3

Goanna, Nifty and the New Tiberius of the Telephone

Don’t they realise it’s a jungle out there and I’m a tiger?

Paul Keating, August 1986

It was the morning of 29 February 1984 and Greg Gardiner, general manager of Fairfax, had just appeared unannounced in the office of Max Suich, the company’s editorial director. Gardiner was visibly shaken. Paul Keating had just been on the phone.

‘He said he is going to destroy Fairfax’, Gardiner said. ‘He is the treasurer of Australia and he said he is going to destroy Fairfax.’

Suich tried to calm him down. This was just Keating being Keating—irascible and, like former prime minister Billy McMahon, a ‘Tiberius of the telephone’. ‘I will talk to him’, Suich said.

Gardiner replied: ‘Well, I said that he should talk to you and he said, “Talking to Suich is like pissing down your own leg”’.

Suich loved it. It was vintage Keating.

Keating didn’t kill Fairfax. But on that day he probably wanted to. And, at that time, so did a lot of others. Sir Peter Abeles, Warren Anderson, Alan Bond, Neville Wran, John Ducker, Kerry Packer, Rupert Murdoch—all were nursing grievances against the Fairfax newspapers.

‘We were overconfident, arrogant, ready for a blue’, says Suich today, casting his mind back. ‘Fairfax, and its editors and journalists, was very, very overconfident. We never really grasped the potential threat from the enemies we were effectively uniting—natural allies anyhow—Hawke and Keating, Murdoch and Abeles and Packer … and their ability to hurt the company.’

A key moment in the transition to a more pugnacious Fairfax came with the death of former NSW premier Robert Askin on Wednesday 9 September 1981. The funeral was to be held the following Monday. On the intervening weekend, when, as the saying goes, the body was still warm, The National Times published an explosive story about Askin’s links with organised crime.

David Hickie, the author of the piece, had been working on the investigation for months. Hickie was a young lawyer who had been recruited straight out of university by Max Suich. He was a talented investigator but he also had connections to Sydney society that eluded most journalists. He had grown up in the affluent eastern suburbs, the son of one of the city’s top cardiologists, who counted among his patients the illegal-gambling king Perce Galea. Galea enjoyed regaling the young Hickie with tales of his associations with police and politicians. Hickie was also familiar with the racing fraternity—he had pencilled for his brother, a bookmaker, throughout his university days—and he had gained the confidence of Liberal Party members and police who were distressed by Askin’s corrupt behaviour. By the time Askin fell gravely ill, Hickie had a mountain of material.

David Marr was then the relatively new editor of The National Times. ‘David [Hickie’s] story is a remarkable story in the history of journalism in this country—a really remarkable story’, Marr says today. ‘We were more or less ready to go with the Askin exposé but I don’t know that the lawyers would have let us publish if he hadn’t died. We might have been able to do one of those difficult-to-grasp National Times specials that were safe from defamation. But his death let us tell the story with the sort of clarity which, as editor, I didn’t think remotely possible if he were still alive. His death let us say: “This is what happened. This was his relationship with these crooks. This is how the money flowed”’.

When Askin died, Marr wanted to publish straight away. But Max Suich, although he knew the story was right, knew Hickie well, knew his sources were excellent, said he wanted to wait until after the funeral. Marr held sway, however, and the story ran.

Headlined ‘Askin friend to organised crime’, the story began:

Sir Robert Askin was an underestimated man. The mark he left on this country was considerable—and has never been publicly discussed.

While Sir Robert Askin was in power, organised crime became institutionalised on a large scale in New South Wales. Sydney became, and has remained, the crime capital of Australia.

Askin was central to this. His links with three major crime figures, Perce Galea, close friend Joe Taylor and another, allowed the transformation of Sydney’s baccarat clubs into fully-fledged casinos.

Askin’s links with corrupt police allowed those casinos and SP betting to flourish. The corrupt police included commissioners Allan and Hanson.

