.au.

23. It's open season on Telstra as bank cartel prospers

By Stephen Mayne

Telstra CEO Sol Trujillo must really think he's come to a backwater after yesterday's underwhelming appearance in Canberra where he was attacked for proposing to remove a modest number of anachronistic pay phones and generally questioned over Telstra's commitment to services in the bush.

With the number of mobiles quadrupling to 18 million over the Howard years, surely it makes sense to progressively wind back uneconomic pay phones. Terry McCrann has been a lone sane voice pointing out the breathtaking stupidity of the campaign to save these dinosaurs, even if he repeated the arguments from Tuesday's Herald Sun in The Weekend Australian.

It seems bizarre that even Communications Minister Helen Coonan joined in the attacks when she's meant to be preparing Telstra for sale and maximising returns for taxpayers.

What makes all this political micro-management of Telstra even more curious is the contrast with the outrageous gouging that the government-licensed bank cartel does without any politicians complaining.

NAB regained its title of "Australia's biggest bank" and the value of our Big Four banks hit a new record of $206 billion, more than four times the $49.25 billion market capitalisation of Telstra, after the following moves yesterday:

NAB: up 63c to $36.55 ($58.57bn market cap)
CBA: up 34c to $44.50 ($57.35bn market cap)
ANZ: down 4c to $25.66 ($46.95bn market cap)
WBC: up 18c to $23.73 ($43.46bn market cap)

Despite NAB's embarrassing $22 billion blunder on loan classification figures in its annual accounts, its shares soared to a record high and CBA has been deposed from top spot in terms of market capitalisation.

If our politicians are really worried about poor service and gouging then they should look at the $20 billion a year in operating profits that the banks will make this year and do something about it.

If current trends continue, Telstra will soon be worth less than all of the Big Four banks, yet the political class doesn't seem to care about all this consumer gouging by a government-licensed industry. The $8 billion received from the privatisation of CBA is certainly looking very sick compared with its $57.35 billion value today.

26. JB Were and the Camberwell cult

By Stephen Mayne

A number of emails have landed in the bunker about blue-chip stockbroking firm JB Were and this so-called "cult" which has been banned from the old Murdoch family Trinity Presbyterian Church in the affluent Melbourne suburb of Camberwell.

Whilst "cult" is an emotive word with all sort of connotations, it seems the "Fellowship" did indeed involve former JB Were chairman Bruce Teele, although it is unclear if he is one of the 15 who were banned last week.

An extract from Morag Zwartz's book, Fractured Families: the story of a Melbourne church cult, is available on this Sydney Anglicans website and includes the following:

Peter Corney looks back over 24 years of ministry at St Hilary's where he nurtured some of the most eminent Fellowship men – Bruce Teele, Neville Langford, John Neil.

Morag's husband, Barney Zwartz, is the journalist who broke the story of the cult being banned from the Camberwell congregation in The Age last Saturday, but there no mention of nearby St Hilary's, an Anglican church in John St, Kew.

Crikey has been told that a number of senior JB Were figures do attend the Trinity Presbyterian church along with Bruce Teele and I saw Bruce there when walking past one Sunday morning in 2003.

However, Bruce also has a connection to St Hilary's which goes back at least 55 years. In his time he was a Sunday School teacher, and in fact was in Stanisforth Ricketson's Sunday Bible class. This was the connection that got Bruce into stockbroking and eventually made him the one of the doyens of the Melbourne establishment for 20 years, handling big companies such as Amcor, BHP, News Corp, NAB and privatisations including Telstra and the Commonwealth Bank.

Bruce was even a regular preacher at St Hilary's and at times was both a Church Warden and Vestryman. A close friend was Murray Neil, also of JB Were, and his younger brother John Neil is named as a Fellowship man in Morag Zwartz's book.

Crikey hears the Fellowship has involved a number of JB Were executives over the years, as well as a group of Camberwell doctors, based around one particular family.

The whole thing has been incredibly secretive, not unlike the "Australia 2000 Club" which Bruce supposedly set up in the 1980s to protect establishment companies from the marauding entrepreneurs. This involved a series of defensive cross-shareholdings between companies such as Amcor and Mayne Nickless.

JB Were was partly bought out by Goldman Sachs in 2004 and it would be interesting to know what the Wall Street heavies make of all this. One of the first things they did was abandoned Bruce Teele's policy of refusing to work for gambling companies. Cult or no cult, Teele was a noble man for taking such a stand, but his world is being rocked right now by developments over the past few days.