MABEL: Sergeant, approach! Young Frederic was to have led you to death and glory.
POLICE: That is not a pleasant way of putting it.
It’s been fifteen months since the publication of Packer’s Lunch in hardback and some home truths need to be faced . . . beginning with the title. Let’s be frank. There’s nowhere near enough lunching in the book. Allen & Unwin, in all other matters an excellent publisher, resisted my suggestions to print ‘CSIRO’ somewhere on the cover. Ditto for any references to ‘Health-Giving Sure-Fire Diet for Eternal Youth and Really Excellent Stain Removal’. That was the demographic I was reaching for with the lunch thing, and the text didn’t deliver. After that, what chance did the book have? The minimum requirement, it seems to me, for a truly commercial publication would have been to include some notes on food. Perhaps some handy recipes. Kerry Packer liked his food simple, particularly in the high-rollers’ room when he was taking some poor hapless casino operator to the cleaners. But the food itself is an untold story. So just how did he like his hot dogs? To a culinary neophyte all tomato sauces may look the same. They probably did for Packer as well. He wasn’t one of your namby pamby fellows, slave to delicate nuances. But how did the Big Fella like to apply the red stuff? Did he get the chef to drown the saveloy in situ on the bun, or did he prefer holding the sausage under the surface in the sauce bowl until it stopped kicking?
The book answered none of these critical questions. Instead, most of the attention before publication was on how Kerry Packer would feel about being portrayed on the cover as a fish. The decision was made early on that he needed to be a very big fish. And as fish go, seen in a certain light, a rather attractive fish. Admittedly that may be in the eye of the beholder. Perhaps it’s a marine organism thing. But at the end of the day a fish is a fish, and not everyone fancies themselves cast in the life aquatic. So it was not without trepidation that the final proofs for Packer’s Lunch were dispatched to the printers on 22 December 2005. No further changes would be made.
It was a surprise and a grief when, four days later on the evening of 26 December, Kerry Packer died. His timing as always managed to snooker everybody. He had flown back to Sydney from Buenos Aires only days before, still with enough ticker to push through a $780 million bid on Christmas Eve for AFL rights for the Nine Network. It would create an impossible headache for the Seven and Ten networks over the New Year break, as they agonised whether to match it.
James Packer was holidaying in the Maldives on Christmas Day when he received an urgent summons home. ‘I called him and he couldn’t talk, and then I spoke to Mum and Dad’s doctor and it became apparent that he was in real trouble,’ James said later. Fifteen years before, James had been the first to gallop over when his father fell unconscious on the polo field. The dash now was far longer, and to no avail. He was there with his sister Gretel and mother Ros when Kerry Packer died on the Monday night.
Cardiologist Ian Bailey suggested the final decision on the timing of his death was made by Packer himself. ‘He knew his body better than the doctors did and made his own decisions about treatment,’ Bailey told journalists in the days that followed. ‘He said he was running out of petrol. He was ready to die . . . he had diabetes, the kidney was rejecting and his heart had gone into failure. He knew he was on borrowed time. He could have opted for more dialysis, but he chose to go quickly and with dignity.’
In the wave of public tributes that followed, Prime Minister John Howard announced a state service at the Opera House for the man he described as ‘a generous, very philanthropic person’ who was ‘always concerned about what was right for Australia’. Rupert Murdoch called Kerry ‘a life-long friend, fierce competitor and the most successful businessman of our generation’, though he didn’t make it to the funeral. It was an early sign that James Packer had better not be looking for any special favours.
The Packers closed ranks to do their grieving in private, leaving Sydney society to do the thing it does best when sensitivity and compassion are called for. It drew up a seat and settled down for some hard gossiping about its late hero. There were so many scurrilous stories to revive, revisit, project, recast, amplify and generally carry on about—in a caring way, intermixed with obligatory protestations of grief and regret. It’s what Kerry would have wanted them to do.
There were so many Packer stories. But the one the Packers themselves always came back to, the single slur that rankled deeply two decades later, was the Goanna story—those unsubstantiated allegations of money laundering and links to crime that emerged in the Costigan Royal Commission on which Packer was later cleared. It was the single issue that could still cause the family pain. So it was perhaps not so unusual that the most salacious report that emerged in the days that followed put Packer in the centre of another dirty money story. The report became the Great Packer Scam and you had to admire the timing. The story was in circulation complete with supporting documentation within three weeks of Packer’s death. And so Kerry Packer began his last, and strangest, journey.
