The Jeff Kennett Treatise in 1999
November 10, 2019
The first serious board tilt was meant to be the 1999 Victorian election but I was ruled ineligible for being on the electoral roll in Sydney and instead turned to the web and produced this 18,766 word treatise on jeffed.com about all that was wrong with Jeff Kennett. It was credited in some circles with helping bring down the Victorian Premier.
INTRODUCTION
''Have you gone completely mad?'' How many times have I heard that since announcing on Wednesday, September 1, 1999, I was quitting my ideal job as editor of the Rear Window gossip column on The Australian Financial Review, after just two months, to stand as an independent against Jeff Kennett in the seat of Burwood.
Now that it has all ended so early with the nomination rejected because I'm on the NSW electoral roll and haven't lived in Victoria for the past month, I owe a lot of people an explanation. You will definitely understand at the end of this that Victoria has some systemic issues of governance, accountability and scrutiny that need to be addressed. This is an insider's account of the nexus in Victoria between business, politics and the media. It's part personal explanation, part journalism and part politics. Many bridges are inevitably being burnt and some built, but in the context of what has happened in Victoria, it is a sacrifice worth making. I will accept the searing criticism that will inevitably come from some quarters with good grace. This is a democracy after all and the more the public knows the better. This final version is also less emotive and aggressive than the original 11,000 word piece published on this site at 10.28am on Sunday, September 5, after a 26 hour stream of consciousness following my disqualification on Friday, September 3. Anyway, here goes.
JOINING KENNETT
I joined the Kennett media unit in December 1992 after spending a year at The Age and three years at The Sun News Pictorial and the Herald Sun. This entire initial four year period in journalism was spent writing about business and I came to know most of the business journalists and most of the major business players in Melbourne at the end of it. I was an inactive member of the Liberal Club at Melbourne University and had always voted Liberal - except in the 1996 Victorian election when I voted for Trevor Huggard's anti-wheel clamping party as a small protest against the Premier.
FIRST KENNETT STAFFER FROM FAIRFAX
I was the first Fairfax journalist to work for Kennett in many years. Being from Fairfax, which then and still does have a reputation for high journalistic ethics and fearless reporting, made me different from others in the Premier's office. As did my significant business reporting experience. Everyone else in the Premier's office were either Young Liberals, political or general reporters, devoted Liberal supporters, aspiring politicians or corporate types. My background gave me a different perspective of an administration which has arguably had a more involved relationship with business than any other state government in Australian history and has been extraordinarily intimidating in its approach to media relations.
ROCKY START
It was a rocky beginning, because as someone who loves a good investigative news story, to suddenly have access to bureaucrats, files and Ministers was very exciting. John Hewson was about to put Fightback!to the people and I was keen to leak as much scandal about the Cain-Kirner years as possible to help out. Unfortunately, the Premier did not agree and during one dispute with a minister over whether we should be dumping on Labor, Treasurer Alan Stockdale intimated that he believed the Premier did not want the Federal Coalition to win. That may have been an unfair observation, but the Premier's consistent attacks on the Howard Government since it was elected in 1996 would appear to support it. After almost getting sacked for leaking, disobeying instructions and youthful enthusiasm in the first few months, things settled down and everything went swimmingly for the last 14 months of an 18-month stint with the government.
PROMOTING TREASURER ALAN STOCKDALE
My immediate boss, Treasurer Alan Stockdale, got a great run in the media; so much so that the Premier once took us both to task because he was getting too much exposure. To this day I still believe Alan deserves the lion's share of the credit for turning Victoria's financial situation around. He is extremely bright and hard working, highly ethical in his approach to the job and will be a huge loss to the government. I can well remember it being suggested he buy $2000 worth of government bonds when the first Treasury Corporation of Victoria retail offer went out in 1993. He declined because he felt that somehow if he had managed the state's debt well he could have made a few dollars out of it. This was taking concern about conflict of interest too far the other way, but reflects well on the Treasurer's professional integrity. I will never forget his satisfaction in reading the Auditor General's reports in the early days as Ches Baragwanath attacked many disgraceful Labor deals and commended the Treasurer for his early success in cleaning up the mess.
CONCERNS WHEN IN THE PREMIER'S OFFICE
The worst thing I saw during my time on the inside was the Premier's share deals in September 1993. As both of us were regular players on the market we talked about it most days. However, when the Premier began using his position to secure unusually large allocations in hot floats, I became uncomfortable and raised these concerns with Alister Drysdale, the Premier's chief advisor at the time. He said he'd already spoken to the Premier about it, so it would not happen again.
HEAVYING THE MEDIA
One other cause for concern was the Premier's attitude to the media. He regularly and systematically courted the moguls such as Kerry Packer, Rupert Murdoch and Conrad Black whilst simultaneously beating up on frontline journalists and editors where necessary. He had received a bad press as Opposition leader and clearly had a plan to turn this around. I'll never forget the Premier's media director Steve Murphy gloating about a cabinet lunch with Rupert Murdoch and then Herald Sun Editor-in-Chief Steve Harris. The Premier opened proceedings with a very familiar ''So, Rupert, how's your mother?'' and Murphy noticed the discomfort on Harris's face, who was still relatively new in the job after leaving The Sunday Age where he and deputy editor Bruce Guthrie had been quite a fearless team in taking on the government in its early days.
DON'T DO IT ALAN
I tried to stop the Treasurer from following the Premier's orders to heavy editors and, if that was unsuccessful, board members. I can recall the Premier insisting Alan call Stephen Mulholland, then chief executive of John Fairfax, publisher of The Age, to complain about something relatively minor. Eventually, I talked him out of it and suggested Alan tell the Premier he could not get through. Politicians should deal with journalists and editors, not management and proprietors.
ATTACKING THE AGE
I can also recall campaigning hard against The Age under then editor Alan Kohler as its state political editor Russell Skelton, now Business Editor of The Age, was causing all sorts of problems over things such as Jeff's old advertising business KNF. The only more 'troublesome' journalist was The Sunday Age's tenacious political correspondent Mark Forbes, who the Premier has referred to as ''the virus''. When David Walker was appointed state economics editor, we got a much better run in The Age and were also supported by Age business columnist Steve Bartholomeusz, who I've disagreed with strongly over the appropriate level of criticism that should be made of Crown Casino. This support in the early days was, I believe, justified but a more critical eye should have been cast across some of the later dealings by the government, particularly in areas such as the profits generated from gambling licences, share allocations in the Transurban float and beneficiaries of government policy who subsequently donated to the Liberal Party.
NO ONE GETS A BETTER PRESS THAN JEFF
The Premier's strategy of aggressively courting and complaining to media owners, chairmen and directors has worked profoundly in his favour and is a core reason I committed professional suicide and announced half-cocked plans to runs against him. Basically, I believe the Premier has most commercial media outlets either in his pocket, cheering from the side or too intimidated to take him on. The others, most notably ABC television, have largely been marginalised through denial of access and vitriolic attacks. As a result, he gets the best press of any politician in Australia and has the biggest majority in Parliament, despite what many people believe is a rising tide of questionable dealings involving family, friends and former staffers. Then there is also the sustained attacks on the Premier's critics, independent watch dogs and democracy generally.
THE PREMIER'S VENDETTAS
If people think this website is some sort personal vendetta, I can only point them to the vendettas the Premier ran against former Director of Public Prosecutions, Bernard Bongiorno, and former Auditor-General Ches Baragwanath, which I will refer to later. The Premier's office has certainly run a vendetta against me, attempting to get me out of journalism and denying me access for the past three years. Two brief respites came in 1998-99 when one of the Premier's press secretaries faxed to thank me for a piece in Sydney's Daily Telegraph which the Premier regarded as a ''breath of fresh air''. With Rupert Murdoch set to arrive that day, editor Col Allan wanted a hard comment piece so I basically attacked Bob Carr and said he badly lagged the achievements of Jeff Kennett. The second occasion was when we shook hands and said 'hello' in Collins Street six months ago. However, based on past performance, he or his staff have probably already made contact with Fairfax senior management and directors to argue the case that I not be reinstated at The AFR. The paper's Editor-in-Chief and publisher, Michael Gill, after apparently talking to chief executive Fred Hilmer, refused to reinstate me when the nomination was ruled ineligible on Friday, September 3. So I am now a contributor to Eric Beecher's new fortnightly national magazine, The Eye.
MEDIA WEAKNESS
My primary reason for announcing intentions to run against the Premier is that there are now several mainstream media outlets which I have directly experienced or observed capitulating in the face of important but hard hitting stories about the Premier. The detail shall be outlined as we go but the blame should be sheeted home to media managers and owners, far more than individual journalists.
On returning to the Herald Sun in June 1994, I possessed a great deal of knowledge about the government's business dealings. My contacts were excellent and remained close as I left on very good terms - as the tributes page on this site attests. I'd seen the share deals and the attacks on journalists but one other thing that had concerned me was the campaign to get rid of the Director of Public Prosecutions, Bernard Bongiorno. The DPP was pursuing John Elliott, a long time backer and friend of Kennett's, and had created a rod for his back by considering laying contempt charges against the Premier for comments he made in 1993 about the Frankston murderer Paul Denyer.
KENNETT'S TOP ADVISER MOONLIGHTING FOR ELLIOTT
The Premier's media director Steve Murphy had mentioned to me one night that it was Drysdale who wrote the statement for Elliott when he first went publically on the attack in 1993 against the NCA and the DPP. The statement lamented the ''relentless and unremitting campaign'' against Elliott who, using Drysdale's words, said the DPP had ''aided and abetted'' the NCA ''in an attempt to blacken my name''.
MOONLIGHTING FOR IAN SMITH
Now at this point I have to admit to writing something on the quiet myself. When Finance Minister Ian Smith was forced to resign after having an affair with his chief of staff Cheryl Harris, I wrote most of the personal explanation he gave in Parliament out of loyalty to him believing that he had been unfairly done down. I had only proposed to drop the newspapers into him at midnight ahead of his 10am personal explanation to Parliament, but found him tired and exhausted after the media blitz by legal firm Slater & Gordon. It is certainly inappropriate for a journalist to be writing controversial parliamentary speeches and from that point I did not write anything more about Smith's troubles for the Herald Sun. I did, however, stick by him as a friend.
DRYSDALE'S INAPROPRIATE ASSISTANCE
Just as I should not have written that speech, the most senior member of Mr Kennett's staff should not have written statements for Elliott attacking the DPP at the same time as the Premier and Attorney General Jan Wade were planning sweeping reforms to Mr Bongiorno's office. Asked in State Parliament about this, the Premier said it was a matter for Mr Drysdale. No one ever has asked Drysdale directly if he wrote that speech and what broader role he took in Elliott's campaign. If what media manager Murphy said is true, this basically means Elliott's campaign against the DPP was partly being run out of the Premier's office. Most reasonable people would think this is inappropriate given the widely accepted doctrine known as separation of powers, whereby the judiciary should be completely independent from executive government.
