JOE COSTIGAN WAVED The National Times in front of his father, who had arrived home late that night to their Melbourne flat. ‘Costigan’s Explosive Recommendations’ the front page blared.1 Joe asked his father what on earth was going on. ‘It’s a fucking disaster,’ Frank Costigan confessed.2 Normally an island of calm, the Jesuit-trained lawyer was not given to swearing, but the royal commission he’d run for four years had suffered a major leak, right at the finish line. The guts of forty-two highly sensitive case summaries, distilling the most promising work of a hundred commission staff and intended for the new National Crime Authority, were now splattered all over the media. Future investigations likely would be compromised, and the standing of Costigan’s inquiry, already low, had taken a body blow. ‘Disaster’ was putting it mildly.
Up in Sydney, Kerry Packer was also in crisis. Prominent among the case summaries published by The National Times that day was a string of allegations about a figure codenamed ‘The Goanna’, who was linked to an unsolved murder, drug importation and tax fraud. Packer wasn’t named, but he had been publicly examined by the commission earlier that year and journalists were crawling all over him. References to the Goanna’s considerable assets, flamboyant lifestyle and gambling habit—all supported by unexplained movements of large amounts of cash—could conceivably identify Packer, given the public evidence he’d already given.
As speculation intensified over the next fortnight, Packer sidelined his top silks, choosing instead to rely on his 29-year-old corporate counsel, Malcolm Turnbull, who urged him to ‘out’ himself as The Goanna and attack the royal commission itself, to try and destroy its credibility. Australia’s fifth-richest man staked his reputation on Turnbull’s advice. It was a huge gamble, but Turnbull was spoiling for a fight, outraged that Packer would be attacked by what he regarded as a ‘star chamber’. For Turnbull, civil libertarian principle was at stake, and Packer was caught up in his righteous anger. As Turnbull recalled many years later:
We had a meeting in Kerry Packer’s boardroom. Kerry Packer, Jock Harper, Alec Shand and Tom Hughes. We went through what we were going to do and I was very strongly of the view that he needed to counter-attack. The older gents took a more conservative point of view. Kerry, having listened to everyone, said: ‘How long do I get for contempt?’ Someone said they thought it was five years. ‘Then I’ll serve that concurrently with the life sentence for murder’, he said. There was an old lady called Enid, she ran the Telex in the lobby. She typed off this long statement onto a tape, fed the tape in, and the Telex coughed and spluttered. We looked at it going out, and he [Packer] said: ‘Oh well, the die is cast’.3
One of the crowning ironies of the Costigan saga is that the Royal Commission on the Activities of the Federated Ship Painters and Dockers Union was sparked by one of Packer’s own publications. An award-winning four-part series in The Bulletin in 1980 exposed racketeering on the Melbourne waterfront, embroiling the notorious union in a string of gangland-style killings, endemic theft, importation of drugs and arms, and identity fraud; the articles would later inspire the Underbelly true-crime TV series. The outcry over the claims forced the Fraser government to appoint labour lawyer Frank Costigan to head up a royal commission. Costigan soon uncovered vast movements of money, beginning with transactions detailed in documents provided by a witness he had been questioning about ship repairing in the Fitzroy Court:
I should tell you that prior to that morning I had not seen signs of money exceeding $5000 or thereabouts. Imagine my surprise to find in the files a cheque for $1.5 million. Two or three minutes later I found an application by an associate company to bring into this company, from Lebanon, $4.5 million. It didn’t really seem to fit in with ship repairing. I decided to look more carefully at this associated company. It had a bank account in a distant suburb in another state. The bank vouchers were subpoenaed. I found that in the three months some $250 million passed through that account. It was one of a dozen such accounts throughout Australia.4
The Painters and Dockers, it emerged, had been willing stooges for tax avoiders. For a fee, union members were appointed to the boards of companies that had been asset-stripped and left with unpaid tax liabilities, which were then transferred into their names and put beyond the reach of the tax office—metaphorically sent to the ‘bottom of the harbour’ (or the bottom of the Yarra). Theoretically the serving ‘directors of convenience’ remained liable for the tax debts, but if they were members of a union so fearsome that inspectors refused to go knocking on their doors, the tax office was unable to recover the money. Just as often, the directors were false identities, concocted by a union adept at ‘ghosting’—the practice of overstaffing ships, sometimes by a factor of five to one. By the end of the 1970s the scams were costing the tax office hundreds of millions of dollars in lost revenue each year.5
A combination of factors caused the tax-avoidance industry to boom in Australia in the 1970s: top marginal tax rates were extremely high at up to 70 per cent, and wage inflation exacerbated bracket creep, putting more and more taxpayers on the top rate. The High Court opened the floodgates by legitimising tax minimisation through dividend stripping. John Howard, who as treasurer tried to close the loopholes, recalled that in 1981 the top tax bracket kicked in at just twice times average weekly earnings: ‘the antics of the tax avoiders were not justifiable, and I made myself a lot of enemies in fighting them, but they were understandable’.6
It is no exaggeration to say corruption was rife in 1980s Australia. In 1984 alone there was scandal after scandal: The Age tapes exposing illegal phone-tapping by police led High Court judge Lionel Murphy to be charged and convicted for attempting to pervert the course of justice (the conviction was overturned on appeal); the Fine Cotton ring-in saw bookmaker Robbie Waterhouse disqualified for life (the ban was lifted fifteen years later); and NSW detective Roger Rogerson, leader of the feared ‘barbecue set’, was stood down over the shooting of an undercover cop. Revelations about former NSW premier Bob Askin and serving premier Neville Wran—who himself faced a short, sharp royal commission that cleared him of allegations that he’d sought to pervert the course of justice—fuelled the intrigue. In Queensland, Joh Bjelke-Petersen was at the peak of his power. And WA Inc. was gearing up under premier Brian Burke.