A bundle of documents that surfaced in Sydney in mid-January 2006 suggested that Packer had been involved in an international money laundering deal with the Russian mafia. Not just any deal, either. It was the biggest money laundering case that US authorities had ever uncovered, a fabulous money trail that stretched out of Russia and around the world. And it had gone terribly wrong.
The public story began in late August 1998, when the Republic National Bank of New York contacted US authorities with a tip-off. Unusually large amounts of money were being transferred by Russian corporations via Russian banks to an account at the Bank of New York (BNY) in the name of Benex International Company. But when Republic’s investigators visited the Benex office address in Queens, New York, there was no one there. The US Treasury alerted the FBI. By October 1998, BNY was cooperating in an FBI surveillance operation that lasted eight months, tracking money flows.
Benex was set up by a Russian émigré, Peter Berlin, but was said to be linked indirectly with Semion Mogilevitch, who was suspected of being a powerful figure in Russian organised crime. Berlin’s wife, another émigré called Lucy Edwards (born Ludmila Pritska), was a senior vice president of the Bank of New York based in London, heading the bank’s move into Russia. Edwards set up a corporate account for Benex at BNY which allowed her husband to move funds directly from overseas accounts through the bank to other destinations. The money never really made landfall in New York—it was immediately forwarded on to offshore accounts elsewhere around the world, with minimal risk of bank supervision or intervention.
The final destination could be anywhere from Cyprus to Switzerland to the Bahamas. Edwards later testified that Nauru was a favourite spot in the itinerary because the money launderers could tell northern hemisphere regulators that the island was part of Australia (the Russian Central Bank has claimed that 70 billion US dollars was processed through Nauru). At least $US7 billion was sucked out of Russia through three BNY accounts including Benex, and more elsewhere. Edwards and Berlin were convicted of money laundering but were not sentenced. Seven years after it came to light in 2005, Bank of New York paid a $US38 million fine to settle two criminal investigations which included the Benex transfers. Republic National’s owner, Lebanese-born billionaire Edmond Safra, died in mysterious circumstances in Monaco in late 1999, several months after Republic National’s role in instigating the FBI investigation came to light.
That was the public story—and a thoroughly smelly one it was too. Now someone was trying to put Kerry Packer in the middle of it. Packer, it was claimed, had been one of the steps along the international money trail that the Russian money followed after it passed through Benex. With each step the money transfers had gained more legitimacy until finally the money could be pronounced ‘clean’. But in late 1998, as the FBI monitored the suspect money trail, US authorities froze one of the money transfers. It was in an account said to be controlled by Packer, who was now asked to reveal details of where the money had come from. The details provided to US authorities had not been accepted, and the money had never been released. Which meant that Packer owed Russian Mafia figures a quarter of a billion dollars, plus seven years of interest. Now they wanted it back.
It was a fantastic story that would have been dismissed out of hand but for the documents that came with it. They appeared to be copies of Bank of New York files. They began with a letter of confirmation dated 12 November 1988 and signed by Lucy Edwards, addressed to a Mr Vladimir Vinogradov, regarding an international bank transfer #194.58.226.0 of $A248 million. Vino-gradov was the head of IncomBank, the beleaguered Russian bank tied to much of the money laundering claims. The Edwards confirmation letter said that the $248 million had been transferred from a Russian entity, Golden Corporation, care of Vinogradov, through InkomBank. It transited through an offshore Benex account 51191055 which appeared to be in Argentina. The ultimate receiver was listed as Crown Group International, care of Kerry Packer, through Bank of New York account 93328295, SWIFT code BONYUN1U and PRT number 843GSG511.
Edwards concluded: ‘Please note the transaction was executed according to the regulations of the Bank of New York. If you have any further questions please do not hesitate to contact us.’
A second three-page document dated 17 November 1998 on Bank of New York notepaper was also signed by Edwards and headed, Summary of the Transactions by Golden Corporation: ‘Here please find the details of the companies belonging to Golden Group International for the period form 01.01.1998 till 11.17.1998 . . . As a matter of privacy of the receiving part we are not able to provide you with any information related to further bank operations done by the receiver.’ There followed two pages of names, addresses, transfers numbers and account details for 40 transfers of amounts ranging upwards from $US12 000. The total came to $154.3 million in US dollars plus $287.3 million in Australian dollars (which included the transfer noted in the earlier document). A typical entry read: ‘194.58.103.0 – 194.58.103.255 (ITC) St Petersburg State Technical University; 28, Grazhdansky pr.; 195220 St Petersburg; RU – USD 59,000.00’.