THE TANTRUM KING'S BIGGEST TANTRUM
The Premier is well known for his bad temper and colorful language but the biggest tantrum he ever threw when I worked in his office was after ABC Television's 7pm news reported that the DPP was considering charging him with contempt over the comments about Denyer. He even mentioned it with great incredulity at that year's press gallery Christmas drinks. A Premier, getting charged! It's only happened to about 10 per cent of Australia's last 30 Premiers, mainly thanks to Western Australia. It is therefore not hard to guess why Attorney General Jan Wade summonsed Mr Bongiorno to her house that night. And of course it is a fair bet that it was the Premier she spoke on the phone with on three separate occasions in an adjacent room. Most observers believe the DPP's consideration of contempt charges were the catalyst for the subsequent changes to his office whereby only the Attorney General can initiate contempt charges in Victoria. The DPP's charging of up to 10 police officers over the Gary Abdulla shooting was also thought to be a contributing factor.
TOUCHE ALISTER
Victoria is unique in Australia for having broken down this traditional separation of powers. This brings a touch of irony to one of the powerful comments Drysdale penned for Elliott which he delivered forcefully in front of the nation's media in 1993:
''One of the cardinal principles of the rule of law in democratic society is that there must be a strict separation of powers between politicians and law enforcement bodies,'' Elliott said.
Touche, Alister. Pity you did not persuade the Premier about the merits of this. When the Premier later publicly criticised the Elliott trial, it was no surprise that Mrs Wade did not seek to lay charges and the Premier escaped with just an apology to Justice Vincent. The Australian's business columnist Mark Westfield (Malcolm Turnbull's new press secretary) did not get off as lightly when he wrote about Brian Quinn's trial and was charged with contempt after a referral from Mrs Wade. If Westfield had said what Kennett said and vice versa, it would have been interesting to see the outcome. One suspects it might have been a little different. Jan Wade, like most of us who worked for the Premier, was terrified of him in full flight, so the prospect of the Premier ever being charged for contempt in Victoria are now as close to zero as you can get. The new Attorney General Robert Dean is a Kennett supporter and therefore unlikely to charge him for contempt under the current system.
CONCERNS ABOUT CROWN CASINO
My last few weeks working for the government raised the first of many concerns I developed about Crown Casino and the relationship between the government and its biggest shareholders; Lloyd Williams, Ron Walker and Kerry Packer. Drysdale, who also doubled as the Premier's special advisor on gambling, commented to me that Crown's application in May 1994 to triple the size of its hotel to 1000 rooms was ''a done deal''. The so-called independent Victorian Casino and Gaming Authority announced it had approved the proposal several weeks later. While it is only incidental to all this, Drysdale told me that Lloyd Williams would call him regularly with racing tips and it is a matter of public record that Drysdale received a $62,000 discount in early 1993 on a St Kilda Rd apartment in the former BP House which was redeveloped by Hudson Conway. Naturally, it was the Casino Sub-Committee of Cabinet, chaired by the Premier, which did ''the deal'', not Drysdale himself. Drysdale, a former trotting correspondent, is a Liberal Party journeyman, having been Malcolm Fraser's press secretary and worked for Andrew Peacock, South Australian Premier John Olsen - and John Elliott when he was embarking on his plot to become Prime Minister in the late 1980s.
THE COLOURFUL ENTREPRENEURS AT HUDSON CONWAY
Having written about Hudson Conway whilst a business journalist, I knew their reputation for being tough, well connected and entrepreneurial. The company founded by Williams, Walker and chairman Sir Rod Carnegie had got rich in the mid 1980s building the extravagant Coles Myer headquarters - known as Battlestar Gallactica - in the Melbourne suburb of Tooronga. The lads got even richer in the late 1980s through Hudson conway's joint venture ownership of 5500 British pubs with Foster's Brewing, then known as Elders IXL and led by one John Dorman Elliott. Remarkably, this produced a risk-free profit of $250 million in less than three years and gave Hudson Conway the firepower to make unsuccessful bids for The Age and the Seven Network, assets that Lloyd Williams's close friend Kerry Packer was also keen to get his hands on, but was prevented from doing so by Australia's cross-media ownership laws.
HUDCON SUES AND DEALS AT THE SAME TIME
I also thought it was a bit rich that the Casino Sub-Committee of Cabinet, still chaired by Mr Kennett, was doing ''deals'' with Crown when its major shareholder and manager Hudson Conway was suing another arm of the government. Only weeks before the hotel expansion was granted, HudCon lodged its $100 million claim against the government-owned Gas & Fuel Corporation after it cancelled an appalling contract committed to by Labor for a new headquarters. It was ironic indeed that the chairman of the Gas & Fuel Corp when the new headquarters was first conceived, Neil Smith, who was also chairman of failed merchant bank Tricontinental, was later appointed by the Premier as local government commissioner for Stonnington, which included Ron and Lloyd's homes. No one in the government has been able to work this Kennett-special out, except to speculate that maybe Smith helped the then Liberal Opposition out during the Tricontinental Royal Commission. It is indeed ironic that the Coalition is still attacking Labor for losing the State Bank, when the Tricontinental chairman was given government posts and the state successfully extracted a $136 million settlement from the failed merchant bank's auditors, KPMG. For all the groundless attacks made recently by the Premier on retired Auditor-General Ches Baragwanath for allegedly not exposing the Labor malaise, it must be remembered that Ches was never the auditor of Tricontinental or Pyramid. They were privately audited, just as much of the public sector was to have been under the now doomed Audit Act which Ches successfully campaigned so hard against.
BACK TO JOURNALISM
The major reasons I accepted the return to journalism were better money (I'd bought a Becton apartment off the plan in Jolimont which was completed early and finance wasn't easy), the chance to work with the highly regarded business commentator Terry McCrann and an opportunity to manage 12 staff. My dislike of the anti-media culture in the government - that journalists were low-lifes to be used, not respected - was also a small contributing factor. I'd seen first hand how successful the government had been at getting its message through and, in some instances, pulling the wool over the media's eyes. Manipulating the media had been quite easy from the inside. If anything it heightened my sense about the importance of having a free, hard-hitting and fearless press.
THAT MYSTERY DEFAMATION SETTLEMENT
The other key part in the Crown-Kennett equation is the Premier's defamation action against the Nine Network's A Current Affair which was resolved three months after I rejoined the Herald Sun. On the night of November 11, 1993, A Current Affair carried a story which suggested Melbourne Water worker Wayne Forder had committed suicide because of changes to WorkCover introduced by the Kennett government. He died five days before the change of government so clearly this was a big mistake. I raised this with Jeff's media man Steve Murphy on the night it was broadcast but he abruptly told me not to correct it. He said words to the effect of:
- The Premier had attempted to call Kerry Packer and Ian Johnston, the head of Nine in Melbourne, to complain about the story.
- When it had not been corrected the Premier had rung his wife Felicity and told her they could look forward to a comfortable retirement because A Current Affair had just defamed him badly on national television and he was going to make it pay.
MURPHY DROPS OUT IT WAS $400,000
In September 1994, three months after rejoining the Herald Sun, I sat next to Ian Johnston at the launch of Nine's Small Business Show. I asked how the defamation case was going and he remarked that the Premier had very persistent lawyers and pointed to the producer Stephen Rice sitting across the table, saying: ''He made a big mistake''.
This was an unusual admission so later that night when I saw Steve Murphy at the home of Ian Smith (another former Kennett press secretary now married to Natasha Stott de Spoja), I mentioned what Johnston said. Murphy replied with words to the following effect:
* The Premier had received a cheque for $400,000 the previous week.
* This was more than enough to pay for renovations at the Premier's Surrey Hills home, which were carried out by one of Ron Walker's preferred builders and cost $300,000.
* The Premier had spoken to Kerry Packer about it directly and it shouldn't have taken so long to settle.
I was horrified and first told this to Michael Gill from The AFR, who then asked Murphy directly. Murphy denied it so despite saying it to me, the only explanation is that he was joking or attempting a wind up. Personally, I doubt it, but the Premier and Murphy both denied it when I raised this in a press release and on 3LO on Thursday, September 2, the day before being ruled ineligible to stand in Burwood. After Four Corners declined to use this claim in its program on the Premier in September 1997, I decided to give a statement to the Victorian Casino and Gaming Authority. The VCGA concluded there was nothing in breach of the legislation they operate under. As Labor's David White had stated in Parliament and the Seven Network's Today Tonight had reported, I also pointed out that five contractors who worked on Crown had also worked on the Premier's renovations. Crown chairman Lloyd Williams told me in September 1996 the settlement was ''more like $90,000" and he strongly doubted that the Premier would have spoken directly to Kerry Packer about it. Maybe it was $90,000 in cash, PLUS the renovations. I simply don't know because the parties have steadfastly refused to reveal details of the settlement.
When I quoted Murphy in The AFR on July 23, 1999, saying the settlement was $400,000 and had paid for the renovations, there was no communication from him denying it or seeking a clarification. You would expect this if it was inaccurate, particularly given the sensitivities of the parties involved.
FIRST SERIOUS CONCERNS
It was this combination of events which first seriously pricked my concerns about the Premier. Kerry Packer owned almost 20 per cent of Hudson Conway, about 45 per cent of the Nine Network and almost 30 per cent of Crown at the time. Some four years later the Premier resigned from the Casino Sub Committee citing the perception of a conflict of interest. But weren't those conflicts there all along? Shouldn't they have been avoided from the start? The Premier should not have been simultaneously negotiating a personal payment from one part of the Packer empire, Channel Nine, while adjudicating on regulatory changes for another part, namely Crown. At the time of the settlement, Mr Packer was well over $100 million in front on his Crown/Hudson Conway investment. Given all these circumstances and varying accounts, surely the parties could agree that the public has a right to know what the settlement was and who organised and paid for the renovations, just to clear the air once and for all. It is simply too sensitive an issue to remain confidential.
DEALING WITH THE BROTHER-IN-LAW AND CHILDHOOD BEST FRIEND
In my first week as business editor of the Herald Sun I wrote a piece explaining the Gas and Fuel/Crown nexus but it was developments about four weeks later that further bothered me. When I left the government, Finance Minister Ian Smith was playing extreme hardball with Melbourne's best builders, Rino and Bruno Grollo. He was trying to extract the government from another awful mess left by Labor - this time a 20-year, $646 million lease on a new Flinders Street headquarters for the old SECV, which was being broken up by the Treasurer anyway. Smith was offering just $150 million to buy the building and threatening to legislate the lease out of existence. The Grollos were naturally and rightly outraged as they had an offer from the private sector for $330 million but the government was refusing to pay the rent. However, they then contracted Michael Rodd, the then managing director of the Victorian office of real estate firm Richard Ellis, to help out. Mr Rodd was the Premier's closest childhood friend and they married sisters, Felicity and Angela Kellar. The Premier has admitted taking calls and discussing price with Mr Rodd. Senior advisers in the government said privately they were concerned and that Smith had been undermined as he was away in Europe for most of the time when the Premier intervened in negotiations. The final sale price was $250 million - still a reasonable result when compared with $646 million over 20 years - but taxpayers still took a loss of more than $100 million when the building was finally sold in 1998. The question that has never been answered - or even asked - is how much did Richard Ellis and Mr Rodd personally get from this deal? Given his close association with the Premier, it is a legitimate question that at the very least should be asked by the media and, given the circumstances, answered by the Premier and his childhood best friend. At this point, it should be stressed that Grocon, the Grollo brothers' company, has used Richard Ellis on several deals over the years, including the sale of Shell House to Lend Lease in 1993.
