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Village Roadshow has joined Westfield as the prime culprits in Australia’s insidious bogus campaign industry run by unscrupulous PR operatives and Anne Davies from the SMH has done a great job exposing it.

The great irony of the campaign that Melbourne spin doctor Ken Davis ran for Village Roadshow against Britain’s Daily Mail Group (DMG), was that Frank Lowy is on the board of the British media company.

Frank, of course, runs Westfield Holdings which are Australia’s most notorious bogus campaign runners through the likes of former Nick Greiner chief of staff Ken Hooper.

Anyway, this is where you can find the Davies piece and below is the full transcript.

http://www.smh.com.au/news/0012/16/text/review3

Public relations, private interests

It’s a $1billion industry that no longer puts out just press releases. Anne Davies reports.

When letters accusing the British-based Daily Mail Group of killing off local radio in Australia began appearing in major newspapers, its chief executive, Paul Thompson, was perturbed.

But when the letters started arriving on politicians’ desks, and there was talk of a parliamentary inquiry into the issue, Thompson decided it was time to take action.

He tried to track down the letter writer, a Peter Johnston, of East Malvern, to have it out with him. The trouble was, he didn’t exist. Nor did two other critics, who had written similar letters.

He began to suspect a smear campaign. In the past months he has turned to private detectives and a linguistic expert to try to identify the real source of the writer.

When the Herald learnt of the intrigue, detailed in DMG’s submission into the parliamentary inquiry, it joined the search.

A piece of coding left on one letter and a mobile phone number provided to a letters editor led to a Ken Davis, one of the senior directors of one of the largest public relations firms in Australia – Turnbull Porter Novelli. Davis’s clients included DMG’s fiercest competitor, Austereo, owner of MMM and 2DAY.

Since the Herald’s story appeared last weekend, DMG has launched legal action against Davis, Turnbull Porter Novelli, Austereo and its executive chairman, Peter Harvie. The statement of claim seeks damages for misleading and deceptive conduct and defamation.

The action will no doubt provide a forum for two of the fiercest competitors in the radio industry to fight it out.

Harvie has denied any knowledge of the letters and Turnbull has also said they were not produced on Austereo’s instructions.

But it has raised questions about the role and activities of the public relations industry, one of the fastest-growing service industries in Australia.

Each day, when journalists arrive at work, they’re likely to find at least two or three press releases, a couple of emails and a voice message or two from a public relations firm.

These are the overt manifestation of an industry which conservatively turns more than $1 billion a year and employs more than 7,000 people. That’s nearly two public relations consultants for every working journalist

But public relations is no longer about putting out a press release or two. It’s in every walk of life – from local government to shareholder relations to crisis management for large companies. And it’s big business.

The top 10 agencies in Australia are now owned by multinational advertising agencies. Hourly billing rates are on a par with big legal firms and a couple of consultants prowling around Canberra’s backbenchers can cost $2,000 or $3,000 a day before a single lunch is bought.

Like the advertising industry, public relations firms are employed to massage the message, to persuade. But unlike the advertising industry, where the tools of the trade are, by their nature, up front and in your face, public relations is sometimes the very opposite.

One of the few experts in the field, freelance journalist Bob Burton, says that Australia seems to have escaped the worst excesses of the profession in the United States. Nonetheless the practice of public relations in Australia is a much under-scrutinised area.

“The nature of public policy and political discourse is being skewed towards those who have the cash,” he says. And it becomes even more sinister when tactics are used to disguise the source of the communications, he says.

Last year one of Australia’s most prominent businessmen, the shopping centre tsar Frank Lowy, apologised to the shareholders of his company, Westfield, over the activities of one public relations consultant, Ken Hooper.

Hooper, a resident of Woollahra, was unmasked by the Herald as the man behind a series of bogus resident action groups in Sydney’s inner west which were opposed to a planned shopping centre development close to one of Westfield’s developments.

Hooper was sued for misleading and deceptive conduct and in the course of proceedings, documents emerged which linked Westfield to the strategy. “We have been guilty of a lack of transparency and openness and that is a matter of great regret and embarrassment to the company,” Lowy told his shareholders.

This week DMG took similar action against Turnbull Porter Novelli. TPN’s chairman, Noel Turnbull, has insisted there is no similarity between the cases, and issued a statement saying Davis had acted privately.

But it was a dreadful blow for Turnbull, who is highly regarded in the industry and who prides himself on his ethical standards.

“Our firm does not accept such action by employees – whether acting on behalf of the company or a client or as an individual – and prides itself on its integrity,” he said. “We require all employees to abide by both the PRIA code of ethics and our own company code of conduct and our six core corporate values. Integrity is one of those core values.”