Another document, dated 11 March 1999, appeared to be a clear forgery. It was addressed to Vinogradov and signed A. Gore, on letterhead for the Russian–US Joint Commission on Economic and Technological Co-Operation, apparently a reference to former US president Al Gore. The letter said, in broken English, under the subtitle ‘Bank of New York Accounts’:
We are looking into the recently raised threat from the part of the banking institutions around the world with our big concern. As we have previously discussed this matter we are forwarding our official enquiry into the Federal Bureau of Investigation. We hope that all funds transferred into the ‘Crown Group International’ will be returned into the primary holder’s dispose . . .
Finally there was a letter of demand from Inkom Bank, signed Vladimir Vinogradov, addressed to the Bank of New York, attention Lucy Edwards, which threatened legal action if funds transferred from Golden Corporation to the Bank of New York were not returned: ‘We express our concern that we no longer having control over the above mentioned account.’
It was worth reading the memos just to savour the atrocious English. Whoever came up with those sentences needed some serious linguistic counselling. But the level of detail was troubling. The timing in mid-1999 coincided with Kerry Packer’s abrupt decision to put his English polo fields up for sale, followed by the announcement that they had been bought by the saviour of Chelsea Football Club, Roman Abramovich. A friend I consulted, Rolling Stone contributing editor Matt Taibbi, was impressed with the addresses cited in the bank documents. In the mid-1990s he had been living with six penniless foreign students in the nondescript Grazhdansky building at St Petersburg State Technical University, which was cited in the Bank of New York correspondence. He believed only a handful of people would know of the little-used telegraph office in the building.
In the end a simple computer search resolved the mystery. A Ninemsn search on one of the telex codes cited in the documents hit pay dirt. It showed that the transfer numbers cited on the bank documents were actually internet addresses. The list of Golden Corporation companies was simply a cut and paste of a 1999 listing of internet registrations in Russia. That was why the list was so detailed with names, street addresses and telex codes. All the forger had done was insert currency amounts next to each entry and attach some letterhead. The whole series of documents was a fabrication. There was no real evidence of any Packer involvement in money laundering. It was all an elaborate scam, released just at the moment when the Packer family was most vulnerable.
It is perhaps comforting that if someone was going to scam the Packers, they would not do it in anything less than grand style. But why had they gone to such trouble, just to blacken Packer’s name? It looked like an offshore production, most likely by someone with knowledge of the Russian émigré scene in New York, but not so much knowledge of English. The appearance of the forgeries coincided with moves by the Packers to become involved in a Russian casino. It seems reasonable to suspect they were related, though sources close to Packer could shed no light on it. There was a suggestion that James Packer had run into problems with his Moscow plans, and he didn’t proceed with them. But the problems were unrelated, and it hasn’t stopped him fearlessly chasing casino projects around the world, from Macau to New Jersey. That’s what appointing a few solid merchant banker types on the board of the family company will do for you.
By June 2007 James had sold 75 per cent of the Nine Network, surrendering management control to private equity—suits with money. After just eighteen months James had given up the role of media mogul. Now he was just another rich guy.
As James assumed the reins of the empire, other characters from Packer’s Lunch were getting on with their lives, some better than others. In the week of Kerry Packer’s death, lawyers in Zurich acting for Trevor Kennedy, Graham Richardson and Rene Rivkin’s estates made a tactical mistake. On 9 December 2005 the Swiss Federal Court had confirmed the decision by Zurich District Attorney Ivo Hoppler and the Zurich High Court to release twelve folders of bank records and witness statements to the Australian Securities & Investments Commission. The judgment with the Federal Court’s reasons was not published until Wednesday 21 December. It was the final court of appeal for the one-time Offset shareholders. Their lawyers had run out of legal cards to play in Switzerland. But that did not mean that the game was over. According to Shraga Elam, they now made an urgent appeal to the European Court of Human Rights at Strasbourg to stop the release of the documents to Australia.