And on it went. Outrage ensued across Sydney.

James Fairfax sent a sharp note to Suich on the day of the funeral. ‘I do not of course suggest that any material should be suppressed’, he wrote, but ‘I think this has damaged The National Times—many people will regard the timing in very poor taste, a view which I share’. There were other issues too. Sir Warwick had been very friendly with Askin when he was premier—he had received his knighthood during that period.

Suich should have been in damage control but he stood his ground. He asserted to the Fairfax board that it had been sixteen years since Askin had come to power and that it was scandalous that these stories, well known in Sydney’s political and judicial circles, had never come to light before in the pages of the Fairfax press. There was an obligation to publish, he argued, particularly since the SMH had been so supportive of Askin during his premiership.

It was good spin by Suich in a difficult situation. The board, the chairman, even Sir Warwick, agreed with him.

‘The roof fell in but our argument to the board was a persuasive one’, Suich says. ‘The great thing about that board was that if you put a persuasive argument to them, they were more interested in publishing than they were in partisan politics. They were conservative but they were publishers. And they were publishers with the long view, in a sense that no-one in Australia is now, and very few [elsewhere], with the exception of the Financial Times in London, are today. And that includes The Guardian that is run by the journalists themselves. They [the Fairfax board] bought that argument and I got the support of the chairman and the support of Greg [Gardiner]. But they never really felt we should have published it before the funeral. I never got off that hook on that one. I got the cuts on that.’

The upshot was a board directive that the Fairfax papers should pursue a general investigation of organised crime. In a memo to Marr and his deputy editor, Brian Toohey, Suich wrote:

It should be understood that the board, while embarrassed by the nature and timing of the [Askin] story, is unanimous in the view that the investigation of such stories is an important part of the work of all the Fairfax papers … No further story relating to Sir Robert Askin is to be published unless you have persuasive and hard on-the-record evidence. This is not to say that you can’t use anonymous sources when you are satisfied of their honesty and accuracy, but the reputation of the National Times must not be prejudiced by serious charges being made by simple assertion. The National Times is to put the maximum available resources into following up the story and publishing the facts not only about Sir Robert Askin but the corruption of other politicians and police—particularly those still living and working in Sydney.

Suich spread the news around the other Fairfax newspapers too. The transformation of Fairfax journalism that had begun with Tom Fitzgerald, Maxwell Newton and Vic Carroll in the 1960s was going to become even more pronounced in the 1980s. And the impact would be more profound than anyone could have imagined on that day in 1981 as Sir Robert Askin was laid to rest.

The Neville Wran Labor government in NSW was one of the institutions that came under tough scrutiny by the SMH and The National Times. Over a long lunch with Suich in October 1982, Wran complained of unwarranted criticism and threatened to withdraw all NSW Government advertising from the SMH. But there was no let up.

In 1983, Wran faced the Street Royal Commission over claims by the ABC program Four Corners that he had tried to influence magistrates over the 1977 committal of New South Wales Rugby League chairman Kevin Humphreys, who had been charged with misappropriating funds from the Balmain Leagues Club. The SMH dubbed it the ‘Wran Royal Commission’ and Evan Whitton wrote a brilliant sketch piece for the SMH on each day’s proceedings before chief justice Sir Laurence Street—proceedings that went on for a long two months. Wran and his NSW right faction of the ALP, which included then federal treasurer Paul Keating and party powerbroker John Ducker, were incensed.

Wran had an almost visceral contempt for the Fairfax press, which predated the drubbing he received during the royal commission. It was a matter of class as far as Nifty was concerned. The Fairfax family were in his view pretentious patricians. Wran had been raised in the then-working class Sydney suburb of Balmain and he never forgot his roots. Although he went on to become a successful lawyer and politician, he considered himself to be part of the blue-collar culture, hence his famous comment to the Street Royal Commission: ‘Balmain boys don’t cry’. The nickname ‘Nifty’ was bestowed on Wran by the controversial solicitor Morgan Ryan, who explained to SMH journalist Valerie Lawson in 1991 that its origins lay in horseracing:

In the racing game we call Neville Sellwood [the jockey] ‘Nifty’ because he can grab an opening with a furlong to go and, in racing parlance, tip you out. However, I think we are encountering the real Nifty Neville [in Wran]. You watch, he’s Nifty enough to get through the eye of a needle.