WHY THE RUSH
While Bruno Grollo directly approached the Premier because he was getting nowhere with Smith, I always suspected that the Crown camp could also have been pushing for an expedited settlement. You see, Crown had won the casino licence with Perth-based Multiplex, controlled by Packer mate and business partner John Roberts, as its preferred builder, even though Lloyd later told me it was always going to be a job for Grocon. Construction at Crown was dragging behind and ANZ was playing hard ball with Grocon until they sorted out the SECV headquarters dispute. The entire SECV building was built with Grocon equity, so much of the family fortune was tied up in it and this may have restricted their ability to commit to the Crown contract. The other possible reason to hurry was the scheduled launch of the Rialto Observation deck which the Kennetts did with a beaming Bruno Grollo the day after the SECV headquarters deal settled.
HERALD SUN BURIES A GREAT STORY
Some 15 months after hearing about this, I proposed the story to the Herald Sun in September 1995 after Mr Rodd confirmed it was true. I thought it was a page ane splash along the lines of: ''Premier in $250m land deal with brother-in-law''. Instead it finished on page two, which all newspaper journalists know is a dumping ground for dull but worthy stuff. For tabloids such as the Herald Sun, that means stories like the latest economic figures. I believe that was a decision taken by Herald Sun Editor-in-Chief Steve Harris. It certainly confounded me and some of the senior journalists on the paper. Thankfully, the paper carried an opinion piece I'd written explaining the Premier's ''blind spot'' for conflict of interest on the same day. Anyway, the story ran for a couple of days and the Premier admitted that ''maybe that call shouldn't have been made, maybe I shouldn't have received it''. His harshest critic on 3AW, the since sacked drive-time host Paul Barber, accused him of ''hiding behind his family''. However, almost like a state secret, the story has never been mentioned again in the mainstream media, not even when Michael Rodd's wife Angela (Felicity's sister) was appointed to the State Library board in 1996. It is a classic ''oncer''. The media report it once, but never remind the public of it when other issues about conflict of interest come up. Compare that with the remarkable repitition in the media of the major events snared by ''Mr Melbourne'' Ron Walker, every time even the smallest event is secured. The Herald Sun will run chapter and verse reads on ''How Ron poached the Bledisloe Cup'' but you never get such coverage when the headline could read: ''How Jeff's best mate and relative made $1 million''.
TOP ADVISER WINS $460,000 A YEAR LOTTERY JOB
The other development in the first two months back in journalism which concerned me was the departure of top adviser and close Kennett friend Alister Drysdale to secretive gambling company Tattersalls on a package he told other staffers was worth $460,000 a year. This hiring came just a few months after Treasurer Alan Stockdale had written to Tattersalls seeking a retrospective fee for its lucrative gaming machine licence which Labor had inexplicably given away for nothing. Former Labor industry minister David White has a lot to answer for on this and the SECV and Gas & Fuel Corp headquarters deals. Because Tabcorp was being floated, the Treasurer wanted to extract a similar fee from Tattersalls to preserve competitive neutrality and to make up for the revenue shortfall created by effectively giving away 25 per cent of Tabcorp's businesses to the racing industry and cutting the wagering tax by about 40 per cent. The racing industry has waxed fat off this ever since, but that's another story. Negotiations with Tattersalls dragged on until the eve of the 1996 election when it was announced the secretive beneficiaries of the late George Adams would contribute the equivalent of $422 million in today's dollars. Based on Tabcorp's share price, the Tattersalls pokies licence is today worth more than $2 billion and it is making more than $100 million a year in profit after making the additional annual licence payments. Lloyd Williams is quite rightly critical of Tattersalls having it so easy. ''They buy the machines off the shelf, give them to someone else and take a fee,'' he said after one of their record profits. ''This is the greatest business we have ever seen.''
WAS DRYSDALE THE FEE STOPPER
So what did Drysdale bring to Tattersalls? Was he a fee stopper, or fee minimiser? A door opener, perhaps? Given that the Premier had prevented another staffer, Phil Gude's press secretary Ian Smith, from going to work for Crown on the basis it could embarrass the government, allowing Drysdale to go to Tattersalls was completely inconsistent. In the United States it is illegal for government advisers to leave and immediately start working as lobbyists or advisers for companies negotiating with government. As far as I know, no one has ever asked the government or Tattersalls what role Drysdale had in negotiations. The then secretary of the Victorian Treasury, Dr Michael Vertigan, quite appropriately ruled himself out because his wife was a Tatts heir, although a much smaller one than Port Arthur mass murderer Martin Bryant who inherited more than $1 million thanks to the lucrative Victorian poker machine licence. If Labor gets to form a minority government they should go after Tattersalls again given the outrageous easy profits they are still making.
AN OFFER TO REJOIN THE GOVERNMENT
All this happened in my first four months back in newspapers. My view of the Premier had been coloured somewhat but after nine months at the Herald Sun, in March 1995, Alan Stockdale offered me a job as his political adviser. I pondered long and hard as I greatly admired the Treasurer but was already reaching some negative conclusions about the Premier. The Treasurer assured me the Premier was comfortable and said he believed his attitude was that I was better to have on the inside than writing for the Herald Sun.
I quizzed the Treasurer about his attitude towards some of the things the Premier was doing and asked whether he agreed. He admitted the 12 Judges of the Accident Compensation Commission should not have been sacked, it had taken too long to find a new Ombudsman and that he opposed blatant pork barrelling such as putting $15 million of government money into the Steampacket Wharf development in Geelong, just because there were four marginal seats involved. However, what the Premier wanted the Premier got and that was just the way it was.
Alan at first said he would take me on a study trip to China, Israel and Greece for three weeks as an added incentive to join. Each Minister is allowed one study trip each term. However, the Premier subsequently ruled this out, which was typical of his small-mindedness. I was 25 and had never travelled so when I raised the offer with Steve Harris my negotiating position was that I be allowed to take a junket to Europe with transport company Mayne Nickless (no relation, unfortunately) and stay on for an additional six weeks in London for a study trip on privatisation and to spend some time at The Times and The Sunday Times. He agreed so this, combined with my concerns about the Premier, prompted me to stay with the Herald Sun. How life would be different if I'd gone back?
RON WALKER'S MANY HATS
From this point it was about a year until the next election and relations slowly deteriorated as more stories were uncovered. The continuing regulatory favours for Crown was something both Terry McCrann and I wrote about critically on numerous occasions. I had a problem with Ron Walker being many tens of millions of dollars in front on his Hudson Conway shares thanks to Crown and also being the primary fund raiser for the Liberal Party and one of the Premier's closest personal friends. As the man who personally brought the Grand Prix to Melbourne without any Cabinet or Treasury scrutiny, I felt his prediction on the day the coup was announced that it would cost $10 million to establish the course and would run at an annual profit should have somehow been at least partly binding to him. When the public costs started mounting I can remember Steve Murphy telling me that Ron had said in one meeting ''It would be different if it was private money''. Murphy then added that ''the Treasurer nearly fell off his chair''. Stockdale also used to be annoyed by Walker's constant calling asking for more money. Both Walker and Alan follow Melbourne Football Club but at least one of the establishment types at Melbourne had told Alan to put some distance between the government and Walker.
SHOULD RON PAY FOR GRAND PRIX BLOWOUT
Given that Mr Walker has made about $30 million out of Crown and taxpayers have spent more than $100 million on the Grand Prix and related infrastructure, I felt Mr Walker should have been held more accountable for the huge blowout. If it was good enough for him to personally take over a $4 million Liberal Party debt, then why shouldn't he also have personally contributed to the grand prix blowout he never predicted, especially given his casino profits. But Ron Walker is so close to the Premier, this was never going to happen. The Herald Sun is the official Grand Prix paper, so this was hardly a line it was going to pursue outside the lone piece I wrote in the opinion pages which sparked a withering attack from Ron who rang Editor-in-Chief Steve Harris and accused me of attempting to ''assassinate'' him. To Steve Harris's credit, he defended the hard-hitting piece, despite being personally on good terms with Walker. Herald and Weekly Times managing director Julian Clarke was a little more concerned, but it was generally safe writing aggressive pieces if you ran them past Terry McCrann first, because his opinion is held very highly within News Ltd and he is fearless. As for the Grand Prix and secrecy, Ron's claim that he ''does not believe in government subsidies'' appears a little less believable than that of billionaire Grand Prix supremo Bernie Ecclestone who said publicly Ron made an offer on behalf of taxpayers that was too good to refuse. So how much of that net $100 million-plus direct cost to taxpayers has gone to billionaire Bernie? Can't say, that's a secret, but my bet is around $40 million.
KENNETT SUMMONSES MEDIA HEAVIES
Two key things happened in the next period leading up to the State election. First, I wrote a strong opinion piece - to its credit the Herald Sun never once knocked back an opinion piece I offered - questioning whether the government had got full value from the three gambling licences it had sold. The owners of Crown, Tabcorp and Tattersalls (the latter was more about retrospectively recovering value Labor squandered) were collectively almost $2 billion in front so it appeared the government had not got anywhere near market value for the licences. I argued the licence sales had been mishandled and the $2 billion missed out on could have been used to publicly fund City Link, without creating the world's second biggest privately owned tollroad. The gambling licence profit figure is now closer to $5 billion - but don't expect to read much about it. Kennett got wind the piece was coming and rang to put his case. It was the last time he would call and ironically he also asked whether I thought Crown shares were a good buy. We used to talk about the market every day but I think he was joking about that one.
As usual, I ran the piece past McCrann who liked it, but this one really sent the rockets off. Stockdale rang with a withering burst and Kennett summonsed Steve Harris and Ken Cowley, the man then running News Corp's Australian operations, to see him. The account of the meeting from Harris was most concerning from my point of view. Kennett was furious and wanted confirmation that the Herald Sun would support him if he called an early election. The idea that a politician would consult on election timing and forthcoming editorial support with an editor is most unusual, but Harris made the comment that the Premier would really know about it if the Herald Sun ever decided to campaign against him. He also correctly stressed that what appeared on the opinion pages was exactly that: opinion. It is meant to be a forum for debate, but Kennett constantly attempts to influence what and who appears on those pages. Despite this furious reaction, Dr Peter Troughton, the highly regarded man who mastermined the $29 billion energy privatisation program, told me he agreed with every word of the article. So there, Jeff.
THE POWER OF THE HERALD SUN
It is the editorial and news support for Kennett from the Herald Sun - Australia's biggest selling paper at about 560,000 copies a day - that has been vital and largely unwavering for the Coalition. It dates back to the passsionately pro-Liberal, anti-unionist, bile-filled, homophobic Piers Akerman who took over as Editor-in-Chief when The Herald, then an afternoon broadsheet, was merged with the benign and politically neutral Sun News Pictorial in September 1990. Akerman, now a hard-hitting columnist on Sydney's Daily Telegraph and still a close friends of Jeff Kennett's, openly claims to have ridded Victoria of Joan Kirner. Given the ferocity of his anti-Kirner campaigning - including that infamous 1991 editorial across the entire front page - it is fair to say he was a big factor. Under Akerman, circulation plummeted, partly because the biased campaign was so unnecessary and sensible reporting of the facts would still have seen Kirner booted out in a landslide.
AN END TO THE BLATANT ANTI-LABOR BIAS
Akerman was finally sent to Los Angeles for a brief and controversy-ridden stint with Fox Television and Steve Harris took over in 1992. Under Harris the Herald Sun-Kennett relationship remained good, but lost its anti-Labor hysteria which had even prompted Harris to splash a big profile of Akerman across the front of The Sunday Age in 1991. Harris wanted to be appointed editor of The Age but was overlooked by Conrad Black's new regime in preference for Alan Kohler, a former editor of The Australian Financial Review who was then a business columnist on The Australian.