As Hoppler prepared to dispatch the folders to the Justice Department in Berne, in accordance with the Federal Court’s instructions, the lawyers contacted the District Attorney’s office in Zurich to raise issues connected with the Federal Court ruling. They made the approach either on the Thursday or Friday before Christmas, or on the next working day, Tuesday 27 December. But whether by carelessness or design, the lawyers did not ask to speak to Hoppler. With no formal contact made, Hoppler proceeded to send the twelve folders to Berne on the 28th with a covering letter. From there they were sent directly on to ASIC in Australia. The Swiss lawyers were still manoeuvring, but the horse had bolted.
‘We’ve got the documents—and they’re in German,’ ASIC’s deputy head of enforcement, Alan Turton, told me in mid-January 2006, with a nice mixture of relief and frustration. ASIC had already put in requests for formal interviews with witnesses in Switzerland. By the end of January, working under the tight time schedule that governs requests for Swiss government assistance, they had forwarded a request for further information. ASIC also filed requests for assistance from the Isle of Man, Jersey and the Bahamas, as they traced the entities behind the Leumi accounts. In early 2007 court challenges were still proceeding. Meanwhile the Australian Tax Office was taking an interest.
ATO officers had interviewed Shraga Elam and me in December 2004 and requested (under threat of a subpoena) copies of the documents I had supplied to ASIC thirteen months before. Three months later on 17 March 2005, the ATO used its powers under the Tax Administration Act to question Graham Richardson about the $1.442 million cheque that was paid into Laira’s Bank Leumi account as his share of the Offset Alpine payout in September 1997. Rivkin was clearly too ill to be questioned. The following month he and Gayle began divorce proceedings, before his suicide on 1 May. It’s not known whether Kennedy was questioned, but it seems likely. The general gist of Richardson’s interrogation under oath emerged later in court proceedings. It seems when Richo packed for overseas trips his luggage of choice wasn’t Louis Vuitton. At any rate it wasn’t his first choice. That was reserved for his briefcase, which was the roomy sort of travelling companion into which you can stuff essential travelling gear—say $50 000 in banknotes—without too much unsightly bulging.
The ATO claimed that Richardson ‘intentionally gave false evidence’ that day ‘by denying any interest in the amount of $1 442 000’. The most damaging issue was his alleged cover-up. In court documents later obtained by Susanna Moran of the Australian, the ATO stated:
Following his failure to disclose the income of $1 442 000 he took extraordinary precautions to prevent the [Taxation] Commissioner from becoming aware of the undisclosed income. These precautions included keeping no records in Australia, maintaining a Swiss bank account under another’s name, withdrawing amounts of up to $50 000 at a time, carrying the cash around in a briefcase and spending it while overseas.
It seems Richardson accepted the validity of Bank Leumi records that the ATO had obtained from the AFR, which showed him taking money out of the Laira account, but denied Rivkin’s claim in his Swiss record of interview that the money belonged to him. ‘I don’t think that Rene was in full possession of all his faculties back then and that’s why he said that,’ Richardson told Ros Reines. In his court filings Richardson’s lawyers admitted that between November 1997 and April 2001 he had ‘obtained from Bank Leumi various amounts of money, and that Bank Leumi provided these amounts, in whole or in part, out of funds that were in the [Laira] bank account, but he denies that [he] made withdrawals from the bank account’. He had obtained up to $288 000 from the account in this way, all of which he had spent overseas. But this was all gifts from his friend Rivkin, ‘in appreciation of the close friendship that existed between them’. Richardson had spent seventy-two days on overseas holidays over five years and received gifts of money from Rivkin about six times, he later told Brad Norington at the Australian. ‘Most people do not have a friend like Rene Rivkin,’ he said. ‘This is a person who gave away Ferraris and watches. He was different to the rest of the people in the world. Giving mattered to him—it was part of his make-up. He gave the impression he had an awful lot more money than he actually had.’ Richardson’s lawyers argued the money ‘does not represent income of the taxpayer according to ordinary concepts’ and did not represent a capital gain for the 1998 tax year. There was no reference in the court documents to Bank Leumi records which showed that his wife Cheryl and his daughter Kate had withdrawn funds from Laira.
