Tele culture, News Ltd, sackable directors and Aussie Post
May 4, 2010
Here are the six stories Stephen Mayne wrote in the Crikey edition on Thursday, September 1, 2005.
1. The appalling culture of The Daily Telegraph
By Stephen Mayne
The bizarre thing about The Daily Telegraph getting on its high horse and hounding John Brogden over a morals issue is that the paper itself is the most immoral and unethical major metropolitan journal in the country.
I only had two years on the paper in the late 1990s, but this involved sitting in the daily news conference as business editor and later chief of staff. Coming from Melbourne, it was quite a culture shock to experience then editor Col Allan, whose conduct would include smoking in the office, urinating in his sink during news conference and regularly making racist and sexist remarks.
These were private and off the record comments to journalists, just like John Brogden's comments at the Hilton Hotel function on July 29. Now that the rules of engagement have seemingly changed, we may as well share a few more of these with the 28,000-strong Crikey army.
Muslims were regularly referred to as "towelheads" by Col Allan, whose personal industrial relations skills were the worst I've seen. One copy kid was screamed at and told he'd never get a cadetship when he brought the wrong utensil for Col to eat his lunch with.
During one Christmas drinks, it was suggested that respected columnist Sandra Lee be invited to join "the boys" in Col's office, to which he replied: "Nahh, no fat chicks allowed."
Brett McCarthy, now the editor of News Ltd's Sunday Times in Perth, would refer to the code of silence, saying that none of Col's appalling comments could ever be repeated outside the conference room. Everyone knew it would make a shameful catalogue that could force News Ltd to sack Col, but instead he has prospered under the culture and is now editing The New York Post.
Then you have the situation with John McCluskey, whose behaviour was tolerated by News Ltd for years before Fairfax hired him to be editor of The Newcastle Herald.
McCluskey's tactics included reading a copy of Playboy magazine in front of Miranda Devine when she worked on the backbench.
McCluskey allegedly had an encounter with one woman on the couch in the office of then editor John Hartigan and would later comment that he beat another more senior editorial figure to the conquest.
After McCluskey suddenly left Fairfax, Stuart Washington broke the story of a flood of complaints about him from women in The Eye magazine. When Washington was later interviewed for a job by Col Allan, the so-called legend confided that The Eye's story prevented him from getting McCluskey back into News Ltd as he'd hoped.
Then there was another Telegraph newsroom veteran who would jokingly say, "I've got one more copy girl in me."
If that wasn't enough, you then had the drugs culture to contend with. About 25% of The Telegraph's newsroom in the late 1990s were taking cocaine on a semi-regular basis. How this operation could sit as the moral guardians of Sydney is beyond comprehension.
By Stephen Mayne
With control of over 70% of Australia's newspapers, it is very rare indeed for an Australian journalist to lash out at News Ltd, let alone resign in a huff and publicly criticise Rupert Murdoch's unforgiving outfit. Therefore, Andrew West's decision to twice resign as NSW state political correspondent for The Australian this week is worth exploring in some detail.
There have only been a handful of examples over the years. One of the more notable was the resignation of The Australian's then political correspondent Gary O'Neil in 1980, when a front page story appeared during the Federal election campaign with his byline claiming Bill Hayden was contemplating a wealth tax.
The man who actually wrote the story was Russell Schneider, who is now CEO of Australian Health Insurers Association in Canberra. O'Neil, who rose to be Kim Beazley's most trusted adviser and is now the veteran Crown Casino spindoctor for Kerry Packer, announced his resignation on AM the morning the story appeared, not unlike the way Andrew West rang in to PM last night to briefly discuss his resignation.
It was David Penberthy's misrepresentation to PM of his position that prompted West's public comments. Check out the Penberthy interview here and West's response here.
Penberthy claimed the following:
"Well this is the second time that this has happened in less than a day with Andrew West because yesterday he offered his resignation to the editor of The Australian because he knew about the story which appeared in The Sunday Telegraph and failed to write it. So yesterday he was beating up on himself for not putting on his tabloid hairshirt and having a crack at the story and today he's decided to head off in a new direction and chuck it in as some sort of protest against the fact that the story appeared in our paper. So, I'm not entirely sure which direction Andrew West is heading in."
West responded as follows:
"Yes I've just heard David Penberthy misrepresent me but I'm not surprised. It is true that I offered my resignation on Monday because I was asked why I had not followed up the unsubstantiated gossip that was published in The Sunday Telegraph. I said, if this is the sort of thing you want me to do I will resign. I did not regret not following that story up. I said, do you want my resignation? My resignation was offered on Monday because I said I wouldn't be doing this kind of reportage. David Penberthy has misrepresented me, but then that is hardly surprising. I mean, if John Brogden was too young to be the leader of a political party I wonder how mature Mr Penberthy is to edit a major, metropolitan newspaper."
