Donations, The AFR and upcoming talks

July 16, 2008

Here are Stephen Mayne's five stories from the Crikey edition on Thursday, February 2, 2006.

1. Why people donate to political parties

By Stephen Mayne

There are just so many fascinating vignettes in the political donations avalanche that it all becomes a little overwhelming. Here are a few snippets that we'll endeavour to keep running throughout February and keep the insights coming.

The Halliburton cash
Trying to keep below the radar was Dick Cheney's old firm Halliburton which used its Kellog Brown & Root division to give $5000 to various Liberal and ALP state divisions. Halliburton built its profile in Australia when it bought the old Kinhills engineering consulting outfit and it was dealing with all sides of politics to win a big contract on that white elephant known as the Darwin-to-Alice rail line.

The Chiekh of it all

Queensland developer George Chiekh is on the Crikey Revised Wealth (CRW) list but his fortune is very much dependent on favourable planning decisions by the Queensland Government after he spent $160 million buying up land in Ripley, near Ipswich. The Courier Mail recently reported that he's reneged on a sponsorship deal with the Brisbane Lions and there was also talk of one project suffering financial problems. Hmmm, what to make of all this given that Cheikh's companies emerged as close to the largest corporate donor to the Queensland ALP in 2004-05. Cheikh is also quite chummy with Paul Pisale, the Labor mayor in Ipswich.

The Liberal donor working for Peter Beattie
Former Liberal staffer and reality TV show contestant Joshua Kennedy-White has continued his personal largesse to the Liberals, donating $20,000 in 2002-03, $14,000 in 2003-04, and $10,000 in 2004-05. It only remains to be seen whether he can keep up the rate of donations in his latest job...working for Peter Beattie.

Explaining those Democrat preferences and Family First
Did the Australian Democrats really pick up $4,250 from the Australian Christian Lobby? Does that explain the preferences to Family First at the 2004 federal election? Meanwhile, Family First's big donors really attracted some attention this morning as this report in The Australian shows. The $200,000 from MYOB founder Craig Winkler has surprised many observers, but at least he did it as an individual.

What about the $55,000 caravan?
Crikey hears that one Federal backbencher in a regional seat was given a caravan worth $55,000 by a donor (which he first used to take his family on holidays at Christmas) to use in the 2004 election campaign, even though this donor had given at least $100,000 to his campaign over the previous year. Has this been disclosed? We doubt it.

Ross Cameron – fund raising powerhouse
He might have lost his seat of Parramatta in 2004 after confessing to serial womanising, but Ross Cameron is said to have been a fund raising powerhouse for the Liberals leading up to the campaign, raising an estimated $750,000.

Giving $25,000 back to the local pastor
One Federal Liberal donated $25,000 to a local pastor during the election who in turn told his flock in all five services, something to the effect of "I'm not telling you how to vote, but (name withheld) is here today and he's been a good friend of ours for a while now."

Oh dear. Keep all these lovely vignettes coming to

2. Political donations - grubbiness tolerated again

By Stephen Mayne

Another year, another disappointing effort from the nation's me dia to adequately cover the array of stories that emerged from the thousands of political donations dumped on the AEC website at 9am yesterday morning.

After yesterday's spoon-fed scoop about the outrageous $1 million gift to the Liberals by dodgy tax haven based British Lord Michael Ashcroft, The Australian produced the best coverage today across all of page 4, although The AFR also did a reasonable job.

The Age was pathetic by comparison with just two stories on the bottom of page 8 and not even a decent table or graphic to show who gave what. Even worse was the Herald Sun which could manage just one story on the bottom of page 29, although at least they had a table.

Perhaps the Melbourne tabloid feels constrained by the fact that Rupert Murdoch's sister, Janet Calvert-Jones, is chairman of the Herald & Weekly Times and her husband John Calvert-Jones replaced Malcolm Turnbull as Federal Treasurer of the Liberal Party in 2003-04. Dame Elisabeth Murdoch's $25,000 donation to the Liberals in 2004-05 also makes it a little difficult for the paper to start campaigning on this issue, although they're giving the ALP's problems in Geelong a good belt at the moment.

Across town, The Age now has to deal with having Ron Walker as chairman of Fairfax, and he's the most successful political bagman in Australian history, having raised $170 million for the Liberal Party over a decade. There's something rotten in a system that sees the fourth estate, supposedly fearlessly independent media companies, run by people inextricably linked to the funding of political parties.

We've commented before that media companies have the worst corporate governance of any sector but they are also increasingly playing the grubby political donations game.

No public company has given as much over the past 12 years as Village Roadshow, owner of the Austereo FM radio network. Despite continuing appalling shareholder returns, the Village empire coughed up about $500,000 in 2004-05. The Kirby family, which controls Village and is supposedly worth $300 million, could at least spare their minority shareholders the expense of it all.