Richardson continued to exchange pleasantries with the tax man through 2005. In late October Graham and Cheryl paid $681 000 for a two-bedroom apartment on the Gold Coast. Less than a week later, on 1 November, the ATO hit him with an amended tax bill for $2.3 million. The tax demand related directly to the $1.44 million cheque that was paid into Laira. The ATO had assessed him for $700 000 in back tax from this transaction, then added $1.6 million in penalty taxes for fraud and evasion in covering up the 1997 payment. Richardson stoutly denied any cover-up and lodged an appeal which the ATO disallowed on 23 May 2006. Up to this point there had been no public sign of any problem. That was about to change. In August 2006 Fiona Buffini of the Australian Financial Review broke the news that Graham Richardson had launched a Federal Court appeal against a Tax Office decision to amend his tax assessment for his 1998 return.
Richardson had previously told me that he had hired a lawyer in Switzerland ‘to get to the bottom of things’, in the court appeal against the release of the Leumi records. ‘The Swiss courts have not found that I owned a Swiss bank account,’ Richardson told me in September 2006. ‘What they found was that I had no standing to participate in the proceedings about an account, because I didn’t own an account.’ The Swiss Federal Court and Zurich High Court judgments were actually a little stronger than this, finding that Richardson was the beneficial owner of the Laira account, but ruling that since he had chosen to hide behind a corporate veil he could not expect to appeal against the release of account records. According to Shraga Elam the EBC files sent to ASIC clearly showed Richardson’s and Kennedy’s links to Offset Alpine and the Zurich High Court believed the files would prove a range of other crimes by various parties, including market manipulation.
Three days after we spoke, Richardson called briefly once more, in no mood for chit chat. ‘Is that your photographer outside my garage?’ he asked brusquely. It wasn’t, but the obvious suspects were the Australian or the Daily Telegraph. ‘Right, I’ll sort them out,’ he said, and rang off. The following day the Australian ran Richo’s picture with a story quoting unnamed sources criticising the basis of the ATO’s case. The ATO was relying on the documents it had obtained from the AFR, which were largely inadmissible in Australian courts, the source said. The ATO’s position was that under the Tax Administration Act, the burden of proving that the assessment was excessive fell on the person appealing against the decision. In early 2007 ATO officers working with the Australian Government Solicitor interviewed me again as well as Rosemarie Graffagnini about our trip to Zurich in October 2003 and the steps we took to verify the documents that Shraga had obtained. A government lawyer subsequently flew to Switzerland for interviews. Richardson had also appealed against an alternative assessment for the 1995–96 year, that found he had earned the $1.44 million profit on sale of shares when the Australian Federal Court sold the unidentified Leumi and EBC Zurich shareholding into a takeover bid. For Richardson, the sting in this case was that it might not end just with a tax penalty. Where tax fraud or evasion is proven, the Taxation Commissioner can refer the matter to the Director of Public Prosecutions.
Life went on. In March 2007 Richardson picked up a $50 000 defamation settlement from Fairfax Media over an article that linked him with the bashing of state Labor member Peter Baldwin a quarter of a century before. No doubt the ATO was delighted to see him come into a little money. The lobbying work was still lucrative and he had retained most of his friends. In the NSW state election in April 2007 Liberal Opposition Leader Peter Debnam called Richardson one of ‘six people who essentially run NSW’, a claim that Richardson called bizarre. His former staffer, Premier Morris Iemma, concurred. What was he thinking? Victorian Premier Steve Bracks was forced to take a principled stand after some unfortunate criticism directed at meetings that one of his ministers had held with Richardson ahead of a favourable planning decision for the Mirvac property group. Bracks was having none of this sort of witchhunt, which he called ‘the new McCarthyism’.