ATTACKING THE AGE
At the time of this meeting with the News Ltd heavyweights Ken Cowley and Steve Harris, the Premier was continuing his venomous attacks on The Age and cranking up his specific lobbying campaign of the board and senior management at John Fairfax to get new editor Bruce Guthrie sacked. When chief executive Bob Mansfield was himself sacked in 1996-97, Kennett rang the office of The AFR and told journalists the board had ''got the wrong man''.The journalists were wondering what on earth it had to do with the Victorian Premier, but were later to hear rumors of discussions about Kennett quitting politics and joining the Fairfax board, possibly as chairman. Thankfully, this never eventuated as both Kennett and Kerry Packer are said to have lists of Fairfax journalists they would love to sack.
SUPPORT FROM BUSINESS AGE
Ironically, the only part of The Age under Bruce Guthrie which was broadly supportive of the Kennett Government was its business section, which I believed was the area where the government deserved a lot of praise, but also a lot of scrutiny. It was all very well running page one stories about money laundering or drugs at the casino, but the biggest story was really in the nexus between business and politics. Stories like who was making money out of the government and who was donating money back to the Liberal Party? Who was profiting from gambling policy? Many political journalists don't like or understand business much and vice versa. The vast majority of The Age's negativity was at a political level whereas the major questioning in the Herald Sun was in the business and opinion pages. As Kennett loves to wield media power by giving out scoops or denying access, Business Age got quite a few exclusives out of the government, as did the Herald's Sun's state political reporters.
STOCKDALE'S TREASURY MINUTE
Given this, Labor leaked the so-called ''Treasury minute'' to McCrann and I in the first week of the March 1996 election campaign. The minute strongly suggested Stockdale knew about the casino bids which everyone had publicly said never left the Casino Control Authority. McCrann and I had a very tense two hour meeting with Stockdale about this at which he regularly flew off the handle at the hint of any suggestion he had done anything wrong. To its credit, the paper put the story on page one and it bounced around for most of the campaign but never resonated with the electorate as the government was returned with an even bigger majority. The government is still fighting the release of casino bid documents in the courts so we could well never know what the casino sub-committee of Cabinet was told. However, these documents they are fighting to keep secret shouldn't exist in the first place if you believe the following comments:
''The process was conducted so tightly and securely that as far as I'm aware nobody had any idea of the figures outside the people concerned within the Authoirty,'' Gaming Minister Haddon Storey on 3AW in October 1994.
''The Government has no knowledge of the contents of the bids; nor does it seek that information,'' Premier Jeff Kennett in Parliament on May 19, 1993.
''I am not aware of the proposals made by the tenderers; nor would it be appropriate for me to be aware of them,'' Treasurer Alan Stockdale in Parliament on May 11, 1993.
Terry McCrann has been a lone voice on this issue. His point is that their should be no documents, yet it remained a secret when Victorians went to the polls on September 18 just what the Cabinet knew about the bids. The key point here is that Crown lifted its bid substantially in the final days of the tender and also knew that Melbourne had secured the Grand Prix when rival bidder ITT Sheraton did not. Was there a leak? What did the government know? The Premier was talking regularly to his great mate Ron Walker about the Grand Prix right through this process. Did he slip up? One whisky too many, perhaps? The Premier says no, but we just don't know because so far the government has spent hundreds of thousands of dollars of taxpayers' money fighting in the courts to make sure voters will never know.
LLOYD'S SKI LODGE
The other story which the Herald Sun splashed on during the campaign, again to its credit, was a $150,000 land deal between Lloyd Williams and a company associated with Peter McIntyre, the head of the Casino Control Authority design panel which selected Crown. Lloyd has never built the ski lodge he talked about after buying the property seven months after the licence was awarded. Professor McIntyre described Crown's design proposal as ''outstandingly better'' than the rival ITT Sheraton proposal but we have never seen this design materialise because the government approved dramatic changes and expansions. Similarly, the proposed builder Multiplex was dumped, as was the casino manager, Federal Hotels. There is virtually no component of the Melbourne casino which is not fundamentally different from that proposed in the winning tender. We do know that the financial bids of the two rival tenderers were too close to call, so it came down to which had the better design. That made Peter McIntyre the key man and his panel went with Crown.
GOODBYE JEFF, HELLO LLOYD
It was essentially these stories during the campaign which ended any hope of rebuilding the good personal relationships I had once enjoyed with the Premier and, more importantly, Treasurer Alan Stockdale. However, ironically, it was later in 1996 that I struck up a close relationship with Crown chairman Lloyd Williams after a chance meeting with his lawyer at a dinner for sacked Coles Myer finance director Philip Bowman. The lawyer was worried about my attitude to Lloyd and invited McCrann and I down to clear the air. It lasted three hours and covered everything from hookers at Crown to Lloyd's belief that Packer only gave the Premier $90,000 settling the defamation action. Lloyd can be very seductive and charming. Clearly he thought he had won us over as for the next 12 months we spoke on the phone on average twice a week. I interpreted this as an unspoken deal for unlimited access and a flurry of great stories for the Herald Sun in return for less negative stories about Crown. My coverage on Crown was more voluminous, but less stridently negative - even positive on some occasions. In simple terms, Lloyd and I used each other for mutual gain.
USING EACH OTHER - JEFF, CROWN AND THE HERALD SUN
The Herald Sun and the Kennett Government have broadly enjoyed a similar relationship for most of the past seven years. I can remember press secretaries leaking several stories to the Herald Sun to pre-empt more negative pieces by Mark Forbes appearing in The Sunday Age. My close relationship with Lloyd at the same time as Ron Walker and the Premier were gunning for me, is perhaps just another example of politics making strange bedfellows. The Herald Sun was a very important vehicle for Crown to gets its message out to the gamblers. Crown spent about $4 million a year on advertising. The Herald Sun is the Official AFL Paper and puts sport on the front page more than any other mass market paper in Australia, arguably the world. Just as big sporting events - particularly at venues near Crown such as the MCG, Melbourne Park and, from next year, Docklands Stadium - bring in extra business for Crown they also boost Herald Sun sales. I can remember asking Lloyd why he had so many sports stars pictured in the 1996-97 Crown annual report and he said: ''Stephen (Lloyd remembers every journalist's name), to understand Melbourne you have to understand sport.'' Ron Walker sat across the top of all this. The Herald Sunusually got the scoop on his latest ''sporting coup'' and the Herald Sun did the official Grand Prix program. However, it is not quite so straightforward. Rupert Murdoch is also quite strongly anti-gambling, except in NSW where the pokies helped fund his Super League wars, and used to encourage negative stories in the Herald Sun. Apparently Rupert believes excessive gambling reduces disposable income for punters to buy newspapers and his Foxtel pay-TV service.
GUANGDONG - THE STORY OF THE YEAR
Shortly before the 1996 election, two journalists from Channel Seven's Today Tonight approached me over a story they were doing on poker machine magnate Bruce Mathieson. A former business partner of Mathieson had been telling me all sorts of stories about him which I had no idea about at the time the Premier placed that call chasing Guangdong shares in 1993. Knowing that it would get very hot in the kitchen if I ever personally wrote about Jeff's share dealings, I tipped the Today Tonight people off about Guangdong and wished them all the best, although they were already on the case. Knowing Mathieson had made more than $50 million from pokies in Victoria, mainly with Tattersalls machines, made it all the more important for the public interest.
HOW HARD CAN IT BE
Today Tonight's Mark Forbes and Greg Hoy pursued the story aggressively and the process that followed has been well documented. From my point of view as a key source, it was incredibly frustrating. The lawyers kept sending the reporters back with more checks and queries when it should have been as simple as confirming Felicity Kennett's name on the Guangdong share register and then relying on me as the source who was in the room when the calls were put in. In the end I was required to sign a statutory declaration stating what I heard and saw. Instead of being proud of what was one of the biggest stories of the year, Seven tried to pull it 30 minutes before it went to air after the Premier rang threatening to sue, screaming down the phone: ''I need a new house''. Clearly, he had a ''Stokes wing'' in mind to add to what could be called ''the Packer wing''.
The story only ran in the end because of the public outrage after presenter Jill Singer collapsed. As the source of the story, I provided the Herald Sun with several scoops in the following week, although all of them were written by other reporters for fear of retribution. As the Premier's defacto share adviser in the office, I simply knew which share registers reporters should search. Herald Sun news editor Shane Burke, the man who wrote most of the anti-Kirner material during the Akerman era at the Herald Sun, had Jeff's media heavy Steve Murphy as his best man so I presume this was getting back to Kennett's office. At one point Steve Murphy recounted a conversation he'd had with the Premier to another reporter: ''How do you spell (Herald Sun business reporter) Lisa Jamieson?'' Murphy had said to the Premier. Answer: ''S-T-E-P-H-E-N M-A-Y-N-E''. This was most unfair on Lisa, who, ironically, now works at Macquarie Bank with Laurie Cox. More on that later.
''FOR YOU MR PREMIER: 78 CENTS''
The facts that came out in the aftermath of the Today Tonight story stunned me. Back in September 1993, all I knew was that the Premier had rung some guy called Bruce Mathieson, the chairman of float underwriter Sino Securities, to try and get some shares. When the Premier rang on the speaker phone, Mathieson first asked about poker machine policy in relation to the casino, as this was just a few days after Crown had been awarded the monopoly licence and the Crown management agreement was still being thrashed out. Without making any promises, the Premier offered the one line response that Mathieson would be okay if his machines were more than 20 kilometres from the casino. This seemed fairly inconsequential.
The Premier then asked about getting some Guangdong shares and Bruce simply referred him to Sino Securities managing director Richard Li, again without making any promises. At the time I did not realise that the Guangdong promoters, including Li and Mathieson, had paid a visit to the Premier a few days earlier and offered him shares then. Anyway, at Bruce's suggestion, the Premier immediately called Mr Li who was ecstatic at getting the call. When the Premier asked what price the shares were going for, Mr Li said: ''For you Mr Premier: 78 cents'' almost as if to suggest this was a discount. Drysdale and I had a chuckle about this, because naturally it was not a discount. The Premier then asked if he could have 100,000 shares and Mr Li countered with an offer of 20,000. Mr Kennett accepted and then rang a stockbroker (I can't recall the name but it was not Laurie Cox) and instructed him to place the shares in Felicity's name. I was never sure if this was for tax reasons or to avoid disclosing the shares to Parliament, or a combination of the two. It certainly wasn't because Felicity had a burning desire to plough $78,000 of her hard-earned into a Hong Kong-based cladding company. The next thing I knew the Premier came around a few days later and told me excitedly that he had received 50,000 shares, 30,000 more than the original verbal agreement with Richard Li. Guangdong was a very hot float and its shares debuted at a premium of 38 per cent, making it one of the most lucrative floats of 1993. This was the guts of what I told Today Tonight which, by any journalistic standard, is a great story that you would be proud to broadcast. They had an eyewitness source who had even signed a statutory declaration yet still management was reluctant to run it.