Then you have the Packer empire which is famed for exerting political influence, although Kerry's relationship with John Howard and James's hard work on Peter Costello meant they didn't even have to write out big cheques in 2004-05. All it took was a public endorsement before the 2004 election. John and Peter, you look so cheap.

Network Ten was for a long time out of the political loop in Canberra but the appointment of former PBL CEO Nick Falloon changed all that, and he persuaded his tight-fisted Canadian bosses to give the major parties $75,000 each last year.

Then you have the conservative forces at Rural Press. The company itself doesn't donate but controlling shareholders Tim and John B Fairfax are happy to contribute to the Liberals which might explain the conservative editorial line across its stable of publications. West Australian Newspapers didn't donate to the WA Liberals but their former CEO Ian Law hailed from Rural Press and he allowed new editor Paul Armstrong to take the paper aggressively to the right.

Whatever happened to the notion of a fearless and independent media campaigning for transparency and accountability and calling political issues on their merits? Australia's democratic system has clearly degenerated to a system when the major media companies are active participants in a grubby system of political fundraising and back-scratching.

The first rule of a media company should be political neutrality, yet even a mid-sized operation like APN News & Media decided to give $75,000 to the Federal ALP in 2004-05.

Given all this activity, it is hard to believe the media doesn't feel constrained in campaigning for donations reform that would clearly be in the public interest. John Howard is about to further weaken the system with increased tax deductibility and a higher threshold for disclosure, yet the media commentary has been muted to say the least. As Kim Beazley said yesterday, the effect of the changes will be to increase corruption.

However, it will also increase the amount available for spending by the major parties, much of which benefits the very same media companies which carry all the political advertising come election time.

18. Pollies who change parties mid-term

By Stephen Mayne

In light of the defection of Julian McGauran, Democrat senator Andrew Bartlett has written to Crikey requesting that we compile a list of politicians who quit their party mid-term. What a good idea. Andrew Bolt had an interesting column on this subject yesterday and here are 12 names to kick if off:

Gordon Ashley: former Liberal MP in Bayswater who will run as an independent this year
John Bradford: former Liberal MHR who stayed in Parliament as a member of Fred's CDP before losing
Mal Colston: from Labor senator to disgraced independent
John Devereux: ALP Senator from Tasmania who became an independent
Alan Rocher: dumped by the WA Liberals but then ran as an independent and later appointed consul-general in LA by John Howard
Kris Hanna:
South Australian Labor MP who defected to the Greens
Bob Katter: finally quit the National Party in 2000 and has twice won Kennedy as an independent
Cheryl Kernot: lured to Labor from the Democrats in 1997 by her then lover Gareth Evans
Meg Lees:
quit the Democrats to form the Progressive Alliance after being dumped as leader
Julian McGauran: former Liberal member who rejoined the party this year after 20 years with the Nationals
Shane Murphy: Tasmanian pro-logging Labor Senator who became an independent
Janet Powell: the third leader of the Australian Democrats defected to the Greens in 2004

We're going to try to have detailed explanations for each defection so send your contributions, additions and corrections to

26. Big changes at The AFR

By Stephen Mayne

Glenn Burge, the controversial editor of The Australian Financial Review, yesterday unveiled his biggest restructure of the newspaper yet, which has already elicited plenty of correspondence to Crikey and raised more concerns of creeping Packer influence inside Fairfax's most blue-chip publication.

The changes were triggered by the decision of managing editor John Hurst and deputy editor (business) Damon Kitney to seek new roles. Hurst, a 20 year veteran of The AFR, told Crikey this morning he wanted to spend more time with his kids and signalled the need for a change to Burge during his performance review last August.

Hurst was working the same 8.30am-8.30pm hours when I was on the AFR in 1999, but despite "a nice offer" to return to writing, he has chosen to pursue other interests that will allow him to see more of his 13-year-old twin boys and 10-year-old daughter.

Kitney will return to Melbourne to assist in the running of the bureau, do some writing and run special projects such as the annual salary and profit surveys.

Burge has selected two very good hands to step up. Paul Bailey, the current deputy editor (national and international) will effectively run the paper because Burge rarely attends either morning or afternoon news conference as he pursues a lot of commercial issues for The AFR. Insiders say that he aspires to take over Michael Gill's job as head of Fairfax Business Publications and therefore wanted a deputy like Bailey, who has experience as editor at The Bulletin and deputy editor of The SMH under John Alexander in the mid-1990s.

However, Bailey is not particularly strong on markets and companies, so Burge has done well to recruit former SMH business editor Jeni Porter to oversee that part of the paper's coverage. This completes The SMH takeover of The AFR but leaves the broadsheet's resources further undermined after last year's redundancies drained a lot of talent.