In the US, creating bogus community opposition or support for a cause is known as creating “astroturf coalitions” – so named because, like the synthetic grass product, they can be rolled out for an immediate effect.

There is no doubt that such activities are unethical, says the president of the Public Relations Institute of Australia, Jim Macnamara.

The PRIA’s code of ethics requires members to deal fairly and honestly with their clients, fellow workers, public officials, the communications media and the public. Members are required to be prepared to identify the source of funding of any public communication they initiate or for which they act as a conduit.

“The code of ethics is a real document. There are three to four members a year who are subject to an inquiry,” Macnamara says.

“Sanctions range from a reprimand to being drummed out of the PRIA.”

But being drummed out of the PRIA is hardly an earth-shattering event.

Only about 3,000 people – less than a half of those styling themselves as public relations consultants – are PRIA members.

And PR consultants are joining the industry at a startling rate. In the absence of hard data – the ABS does not chart the PR profession – Macnamara estimates that over the past decade, the industry has grown steadily at 10 to 15 per cent a year.

In more recent times political spin doctors have moved into the corporate world, congregating in the part of PR known as issues management, arguably the most contentious end of the profession.

One of the industry’s most flamboyant characters, Ian Kortlang, who last year sold his issues-management consultancy to multinational Gavin Anderson for $14 million, says that he was probably the first of the political apparatchiks to cross the divide. Kortlang admits that as director-general of the Department of State Development under the Greiner Government he created the Kingsford Smith Airport task force, to back a third runway at Mascot.

“I helped galvanise a group of businessmen to support the project, I formed the KSA task force to orchestrate the campaign, using all those communications vehicles that are available to government,” he says.

He’s a little more coy about whether he has set up such organisations for corporations, although he admits to helping industries form associations to represent shared views – something that does not breach the PRIA’s code of ethics. “I think the PRIA, which I am not a member of, represents public relations … but we are in issues management and we use tools and things that scare some of those people,” he says.

“People may decide the family pet needs to be put down, but they don’t like seeing it strangled in front of the grandchildren.

“I think what Hooper [also a former Greiner staff member] has done is let the cat be strangled in front of the grandchildren and I think what happened in cash for comment – people seeing it – they accept the outcomes but they don’t like seeing it.”

But others in the industry, even in the more robust issues-management game, don’t share Kortlang’s pragmatic view.

Keith Jackson, of Jackson Wells, another boutique issues-management firm, says unethical behaviour is a short cut and is often a disaster for the client.

He points to the banks’ decision to enter into arrangements with 2UE’s John Laws for positive editorial content.

“The banks certainly have an issue,” he says. “They have a poor image in the mind of the community.” But Jackson says that the way to manage such a problem is a properly thought-out issues-management strategy that may take a year or more to implement and would include such strategies as proper community consultation and listening to what their critics are saying in the bush.

Some of Australia’s biggest companies have embraced these more robust techniques of the PR industry. Several corporations, such as Qantas, have continued with arrangements which involve them paying for on-air support from talkback hosts.

A decade ago public relations used to be primarily the tool of obvious sectors of corporate activity – tobacco companies, drug companies, chemical companies and heavily polluting industries. Now it has become respectable and indeed a mandatory part of the artillery of unions, government and even local councils.

Over the past decade, the debate in the US about ethics and accountability of the practice of public relations and the apparent willingness of companies to accept their advice has burnt brightly.

Books with such colourful titles as Toxic Sludge is Good for You have charted the rise of the covert public relations campaign in an increasingly globalised industry.

A Web site, PR Watch, regularly exposes the less honourable activities of public relations consultants, while US consumer and green groups spend considerable resources trying to expose and counterattack public relations strategies they consider beyond the pale.

In Australia, there has been much less scrutiny and, perhaps, less unethical activity.

ends

Well done, Anne, terrific piece. It is long overdue that the mainstream media start to put the microscope on this insidious industry which are paid to manipulate public opinion, often against the public interest.

DMG are providing some much-needed competition to Village Roadshow’s national FM network Austereo after shelling out more than $200 million for licences in Melbourne and Sydney.

The fact that Australia has less FM stations in our big cities than any comparable city in the western world says a lot about the power of the incumbents.

The story could have gone a lot further. What about pointing out that Village Roadshow have been the biggest donors to the Howard government? These guys will stop at nothing to protect their commercial interests and this included hiring jovial Ken Davis to run a bogus political campaign. Shame on you Ken and shame on you Village.

Disclosure: Crikey’s wife and bankroller Paula Piccinini owns Village Roadshow shares and Crikey has dealt with Ken Davis numerous times over the years. Nice guy but he’s overstepped the mark this time.

Peter Fray

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