Costigan began receiving evidence literally by the semi-trailer load, running to millions of pages. His terms of reference were widened, his staff quintupled, and he won repeated extensions of time. Two special prosecutors were appointed to pursue allegations made before the commission: Roger Gyles QC looked into the bottom-of-the-harbour tax schemes, and Robert Redlich looked into everything else. The Fraser government passed laws to establish the National Crime Commission—effectively, a standing Costigan inquiry—which the Hawke government would refashion as the National Crime Authority after it was elected in 1983.
Turnbull had spent the best part of a year sorting out the affairs of his late father, filing his legal affairs column for The Bulletin and serving as Packer’s group counsel. Turnbull worked closely on the crucial privatisation of the Packer family’s main company, Consolidated Press Holdings. In 1976, after the death of Sir Frank, Kerry had bought his older brother, Clyde, out of the business. Now he borrowed big to buy out the rest of the CPH shareholders, delist the company and take full control. Done in the throes of recession, the controversial, cut-price deal would pay off in spades before the decade was out. The privatisation was supposed to relieve Packer of outside scrutiny,7 but nothing could shelter him from the storm that was brewing within the Costigan inquiry.
The royal commission had been hearing evidence from Gold Coast property developer Brian Ray about his involvement in a film scheme, apparently designed to avoid tax. Ray was on the board of a company, P&S Meats, alongside Ian Beames, who was squarely in Costigan’s sights and had already been jailed after pleading guilty to tax fraud. The commission’s investigators noticed large withdrawals from the company’s account with a Westpac branch in Brisbane, and suspected the money was distributed profits from the film scheme. Five documentaries had been bought for just $100 000, but the scheme raised $2.4 million from some 175 investors and was looking to generate tax-deductible losses of up to $19 million by reselling the film rights to affiliated entities at ridiculously inflated valuations, using non-existent funds borrowed in a round-robin loan arrangement.8 What was really happening, according to Queensland Police, who looked closely at the scheme, was that most, if not all, of the $2.3 million balance of the money raised from investors, after the purchase cost of the films was deducted, was going straight into the pockets of the promoters—Ray, Beames and an unidentified third party.9
In the middle of an otherwise snoozy session in Brisbane, Ray suddenly admitted to counsel assisting the commission, Douglas Meagher, that in February 1980 he had taken $50 000 out of the company bank account and sent Beames to deliver it to ‘a friend’ in Sydney.
Meagher: ‘Did you give Mr Beames instructions as to who he was to deliver the money in Sydney?’
Ray: ‘Yes.’
Meagher: ‘Who did you tell him to deliver it to?’
Ray: ‘Mr Kerry Packer.’10
There were two more cash deliveries: over the next fortnight Ray sent Packer a total of $225 000. Ray, who was at this point an undischarged bankrupt, described the money as a loan to Packer, although there was no documentation, no security, no term, no interest was payable, and three years later not a cent had been repaid. Asked why a bank cheque or ordinary cheque was not used, Ray told the commission it was because it would not have been confidential.
For Packer’s name to come out in an open hearing like this was a bombshell. Turnbull and Bulletin editor Trevor Sykes were overseas at the time, having a pleasant dinner as guests of Consolidated Press’s man in London, former journalist and D.H. Lawrence expert Robert Darroch, when the calls started coming through: Packer had been named in the royal commission and would be asked to appear, like any other white-collar criminal. The two men were soon winging their way back to Australia.