Burge and Bailey are known to be close to PBL CEO John Alexander and his key ally inside the Packer camp, Chris Anderson, himself a former SMH editor. However, the huge promotion of Anderson's son, Simon, into the role of news editor has got tongues wagging. That said, there is much relief amongst staff that someone will be replacing incumbent news editor Geoff Winestock who is not exactly the best people manager.

Burge hasn't nailed down all the changes as his memo said that Simon Anderson was "scheduled to take over as News Editor on Geoff's move to the writing role".

Similarly, New York correspondent Sean Ayler "is scheduled to take over from Robert Guy as Companies Editor." Guy is tipped to go to New York but this hasn't yet been finalised either.

The raft of other changes include acting online editor Jim Parker becoming markets editor, financial services editor Sally Patten becoming deputy news editor, current features editor Alan Stokes picking up additional responsibilities as deputy news editor and current Market Wrap editor Phil Baker becoming financial services editor.

As staff attempted to soak up all these changes, Burge concluded his memo on an upbeat note:

The AFR enters 2006 performing strongly. The newspaper will post higher circulation for the December audit. The new Smart Investor magazine has achieved excellent circulation numbers. I would like to thank everyone for their commitment to ensuring The AFR is performing so well, based on high quality editorial and a willingness to constantly examine ways to further improve the daily operation of the newspaper.
All up, it doesn't look like a bad package of changes, although such broad restructuring will inevitably cause some tension and the unpopularity of Burge has certainly triggered some of today's correspondence. Hurst is a loss, but Porter and Bailey will strengthen the paper in their new roles.

38. An avalanche of talk-fests

By Stephen Mayne

Spending an hour talking to 40 Victorian mayors at a training weekend last Sunday was fascinating, but there's no rest for the wicked as the coming weeks will see another four interesting debating sessions that are worth sharing with the Crikey army.

Apologies in advance for not filing any Crikey stories on Tuesday or Wednesday next week, but I'll be locked away for three days at Mirvac's luxurious Heritage resort in Victoria's Yarra Valley at this Future Directions forum discussing challenges for the nation. Chanticleer referred to it in The AFR today and doesn't it all sound oh-so lofty?

The guest list is said to be fascinating and the idea is to gather about 90 people aged around 40 to thrash out key issues that will confront Australia over the next 15 years. Several CEOs and politicians, a Howard Cabinet member, union heavyweights, various community and environmental luminaries, law enforcement types and a couple of journalists will literally be locked away to create the so-called island effect.

All delegates had to provide a 500 word statement on the key changes they would like to see in Australia over the next 15 years and these are currently online but only accessible by other delegates on a password protected website.

After being released back into the community next Wednesday, I'll be heading to Sydney Thursday for the Patrick Corp AGM, but that night there'll be an interesting forum back in Melbourne which is being put together by a new Australian version of the legendary Churchill Club, the biggest business and technology forum in Silicon Valley.

I'll be moderating proceedings on a panel seeking to answer the question: "How to put together a killer board." Drop us an email if you've got any advice on this. For instance, a lot of people say they'll never go near a board that has a dominant founding CEO or is too top heavy with venture capitalists.

After that, there is an interesting full-day seminar at the Melbourne University Law School on February 24 called "Corporate Governance - Managing Risk and Driving Value".

I'm the light entertainment over lunch, but the really interesting session features Macquarie Bank investment banking boss Nicholas Moore on a panel with corporate governance kingmaker Dean Paatsch, sceptical fund manager Anton Tagliaferro and Peter Doherty from Capital Research, the firm which clobbered the Babcock & Brown share price last year with a report saying it was hugely over-valued.

Finally, we've got separate functions in Melbourne and Sydney on April 5 and 6 for Chartered Secretaries Australia who are hand-wringing about the appallingly low level of debate at public company AGMs. Their flyer includes the following:
Is the AGM Dead? – New directions that will breathe life back into shareholder engagement

The AGM is not dead, but following another sometimes frustrating AGM season, many in the business community are concluding that AGMs are not achieving their purpose and are therefore a waste of time. The AGM seems to be just going through the motions rather than being an important annual forum for companies and shareholders to engage in a meaningful exchange.

It would seem that change is long overdue; however, there is a strong reluctance among companies, shareholder groups and investors to invest in "fixing something that ain't wholly broke." There are some proposed "solutions" to the current problems, but there are those who perceive them as increasing the complexity of engaging with shareholders and adding new and additional obligations, rather than simplifying the process. Others note this hesitation could be due to legislative and regulatory reform fatigue, whilst others suggest that the proposed solutions will increase shareholder participation and clarify the exercise of shareholder rights.