FIRST GUANGDONG DEFENCE - HOW DARE YOU INVADE FELICITY'S PRIVACY
The Premier first defended the story by claiming it was a great invasion of his wife's privacy and she could invest in what she liked. The reality is that I doubt Felicity even knew she had bought the shares. It then emerged that the Guangdong board had visited the Premier prior to my witnessing the phone calls and that the Premier had called several days AFTER Sino Securities and Mr Li had told the Stock Exchange it was ''unlikely'' any new applications would be accepted because the response from investors had been ''overwhelming''. At first the Premier said the government would never have invested in a float of a Chinese company - but it turned out that WorkCover and the Transport Accident Commission, which together manage about $7 billion for Victorian employers and motorists, had also both purchased 50,000 shares in Guangdong after being slightly cut back by the promoters. It is virtually unheard of that an individual investor receives as many shares as multi-billion dollar institutions, but this is what happened to the Premier's wife after he personally intervened. It also emerged that the government provided a taxpayer-funded reception at Parliament House on the day Guangdong listed - the same day Jeff sacked the Melbourne City Council - and he attended celebrations that night with the Guangdong promoters at the Melbourne restaurant Selbys. All of this deepened my concern about Guangdong, which Mr Kennett defended because it was based in Hong Kong and had nothing to do with the government.
KEEN DAFFODIL GROWER BUYS INTO SEED COMPANY ARTHUR YATES
Other investments also emerged after the Today Tonight story. I knew about how the Premier had rung Laurie Cox to get 20,000 $1 Yates shares, so we broke that story, and the estimated $7000 profit made by Mrs Kennett, which was also not disclosed to Parliament. The Premier later said he organised Felicity's Yates shares "because I like gardening and they make seeds". He again responded that Felicity could invest in whatever she wanted and Mr Cox refused to comment. I knew the Premier had personally rung Mr Cox, then chairman of the Australian Stock Exchange and a member of his Business Roundtable, to get the shares. The story ran for a day or two before the Transurban annual meeting. Mr Cox is the chairman of Transurban and could not avoid the media questions after the meeting but still refused to comment on the basis of client confidentiality. The Premier is obviously one of his most powerful and prestigious clients and now the former Treasurer Alan Stockdale is a work colleague of Laurie's at Macquarie.
DON'T MENTION AMSKAM ANYBODY
The last story to break during this frenetic period was the investment by Mrs Kennett and two of the children in 80,000 shares in Amskam after our sports editor received a tip off from a senior Liberal Party figure. Amskam was a little known technology company which hoped to win a contract with Transurban but went into administration and was eventually bought by HRL, a company 40 per cent owned by the state government and controlled by Kerry Stokes. Clearly the ''nothing to do with the government'' line did not apply here, but the Premier had again failed to declare it in his register of interests. The Herald Sun had bravely led the way on the shares story but when the heavy calls started to come in, its enthusiasm began to wane such that the Sydney Daily Telegraph was giving some of the later stories a bigger run. By the time it came to demanding answers on Amskam, we were all a bit punch drunk. Remarkably, the Premier managed to avoid answering any questions on this one. He simply told Parliament he had nothing more to add. To this day it remains a mystery. No one in the media ever publicly pushed the point. Radio station 3AW's Neil Mitchell went missing in action on much of this issue. When the Premier emerged from his bunker for the second of his hour long interviews whilst the controversy raged, he managed to not mention the word Guangdong once. Even Channel Seven's then Melbourne general manager Brian Mallon described that particular interview as soft.
KENNETT SHARE PROFITS TOP $130,000
It also became apparent that the Premier and his family has made sizeable profits in the 1993 Seven Network float and that Felicity Kennett made about $4000 buying into speculative gold mining company Haoma, controlled by pollster Gary Morgan and John Elliott. In total her known investments generated an estimated $30,000-plus in profits whereas the Premier has made an estimated $100,000-plus from his known investments since 1992. Yet we still don't know many of the key answers as to how this happened and on how many other occasions he lent the authority of his public office to secure private profits. The Premier and Bruce Mathieson never did sue Seven or anyone else as they had loudly threatened, so there must have been a good deal of accuracy in what was reported.
THE LAST ALTERNATIVE TO GET ANSWERS - FOUR CORNERS
It was after this episode that I realised the only way to get the truth would be to out myself as the source and speak openly about what I saw. Given the omnipotence of the Kennett culture, I knew this would lead to my departure from Victoria. But this was something I was prepared to do because there were some serious discrepancies between the publically established fact and my recollection of events, compared with what the Premier was claiming. I knew the Herald Sun would not be keen on splashing a big ''adviser tells'' story from one of its own staff and therefore spoke to Sally Neighbour from Four Corners shortly after seeing a courageous story she did on Kerry Packer. It is still in the courts.
Rupert Murdoch, and therefore most of his editors, have a strong dislike of the ABC, so I suspected permission would not be granted to give an interview whilst on staff. I therefore attempted to resign from the Herald Sun and tentatively offered the shares story on the way out. Editor Peter Blunden was not keen but still kindly offered 18 months leave without pay and thanked me for all the effort. He knew and accepted I proposed to talk to Four Corners, but not the full extent of what was to be revealed. Eighteen months was a long time to be away, so I recorded a tell-all interview in June 1997 which canvassed many of the things mentioned here. The Premier has long had a tense relationship with the ABC - I was the press secretary who told Mary Delahunty in 1993 that all Ministers were banned from appearing on The 7.30 Report after reporter Greg Hoy (before he went to Today Tonight) dared to ask about problem gambling at the announcement of Crown winning the casino tender. It has now been seven years since Kennett appeared on The 7.30 Report. The Premier told his favourite radio station 3AW, where he has done 350 hours of interviews with Neil Mitchell whilst in government, that the show would be ''an hour of slime''. Naturally, he refused to be interviewed. Sally Neighbour was labelled a ''liar'' and legal action was threatened so the ABC's lawyers were very jumpy and eventually only broadcast about 40 per cent of what I told them. This was amazing. If even Four Corners was intimidated would anyone ever tell the truth about the Premier from a primary source. Once again, the story dealt in the truth and everyone who predicted litigation would follow were proved wrong.
OPERATION SACK GUTHRIE - THE LAST BATTLES
I went to Europe for three months after recording the interview and before the show went to air. Whilst in London, Bruce Guthrie was finally sacked as editor of The Age after a long campaign. Hudson Conway chairman Sir Roderick Carnegie - John Elliott's mentor and a close friend of Walker and Williams - is the only Melbourne director of John Fairfax, owner of The Age, and was telling its Sydney-centric board that Guthrie should go. He even stood up and questioned Guthrie in public at a business luncheon. Sales were under pressure as Kennett maintained his relentless campaign describing The Age as a rag that you would not wrap your dead fish in. Rather than defending the right of its industry colleague to report and ask questions, the Herald Sun simply sat back and took the easy ride with Kennett.
NEWS LTD, JEFF AND DEFAMATION BATTLES
My last day with the paper was June 20, 1997, and since then it has remained strongly pro-government, despite a flourish against the gag imposed on Liberal candidates early in this campaign. Kennett rings editor Peter Blunden regularly and keeps the pressure on by staying in regular contact with Lachlan Murdoch. Whenever Rupert Murdoch is in town he usually visits Kennett, even whilst the recent defamation action against The Australian was in progress. To News Ltd's eternal credit it did not settle this like Nine did over the A Current Affair story. Just as with A Current Affair, the Premier did not criticise The Australian's story the day after it appeared, but he did launch a savage attack on myself, Jill Singer and Moira Rayner for daring to talk about his announced separation with Felicity. It would appear the strategy was not to seek an instant public rebuttal from The Australian but to go for the big secret payout instead. The Kennett's apparently asked for a $500,000 settlement (equivalent to $1 million in gross terms because it is tax free) and even suggested to the jury that more than $200,000 was the appropriate amount. In hindsight, I regretted speaking about the Premier's separation, even though it was a legitimate subject of public discussion. The Premier or his staff placed some heavy calls of complaint into News Ltd in Sydney and I was reprimanded. A memo went up reminding all staff to seek approval from the editor before giving interviews to outside media, which is fairly standard practice in newspapers.
NEWSPAPERS COMPETE TO BE CLOSE TO THE PREMIER
After seeing the damage the Premier could wreak, the Fairfax board decided they had to ''out Herald Sun'' the Herald Sun and that the constant warring with Kennett was hurting its business, which it was. It therefore poached Herald Sun's well regarded Editor-in-Chief Steve Harris to become publisher, combining the role of managing director and Editor-in-Chief in a move which upset many of its journalists. Fairfax was now blurring the lines between editorial and commercial interests. Guthrie's contract was paid out and Harris started poaching his favourite Herald Sun staff. Harris called when I was in London and offered me a job writing across the paper. He said I was his third choice for business editor but could definitely be deputy with a writing role. In the end his first five choices for business editor knocked him back. Harris insisted that I call him on returning from London although, knowing his close relationship with the Premier, I warned him something was about to happen in my life that would perhaps change his mind. I did not tell him about Four Corners but he made me promise I would phone on my return and just give him a chance. When I did phone twice after the program has gone to air, Harris simply refused to return my call. Clearly, his brief was to mend fences with the Premier and hiring me would have been like a red rag to a bull. When I saw him at the Walkley Awards last November he said we would ''work together again one day''. I look forward to the call.
DEMOLISHING FOUR CORNERS
After the heavily legalled Four Corners program went to air, Kennett attempted to demolish it the next morning. I ran a week long media campaign, doing interviews, briefing, lobbying and the like. All the skills picked up working for the Kennett media machine were being used against them. It was the only way to get debate going but still the Premier refused to answer the key questions? The only time he was subjected to sustained questioning was by Neil Mitchell, the closest thing Victoria has to an ICAC or CJC, who failed to really push the key point. After the verbal agreement for 20,000 Guangdong shares, Mr Kennett organised for a second ambit claim of 80,000 shares to be lodged. Richard Li ran the line that Mrs Kennett was ''savagely'' cut back from 100,000 to 50,000 shares. Yes Richard, but you verbally offered 20,000 and that was accepted. The Premier whacked in a second ambit claim which must have put you and your five person share allocation committee in a right quandary. Do I offend the Premier's wife? Particularly as we have been invited to Parliament for a taxpayer funded reception. The Premier also dropped into the celebratory dinner on the night of the Stock Exchange debut knowing that he'd just pocketed an $18,000 paper profit which he would never have to disclose because it was in his wife's name. In my view, that was simply unacceptable conduct. The Premier said some of the shares were sold to pay for private school fees for his children. In my view, any profit the Kennetts made out of Guangdong should be returned to taxpayers.
YATES - I CAN'T REMEMBER
The Premier was equally vague about my account of how he rang former Stock Exchange chairman Laurie Cox and secured 20,000 Yates shares for his wife after I'd rung underwriters Potter Warburg as ''Joe Public'' and was told there were no more available. He simply said he could not recall ringing Mr Cox who also refused to comment. I was basically alleging Mr Kennett had used his position to make a quick $7000 profit in the name of Mrs Kennett and the parties involved simply refused to comment. Mr Kennett did describe Mr Cox as ''one of my brokers'' which is interesting because he also doubles as chairman of the world's biggest tollroad company, Transurban, a position he was supported into by the Premier.