The initial reaction inside the Packer camp was to cooperate with Costigan: the commission was told Packer would appear voluntarily as soon as he too returned from overseas, to clear up any misconceptions. Within a week, however, they had decided to fight: Tom Hughes QC argued in the Federal Court that Packer, Ray and associates had nothing to do with the Painters and Dockers union, and the matters Costigan sought to investigate were outside the commission’s terms of reference.11 This accusation has been levelled at the inquiry ever since, with particular consistency by Turnbull, who wrote in 1987 that Costigan ‘construed his terms of reference to include an inquiry into criminal conduct in general’.12 He was still saying the same thing on national television two decades later, that the commission began ‘as an inquiry into the ship painters and dockers union but it became sort of an inquiry into wickedness in general’.13 The criticism is unfair, at least according to the Federal Court judge who found against Packer et al. in December 1983:
The terms of reference are extremely wide … there is nothing in the terms of reference limiting the inquiry to illegal activities having some association with the union. The terms of reference permit and require the respondent to inquire into the illegal activities of members of the union and their associates, even though those activities are remote from the affairs of the union itself.14
Packer was not the only one to complain: the commission was taken to court on six separate occasions over its four-year life span. It won every time.15 In Packer’s case, the judge made it clear that while Costigan was not free to go off on a frolic of his own, nor was he the sole arbiter of what was relevant to his terms of reference (a witness who refused to answer a question would have their own day in court), he did have the right to pursue a bona fide investigation. Costigan’s confidential letter to Packer—which spelt out what Costigan wanted to ask Packer, and which to his horror was read out in open court by Ray’s lawyer16—showed that the investigation fell clearly within the inquiry’s scope.
Packer’s court challenge only heightened Costigan’s suspicions, which were already elevated after a farcical paper chase through Singapore and Hong Kong involving lawyer Bruce McWilliam of Allen, Allen & Hemsley, Turnbull’s lifelong friend with whom he would soon set up a law firm. Costigan wanted to determine the source of $920 000 paid from the Singapore account of a company called Progress Credits into a shelf company jointly owned by Ray and Packer. Costigan flew to Singapore with two investigators and a Victorian police officer, and sections of the Progress Credits file were read out to them—which confirmed to them that the whole point of the company was the transmission and disguising of funds—but they were refused access to it. By the next day they were told the file had gone to Hong Kong. They were shown a telex from Allens that read: ‘Mr Bruce McWilliam of this office will be in Hong Kong today and we would be grateful if you would give him access to all documents and correspondence in relation to Progress Credits.’ But by the time they got to Hong Kong, McWilliam was on his way back home. The investigators raced to the airport and found McWilliam, but he denied that he had any documents with him.
Costigan was convinced he had been given the run-around. In his final report he directly accused Packer of interference with the commission, and recommended Allen Allen & Hemsley be investigated as an accomplice to the alleged illegality of the film scheme.17 Packer vehemently denied he had instructed the removal of any documents—although McWilliam’s affidavit admitted he flew to Singapore and Hong Kong for the sole purpose of advising Packer in relation to the commission. While there, McWilliam stated, ‘I viewed certain documents, none of which documents belonged to or were under the power of my client. I did not remove or destroy any documents, nor did I direct any person in possession of any documents that he should or should not make them available to the Commission.’ Costigan was determined to get to the bottom of it.
Packer and his advisers, including Turnbull, bowed to the inevitable and in February 1984, after three months’ resistance and delay, Packer was forced to give evidence in public.18 Asked to explain the cash from Ray, Packer said:
My recollection of it is that we were talking on the telephone … and he made the remark: ‘How are things going?’ I think I said: ‘Well, it has not been a good week’. ‘What is wrong?’ I said: ‘I lost too much at the races’ or whatever it was. He said: ‘Do you want some money?’ I said: ‘Have you got any?’ He said: ‘Yes, I have got a bit’.19
A while later there was this exchange: Meagher: ‘Why did you ask to be paid in cash?’
Packer: ‘Because I wanted it in cash. I have a squirrel mentality. I like to keep money in cash.’20
Packer’s explanation was defiant and colourful—good copy for the next day’s newspapers—but totally unconvincing. Costigan later wrote that Packer’s extraordinary account ‘defied rational belief’.21 Far more convincing, however, was Packer’s in-camera evidence to Costigan.22 Cagey in public, Packer was cooperative in private—indeed, he became almost a sympathetic character. He did not cry poor, which would have been ridiculous for a man whose fortune BRW reckoned at $200 million, but he did explain frankly that his liquid assets were limited. Apart from his Bellevue Hill home and his CPH shares, which could not be sold without losing control of the empire, he had little else. He was constantly borrowing from the banks, and while they were generally happy to lend him money, there were many times he would rather not ask.
In-camera, Packer was also asked about a $1 million cheque he’d cashed on a company account at the CBC Bank in Sydney. He explained this was the part-proceeds from the sale of two family properties into CPH after the death of his father. Extraordinarily, Packer told Costigan that when he cashed the cheque, the bank’s chairman, Robert Crichton-Brown, called the police and prime minister Malcolm Fraser, telling them Packer was withdrawing the money to bribe NSW premier Neville Wran, in exchange for a share of the state’s Lotto consortium. Packer called Fraser himself to denounce the rumour as a lie and immediately closed his CBC account, telling Crichton-Brown the bank was ‘the most disgraceful operation I’ve ever seen’.23
Packer explained he had hardly ever attended to his personal finances but always focused on the main business, Channel Nine, on the basis that ‘if it prospered, everything else was unimportant’.24 Packer told Costigan his $1 million from CBC, combined with the $225 000 from Ray, was the first time in his life he had ever enjoyed real liquidity—money he could do with as he liked. He was very open about his legendary gambling habit.
