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How ABA tried to hang Kerry Packer

By David Flint - posted Tuesday, 3 January 2006


When the 1991 parliamentary committee into the print media subpoenaed Kerry Packer, which proved to be one of the great theatrical events of the decade, I had the good fortune to be in the front row of the committee room.

As chairman of the Australian Press Council, I was called to give evidence that morning. Forgoing lunch, I remained in my seat for what I suspected was going to be, if not informative, at least entertaining. Earlier, when I arrived in Canberra, I was told the committee was meeting in camera and there would be a delay. I heard later that the ABC had asked permission to televise the hearing, a rare event then. I suspected that the committee would regret its decision. The nation was able to see how the committee reacted to Packer.

And that was remarkable. From the moment he entered the room, the members did not seem to be the same committee. The high point was when Jeannette McHugh asked a question relating to an alleged warehousing of shares to evade the foreign investment restrictions. Packer exploded, citing the Costigan royal commission. McHugh replied, abjectly: "I'm sorry, Mr Packer."

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The most amusing moment was when Ian Sinclair, who seemed the least affected by Packer's presence, served himself a cup of tea. Packer boomed: "Hey! That bloke's getting a cup of tea; don't I get one?"

Several underlings and MPs rushed to serve him.

Having told the committee that of course he did what any sensible person did, paid no more tax than he had to - after all, "you" only wasted it - talkback radio the next day was inundated with calls proposing Packer be PM.

Now it is sometimes said that Packer improperly interfered with editorial decisions. I was on the press council for 15 years and never once did I hear of an allegation of improper proprietorial interference at the Packer (or indeed the Murdoch) groups. If there had been a scandal, surely it would have leaked. Wouldn't a disgruntled journalist have gone to a competitor or the ABC?

Later, when I was at the Australian Broadcasting Authority, the most important matter concerning Packer that came before us was when his chief executive Brian Powers left to return to the US, but also to act as chairman of Fairfax.

In the middle of a media controversy over the move, the ABA board decided to investigate whether this breached the cross-media rules. (Although commercial television was introduced by newspaper proprietors, Paul Keating decided to ban them owning both forms of media when national networking was allowed.)

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To find a breach, the ABA had to make two findings of fact: first, that Powers was an associate of Packer; and, second, that Powers was in control of Fairfax. The evidence indicated a friendship between Packer and Powers, a diminishing business relationship, but nothing to show they were acting in concert in the conduct of the affairs of Fairfax. Packer proved to be a tough, straight-talking but truthful witness. Not surprisingly, he delivered the coup de grace to the case against him. Referring to Fred Hilmer, who he said had never run a newspaper, he boomed: "Do you really think that if I were running Fairfax I would have appointed that bloke?"

But, when we discussed the case, a board member raised a provision in our legislation that allowed members to rely on their own knowledge and experience. I had thought this was inserted to guide us in making policy decisions. He said: "These people meet one another, they play golf together. That is where they make their decisions. There are two camps in Sydney, Packer and Murdoch.

You are in one camp or the other, and Powers is in the Packer camp."

Pointing out that the parties were entitled to a draft of our tentative conclusions and we had to consider any submissions they made on this, I said the report would have to state what knowledge and what experience was being relied on. How could they make submissions if they did not know the basis of our decision?

In any event, I said, statements made by the board about playing golf and being in one camp were hardly persuasive, and would not satisfy the burden of proof. And if a member wanted to give evidence, he would have to withdraw from taking part in the judgment.

I said that we also had to have evidence showing that Powers was actually in control of Fairfax. But some members argued the ABA could assume a chairman controlled a company. I said they should ask a few chairmen about this.

One of the difficulties of a board trying to make a collective decision on such a matter is that the loudest and most insistent voices tend to prevail. Successive draft reports prepared by staff continued to record a breach finding, but did not also reflect my minority view.

I had to bring this to a head. So I wrote to all members, with a copy to our lawyers setting out my views. I said that, although the subjects of the investigation were rich and powerful, they were entitled to no more or less justice than the most humble citizen. Although we had heard assertions about decisions taken over golf and the Packer camp, there was still no reference to this and no attribution in the report. If that was the reason for finding a breach, why didn't the report say this?

I told the board at the next meeting that my minority view had to be included in the report. If the board voted to gag me, I said I would not hesitate to make the minority report public. And this would not be a leak, but would be directly attributable to me. This did not go down well. I said that while speaking with one voice might be acceptable for policy issues, it was completely unfair when we were deciding on a person's rights.

Senior counsel's views had by then been obtained on the two issues. No doubt to the surprise of some, both opinions supported my position. Eventually, a majority agreed that we could not find that Powers was in control of Fairfax. After the release of the draft and the submissions on this, I suggested a compromise, which was accepted. This was that the ABA merely finds that Powers was not in control of Fairfax. Then there would be no need to decide whether they were associates.

The case taught me two things. First, it is crucial that any dissent on a body, such as the ABA, which can make decisions affecting a person's rights, should be made public. (A later case, that concerning John Laws and Southern Cross, demonstrated to me that this is a most important public safeguard.) Second, this case was but one example of a strange and worrying propensity in some circles to make adverse judgments about public figures based on rumour and gossip, something that Packer had experienced more than once.

Powers, of course, is no longer chairman of Fairfax. But while he remained in that role, no one again seriously suggested that he was still working for Packer.

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First published in The Australian on December 29, 2005.



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About the Author

David Flint is a former chairman of the Australian Press Council and the Australian Broadcasting Authority, is author of The Twilight of the Elites, and Malice in Media Land, published by Freedom Publishing. His latest monograph is Her Majesty at 80: Impeccable Service in an Indispensable Office, Australians for Constitutional Monarchy, Sydney, 2006

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