Ducker also harboured a hatred of Fairfax. ‘Ducker thought we were a conservative reactionary company’, says Suich. ‘We didn’t recognise that the right [wing of the ALP] were on the side of the angels. They were fighting the communists and the socialists. They felt Fairfax owed them an obligation for defeating the left and that we should ignore the excesses of the right. And that never came through, certainly not with the journalists.’

It all came to a head, much to Greg Gardiner’s dismay, in October 1984. On the day in question, the front page of the SMH was devoted to an attack by Ian Sinclair, the leader of the National Party, on the findings of a special commission of inquiry held in response to Sinclair’s allegations about the NSW justice system—the story was headed ‘Sinclair’s views of the bookie, businessman, lawyer, judge and Premier’. On page three of the paper was the reply Neville Wran made in parliament to allegations made by Rosemary Foot, the NSW deputy Opposition leader, concerning the ‘deliberate and systematic favouritism’ the government had shown towards controversial property developer Warren Anderson. (Foot had objected to Anderson, a close friend of Keating’s, purchasing harbourside land from the NSW Government at what she claimed was $550 000 below market value. She later lost a defamation case brought by Anderson and was forced to apologise to him and Keating.) This was a gross slight on the premier, according to Wran and his supporter Keating.

Gardiner got two calls that day—one from Keating and one from Wran. According to Gardiner’s file notes, which are presented in Gavin Souter’s book Heralds and Angels, Keating said that if Fairfax did not get Wran removed, it must understand that Wran would go for it with a vengeance, and that federal Labor would put its back into his efforts to crush the company.

Wran was even angrier, according to Gardiner. The SMH, he said, had reached its pinnacle as an organ of the Liberal Party. He was sick and tired of being portrayed as a crook. Although he was not a great believer in conspiracy theories, it was patently obvious that there was a conspiracy involving The Age, the SMH and The National Times. He said Fairfax was going to pay the price for this. He assured Gardiner that he did not forget easily, and that he would devote a lifetime to bringing down Fairfax and the SMH.

The rants by Wran and Keating didn’t have much impact. The Fairfax journalists continued to pile the pressure on. And it wasn’t confined to the NSW premier either. A whole range of key players came under the journalists’ microscope, from High Court judge Lionel Murphy to transport magnate Sir Peter Abeles, Warren Anderson and, of course, Kerry Packer. Murphy was a much-loved Labor figure and a former attorney-general in the Whitlam government. Anderson was a close friend of Keating and Abeles was a close friend of Prime Minister Bob Hawke. And Packer was Packer. These were powerful people, and they made powerful enemies.

At this point, David Marr was two years gone from the editor’s chair at The National Times. He had been demoted in early 1982 after a fierce clash with Suich over an article written by deputy editor Brian Toohey titled ‘Tax heist: how hardened criminals and lawyers are combining to cost all Australian taxpayers millions’. It was based on evidence given to the Costigan Royal Commission into the Ship Painters and Dockers Union. One of the lawyers mentioned in the article was a prominent QC (later a judge), LJ Priestley. He had complained that the article implied he had acted improperly, was involved with criminals and had a substantial financial interest in the matter, when he had merely received a fee for answering some questions. Marr claimed that it was the headline that was at fault—the article was accurate. But Suich insisted on a particularly prominent apology. He also sacked Marr as editor, although Marr stayed on at The National Times as a journalist before taking leave to write his award-winning biography of Patrick White.

As it happened, Marr’s replacement, Brian Toohey, was even more pugnacious. Under his watch, The National Times published a series of groundbreaking articles during the 1980s.