In the confused world of Richardson’s affairs, at least some clarity was emerging to dispel his confusion about his lunching partner, back on that fateful day of 7 June 1995 when Caroline Byrne died. When Richardson spoke to detectives from Taskforce Irondale in 2000, he said his diary showed he had lunch that day with the head of Canterbury Bulldogs, Peter Moore, at the Hilton Hotel’s San Francisco Grill, but he himself couldn’t recall whether he was there, or being driven to lunch with Rene Rivkin by his driver Gordon Wood. Soon after Packer’s Lunch was published I was contacted by a reader in a North Sydney nursing home who recalled being at the San Francisco Grill with her husband that day. She remembered the date because the lunch was a celebration for her birthday, and both she and her husband had noticed the odd pairing at a nearby table. There was Peter Moore, whose club had spearheaded the Super League breakaway from the Australian Rugby League, talking to one of the ARL’s chief negotiators, Graham Richardson. They were both so struck by this that they called a Sunday Telegraph journalist, Phil Rothfield, to tell him. Rothfield reported the lunch in his ‘What’s the Buzz’ column the following Sunday in a story titled, ‘Super deal in Moore’s lunch pack’. Rothfield had called Moore to confirm the lunch and the date. ‘Graham actually phoned and invited me,’ Moore told Roth-field. ‘We had a really good chat for a couple of hours.’ The story had lain in the Sunday Telegraph archive for eleven years. No one at News Limited had recalled the story or looked for it after Richardson’s lunch companion became an issue at Caroline’s inquest in 1998, or during the repeated waves of press coverage about her death in the years that followed. Apparently even Richo had forgotten about it.
Trevor Kennedy meanwhile had dropped out of view. After all those headlines he seemed to like it that way. On the basis of Richardson’s $2.3 million tax assessment, if the ATO believed that Kennedy received 12 per cent of the Offset Alpine proceeds compared to Richardson’s 7 per cent, then Kennedy could be facing a $4 million tax bill. But there was no sign of any court action connected with this. Rene Rivkin’s estate had been hit by a tax bill for $29 million as an amendment to his 1998 return. On 6 November 2006 his executors, Gayle and son Damien, asked the courts to appoint insolvency accountant Anthony Warner of CRS Warner as liquidator to the estate. Warner was one of the only liquidators in Sydney who didn’t know Rivkin. Rene’s estate had assets of $1.1 million and liabilities of $39 million. Gayle Rivkin was registered as an unpaid creditor who had loaned Rene $2.4 million.
It wasn’t clear where all the money had gone. Rivkin’s family had been selling property, boats and cars since 2003, raising some $27 million. This included the heavily mortgaged family home, Craig-y-mor, that went for $16.5 million. Rivkin’s boat, Dajoshadita, sold for $5.7 million, but the owner was a company in the British Virgin Islands. The estate had no record of Rivkin having received any of the boat’s sale proceeds. While Rivkin in the end left his heirs nothing in his bankrupt estate, the family was not exactly penniless. In June and July 2004 and February 2005, Gayle and the children bought a townhouse and five apartments for a total $6.7 million. Rivkin’s wife, children and business associates were due to be questioned in a liquidator’s hearing in June 2007 as Warner sought to trace the flow of funds in Rivkin’s world.
The 2006 year brought some hope of resolution for Tony Byrne in his quest to discover what happened to his daughter. Just before 9 a.m. on Monday 3 April, British police knocked on the door of Gordon Wood’s London apartment with an arrest warrant for Caroline Byrne’s murder. After eleven years of sporadic investigations and nearly two years of toing and froing between NSW police and the Director of Public Prosecutions office, the Australian government had filed an extradition request with Britain. Wood, who was working as a consultant to a chain of gyms, was not home when the Scotland Yard detectives knocked on his door. He did not return until nearly eight hours later, after a weekend skiing in the French Alps. Wood did not oppose extradition and Inspector Paul Jacob and Constable Paul Quigg flew to London a month later to escort him home. In Sydney he was released on bail and was due to face a committal hearing in late 2007.
Rodney Adler’s fortunes seemed on the mend. He was due to be released from prison on 13 October 2007 after serving two and a half years on dishonesty charges, touring the state’s correctional facilities, from Long Bay to Kirkconnell state prison farm, to Bathurst Jail and finally Kempsey. He had begun a Bachelor of Arts correspondence course through Charles Sturt University. One of the first subjects he studied was ethics. Besides his family, one of his regular visitors was Jodee Rich, who no doubt had much to say about his own civil trial for $92 million in damages relating to the One.Tel collapse. A judgment on that case seemed unlikely until late 2007, with further appeals almost inevitable.
In Zurich, Shraga Elam became a little more security conscious after he received death threats in November 2006, linked to his work as a peace activist in Israel. Shraga was quite sanguine. He told me police regularly patrolled past the front of his apartment building because it was next to one of Zurich’s best known spots for drug deals. Meanwhile he was pursuing some interesting new leads about Australian investors in Switzerland.