The reason that West followed through and resigned again yesterday was because The Australian refused to run his comment piece attacking The Daily Telegraph and included his byline on a front page story containing salacious gossip when his contribution was just one paragraph. MEAA President Chris Warren has sent this letter to The Australian outlining West's position.
Amanda Meade mentioned West's resignation in today's Media cover story and The Australian belatedly ran his attack on The Daily Telegraph today, albeit briefly and not on its website.
4. How about some "do unto others" justice for News Ltd?
By Stephen Mayne
Just what will it take to make News Ltd see the error of its ways with the The Daily Telegraph's final onslaught against John Brogden's reputation? The paper completely refused to give an inch yesterday, so maybe it is time for a little bit of "do unto others" justice.
News Ltd CEO and chairman John Hartigan has long been a bloke who loves a beer and a chat with his favourite journalists, whether that be Rebecca Wilson, Dave Penberthy or Col Allan. When he was appointed CEO in October 2000, Sydney Morning Herald journalist Anne Davies wrote the following in a profile:
Harto, on the other hand, is steeped in the culture of the News Ltd newsroom. He is the quintessential journalist, showing the best and worst traits attributed to the profession. He's charming, urbane and bright. Perhaps too charming. In recent years he's become something of a health fanatic, but that is not the first thing that springs to mind when you ask colleagues to talk about him.
The bulk of his exploits at the now-demolished News Ltd watering hole, the Evening Star, are unprintable, even in the business pages. What can be said is that he is – or was – a ladies' man, who occasionally liked a drink or three.
Jeepers, imagine if some of these stories started coming out?
Then you have the fine record of Daily Telegraph editor David Penberthy. One emailer to Crikey today has claimed that he proposed a threesome when drunk at a pub in Sydney four years ago. Who knows if that is true? We haven't checked and it is unsourced gossip, but given the News Ltd culture, Penberthy will probably be hailed as an even greater legend.
As Crikey reported two years ago, Penberthy reached for what he thought was a glass of coke next to his bed after a drunken post-budget function in Canberra and actually sipped a glass of red wine. The result was a projectile vomit and when this surfaced in Crikey, his then editor Campbell Reid called him to say he was a legend. What a role model!
Penberthy started out as an Adelaide University Trot, but his editorship of student newspaper OnDit was embroiled in controversy when he ran a large photograph of an indigenous Australian under the headline: "This man wants to take your land."
It was meant to be a shot at the Liberal Party but, unfortunately for Penberthy, the indigenous Australian had recently died so he found himself the subject of a full anti-discrimination process.
It would also be interesting to know how Glenn Milne, who got the ball rolling against Brogden with his Sunday Telegraph story, would feel if a "dossier" on his past made it into the public domain. Milne is married to Crosby Textor's Canberra boss Jannette Cotterell, a friend of controversial Liberal senator Ross Lightfoot. Given that News Ltd is openly saying "senior Federal Liberals" were the source of the stories, the Crosby Textor bunker is surely feeling a tad uncomfortable at the moment, especially given the emphatic denials of any involvement from Tony Abbott yesterday.
By jingo, there are just so many stories to tell if the rules of engagement really have changed!
6. With Lachlan gone, it's time to sack Dave Penberthy
By Stephen Mayne
Lachlan Murdoch formally finished his executive duties at News Corporation yesterday, which surely clears the way to fix up another one of his mistakes – the appointment of fresh-faced David Penberthy as editor of The Daily Telegraph at the tender age of 35.
Penberthy's appointment in April this year came as a huge shock because it bucked the traditional News Ltd trend of training up promising young editors on smaller papers in Perth, Brisbane or Adelaide before giving them a major competitive editorship in Melbourne or Sydney.
Instead, Lachlan took a huge personal shine to Penberthy after several cosy meals together and he was fast-tracked – a decision which has now caused the paper its greatest crisis in recent years.
Unlike John Brogden, who did the decent thing and resigned on Monday morning, The Daily Telegraph is refusing to admit it did anything wrong.
First we had this story quoting its discredited spindoctor Greg Baxter, who came to News Ltd after helping mastermind James Hardie's asbestos backsliding. It appears to contain a threat to the Liberal Party dirt pushers who fed News Ltd's tabloid hounds the stories:
"The source of the original story (which led to Mr Brogden's resignation) came from within the Liberal Party itself, and the new source about the fresh allegations also came from the Liberal Party, including at very high levels of the Liberal Party," Mr Baxter said. "People need to be very careful about pointing the finger at The Telegraph."
Be careful about what, Greg? Surely, you would never out a source. After taking the high moral ground over Herald Sun reporters Gerard McManus and Michael Harvey, such an indiscretion when the paper was under attack would reflect very poorly on News Ltd ethics. Narrowing down the source to very senior Federal Liberal players is already extraordinarily indiscreet.