Rex Jackson, the NSW minister for corrective services in the Wran government, finished up in jail in the aftermath of a story written by Marian Wilkinson in 1983 about the suspicious early release from jail of three prisoners in return for money. The story was based on federal police transcripts of bugged telephone conversations.

In early 1984, Wilkinson wrote ‘Big shots bugged’, a story on the sensational telephone transcripts that involved Lionel Murphy. The allegation was that Murphy had intervened in the NSW magistracy to assist his friend, solicitor Morgan Ryan, who was facing charges. The Age, under editor Creighton Burns, later took the lead on this story in spectacular fashion. The telephone transcripts became known as ‘The Age Tapes’ and they led to a judicial and political crisis, which only ended with Murphy’s death in 1986.

Wilkinson also wrote a long piece entitled ‘Sir Peter Abeles and TNT’s brush with the Mafia’. Meanwhile, national security stories were broken by Toohey and exposés on corrupt NSW police were delivered by Wendy Bacon. Toohey, Bacon and Suich found themselves, on one occasion, called before the Senate Privileges Committee and on another, before the High Court. But the heat really came on when Toohey and Wilkinson focused on the investigation that was underway for the Costigan Royal Commission.

Frank Costigan, with his counsel assisting, Douglas Meagher, had originally been asked to inquire into the Ship Painters and Dockers Union, but in their digging they had come across a massive bottom-of-the-harbour tax scheme—Painters and Dockers members participated in it, becoming straw directors for a fee. Later, chasing a suspicious transfer of funds, the Costigan investigators had come across Kerry Packer. When the Hawke government decided to close down the Costigan commission in 1984 and transfer its work to the newly created National Crime Authority under Justice Donald Stewart, The National Times queried whether the NCA would continue to pursue the Packer investigation. Then, in August 1984, it published a long piece by Wilkinson titled ‘Kerry Packer and the Costigan Commission’. It touched on Packer’s business dealings with Queensland property developer Brian Ray, a film tax scheme, the suicide of a Queensland bank manager and Packer’s withdrawal of $1 million in $50 notes from a Sydney bank.

Not all of the fighting was external, however. Suich had testy dealings with Toohey over the contents of the Packer story. He was also concerned that Toohey was not giving enough attention to marketing The National Times, the circulation of which was floundering in the mid-80 000s after having been well above 100 000 under previous editors, including Suich himself and Evan Whitton. Jefferson Penberthy, then editor of Fairfax finance magazine Business Review Weekly, was subsequently appointed by the board as managing editor of The National Times over Toohey.

Fairfax journalists interpreted this as an attempt to silence The National Times and staged a two-day strike. It was the first time they had stopped work over an editorial issue. Penberthy was taken aback by the reaction and was determined not to be seen as a patsy. Within a month of his appointment, he gave the go-ahead for the most explosive Packer story of all—what has become known as the ‘Goanna’ saga.

The genesis of the story lay with Brian Toohey. He was no stranger to confidential documents, but when he was leaked the forty-two references from the Costigan Royal Commission to the newly formed NCA, he knew it was gold. These were the matters that were still ongoing, the investigations that Costigan’s staff had not been able to complete after being shut down by the Hawke government.

The relationship between Costigan and NCA head Donald Stewart was frosty. There was little optimism that any of Costigan’s investigations would even be continued by the NCA. Prime minister Hawke had refused to extend the life of the royal commission by the six weeks to three months that Costigan had said he needed in order fully to brief the NCA. The royal commission that had started out looking at a union on Australia’s docks had delved into the business dealings of some of the country’s most powerful businesspeople, and as far as Hawke’s government was concerned, enough was enough.

This is an extract from a letter written by Frank Costigan to Justice Stewart and other members of the NCA, dated 5 September 1984:

I note your confidence that failure to receive briefings will not constitute a serious impairment to the work of the Authority. I do not share that view nor do I understand how it could sensibly be entertained; you will not be able, without briefing, to take on my investigations, if that is your intention.