Paul Makucha was back in the pink, his financial worries once more subsiding. Pat O’Shane faced a judicial inquiry which vindicated her treatment of him. Makucha called me in late 2006 to ask if it was a good idea to move back into the Toaster, just to show them all that he was a survivor. I told him I thought life was too short. If he was getting out of the Shithouse Motel, he might as well find a place that he actually enjoyed. Perhaps with indoor plumbing. He seemed inclined to agree.
The biggest news in Lang Walker’s household was that he sold the jet. By early 2007 the Falcon F20 with the VH-LAW registration was owned by a company linked to Paul Little, the head of Toll Holdings. One can only wonder at how Lang broke the news to Mrs Walker. Then again, he had just raised $1.125 billion selling off Walker Corporation so maybe he managed to cushion the blow.
In the last half of 2006 Walker unwound the British Virgin Islands financing for Walker Corporation, repaying the $509 million in loans and preference shares held by Athenaeum Investments. By the time he put Walker Corp up for sale in March 2007 there was no sign it had any connection with anything so unfashionable as tax havens. Like any major company, Walker Corporation attracted a periodic review by the Australian Taxation Office. In May 2006 eleven Walker companies filed challenges in the Administrative Appeals Tribunal to tax assessments. It’s not known how large these assessments were and there is nothing to link them with the sale of the group. Regardless of the cause, Walker was not going to be having any trouble paying tax bills after the sale. Walker Corp’s lobbyist, Graham Richardson made the transition seamlessly to acting for one of the buyers, Girvan Corporation. Meanwhile Walker’s case for compensation for Ballast Point continued to bounce back and forth between the courts.
Walker appears to have retained some of his links to Europe, including a Luxembourg investment with Bob Cowper, the former Australian Test cricketer and Elders executive. Since 2003, Walker and his offsider Mark Wilkinson have been directors of PASE Private Equity Holdings SA, a societe anonyme on the Luxembourg register, together with Cowper and another former Elders exec, Bill Payne. Cowper, whose 307 runs against England in 1966 remains the highest score ever made at the Melbourne Cricket Ground, was instrumental in the 1983 Elders–Henry Jones IXL merger before he moved to Monaco. These days Cowper controls the highly respected Pyrford International Plc, which was formed in 1991 to take over the business of Elders Investment Management, which had run the super funds of the Elder group. Former Elders exec Ken Jarrett claimed in court cases in the 1990s that Cowper was one of the mystery investors who made a fortune from a line of Elders bonds that were issued in Switzerland and held through Monaco. Cowper and the others named by Jarrett denied this.
In Sydney, Caterina Tarchi at Machiavelli grew tired of a decade of boring political leaders and dumped politicians’ portraits from the walls of the restaurant in favour of photographs of leading business figures, most of them close to the Packer family. The restaurant was the scene of the Bulletin’s Great Australian awards in June 2006, which honoured Rupert Murdoch as the greatest Australian of them all . . . only to see him launch a ferocious campaign in his newspapers. It began with scathing coverage of Nine chief Eddie McGuire’s supposed threat to ‘bone’ Nine presenter Jessica Rowe, that quickly evolved into a fierce attack on James Packer—‘Jamie in short pants’, as the Daily Telegraph put it on its front page.
Despite the drama, it seemed a desperate gambit for a restaurant named after the author of The Prince to drop its links with politics. But Tarchi said she would reconsider the decision next year, if politics grew more exciting. That seemed to depend on whether Kevin Rudd managed to snatch government from John Howard. The issues were hardly unfamiliar. La Trobe University professor of politics Judith Brett writing in The Monthly in March 2007 put Howard on the wrong side of a shift from ‘age to youth, from fear to hope and from private withdrawal to public engagement’.
She was describing the gathering pace of generational transfer, but there were more concrete examples of the new fault-lines of power. The speed of Sam Chisholm’s exit from Nine after Kerry Packer’s death was another, punctuated by the systematic ejection of his former protégés in the months that followed, which is how Eddie McGuire’s boning fiasco began. By mid-2007 James Packer had sold 75 per cent of the Nine Network to a private equity group. But the move in power lines was being played out on a wider scale, a grander version of Life After Kerry.