Packer was also questioned about a 1978 drug importation: a suspicious-looking box from Kathmandu, addressed to him at World Series Cricket, was detained at Customs. Customs asked ACP about the box and was told no-one at the company knew anything about it. ACP asked Customs to open it. Apart from the cricket books and figurines inside, Customs found the thick sides of the box concealed hundreds of condoms filled with hash oil. When asked about the incident, Packer exploded: ‘You do not believe I am involved with smuggling drugs, surely?’ Costigan told Packer the commission was interested in a cleaning company that worked at the ACP headquarters and was linked to a Painters and Dockers address, and placated him: ‘I just hope you understand that so far as the commission is concerned it is not making any allegations against you of that kind at all.’25 As he walked out, Packer would have been entitled to assume the episode was dealt with.
Wrong. Costigan, it soon became clear, had been unmoved by Packer’s masterful performance as witness. The pressure kept building. An investigation by National Times journalist Marian Wilkinson was held up for weeks, putting the newsroom on edge as Fairfax management got jittery. It was reported that managing editor Max Suich was trying to water down Wilkinson’s copy, and would not even let her put questions to Packer.26 Wilkinson remembers that when she finally did get in to see Packer, Turnbull was beside him. As journalists do, she opened with the softer questions about his approach to tax, rather than going straight for the jugular. Packer and Turnbull would have none of it: they told her to read out all her questions, top to bottom, before they would say a thing.27
Turnbull may have been constantly at Packer’s side in 1983 and 1984, but his role should not be overstated. Costigan’s investigations concerning Packer’s tax affairs dated back to 1979–80, when Turnbull was in England. Packer’s tax arrangements were no part of Turnbull’s responsibility as group counsel—he may have been able to advise on the legality of a particular structure after the fact, but he did not have the expertise to design tax-efficient structures from scratch. Tax was left to very expensive outside specialists, lawyers and accountants who were way above Turnbull’s pay grade. What’s more, Turnbull was extremely wary of some of the characters Packer hung around with, and deliberately kept his distance—he would not even be in a room alone with Beames, for example, insisting instead on the company of one or two solicitors, taking furious notes. But Turnbull would soon be pitched into the centre of the maelstrom.
In March 1984, a month after Packer’s appearance, Costigan got his last extension from the prime minister: the report would be due by 31 October. Within the Hawke Cabinet, it was reported, the NSW Right and treasurer Paul Keating in particular were agitating about the ongoing impact of the inquiry.28 The Liberals, then under the leadership of Andrew Peacock, smelled a rat. In June, Liberal senator Alan Missen told parliament that attorney-general Gareth Evans had attempted to bribe Costigan, offering him a seat on the High Court if he wound up the commission.29 Evans flatly denied it, but when it came time for the NCA Bill to pass the Upper House, Missen decried amendments introduced, he said, at the behest of Packer, ‘who has been running around the country with great determination to get this feeble Bill through and to get rid of the Costigan Royal Commission’.30 Evans was ducking and weaving, Missen suggested:
The Attorney-General said that he had not had any representations, either directly or indirectly, from Mr Kerry Packer … He thought the other Ministers had not … We all know the people who have been going round making representations like mad—Mr Malcolm Turnbull, the counsel for Kerry Packer. He has been in touch with many people … including honourable senators in this place. Some of them have acknowledged it to me. What does the man call himself? It is not the injudicious bystander; he is the ‘Officious Bystander’ of The Bulletin … This man has been doing a lot of inquiring.31
Missen was simply fobbed off. Gareth Evans nowadays cannot remember whether Turnbull lobbied him personally over the NCA legislation or the Costigan inquiry, but says he probably did, and ‘if he did, he would have been pushing on an open door in terms of my perception of the bad behaviour of Costigan. The way in which they were tarring people was just a classic misuse of royal commission powers.’ Certainly there was no love lost between Evans and Costigan—they came from opposing factions in the divided Victorian branch of the ALP—but Evans insists the bitter rivalry was beside the point. Evans had no relationship with Packer himself but in a roundabout way concedes the NSW Right members within federal Cabinet may have had a different motivation: ‘You didn’t get much high civil libertarian principle in a lot of those guys.’32
Costigan could see which way the wind was blowing: his investigations were not complete, the NCA itself had been weakened so that its investigations would be conducted in private, and the handover from his own inquiry to the NCA under inaugural chairman justice Donald Stewart was compromised, with time running out for proper briefing of its investigators. Worse, Stewart did not seem to care. In early September, Costigan wrote to Stewart:
I note your confidence that failure to receive briefings will not constitute a serious impediment 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.33
Costigan could not make formal references to the new NCA under its establishing legislation, so he settled on providing the attorney-general with ‘case summaries’ which outlined the nature of the allegations before the commission, and the evidence obtained so far. The case summaries were not conclusive findings, and if he’d had his way Costigan would not have produced them. But his time was up. The case summaries—forty-two in all—were given to Evans in August then handed on to the NCA. That same month, Marian Wilkinson’s Packer investigation was finally published in The National Times, looking at the film scheme and the unusual death of a Queensland bank manager, Ian Coote, with close links to Ray. Under privilege, Missen kept probing Evans in the Senate, asking about the case summaries and precisely how many related to Packer.34
At first, after The National Times splashed with the Goanna revelations, Packer’s team kept their heads down even as the speculation went wild, including one night when someone spray-painted ‘Packer is the Goanna’ on a hoarding at Sydney’s Central train station. When it looked as though Packer would be identified as The Goanna in parliament, after then opposition leader Andrew Peacock called prime minister Hawke a ‘little crook’ and briefed the media that he was referring to his relationship with The Goanna, Turnbull urged Packer to take the fateful step to out himself and attack Costigan. Turnbull had written a comprehensive, 5000-word rebuttal of the Costigan case summaries, and this was published in full or in large part in most major newspapers across the country. The Herald ran it across three broadsheet pages, headlined: ‘Each and every one of the allegations against me … are false, and demonstrably false’. Although written in the first person, as a statement by Packer, the voice is recognisably Turnbull’s—combative, legalistic and full of the triumphant debater’s galling logic.