The correspondence between Prime Minister Hawke, Justice Stewart and Royal Commissioner Costigan on the winding up of the investigation and the transfer of material to the NCA clearly indicates that Costigan was being brushed off. Following up his investigations was not a priority—to say otherwise was a sham.

Still, Toohey wasn’t quite sure how to handle the leaked references. Did he launch a series of exposés? The defamation risks would send Fairfax lawyers into apoplexy. These case summaries were just that, an assessment of the evidence gathered to date during investigations that were incomplete. But there was a public interest angle—if the Hawke government had closed down Costigan’s commission to protect its business mates, and if Donald Stewart was not going to follow up on the suspicion of criminal activity, then the public ought to know.

Toohey decided the safest measure was simply to present the material to National Times readers as it was. He would print as much of the references as he could in the paper and let the readers decide for themselves—albeit the material was too voluminous to be printed in full, so the exposé had to be, by definition, an edited one.

The most juicy reference was entitled ‘Squirrel’. It was not hard to work out which businessman this referred to. Kerry Packer, while giving evidence before the Costigan Royal Commission, had answered a question about why he had $1 million dollars in cash in his safe by saying that he had a squirrel mentality. Toohey was going to publish the Squirrel reference, but he had to change the name. Readers would pick up straight away that it was Packer. Any protection of anonymity would disappear and leave the paper open to defamation. Toohey came up with the name ‘Possum’ but his deputy, Adele Horin, felt it was too close to ‘Squirrel’—anyone could work that out. She suggested ‘Goanna’.

The public reaction to the story, published on 14 September 1984, surpassed even Toohey’s expectations. There was graffiti at Sydney’s central railway station that read, ‘Who is the Goanna?’. Rumours swept the city. Then, Andrew Peacock, the federal Opposition leader, ‘belled the cat’ in parliament. He referred to Prime Minister Bob Hawke as a ‘a little crook’. Journalists were briefed by the Liberal Party that Peacock was referring to Hawke’s friendship with Goanna.

A few days later, Packer outed himself in a 5000 word statement, which read in part:

My identity as the Goanna has become well known by word of mouth and veiled hint through the media … Each and every one of the allegations made against me in the National Times article are false, and demonstrably false. It is extraordinary that this disgusting publication should place me in a position where I have to effectively prove my innocence.

Lawyer Malcolm Turnbull swung in behind Packer to take up his defence. For two years they battled with the Fairfax organisation for an apology. But at the board and corporate level, Fairfax formally said it had confidence in the report. Packer was told that if he wanted to challenge it, Fairfax would see him in court, the implication being that they would grill him in the witness box. The discovery process would be brutal. It was a serious stand, yet James Fairfax didn’t falter, even when the Packer group came after him personally.

Not everything went Fairfax’s way, however, and by April 1985, the company realised it was in trouble. The most serious allegation, relating to the alleged murder of a Queensland bank manager, had been conclusively proven wrong at a subsequent inquest and the original analysis of suicide confirmed.

Today, Suich says, ‘It was a wrong story. Wrong on Packer being involved in a murder. Wrong on Packer being a drug runner. Though conceivably on the right track with Packer being an offshore tax evader. That’s trivial compared with the other allegations’. Toohey maintains that the story stands because the newspaper had made no claims one way or the other—it was merely publishing leaked documents as they stood.

Another development confirmed that time was running out for The National Times. The same week that the Goanna story was published—in fact, the day before the story went to press—the NSW Government informed Fairfax that it was withdrawing all of its classified advertising from the SMH and transferring it to the Murdoch-owned Daily Telegraph. Two weeks later, the state’s public hospitals, on instructions from the minister for health, followed suit. It amounted to an annual loss in revenue to Fairfax of $3 million—quite a hit in 1984. Twelve months later, after a new tender process, Fairfax got the advertising back, but it was already significantly out of pocket.