I was still thinking about Packer’s legacy when I attended his state service at the Sydney Opera House in February 2006. The media took the front seats of the gallery. Directly below me I could see Graham Richardson sitting in the back row of the main hall. Trevor Kennedy was further along from Richo. The right side of the hall, filled with business associates, family and friends, was packed. Every seat was filled. There was genuine grief here, but something more as well. The succession was still up in the air. The old game of Sticking Close to James was now being replayed with real money.
On the left side of the Opera House the picture was quite different. In the banks of seats reserved for politicians there were gaps. It seemed an effort had been made to bunch those attending together, but it left a solid rank of about twenty empty seats towards the rear, each of them representing a politician who had decided they didn’t need to attend. They would never have dreamed of not coming to his funeral while he was alive. Packer would have dealt with such impertinence directly. The worry was that even now, he would somehow manage to show his displeasure. But they were prepared to risk it. They didn’t come to his state service because they didn’t have to.
It was the same issue with the forged Bank of New York documents. Somebody did it because they could. A wider value system was up for renegotiation. At the start of this story, the whole saga of Rene Rivkin and the amigos’ Swiss bank accounts had come to light because someone had decided the three had become irrelevant. They were no longer players. Such casual dismissals are the covert symbols and signs that mark the passing of power.
Alan Jones, that flag-bearer for the pre-Boomers, was master of ceremonies for Packer’s service. Cricketers were plentiful, extolling Kerry’s largesse in saving the game. Rugby league players were in shorter supply. Much was said of Kerry Packer’s generosity and secret philanthropy, which was certainly true, if a little under-explored. They might have looked a little further for examples. The tribute to Kerry which ran on Nine the night before told the story of Packer paying for a boy in a wheelchair to go to Disneyland with his family. Jones thought so much of the story that he repeated it in his valediction. And when John Howard rose to say a few words, he found himself talking about being on a plane to Los Angeles with a boy in a wheelchair. He was on his way to Disneyland.
James Packer spoke briefly and creditably. His sister Gretel took no part but asked Russell Crowe to speak for her. He made his way to the rostrum to recite Rudyard Kipling’s poem ‘If’. It was arguably the emotional heart of the service, somewhere between Alan Jones’ glib soliloquies about Kerry Packer the battler’s friend who never believed in handouts from government, and the massed private-school choirs singing ‘C’mon Aussie Come On’. Crowe’s measured tones stirred more authentic cadences of earlier times, older voices.
Just over a week before the Packer service in February 2006, the Melbourne business world had gathered at St John’s Anglican Church in Toorak to mourn the passing of that son of the Establishment, Ossie Porter, aged seventy-two. John Barrie Porter, the legendary stockbroker who in his heyday had one of the biggest private client lists in the country, drew a crowd of more than 600 mourners from all over the world to his funeral. One had come from as far as Monaco. Bob Cowper, who worked with Porter at broking house Guest and Bells in the 1970s when Rene Rivkin was still just a passing shower, walked to the front to give his own tribute. Cowper recited ‘If’.
If you can keep your head when all about you
Are losing theirs and blaming it on you
For moments in the crowded Opera House hall the two voices, Crowe’s and Cowper’s, in funeral services days apart, seemed to march together across the gulf in lock step: the deep rolling authority of the actor who won an Oscar for Gladiator, mixing with the older, world-weary tones of the maestro of cross-border currency flows.
If you can make one heap of all your winnings
And risk it all on one turn of pitch-and-toss,
They were celebrating, in their different ways, a nineteenthcentury ideal of masculinity and empire. It was an ideal that had also proved serviceable in covering a wide landscape peopled by more shabby incarnations.
Yours is the Earth and everything that’s in it,
And—which is more—you’ll be a Man, my son!
It seemed, for a sentimental moment, almost touching. Thankfully Alan Jones was there to tidy things up and set the right tone. Sic transit gloria. Or as Horace would have put it if he had Google Translator handy, ‘There goes the Parrot’. Rudyard Kipling and his ideals were a product of his time. But they were not the only product. He shared his age with another acute observer of the nouveau riche, who fomented his own peculiar ideas of propriety and honour in the guise of light opera; who admired the fabric that makes the very model of the modern chief executive, yet realised that some social divisions should not be bridged, some worlds should never meet. He lived at the heart of the Establishment and asked, who needs it? Sometimes even pirates must draw the line.
Pirate King: No, Frederic, it cannot be. I don’t think much of our profession, but, contrasted with respectability, it is comparatively honest.