Packer’s statement said that when the case summaries were published,
I fully expected the royal commissioner himself, Mr Costigan, to publicly disassociate himself from The National Times material and expose it as a gross journalistic fraud. It is for that reason that I initially decided not to make any public statement about ‘The Goanna’ allegations. The royal commissioner has not chosen to deny or affirm the correctness of the attributed material … His silence virtually compelled a conclusion on my part that the attribution of the public material to the royal commission is correct … His failure to take any action regarding material concerning ‘The Goanna’ amounted to an implicit endorsement of its publication.35
The statement went on to address the major allegations made in the case summaries. Packer had come out swinging. ‘It actually did turn the tide,’ Turnbull recalled later.36 The Bulletin followed through with a series of articles by editor Trevor Sykes and managing editor Trevor Kennedy, decrying the ‘New McCarthyism’ and countering the ‘laughable’ allegations one by one.37
Roughly six weeks after The National Times revelations, on 1 November 1984, Costigan’s final report was released. The most explicit material on Packer was kept confidential, in unpublished volumes, but there was a 22-page rebuttal of ‘Mr Packer’s complaint’. Costigan spoke plainly of the damage done to the inquiry by the leak of the case summaries, describing it as ‘highly regrettable’ not only for the harm to reputations but for the potential prejudice to ongoing investigations arising out of the commission’s work. He warned it was ‘wrong to assume, as Mr Packer has done, that the case summaries represent final conclusions. They do not.’ Costigan then insisted that the commission was not the source of the leak. Finally, Costigan noted that he had not sought to publicise Packer’s name—Packer had identified himself, and the reputational damage was therefore of his own making.38
On the day Costigan’s final report was tabled in parliament, Turnbull released another long denunciation of the commission. He also did a thirteen-minute interview on the Nine Network’s top-rating Willesee current affairs program. Turnbull was unrestrained, calling Costigan ‘unjust’, ‘incompetent’, a ‘statutory Savonarola’ who felt he had a ‘licence to libel’. The soft-pedal interview was regarded as one of the lower points in Mike Willesee’s stellar career,39 but one question did stump his guest: ‘Why?’ Turnbull paused: ‘That is one of the great questions of all time, Michael. I cannot understand it.’40 In truth, no-one has answered that question: Why would Costigan risk his professional reputation and turn such an important inquiry into a personal vendetta against Packer, a man with whom he had no beef whatsoever? But there was no time to reflect while Turnbull’s guns were blazing:
Willesee: ‘On the nasty aspects of possible complicity in a murder, financing drug-running, being involved in major SP network, would you put your reputation on the line that there is no evidence to support any of those allegations?’
Turnbull: ‘I would certainly do that. I’d have no hesitation in doing that. I mean I know by virtue of my position, as much about Mr Packer’s activities if not more than [Costigan] does, and I have no doubt at all that he is innocent of those allegations. Totally and utterly innocent.’41
Turnbull had nailed himself to the Packer mast. Next day, Nine news showed Turnbull handing out Packer’s thick statements in the foyer of the ACP office at 54 Park Street, telling reporters Packer would be making no further comment.
Costigan’s final report had called for an inquest into the death of Coote, who was found shot dead beside his car on the outskirts of Brisbane in 1982. Just prior to his death, Coote had been told he was under investigation by the Queensland Fraud Squad—he had been caught skimming off his bank. Fearful his family would lose everything, he tidied up his financial affairs, took out an old gun he’d inherited from his father and shot himself. At least that’s how the police saw it. But a bizarre series of errors by ballistics experts working for the royal commission in Victoria—who conducted test-firings but failed to check photos of Coote’s gunshot wound—resulted in bad advice being given to Costigan. Costigan was told the entry wound was so big the muzzle had to be at least a metre away, so someone else must have pulled the trigger. In fact, the wound was exactly the same size as the barrel, not conclusive of suicide, but certainly consistent with Coote leaning over the gun, reaching down and pulling the trigger himself. It was a fundamental, unforgivable error, and when the inquest established what had happened, the murder theory went out the window—very publicly.