TRANSURBAN AND THE PREMIER'S BROKER
The Transurban float is the best example I've ever seen of fat cats and insiders making millions from a business which relies on ordinary citizens paying up. And it was all mandated by the government. Yet in the Melbourne media, hardly anyone ever mentions that Transurban investors have tripled their money, collectively pocketing $1.5 billion. Mr Cox has profited to the tune of more than $2 million. So one of the Premier's brokers has made $2 million out of Transurban, yet no-one in the Melbourne media seems to care.
THE ONLY OPTION LEFT - RUN IN BURWOOD
It was after Mr Kennett brushed off Four Corners that I started to think the only way of getting him to answer serious questions would be by running against him in his own seat. The media in Melbourne just does not have the ability to sustain any pressure, Ministers are gagged, the opposition is ineffective, Parliament is sitting less and less and now the Auditor-General, the single best source for information about the government, has gone and not been replaced.
THE FIRST REALLY BIG STORY ON VICTORIA INC
On the Friday after Four Corners I was in the pub with the two most senior people from The Australian newspaper in Melbourne, Stuart Rintoul and Jamie Walker. They were curious as to why I had done the whistleblower thing and I explained that it wasn't just the share trading, I was concerned about a whole range of deals the government had done but that no one would write about and that Four Corners had not used. As I started to run through them their eyes lit up and a call was placed to The Australian's Sydney-based editor Campbell Reid. He agreed to me writing a major piece with the proposed headline ''Inside Victoria Inc''. I spent the next few days working on it before taking up a parachute position I had organised for a four month stint as busines editor of the Daily Telegraph in Sydney. You could not go on Four Corners and stay as a working journalist in Melbourne.
THE BIG PUSH - SACK MAYNE
Shortly before leaving for Sydney, Kennett's machine organised a sustained attempt at getting me sacked from News Ltd. Calls were placed into Lachlan Murdoch and other executives. Suddenly the Daily Telegraph wasn't saying come up and start but they were hedging. The editor Col Allan and Editor-in-Chief John Hartigan would need to talk to me first. Thankfully, Terry McCrann saved the day and intervened so up I went to Sydney. However, the enthusiasm for me to write the inside story on Victoria had dried up on sister News Ltd paper The Australian. The piece was supplied but never used and I was never spoken to about it by the editor Campbell Reid or Editor-in-Chief David Armstrong. My best guess is that Kennett had brought pressure to bear by calling Lachlan Murdoch, although there was also an issue about the timing as the weeks dragged on and, to be fair, it might have rambled a bit, not unlike this, as I tried to include as much as possible. Even so, there was no suggestion of reworking it for a later date so the opportunity for someone in the media to write the really big piece on Victoria Inc had passed by again. I accepted a $500 ''kill fee'' from The Australian and that was the end of it.
THE DAILY TELEGRAPH AND AGMS
After four fun months as acting business editor of the Daily Telegraph I went to Europe for another summer in 1998 and returned to accept a full time position as business editor in June. In October and November last year I did something quite unusual in business journalism after 10 years of frustration at the pathetic level of debate at company Annual General Meetings. Small shareholders generally do not know what to ask and institutions save their questions for the boardroom lunches. So I borrowed $80,000 and bought $120,000 worth of shares spread across 50 companies and then attended 25 AGMs, asking a raft of questions.
STOKES AND SEVEN - COMING TO MELBOURNE?
This included asking Kerry Stokes why Seven sacked all the journalists involved in the Today Tonight share scandal. The story was a finalist in the prestigious Walkley Awards yet Seven was clearly embarrassed by it. Kennett is known to be close to Stokes, who has called him the ''greatest salesman he ever met'' after the Premier miraculously made ''14 million public servants and 45 million departments'' disappear to rush through the tax-effective sale of coal research firm HRL to a syndicate led by Mr Stokes on June 30, 1994. With Victoria's share of Melbourne-based top 10 listed companies having shrunk from eight to four over the Kennett years (don't expect to read about this in the media), Jeff is keen to lure new headquarters to Melbourne. The rumor going around some media circles at the moment is that Seven has been offered as much as $40 million in incentives to relocate to Melbourne's Docklands. If Seven is going to win the AFL broadcasting rights next year, being a Melbourne-based company with the backing of Premier Kennett could be very important.
KENNET T AND THE PACKERS - VERY CLOSE
However, the Premier is believed to be even closer to Kerry Packer and actively pushed the case for his flagship listed company PBL to take over Fairfax when the Howard government was trying to relax the cross-media ownership rules in 1997. This would have further reduced media diversity. James Packer attended the Liberal Party celebrations after the 1996 Victorian election win and Nine has not done anything noticeably heavy on Victoria or the Premier personally over the past few years. At least the ABC's flagship current affairs program Four Corners has had a serious go on issues such as the ousting of the DPP, the Intergraph contract, the casino tender process, Kennett's share dealing and corruption in the Victoria Police. Naturally, the Premier refused to co-operate or answer questions on any of these programs, or acknowledge the issues they raised afterwards.
Paul Lyneham came up with a cheeky segment on larrikin Jeff for 60 Minutes last Sunday, but that largely repackaged what is already known. It is also important to note that Packer's PBL has seen its shares rocket more than 50 per cent since announcing a takeover bid for Crown casino last year. Equally, observers sometimes overstate the direct influence of proprietors. For instance, Lyneham's very hard hitting piggery story on Keating earlier this year was anything but a conspiracy by Packer to get back at Keating. Lyneham simply had a great story from Keating's former partner. The fact that Keating never sued says a lot about its accuracy. (I am equally confident of not getting sued for anything on this website as it is accurate and factual.) This was one instance where Daily Telegraph editor Col Allan, who is close to Keating, got it wrong. The Telegraph at first ignored the 60 Minutes piggery story and then set about attacking Packer and Keating's former partner, Al Constantinidis. Attacking Keating and demanding answers would have been the more appropriate course to take. Last year I sent Daily Telegraph police reporter Charles Miranda to the PBL AGM to ask a few questions but he was comprehensively demolished by Kerry Packer who showed much fatherly protection for son James during his first attempt at chairing an AGM. It will be interesting to raise some of the issues discussed here at this year's PBL AGM.
PACKER INFLUENCE AT FAIRFAX
I also went to the John Fairfax annual meeting and asked questions about why some of its directors were associated with Kerry Packer when it is against the cross-media ownership laws for him to influence Fairfax. I opposed the re-election of long time Packer adviser David Gonski and questioned the relationship chairman Brian Powers still has with Packer. Powers was the managing director of the Packer empire for five years and one of his closest associates. Now, all of a sudden, he is the independent chairman of John Fairfax. Powers' shareholding in Fairfax is funded by a loan from the Packer camp. Hudson Conway chairman Sir Rod Carnegie's seat on the Fairfax board brings to three the number of directors seen to be closely associated with the Packer camp.
TAKING ON WESTFIELD'S FRANK LOWY
At the Westfield Holdings AGM, chairman Frank Lowy gave me a fearful tongue lashing in front of Fairfax chief executive Fred Hilmer, Gonski and Dean Wills, the man who ran Coke in Australia. These three men are commom to the Fairfax and Westfield boards. Lowy is Australia's second richest man and has built his fortune through the Westfield shopping centre empire. This effectively means that Fairfax has close to a majority of directors who are either close to Kerry Packer or on the board of Frank Lowy's Westfield Holdings. So Fairfax papers are meant to be fiercely independent yet its board has close connections with Australia's two richest men.
As Fred Hilmer and Financial Review publisher/Editor-in-Chief Michael Gill pondered the question posed on Friday, September 3, about rehiring me after I was ruled ineligible for Burwood, it would be interesting to know who they consulted. Did they anticipate the heavy calls that would come in from the Kennett camp? Did Fred think what his Packer and Lowy friendly directors would say? In the two months I had the Rear Window gossip column, the Packers and Frank Lowy probably got more aggressive treatment than anyone else, with the possible exception of Jeff Kennett. The brief was to write a hard hitting column and hard it was. Frank Lowy was up for a quick chat during an adjournment of a Westfield Trust unitholders meeting last month so I asked who else was on his boat which had been spotted in July off St Tropez in the French Riviera. ''Just some friends,'' he replied. When pressed he said: ''I can tell you but you won't write it: Fred Hilmer". Much to Fred's credit, I asked the Fairfax internal PR manager, Bruce Wolpe, if he had any concerns if I mentioned the boat trip and he said no. I had planned to write it but got caught up in other things. Fred was asked at last year's Westfield Holdings annual meeting about any potential conflict with staying on the Westfield board now that he was leading Australia's best respected newspaper group. He said there was none. I would submit that a Fairfax chief executive should have absolutely no outside business interests.
THE PUBLISHER/EDITOR MODEL AT FAIRFAX
Since Fairfax has adopted the publisher/editor model, whereby the person running the business of the paper also has editorial control, two people in this new position have rejected my services after saying nice things about the journalistic performance. Clearly, Steve Harris at The Age did not have the stomach to hire me for fear of a boardroom backlash when the plan was to improve relations with the Victorian Premier. He was hired to start mending fences and The Age has certainly been less critical of the Kennett government since he took over from Bruce Guthrie. The Michael Gill decision is less clear cut as to take me back on The AFR would have required some serious humble pie eating on my behalf, although I'd only been gone three days when ruled ineligible. Even so, The AFR is now advertising for a new Rear Window editor after rejecting the services of someone they professed to like. If it had been a decision of the editor alone, there is a good chance none of this would have happened.
THE AGE AND THE HERALD SUN AFTER FOUR CORNERS
After Four Corners went to air, the Harris-chosen new editor of The Age, Michael Gawenda, insisted that two paragraphs be inserted into an editorial about my revelations which questioned why it had taken me so long to tell the story. This had been explained in a piece I wrote in the Herald Sun that morning. A couple of senior journalists on the paper rang me to express their concern. After all, since when do newspapers question the motives of whistleblowers? They are the lifeblood of journalism. I hope you read this Michael as I also know that when you went on 3LO with Jon Faine that morning and said there was nothing much new in the revelations, you met the Premier for lunch later that day along with the man running your business, Steve Harris, The Age's state political editor Tony Parkinson and Kennett media man Steve Murphy.
Of course, there was a lot new in the ABC program, even after heavy legalling by Four Corners. Firstly, it completely blew out of the water the Premier's claims that his wife can do what she likes and it was none of his business. Secondly, it revealed the crucial role of Laurie Cox in the Yates purchase for the first time. At least The Age put the story on page one, unlike the Herald Sun which put it on page two, the place for dull but worthy stories. Then again, in Melbourne the Brownlow medal winner is usually a walk up start for page one on the Herald Sun. I was forced to defend this on 3AW the next morning and fudge about why the Herald Sun did not get the story. The truth is that the story was probably too hot for the Herald Sun, although I did not offer it with a lot of gusto. But, ironically, Lachlan Murdoch's only question to editor Peter Blunden was why the Herald Sun did not have the story, so Blunden faxed several front page stories from the previous year's share revelations saga to justify his more modest coverage this time around. After negotiating for months with Four Corners so that the Herald Sun could have a taste of the revelations on the Monday morning the program appeared, the paper ended up not running the preview story provided on the grounds there was ''nothing new'' in it. The Courier Mail in Brisbane found it interesting enough to run.
