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How Packer slipped on Fairfax

By Rodney Tiffen - posted Friday, 8 December 2006


In crucial ways, Packer had mismanaged his bid. Apart from the issue of media monopoly, and hostility based upon his own record, Packer's major political problem was the central involvement of two people perceived to be doing his bidding. The Tourang consortium's designated new chief of Fairfax newspapers was Trevor Kennedy, who had worked for the Packers for almost two decades. Also publicly prominent was Malcolm Turnbull, who had worked many years for Packer before becoming a merchant banker.

Ironically, despite the public perception that these two were Packer stooges, what eventually caused Packer's failure was the internal pressure put on them, and Packer's failure to support them. The two executives from Tourang's foreign companies, Brian Powers and Dan Colson, took command of many aspects of the bid, and sought to overturn agreements Packer had earlier reached with both Kennedy and Turnbull. Packer conspicuously failed to stand up for them.

The first to go was Kennedy, who unexpectedly resigned in mid-October. Publicly he blamed the “McCarthyist” campaign against Packer, but this hid the tensions inside the camp, which were the real reason for his departure.

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Turnbull was involved in the bid because of a shrewd tactical move he had made. As Fairfax, sinking under the self-inflicted debt incurred by Warwick Fairfax's privatisation, slid towards bankruptcy, it had sold junk bonds in the US. Turnbull saw that this group was a key to future control of the company, and he had the entrepreneurial vision and energy to secure control of them. He teamed up with an initially reluctant Packer and the other Tourang partners.

Like Packer, Turnbull had been vocal in expressing what he saw as the shortcomings of Fairfax journalists. The other Tourang partners saw Turnbull as a political and management problem. At the parliamentary inquiry, Packer had been insultingly dismissive about his participation, saying there would be no future role for him, except that he desperately wanted to be a director of Fairfax.

When the Tourang partners were putting pressure on Turnbull in November, Packer refused even to return his telephone calls. Turnbull later told Four Corners that he no longer considered Packer a friend, that Packer's behaviour had ended 17 years of friendship. Eventually Turnbull resigned.

Westerway's appearance in Parliament came a few days later. What sealed Packer's fate in the announcement of the inquiry was the precision with which Westerway identified the documents the tribunal would subpoena.

Kennedy had made notes at key moments during the enterprise, including a long record straight after his resignation. These notes revealed that privately Kennedy had the exact opposite understanding of Packer's role from what he (and Packer) had said publicly, including to the inquiry. In Kennedy's notes, Packer did intend to exercise control.

It was clear that Westerway must have had an internal source to know these documents existed. He has refused to publicly identify this “prominent public figure”, except to say it wasn't Kennedy. In addition to Paul Barry's account of these events (The Rise and Rise of Kerry Packer), Neil Chenoweth's recent book (Packer's Lunch) adds some graphic detail.

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Westerway waited in a parked car in a darkened street in North Sydney on a Sunday night to meet this source, who had said that “he, his wife and his family were all at risk”. In these melodramatic circumstances the key documents were handed over. Having received them unofficially, Westerway was able to demand them officially to use as evidence.

Although not identified by Barry and Chenoweth, the circumstantial evidence clearly points at Malcolm Turnbull, a prominent public figure, with inside access, who had resigned the day before.

According to Barry, Packer later accused Turnbull and Kennedy of “treason”. Rather the whole attempt, and its failure, betrays more of his born-to-rule arrogance, and his dishonesty.

Three weeks earlier, he had emphatically and repeatedly denied to the parliamentary inquiry that he would exercise any control over Fairfax. You are either going to have to believe me or call me a liar, he said. It was riveting television, silencing his questioners, and spoilt only by the fact that he was lying.

Moreover, just three weeks later, he was effectively caught out. Luckily for him, the extent of his dishonesty never came into public focus. But the tribunal's demand for the key documents was enough to undo him.

When Packer's hagiographers talk of his triumph before the parliamentary committee, it should be recalled that it was no coincidence that three weeks later, his quest for Fairfax ended in failure.

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First published in The Age on November 30, 2006.



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About the Author

Rodney Tiffen is Professor in Government and International Relations at the University of Sydney. His books include Scandals: Media, Politics and Corruption in Contemporary Australia (University of New South Wales Press, 1999)

Other articles by this Author

All articles by Rodney Tiffen

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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