The endgame for The National Times came not directly from the Goanna story, although that didn’t help, but from its coverage of another powerful businessman, Sir Peter Abeles. Abeles was well connected. He was a close friend of Bob Hawke, who placed him on the Reserve Bank board. He was in business with Rupert Murdoch through their joint ownership of Ansett Airlines. And he was a friend of Sir Warwick and Lady Mary Fairfax, a regular visitor to Fairwater.

The Abeles investigation was undertaken by a team of top National Times journalists—Toohey, Wendy Bacon, Geoff Kitney and Geraldine Brooks. (Brooks went on to become a Pulitzer Prize–winning author with an international reputation for both her journalism and her literary fiction.) Its work resulted in an article entitled ‘Empire of influence’ that canvassed Abeles’ connection with the US-based Teamsters union, which earlier had been exposed by Marian Wilkinson, as well as his relations with the Askin and Wran governments and various business associates.

Abeles was well aware of this team effort by The National Times. Former Murdoch editor and now public relations consultant Martin Dougherty, who would later play a crucial role in the fate of Fairfax, was working for Abeles as a public relations consultant, attempting damage control ahead of the publication of the article on Abeles and his business connections. Dougherty rang Jefferson Penberthy and reminded him that Abeles was a close friend of Sir Warwick and Lady Mary Fairfax and that he knew they were unhappy with Penberthy’s failure to tame The National Times. He said that Sir Peter was disturbed at the prospect of another article on him in the newspaper, following Marian Wilkinson’s earlier effort. Penberthy passed Dougherty on to Suich, who declined to interfere in the Abeles story but told Penberthy it had better be right.

The article went ahead. No legal action was taken by Sir Peter, but he did work his connections.

There was a Fairfax board meeting on the day the Abeles story went to press, 19 September 1985. Sir Warwick told the board that he had been considering what to do with The National Times. He said that the paper’s reputation had suffered of late, that readers now saw it as a publication that wanted to capitalise on people’s mistakes. Sir Warwick thought that Fairfax should be looking at the Sunday market (The National Times came out on a Friday at that point). He believed that readers wanted a serious Sunday newspaper alternative.

The National Times’ case wasn’t helped by the fact that it was losing money. Its circulation was around 86 000, but advertisers would not go near it. It was an edgy publication and was not considered an appropriate forum for advertising by the conservative business community. The paper had lost $2.1 million the previous year, and since its establishment in 1971 it had racked up total losses of over $12 million. Even Max Suich couldn’t ignore the numbers. It might be best, he told the board, if it became a Sunday paper and changed from a tabloid to a broadsheet.

At another meeting three months later, the board made a formal decision to go ahead with Suich’s plan and rename the paper The Times on Sunday. Brian Toohey lost the editorship. Robert Haupt would be recruited from The Age, where he was deputy editor, to look after the new paper. The publication would be launched in August the following year, but Haupt would take his seat in the editor’s chair immediately.

James Fairfax, as chairman of the board, had agreed with ending The National Times, but he wanted to let Toohey know that he respected his journalism. He called Toohey to his office and told him that the fallout from The National Times didn’t bother him. Kerry Packer wasn’t speaking to him because of the Goanna story, but the pair had never had a particularly friendly relationship. Neither was he concerned about the reactions of the politicians or the business heavyweights. He respected good journalism. Toohey was to continue his good work.

Suich now says that the published allegations against Packer lacked credibility, but at the time he admired the resolute manner in which James Fairfax handled the situation: ‘James was a magnificent chairman and he never urged a backward step in the confrontation with Packer. He deserves credit for both his courage and his quiet, calm tolerance. He took a lot of hits at that time and he never once complained about it’.

For his part, James Fairfax admits that ‘all sorts of nasty threats were made against me. But, quite honestly, I accepted it all as part of the job. I certainly lost no sleep at night over it. I did respect the rights of editors. My father regarded it as the family’s right to override editors—they all knew that I didn’t subscribe to that view’.