KENNETT'S TOUGHEST CRITICS - THE INTERSTATE MEDIA
Remember how it was The Sydney Morning Herald that first really exposed WA Inc and how Sydney-based Chris Masters exposed corruption in the Bjelke Petersen era in ''The Moonlight State'' on Four Corners. Well, surprising as it may seem, it was The Sydney Morning Herald that was toughest on the Premier's share trading after Four Corners. The coverage in Melbourne left me believing that the only way to get the Premier to focus on these key ethical issues would be to run against him in his own seat. After almost two year working for the Sydney media, I now believe that NSW Labor Premier Bob Carr would not have survived doing what Jeff Kennett did. The Sydney media is far more robust and fearless in its coverage. It was the SMH that dared to pry into Cheryl Kernot's relationship history and which ran a convincing campaign leading up to the last NSW state election exposing ''the secret state''. It also campaigned effectively against ''The Secret Games'' and led the charge against Sydney shock jock John Laws over his grubby deal with the Australian Bankers' Association. Surprisingly, they have so far been silent about the issues raised on this website, including the media culture in Victoria. The Australian, which is based in Sydney and has conducted itself with great dignity over the past two weeks, recently labelled Victoria the most secretive state yet you do not see either The Age or the Herald Sun running campaigns to lift the veil of secrecy in Victoria.
The Herald Sun did not even deign to editorialise about the Four Corners program when most other papers around the country did. In the Sydney Morning Herald, Alan Ramsay wrote a searing comment about what he called the Premier's fatuous defence, Deborah Snow wrote the best extended Saturday read by far. And take this as a sample from the Sydney Morning Herald editorial.
''To allegations that he improperly dealt in shares and misled Parliament, the Victorian Premier Mr Kennett says: ''They are not new and they are all on the public record.'' That might have served in the past to brush aside doubts. But no longer. Mr Kennett's previous accounts of share transactions in the name of his wife Felicity are now clearly contradicted by a credible first hand witness, his former press secretary, Mr Stephen Mayne. Mr Kennett now has detailed allegations to answer, following Mr Mayne's appearance on the ABC-TV program Four Corners on Monday. The fact that Mr Kennett declined to respond to these allegations in the same program simply increases the need to do so now. His reasons for not giving an interview to the ABC are fatuous. He would not be interviewed, he said, because the ABC is "an abject waste of taxpayers money'' and the Four Corners program ''was born out of jealousy and hate''. The attitude implicit in that simply feeds the suspicion that Mr Kennett is running away from questions he does not want to answer.''
THE SNUGGLE KENNETT COMPETITION IN MELBOURNE
Why couldn't a Melbourne paper be as pointed as that? Because at the time The Age and the Herald Sun were virtually in a competition to see who could snuggle closer to the Premier. Kennett was simply playing them off against each and easily got through the allegations. Compare what the Premier did with poor old Tasmanian Senator Brian Gibson who resigned because he owned some Boral shares when he approved a meaningless energy futures trading licence in Victoria. So what.
By way of contrast, Mr Kennett used the influence of his office to secure a $38,000 share allocation in Guangdong, which was the same as two multi-billion state institutions. He then deliberately placed them in his wife's name to avoid disclosure and provided a taxpayer funded reception for a cladding company based in Hong Kong. He says he did it because it was good for Victorian business. The truth is he knew it would be good for his bank balance as the stock was so hard to get. The Premier is acutely aware about money and how to make it, yet this is completely off limits in Victoria. Why can't Steve Harris show the same courage now that The Sunday Age did when he and Bruce Guthrie chose to run the piece in the early 1990s on Paul Keating's personal finances? Based on what 60 Minutes revealed on the piggery, it is certainly worth exploring. Sure, Keating rang and complained bitterly at the time, but that is what journalism is all about. Remember the famous British media baron who said: ''News is everything people want to suppress. The rest is advertising.'' In Victoria, there's a bit too much free advertising creeping into the news pages and advertising man Jeff Kennett loves every word of it.
COMPETING TO WRITE THE KENNETT BOOK
One other example of the two Melbourne papers sucking up to the Premier is the issue of the agreed Kennett biography. When The Age's newly appointed publisher/editor Steve Harris poached Tony Parkinson from the Herald Sun and lined him up to write the book, the Herald Sun's Peter Blunden immediately lined up John Hamilton to write a rival book. Both papers were clamouring to get the best family photos. I had a conversation with Parkinson after Four Corners in which he said he wanted ''hard documents'' before he would accept allegations of wrongdoing against the Premier. As if something like Guangdong would ever be put down on paper! Parkinson now has the field to himself as Hamilton has decided one biography, that of disgraced former WA Premier Brian Burke, was enough. So we can all look forward to Parkinson's warts and all account. Hopefully, he will use this website as a reference point.
COL POT AND THE DAILY TERRORGRAPH
After more than a year as business editor of The Daily Telegraph, I was promoted to chief-of-staff in December 1998, but quit after three months because I was no good at co-ordinating the ambulance chasing in a city I did not know. It's business and political journalism or gossip for me. The plan was to go travelling for up to a year, play some tennis in Europe and maybe do the AGM series in London. Running against Jeff was also an option but when The AFR persuaded me to return after three months, this was ruled out. My time at The Daily Telegraph under the fearless and often brutal editor Col Allan taught me a lot about how newspapers should serve the community. When Sydney's water crisis broke, Allan did a photoshop of an African woman carrying a bag of maize on her head with Bob Carr's head super-imposed over the face, reflecting the third world nature of the problem. He is fearless. No politician ever tells him what to do and management often tear's its collective hair out when Col runs front page headlines such as: ''A Nation of Bastards''. This related to a survey which showed the amount of children born out of wedlock had risen.
SUPER WINDFALL BY STEALTH
When the Carr government and the NSW opposition conspired to put through its notorious ''thief in the night'' superannuation increases for all current and former state MPs in 1998, the Telegraph went absolutely feral, as did the Sydney Morning Herald. Within days Carr had backed down. With the blessing of Kennett, the Victorian Parliament conspired to do something similar late at night and The Sunday Age broke the story but no one else really followed it. The amount Victorian taxpayers owe their current and former MPs in super has rocketed from $80 million to more than $130 million over the Kennett era.
EXTRA RETIREMENT BENEFITS WITHOUT CABINET APPROVAL
Similarly, if Bob Carr had universally granted himself $200,000 a year worth of extra retirement benefits such as a a fully serviced office with secretary, 12 free business class flights for hubby and wife and a chauffeur driven car, the Sydney media, and its citizens, would have been in uproar. Victoria's Premier did exactly that and simply dismissed it as being just like business, which is complete rubbish. If a chairman of a company wanted to increase his retirement benefits he would need board and shareholder approval. The Premier did not take his better resourced retirement proposal to Cabinet. He just universally approved it - and got away with it. If he works for 10 years after retiring this will probably drain the public purse another $2 million, on top of his $1.2 million-plus superannuation package. And still no-one has ever written the story about the Premier and his love of money and the perks of high office.
THE MILLIONAIRE DAUGHTER OF A CABINET MINISTER
Similarly, if Michael Knight's daughter was earning $500,000 a year from a consultancy deal with the Carr government which did not got to tender, the Sydney press would be baying for blood. This is exactly what one daughter of a Victorian Cabinet Minister has done and the Premier had to personally sign off on the charge out rate which was several hundred dollars an hour. She may be very good, but surely things like this should go to tender. This revelation has now been on the website since Sunday, September 5, and only one journalist has rung to ask who the person is, but the story has still not appeared anywhere. In any other state it would be a front page story. Even the woman concerned is surprised it has never generated any political heat for her dad or the government.
THE FREE BIKE, THE GOLF JUNKET
And can you imagine if Bob Carr got a $1600 taxpayer funded exercise bike for his home? That is what Jeff did. And what if Queensland Premier Peter Beattie took a four day all expenses paid golfing trip in Scotland with Swiss-American investment bank CS First Boston, which has earned almost $90 million from selling Victoria's power assets? CSFB managing director John Wylie has now been appointed chairman of the MCG Trust and the Premier did not make any adverse comment when it was revealed he charged taxpayers $700 for a night in a Hong Kong girlie bar with prospective bidders for the Loy Yang A power station. Wylie did a superb job selling the power assets, but what message does this episode in Hong Kong's Popeye Club send to the community about standards in Victoria. Wylie has probably collected more than $10 million from the great Victorian power sell off. Why did he need to charge the taxpayers for this one?
SHUTTING UP CHES BARAGWANATH
This litany of media inadequacy became too much when I started writing Rear Window for the Financial Review in July. Here are some of the things that I wrote which were completely ignored by the Victorian media. Discussing Auditor-General Ches Baragwanath, Kennett's media man Steve Murphy told two journalists over dinner in 1997 that:
''We are going to shut that c___ up''.
This completely contradicted the Premier's claims that reforms to the AG's office were designed to conform with national competition policy requirements. Radio station 3AW, which after the Herald Sun is probably Kennett's second most important media power base in Victoria, is unlikely to get too aggressive about the hounding of the Ches. John Dahlsen, chairman of the Herald & Weekly Times before Murdoch bought it in 1987, is a director of 3AW's parent company Southern Cross Broadcasting and was one of the three member panel which recommended neutering the Auditor-General's office. Dahlsen was also a director of the Sandridge development company which was the subject of a scathing report by Ches about 10 years ago. Of course, that made him the perfect person to ''independently'' review the AG's office. Not.
Being the chairman of Woolworths, Dahlsen is also a big fan of Jeff for introducing 24 hour shopping in Victoria. Former Crown casino director and Hudson Conway auditor Ken Spencer was another member of the audit review panel. Who could forget when Ches revealed that Victoria's Treasury department had valued Crown's additional 150 gaming tables at up to $259 million when the casino sub-committee of cabinet, still chaired by the Premier, had approved them for additional licence payments of $85 million in today's dollars. Ken Spencer is a well regarded accountant from KPMG, the auditing firm for many big companies and failed merchant bank Tricontinental, but these perceptions of a possible conflict of interest should be avoided at all costs. KPMG also made almost $40 million advising on Victoria's great $29 billion power privatisation program, so the Kennett government is one of its most lucrative clients.
THE PACKER WING - MEDIA IGNORES IT
In the same column on July 23 this year, I revealed the comment by Kennett media man Steve Murphy about Packer paying $400,000 to the Premier settling a defamation action which paid for the renovations at the Premier's home. This, too, was completely ignored by the Victorian media, as was the item about the secret legal fees settlement News Ltd did with the Premier over his failed action against The Australian. The Premier was potentially up for $250,000 in legal fees but News Ltd and the Premier reached another secret settlement over this. The same item included the very juicy morsel that Lachlan Murdoch had suggested the Premier take up the post of chairman of the Herald & Weekly Times, a position presently occupied by Rupert's sister and Lachlan's Aunt, Janet Calvert-Jones.This bit of information came out of the Michael Kroger camp. He is very close to Janet's husband John Calvert-Jones, a former stockbroker who also spent about two years on the Crown board. So if Lachlan is talking to Jeff enough to want to give him a job were he to quit politics, it is hard to expect Herald Sun editor Peter Blunden to start giving the Premier too much of a hard time.