After doing several radio interviews during the day, Dave Penberthy wrote his own statement for The Daily Telegraph's website which did not take a backward step and included the following lines:
Yesterday we investigated these new allegations – these allegations were very serious. These people came forward. They weren't invented by us. It is perfectly legitimate, in fact it is our duty, to investigate well-founded allegations and to report on them. We chose to do so yesterday because he has chosen to remain in public life by staying on as the member for Pittwater. He therefore remains a legitimate public figure.
Hmmm. Channel Seven reported last night that it contacted the two journalists involved in the new allegations and both denied speaking to The Daily Telegraph.
Remarkably, the shameful splash is still on the paper's website. Read it carefully because it really is pretty thin stuff. Only one woman is named and her crime was simply being friends with Brogden when she worked for him.
Now that Lachlan is gone and John Hartigan has complete control of News Ltd's Australian newspapers, he really should sack Penberthy and dismiss his appointment as just another one of Lachlan's blunders along with Super League and One.Tel.
23. Crikey hit list: executive directors who should quit
By Stephen Mayne, shareholder activist and serial board candidate
As we count down to the 2005 AGM season, one trend that is likely to appear is big votes against the re-election of surplus executive directors on boards. Chris Corrigan's Patrick Corporation got a rude shock in January this year when executive director Maurice James suffered a protest vote that almost got out of hand as 35% of the stock voted went against him.
With this in mind, Crikey has drawn up a hit list of executive directors who are surplus to requirements and should bow out gracefully. All of these directors are on boards where there are at least two other executive directors. In an era of non-executive directors keeping management honest, investors don't want more than two executive directors on any board.
Babcock: Martin Rey, James Fantaci
Billabong: Paul Naude, Craig White
ABC Learning: Matt Loveday (CFO)
Harvey Norman: Brew, John Skippen, Slack-Smith
Macquarie Bank: Laurie Cox, Mark Johnson
Macquarie Infrastructure Group: Nicholas Moore, John Roberts
Metcash: Wesslink, Jardin, Jablonski, Jankelowitz
Multiplex: Roberts (one of three should go), Corcoran, Ross McDiven
News Corp: David Devoe (CFO), Chase Carey (CEO Hughes)
Patrick Corp: Maurice James
PBL: Rowan Craige, Sam Chisholm
Rio Tinto: Richard Goodmanson
Seven Network: Bruce McWilliam
Spotless: John Bongiorno
Westfield: Steven or Peter Lowy
This list is only drawn from the top 200 but if you can track any others, please email smayne@crikey.com.au. We'll be keeping an eye on the re-election prospects of our hit list. For instance, it is very interesting to see that Stephen Hauville quit the Harvey Norman board yesterday. He was only responsible for the relationship with electrical franchisees, a relatively junior position for someone to sit on the board.
Gerry Harvey should lose at least two more executive directors and appoint at least three genuinely independent, non-executive directors, because at the moment he hasn't got any.
26. Why Aussie Post should be sold
By Stephen Mayne
We've let it slide for a few days, but last week John Howard made the following comments about government ownership of Australia Post during an interview with Tony Jones on Lateline:
TONY JONES: If the principle of selling off government-owned enterprise is so important, why have you ruled out selling off Australia Post?
JOHN HOWARD: Because we believe the public interest in maintaining Australia Post exceeds the public interest in selling it in that there are some services, the basic services provided by Australia Post have to attract an ongoing government subsidy in a way that the services provided by Telstra, because of the capacity through its commercial operations to cross-subsidise, does not require.
TONY JONES: So this important principle of selling off Government enterprise is, in fact, a flexible one?
JOHN HOWARD: No, the principle is you sell them if the company and the enterprise is going to operate better without government control. That is the principle and in the case of Australia Post it is not commercially viable to provide the basic letter service without having a company run by the Government and for the time being, I think well into the future, we won't be proposing any sale of Australia Post.
CRIKEY: This is a pretty flimsy argument in light of what is being said about Telstra. The basic letter service is not much different from the basic telephone service, in that it requires plenty of cross-subsidisation in rural and regional areas. You could sell Australia Post and enshrine its basic letter service in the same way that the government is laying down the regulations for Telstra once it is fully privatised.
If the government has a conflict of interest from regulating its own telco, that very same conflict exists with owning and regulating Australia Post, which reported a record net profit of $371 million in 2003-04, up from $331 million in 2002-03. Check out its annual report here.
It also teamed with Qantas to shell out $750 million for Greg Poche's Star Track Express business last year, thereby increasing the trend which already sees a majority of its revenue coming from competitive parts of its business.
If anything, Australia Post should be privatised because it has so successfully used the power of its basic letter service monopoly and branch network to take huge share from its commercial competitors.
Then again, even Maggie Thatcher drew the line at flogging the Royal Mail, but some wags reckon this was because the Queen appeared on so many millions of stamps. Could that be why our Monarchist PM thinks it is fine to sell off Defence headquarters in Canberra (could anyone imagine the American selling The Pentagon?) but Aussie Post must remain the last commercial business in the hands of the Federal Government.
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