The National Times may have folded but, nonetheless, by 1986 Fairfax’s strident journalism had built up a potent range of enemies—Packer over the Goanna story; Sir Peter Abeles over the coverage of his business and political connections; Neville Wran over the Street Royal Commission and the pursuit of his business alliances; and, along with Wran, the NSW right and Paul Keating. And there was more in store for the federal treasurer.

The first issue of The Times on Sunday hit the streets on 10 August 1986. The main feature story was titled ‘The multilevel world of Warren P Anderson’. It was followed up a week later by a story headlined ‘The Keating–Anderson Connection’, which offered a forensic analysis of the treasurer’s dealings in antique French clocks and his visits to Paris with Anderson. Keating’s response was ominous. He said to friends in relation to The Times on Sunday: ‘Don’t they realise it’s a jungle out there and I’m a tiger? The only way to get a tiger is to shoot it here [taps the middle of his forehead]. Those fools hardly hit me’.

It is true that The Times on Sunday article did not provide evidence that Keating had acted improperly in his role as federal treasurer. That meant, as Keating had pointed out, that the tiger was barely wounded—and it was about to lash out.

A few weeks later, Keating was in the United States for a meeting of the International Monetary Fund. He took time out to visit Rupert Murdoch, taking the opportunity to give the magnate the heads-up on changes he was considering making to Australia’s media ownership rules. This was critical information for Murdoch and would lead to him establishing an unassailable position in the national media. When he returned to Australia, Keating also gave Kerry Packer a briefing on his media law changes. Packer, too, was now well positioned, like Murdoch, to pull off the deal of a lifetime.

Under Keating’s proposal, which still had to be passed by parliament, existing media holdings would be ‘grandfathered’, or allowed to continue. But from November 1986 onwards, any changes in ownership would be subject to new rules. These would include allowing the possession of any number of TV stations, subject to a certain percentage of the national audience, which would overturn the existing edict that one media group was limited to the ownership of two stations. However, there was a key restriction—the owner of a newspaper would not be able to acquire a television station in the same city and vice versa. As Keating had explained to Murdoch and Packer, media proprietors could be ‘Queen of Screen or Prince of Print’, but not both at the same time.

Fairfax and the HWT were completely oblivious to these massive changes, which were about to turn the media world upside down. Murdoch and Packer had been placed at a substantial advantage.

Within three months, Murdoch would, through a takeover of the HWT and Queensland Press, control two-thirds of metropolitan newspaper circulation in the country. He would add to his stable some forty newspapers, including key publications such as Melbourne’s Herald and Sun News-Pictorial, Brisbane’s Courier-Mail and Sunday Mail, Hobart’s Mercury and Adelaide’s Advertiser. Murdoch also would go on to sell his television interests in Channel Ten to property developer Frank Lowy of the Westfield group. Packer, meanwhile, would pick up $1 billion by selling his network to the Western Australian entrepreneur Alan Bond.

Fairfax was completely wrong-footed. It was already loaded up with more debt than it wanted, thanks to the decision to buy the David Syme family out of The Age in 1983 and eventually move to 100 per cent ownership of that company, as well as the establishment of several new Australian business magazines—Business Review Weekly in 1981, Personal Investment in 1983 and Triple A in 1985, plus the purchase of London’s Spectator in 1985. Greg Gardiner and the board had been distracted by the need to raise new funds for Fairfax.

On 3 December 1986, Murdoch was ready to move and he made a $1.8 billion takeover bid for the HWT. Robert Holmes à Court, a Western Australian entrepreneur who had made his name when he bid for Australia’s biggest company, BHP Ltd, in 1983, also had been stalking HWT. He upped the ante and made a bid of $2 billion. The Fairfax board decided that it didn’t want to bid for all of HWT but it was very interested in the group’s stake in Queensland Press. Gardiner chose to line up with Holmes à Court’s bid, and on 4 January 1987, he made a $910 million offer for Queensland Press.