PEACOCK' $50,000 A MONTH FRENCH NUCLEAR FEE
Another interesting item in Rear Window was the revelation that Andrew Peacock was being paid $50,000 a month by the French government-owned nuclear power giant Electricite de France when it was bidding for Melbourne electricity distributor United Energy in 1994. Peacock, a close friend of Jeff's, was credited with keeping EDF in the bidding despite the furore surrounding French nuclear testing in the Pacific at the time. Eventually, French President Jacques Chirac sacked the chairman of EDF and announced it was pulling out the night before bids were due. This reduced the realistic bidders to two and the price received was only $1.55 billion. Every time the Premier turns on the light at his Surrey Hills home, he must wince at the fact the new owners, Kansas-based UtiliCorp and AMP, are enjoying paper profits on their equity of about 55 per cent.
If EDF and Peacock's consultancy had been thrown out earlier, taxpayers could well have fetched a better price because EDF's partner AGL might have had time to regroup. But this didn't stop Jeff claiming he was punishing French companies for testing their bombs and had ruled out a bidder for the next power company to be sold after United Energy. Pity he didn't rule out the one advised by Andrew Peacock which actually generated nuclear power itself and was owned by the French government. Couldn't get a more direct target than that. Peacock also collected a tidy fee as chairman of the Transurban bid committee, but that is another story. It will be interesting to see if he picks up much government work when he returns to Melbourne from Washington next year.
SOFT INTERVIEWS ON FM RADIO
By this time I realised that there was very little the Premier could do that would attract negative publicity in Melbourne. There is no independent watchdog such as ICAC in NSW or the CJC in Queensland. His popularity is enhanced by soft interviews on FM radio which attract the youth vote. Deb Clarke, who is married to Jeff's press secretary Steve Murphy, is naturally very soft in her questioning on TT FM each Monday. Similarly, the Triple M interviews each week are equally soft.
WHY DOES VILLAGE ROADSHOW GIVE MILLIONS TO LIBS?
No one in Melbourne's media has ever pondered if there is any connection between this and the fact that Triple M owner Village Roadshow has been the largest donor to the Liberal Party over the past three years, kicking in more than $2 million. Or was it something to do with the blocking of plans by US cinema company Reading to build a huge multiplex in the Premier's seat? Reading executives were shocked by the tactics used by Village Roadshow and Hoyts to get it blocked. Then again, the big donations could have related to favourable tax treatment Village was enjoying out of Canberra on film financing schemes. These have now been closed down. Whatever the connection it is a Melbourne one because Village Roadshow is controlled by Melbourne's Kirby family and the fundraising would have been secured by Ron Walker. The 14 Village cinemas at the Crown complex, which operate 24 hours a day, have also performed well ahead of budget since the permanent casino opened in May 1997.
TWO MONTHS AT THE AUSTRALIAN FINANCIAL REVIEW
While the Herald Sun has been know to gag columnists from writing about the Premier when he has complained loudly, to its credit The AFR never intervened with my column. However, the reason I resigned was that after being commissioned to write a major insider's piece on the Premier for the Saturday paper on August 28, Editor-in-Chief/publisher Michael Gill intervened and canned the idea before it had even been submitted. There was also an issue about which section of the Saturday paper the piece would run in, but Michael let his opposition be well known. This was highly embarrassing for me as I'd emailed about 30 contacts, including many Liberals, saying this piece was on the way.
Gill is no fan of the Premier's and wrote many critical pieces of him when covering Victorian state politics in 1992-94. As a press secretary I spoke to him every other day and was very impressed with his insights. However, just like Steve Harris at The Age, Gill answers to Fairfax chief executive Fred Hilmer and the Jeff-friendly board. Gill tells the story of Jeff being in for a boardroom lunch at Fairfax and embarrassing him in front of chairman Brian Powers. Jeff first took issue when a mildly critical editorial and then producing a copy of it from his suit pocket when Gill questioned the claims. As publisher of the paper, Gill probably had no say in the timing or content of the editorial, but Jeff was in their chipping away at him in front of the board, keeping the pressure on. It's all part of the carefully crafted strategy to get positive media coverage.
THE REASONS FOR QUITTING THE AFR
As the person who probably knows more about the Victorian business-political nexus than anyone else prepared to speak publicly, it was very disappointing not to be able to write this story for The AFR. Researching it merely served to raise my hackles again about the media's treatment and the ethical issues that are not widely discussed in Victoria. There was the prospect of writing a piece jointly with another journalist down the track, but Gill made his opposition to me doing a stand-alone piece well known. Sight unseen, he said the originally proposed piece sounded like it would contain nothing new. I would submit that an awful lot of the material in here is new and of great interest to many Victorians.
Frustrated at this latest apparent example of media timidity, I then proposed standing as an independent and taking leave without pay like every other independent. This was refused by Gill, so I was forced to resign despite both Gill and editor Colleen Ryan saying they liked the column. At the end of the day it was obviously a poorly researched decision taken spontaneously, as I was ruled ineligible for being on the NSW electoral roll and not having lived in Victoria for a month before polling day. How ironic that you live in Melbourne for 28 years and plan to run for the election arguing for more democracy, and then you are ruled out. Gill then ruled out any form of return to The AFR after I was ruled ineligible so here I am doing this, attempting to explain what on earth possessed me to run and the nature of my concerns.
PRO-KENNETT COVERAGE IN THE CAMPAIGN
I passionately believe that the Premier has avoided appropriate scrutiny with his powerful divide and conquer media tactics and knew it would be difficult to get much attention during the short campaign. I opened with a hyperbolic flourish calling for a Royal Commission and promising to dish the dirt, but was surprised at the modest coverage, particularly in The Age. Not surprisingly, 3AW left it alone but most of the TVs gave it a good run on Thursday night. On day two I called for the Premier to come clean on all his defamation settlements and outlined the Steve Murphy conversation about Packer and the renovations. While The Age covered it the Herald Sun completely ignored it and simply quoted the Premier attacking me. It was quite funny really. Jeff said when we worked together I was ''treated like a son'' and looked after when I was sick ''many times'', but now I was ''lonely'' and ''frustrated''. What about the issues I was talking about, boss?
EXPOSING MEDIA COMPLICITY
After another dreadful night of very little sleep, I took a decision on the morning of Friday, September 5, to publish the ultimate account of Kennett and the media on the internet and then focus on a direct mail campaign to all 17,000 houses in Burwood. However, when news came through I was ineligible to stand, I attempted to get my Financial Review job back. Gill refused to even speak to me about a possible reconciliation but word came back that he was immoveable. I was surprisingly calm on Friday but became terribly upset on Saturday after visiting my parents and seeing how distressed they were. That was when the first 11,000 words of this treatise was churned out and here we are now with an expanded version which hopefully lifts the veil on the Kennett media machine and some of the issues that just don't get talked about enough.
PARALLELS WITH 1988 AND THE VEDC
In essence, I believe the parallels in Victoria between 1988 and 1999 are very similar. In the 1988 campaign The Age failed Victoria by refusing to follow up the numerous breaking stories on the VEDC disaster being uncovered by Ben Hills in the now defunct Herald. Victorians are now not being given the full story on Jeff Kennett by any stretch of the imagination. We are going to the polls without an Auditor-General or a DPP who can charge politicians with contempt. We have a rampant premier, a compliant media and are not even being told who the next Treasurer will be. Jeff's conquering of the media in Victoria is a striking example of how the concentration of Australia's media ownership has weakened democracy. The public is being told less and less about what is going on and the election campaign is spent discussing Grand Prix games on the Premier's web site, use of the F word in advertising and the gag on all Liberal candidates from talking to the mainstream media.
GOODBYE TO THE NEWSPAPER DUOPOLY
It was for these reasons that I proposed running for Parliament - not that I really wanted to lobby for traffic lights on Burwood Road and lounge on the backbench for four years. After this appears I will be most unlikely to work for either of the newspaper duopolists again, but given their performance in Victoria I would frankly rather work elsewhere. It is not the fault of individual editors or journalists but rather the capitulation of boards and the lack of diversity of ownership. Kerry Stokes has his coal research facility in the Latrobe Valley, Kerry Packer has his casino and Channel 10 barely ever gets into investigative stories. The Packers and the Murdochs like Jeff and if our Premier had his way, the ABC would be closed down. Fairfax has to some degree been beaten into submission and 3AW just rides with the Premier to entrench itself as Melbourne's top talkback radio station.
WHAT NEXT - AGM AGITATING
With no prospective job in journalism, the next best thing is probably to go to all the upcoming annual meetings of the media companies and quiz then publicly on these and related issues. I was really impressed when the offer from The AFR came through this year despite me questioning them at last year's AGM and writing nasty pieces in The Daily Telegraph about Fred Hilmer's lack of newspaper experience and Kerry Packer's defacto control. Now, it is a slightly different story. How Kerry Packer's former right hand man can be chairman of Fairfax and Hudson Conway chairman Sir Rod Carnegie the only Melbourne director is beyond me. Fairfax is still looking for a director with some newspaper experience. How about putting a seasoned journalist or former editor on the board?
IN CONCLUSION
So what should come of all this? In conclusion, the media needs to better understand its role as the Fourth Estate. It should stick together on matters of public interest, rather than allowing themselves to be played off against each other by vested interests. Herald Sun editor Peter Blunden should work with The Age and the ABC in protecting the media's legitimate role in society. Instead, they are two of his pet hates.
Media proprietors should refer marauding politicians to the relevant journalist or editor and Fairfax should review its publisher/Editor-in-chief structure, as the ultimate editorial decision-making should not be taken by someone also charged with custody of bottom-line profits.
It would be great to see proprietors coming out strongly to support their journalists just as Rupert Murdoch did in 1995 when he attacked then Coles Myer Chairman Solomon Lew:
"Implied threats have been made to our senior management that unless we censored our journalists in criticising we'd lose the advertising,'' Rupert thundered. ''I think the most improper, thuggish behaviour has been engaged in by the leadership of - not just the chairman - but the leadership of Coles Myer."
Four years ago, this was an inspiration to us all. The campaign for change at Coles Myer gathered pace after this attempt to use business dealings to impact on editorial coverage was dismissed as improper in the most emphatic public way possible by Rupert himself.
So rather than having people like James Packer publicly declaring that Jeff Kennett is "fantastic", at the same time as the Packer camp was trying to buy Fairfax, now it's time to once again state the importance of independent, fearless journalism.
And lastly, it is important to deal with that old chestnut about how ''Jeff's been good for Victoria'' and therefore anything he does is tolerable. The reality is that Alan Stockdale was the man who deserves the most credit for ''saving'' Victoria. The Premier simply provides the political muscle and the showbiz, whilst also bringing a lot of the downside to the government. We don't need the attacks on democracy, independent watchdogs, secrecy, increases in benefits to politicians and so on and so on. In my view, a Jeffless Coalition government is the best outcome we can hope for on September 18, and I hope as many Burwood voters as possible get a chance to read this.
For anyone who has got to the bottom of this tome I have to say that there have been some tears along the way for me. I am deeply sorry to Colleen Ryan, editor of The AFR, for letting her down and disappointed I was not allowed to rejoin the paper. I would also like to thank my parents for all their love and support and the many friends, particularly webmaster Con, who have helped out and offered their support during this difficult time. Apologies to those who think this is one huge exercise in self-justification and likewise to anyone unfairly caught up in the collatoral damage of what is undoubtedly quite a bridge burning exercise. Then again, the media and public usually love a ''tell-all'' story. And this is exactly that.
Thanks for going the full distance. If you liked it, tell your friends.
STEPHEN MAYNE (stephen@maynereport.com )
September 1999
See the full jeffed.com website here.
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