Packer had such confidence in Turnbull that he sent him up to represent him during the inquest in Brisbane. There, Turnbull cross-examined a Queensland detective, Gary Wilkinson, who had conducted the original investigation into Coote’s death, and who now revealed a conversation he had had with Douglas Meagher outside the Costigan commission hearing in Sydney:
Wilkinson: ‘He said Packer was involved in organised crime in Australia and they were going to get him.’
Turnbull: ‘Can you remember the exact words?’
Wilkinson: ‘One part I recall he said: “He’s a prominent criminal and myself and the commissioner are going to destroy him.”’
Turnbull: ‘Did you get the impression that Meagher and Costigan hated my client?’
Wilkinson: ‘They obviously did not like him, but I don’t know if they hated him.’42
Turnbull’s attack resulted in more headlines, sympathetic to Packer. Two days later, coroner Bob Bougoure found Coote’s death was indeed a suicide, concluding there was a ‘complete lack of evidence to support murder’.43 It was enough vindication for Packer—and for Turnbull—and the reputation of Costigan’s inquiry never recovered. In a doorstop press conference, Turnbull let rip, foreshadowing legal action, saying the finding was a ‘savage indictment of the disgraceful and improper methods by which the Costigan commission conducted its operations’.44
Flushed with success, Turnbull now over-reached, accusing Meagher of leaking the case summaries to Brian Toohey, editor of The National Times, at a lunch at the Jade Lotus restaurant in Melbourne, a week before they were published. But he also said Toohey told Meagher he had been leaked the case summaries by a source at the NCA. Quite how Turnbull knew what Toohey told Meagher was unclear, and Turnbull vacillated between arguing Meagher himself did the leaking to Toohey, and arguing a lesser charge that Meagher and Costigan failed to prevent publication of the leaked material. Turnbull told Nine news:
Certainly, it was a highly improper meeting for him to be having, even on his own admissions, because it would seem that what he was doing was verifying the documents. As counsel assisting a royal commission, he had no business having a clandestine lunch with Brian Toohey in those circumstances.45
Toohey issued a prepared statement: ‘Malcolm Turnbull does not know who my sources are for any story I’ve written. I’m surprised that he should claim to do so.’46
A spat in the media was one thing, but Turnbull on behalf of Packer the next day filed a defamation action against Meagher in the NSW Supreme Court. That very morning he gave another interview, this time to the ABC, whose reporter asked what evidence he had that Meagher had leaked documents to The National Times:
Turnbull: ‘Well, I have significant evidence that’s sufficient to enable me to make these statements.’
Reporter: ‘Until you give evidence in court, all that you say is really innuendo—the same sort of thing that you accused Mr Meagher and Mr Costigan of throwing up against Mr Packer. Aren’t you playing the same game that you accused them of doing?’
Turnbull: ‘No, I’m playing nothing like the same game. I do have evidence. The lunch in itself and the implausible version of what happened there, is evidence in itself.’47
Judge David Hunt took a very dim view of these statements to the media, and he accused Turnbull of ‘poisoning the fountain of justice’—especially when the evidence failed to emerge. Missing entirely from Packer’s statement of claim, the judge found, was ‘any attempt at all by the plaintiff to give particulars of the allegation’. When Meagher sought particulars of the case he had to answer—as he was perfectly entitled to do—Turnbull told the judge that he preferred to remain ‘opaque’.48 Next thing, the Packer camp put out a press release purporting to discontinue the proceedings altogether, flagging different litigation in another jurisdiction, and finishing with the line ‘none of the allegations that have been made about Mr Meagher are withdrawn’.49
Meagher would not let Turnbull off the hook so easily, and nor would Hunt. The discontinuance notice was struck off as an abuse of process, as were the original proceedings, which Hunt found were not designed to vindicate Packer’s reputation by winning damages in compensation, but to investigate the conduct of Meagher and the Costigan commission. Hunt found Packer ‘never did have a case’ against Meagher over the leaking allegation:
There may indeed have been a vindictive desire on the part of the plaintiff to make the defendant as uncomfortable as possible, for as long as possible, by having these proceedings hanging over his head in order to punish him for his part in assisting the compilation of the report of the commission.50
Hunt ruled Meagher was entitled to enjoy the vindication that came by throwing the proceedings out, with costs: ‘He has successfully and publicly called the plaintiff’s bluff.’51
Packer and Turnbull had more luck suing National Times publisher Fairfax. After the Coote inquest, Fairfax came under increasing pressure and wound up issuing what The Bulletin called an ‘abject’ apology to Packer, as part of an undisclosed settlement. Strangely, in the apology, Fairfax accepted that it ‘had no evidence nor was it aware of any evidence to support the allegations in the Costigan case summaries’52—as though the newspaper could not rely on the Costigan commission itself but should have reinvestigated every allegation.