Holmes à Court had two guests that day at his stud just outside Perth—Paul Keating and Warren Anderson. While the entrepreneur was in his study negotiating by phone with Fairfax, he allowed the treasurer to listen in to the conversation. Keating later contacted Murdoch to tell him that Holmes à Court was serious and that if he wanted HWT, he should deal with him. And that is what happened. Murdoch negotiated with Holmes à Court, agreeing to sell him WA Newspapers and the Melbourne television station HSV7.

(Later, Keating also took credit for helping Murdoch get funding for his HWT bid from the Commonwealth Bank. Murdoch executives would have Keating tell them on more than one occasion over the ensuing years, when Keating was angry about the coverage of him or his government in News Limited newspapers, that they should remind their boss of what he had done for him during the HWT takeover.)

By the end of 1986 the HWT had a new owner, and Fairfax panicked. In what was to be one of the most stupid business decisions Fairfax ever made, it bid against Holmes à Court for Melbourne television station HSV7. It won the deal on price but in so doing breached the proposed media laws. Fairfax had put itself in a position where it would have to sell either The Age or HSV7 if the new laws were passed by parliament—which they were in June the following year. Keating was triumphant and promptly castigated Fairfax for breaking his new regulations.

This would all sound like a classic conspiracy theory except that we know it is factual because Keating detailed the chain of events in a five-hour meeting with Max Suich some months later. Suich’s memo to the Fairfax board on that meeting is worth relaying at length.

Keating told Suich of his meetings with Murdoch and Packer to alert them to the upcoming law changes. He had not alerted HWT because of a campaign run by The Herald against the Hawke government’s new assets test on pensions and rules concerning lump-sum superannuation. He had not informed Fairfax because of attacks by Fairfax publications on him personally, as well as on Warren Anderson, Prime Minister Hawke, Kerry Packer and Sir Peter Abeles. Keating also took credit, in his discussion with Suich, for putting HWT ‘into play’. He spoke of his visit to Holmes à Court’s stud on the day Fairfax made the bid for Queensland Press and of his phone call to Murdoch to alert him to the negotiations.

Suich wrote in his board report:

Keating’s point is that this intervention by him was critical to persuading Murdoch to ultimately do a deal with Holmes à Court. This, he says, left Fairfax exposed and ultimately cost it control of Queensland Press. Keating believes that as he successfully intervened with Murdoch to make a deal on West Australian Newspapers he could similarly have intervened to force Murdoch to deal with Fairfax over Queensland Press … Keating says his motives for getting involved in the HWT takeover were a desire to see the Herald [HWT] broken up and a desire to hurt Fairfax.

On reflection it would seem to me the only significant disadvantage the company suffered from the Treasurer in the HWT takeover was in not receiving detailed briefings on plans for the legislation such as those received by Murdoch and Packer … The Treasurer is a product of the NSW right wing of the ALP and his conversation is littered with threats, references to getting even, doing deals and assisting ‘our crowd’ in business, the press and within the ALP. He is very blunt about the fact that the NSW right are ‘deal makers’ and that they provide favours to ‘our crowd’ in return for favours given.

He also has a very strong feeling about what he calls old money or establishment money, which he describes as dead money stultifying the economy, and he sees great advantages in new money—in which he includes Murdoch and Packer—being given opportunities to knock off old money. This I guess is the last glimmer of the class warrior.

Our meeting ended on friendly terms when he asked that I organise a lunch for him with Greg Gardiner, Fred Brenchley, Chris Anderson and myself. Unless some deal can be made to the Treasurer’s advantage (and he acknowledges that Fairfax does not ‘do deals’) I think the venom will remain, although the meeting did allow him to let off steam.

It seemed that all of Fairfax’s enemies had gathered in the proverbial dark alley to teach the one-time big boy on the block a lesson. But it was not outsiders who would beat the company into submission. Rather, it was the Fairfax family itself that would carry out a final mugging.