Toohey is unrepentant:
It is absurd to suggest that journalists have to independently report what a royal commission has spent huge amounts of money and huge numbers of lawyers working on. It is absolutely standard practice in Australia to report what royal commissions have to say, and it’s ludicrous to suggest otherwise in this case.53
Toohey says Turnbull himself—to his credit, given it would not have pleased Packer—acknowledged in front of several editors at a conference on the Gold Coast, that he supported the decision to publish: ‘That doesn’t surprise me, because he is quite proud of his background as a journalist.’54 Still, the backlash hurt The National Times, and it wasn’t long before the paper closed down. But as managing editor Max Suich later recalled: ‘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.’55
Brushing off the verdict against his Supreme Court proceedings, Turnbull remained adamant the commission itself was the source of the leak. Twenty-five years after the event, he said in an interview that he had relied on surveillance evidence of the Jade Lotus lunch. The ‘incontrovertible, rolled-gold’ evidence was gleaned from an officer from the Australian Federal Police, which investigated the leak at the time, and he or she would have been compromised if the nature of the evidence had been revealed. ‘We got ourselves into the position where in order to stop Hunt striking the action out we would have had to disclose the basis of our assertion,’ Turnbull said, adding: ‘There was a lot of anger among people in the law-enforcement agencies about Costigan and Meagher.’56 Toohey shot back: ‘I can state categorically that Malcolm Turnbull cannot possibly have any evidence that Douglas Meagher leaked those summaries to me, because he didn’t.’57
In 2006, former Age investigative journalist Bob Bottom said a source within the commission had leaked to The Age the same material that Toohey had. Livid, Toohey told Crikey:
If Bob is saying he had a source within the commission then that is very foolish and irresponsible of him. The material was given to government, and was quite widely distributed. I am not saying who my source was, and I don’t know if it was the same person as Bottom. No responsible journalist should say any more.58
For Joe Costigan, it is galling to hear repeated over the years the same blithe leaking accusations against the royal commission: ‘It does Turnbull no credit to continue to assert without evidence that Dad or Doug were responsible for the leak.’59 Malcolm Turnbull now says that, at the time, ‘detailed information about Meagher providing the case summaries to Toohey and Bacon was provided to us by a senior AFP officer. I had no reason to doubt it.’60
Forever linked to the Goanna revelations in The National Times, the Costigan inquiry itself had a more important legacy in fighting tax evasion: the exorbitant cost of the commission, estimated at more than $10 million, was rendered trivial by the $590 million in tax revenue collected or expected by the time of the final report, and the thousands of successful bottom-of-the-harbour prosecutions.61 There may have been more had the NCA followed up the commission references with more gusto, but Justice Stewart had his own methods and a mixed opinion of Costigan. The NCA had inherited a trove of documents from the Costigan commission, Stewart wrote in his memoirs, ‘some useful, many not’.62
Packer and Turnbull met with the NCA half-a-dozen times during 1985, and subsequently with the Director of Public Prosecutions, who was asked in early 1986 to decide whether to press charges. Ultimately the DPP did not proceed with the investigation.
For all that his business emerged unscathed, Kerry Packer never forgot the Costigan affair and was forever grateful to Turnbull, who fought so hard in his corner when it counted, and when plenty of fairweather friends deserted him. Turnbull, as colleague Trevor Sykes recalls fondly, was a great lawyer for a hard road—although if you had a perfect alibi and twelve priests as witnesses, you might choose someone else. The threat to Packer’s business lingered for months, as the Broadcasting Tribunal was urged to consider the Costigan material in its review of Nine’s licence in 1985, and decide whether he was still a ‘fit and proper person’ to hold a licence. Turnbull went in to bat for Packer with the tribunal, and was successful.63 Packer’s burning sense of injustice was passed on to the next generation. At his funeral in 2006, son James made a point of raising what he called the Goanna travesty—Kerry’s ‘darkest chapter’.64 Turnbull himself wrote that the Costigan commission was ‘one of the blackest episodes in Australian legal history’,65 and he has stayed on the attack ever since. Speaking to the Sydney Institute on the rule of law in July 2015, Turnbull recalled:
I had a client many years ago called Kerry Packer, who thought he was a pretty powerful guy. He was brought to the brink of ruin by a royal commission that ran off the rails, the very brink of ruin. He was denied due process, denied natural justice, denied his rights. He had the resources to be able to take it on, but it was a very close-run thing.66
Sometimes, Packer’s sense of injustice was overdone. Comic actor Max Gillies found himself up against Turnbull in 1985 over a Gillies Report sketch for ABC Television that he thought was quite sympathetic to Packer, and was certainly legalled as okay, but which went down the wrong way at Channel Nine. The sketch portrayed a loud-mouthed Packer, bloated and chain-smoking, getting grilled by an audience of lawyers and journalists. At one point Gillies even snuck in a Turnbull gag, with his Packer piping up: ‘My lawyers tell me there’s more than one way to strangle a cat.’ As the mob grows more strident, Packer loses it, smashing his desk and escaping to climb up a transmission tower, like King Kong but with a big goanna tail, fending off choppers from channels Seven and Ten.
At first there was no reaction. In fact, everything still seemed fine a few weeks later when Gillies was invited to appear on a Monday edition of The Mike Walsh Show, a handy opportunity to promote his upcoming live tour. But then, the day before his appearance, some promo spots for Gillies went to air during the Sunday current affairs program, which Packer happened to watch religiously, and out of the blue, Gillies got a call from a researcher on the Walsh program: ‘We can’t proceed tomorrow night. Your spot has to be cancelled. The producer said not to beat about the bush but to tell you that your past has caught up with you. You have offended Kerry.’67
Gillies was beside himself, and by the end of the day was getting calls from journalists filing for Monday’s papers. The next morning he did a few impromptu radio interviews in which he said he had no idea why his spot had been pulled, and complained about his apparent black ban and management interfering with programming. As he was walking home later that day, a truck carrying the afternoon edition of Melbourne’s Herald drove past, emblazoned with the headline: ‘Gillies challenges Packer’. The story was snowballing. It was time to get a lawyer, but to Gillies’ horror the ABC legal department was now backpedalling at a hundred miles an hour.
The following day in Sydney, Gillies got a phone call from Turnbull:
Gillies: ‘I’m glad you rang. I haven’t heard anything from you. I want to know the substance of the ban. Does it mean I’m banned from all Nine programs?’
Turnbull: ‘What I am ringing you about is to try and find out where to serve this writ …’
Gillies: ‘What’s this about?’
Turnbull: ‘It’s over the Goanna sketch.’
Gillies: ‘Will you explain to me what’s the problem? Shouldn’t we talk about it?’
Turnbull: ‘On the basis that this conversation is without prejudice. I won’t tell anyone about it if you don’t.’
Gillies: ‘I didn’t understand that Packer was upset. I understood people were upset on his behalf …’
Turnbull: ‘Kerry was very upset by it, and I cried when I saw it. It was beyond the pale.’68
Turnbull, according to Gillies, added that Nine boss Sam Chisholm had also cried, and described the sketch as ‘a savage piece, where you presented a hounded criminal’. He went on:
Turnbull: ‘You’ve got this line “Will he [Packer] escape the slammer?”, which clearly suggests he will be in the slammer. You’ve got to understand what it’s like up here in Paranoia Towers. This is clearly part of what the ABC is doing, which is a conspiracy. The ABC put the Goanna piece up when [the] Broadcasting Tribunal renewal hearing was on. We are going to sue the ABC over the Goanna piece, but we were awaiting the outcome of the Fairfax defamation action.’
Gillies: ‘I want you to tell him that I’m very upset that he’s upset.’69
The idea of those Packer hardheads weeping at a comedy sketch was a little hard to come at. ‘Paranoia Towers’ was probably closer to the mark. Mainly, Gillies wanted to know if he was banned—a big deal for an actor, to be banned from appearing on the nation’s top-rating TV network. Turnbull wouldn’t say, but he thought it would help if Gillies apologised personally, even though Nine would still sue the ABC. Gillies had his pride, however, and did not apologise. He accepted the Packer writ, but the case never got to court—it just hung over his head. Actors Equity challenged Packer in the Broadcasting Tribunal on Gillies’ behalf, arguing that the ban amounted to ‘the resources and licence of Channel Nine being brought to the aid of a private citizen’—barristers Stuart Littlemore and Tom Hughes went toe-to-toe.70 The tribunal ruled Nine could keep its licence, and Gillies did not appear on the station again for many years, until after Packer died.
In 1987, at the behest of prime minister Bob Hawke, attorney-general Lionel Bowen issued a statement in the federal parliament exonerating Packer completely:
First, an incalculable and unwarranted damage has been done to Mr Packer. Second, there is no basis to justify any charges being laid against him. Third, he is entitled to be regarded by his fellow citizens as unsullied by the allegations and insinuations which have been made against him.71
It was an unusually definitive statement, one welcomed within the Packer camp. Turnbull later said that it would have been an act of
unutterable bastardry, having had Packer go through all this stuff for all these years, for the DPP to decide not to charge him and the government not to say anything about it. Even if Packer had been charged and convicted on offences relating to the film scheme, that could never, ever have justified what had been done to him in respect of all the other allegations.72
Frank Costigan saw the attorney-general’s statement differently and promptly sued for defamation, taking advantage of a slip-up: Bowen’s office had issued an advance copy of the statement as a press release, which was not covered by parliamentary privilege. Costigan took particular exception to a paragraph in Bowen’s statement that read that the government ‘rejects the policy favoured by Mr Costigan of public exposure of persons suspected of criminal activities as a means of combating criminal activity. There is no place in our legal system for guilt by accusation or denunciation.’ The two men slugged it out in court for years, until it was finally settled. Like many a courtroom drama, the only winners out of the Costigan saga were the lawyers—particularly Turnbull, whose huge gamble with Packer’s reputation had paid off. Turnbull was blooded.