We don’t usually lift material but this article in The Sunday Times of London about Westfield’s grubby tactics in the UK is just too good. We’re building up Westfield’s global shame file and have included Ian Verrender’s award winning piece in the Sydney Morning Herald from December 1998 about Westfield’s use of bogus community groups.
The payment, made to Levy in January, came from Westfield, one of the world’s largest retail developers which is attempting to push through plans to expand seven inner-city shopping centres in this country.
Levy’s retainer threatens to spark a new “cash for access” row in the Commons. Peter Allen, the head of Westfield’s UK arm, confirmed he had access to senior government figures. “I’m developing relationships with ministers,” he said. “I have been to different Labour party events at Downing Street.”
Levy, who has no obvious expertise in developing shopping malls, has not revealed the payment in the register of Lords’ interests though he does declare his ownership of Wireart, the company that received the money.
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Norman Baker, the Liberal Democrat MP for Lewes, called on Blair to sack Levy as his special envoy.
“It appears that Lord Levy has been trading on his status as the prime minister’s friend,” he said. “It is hard to believe that a former music promoter could command such a fee for that type of work for any other reason.”
Levy, a former impresario whose discoveries include Alvin Stardust and Chris Rea, has come to prominence as Labour’s chief fundraiser, pulling in donors such as Bernie Ecclestone, the Formula One boss who donated £1m, and Lakshmi Mittal, the Asian steel billionaire.
Westfield’s £100,000 payment to Levy thought to be one of several was for six months’ consultancy work, ending in June this year. He had been a consultant “for two or three years”, according to Westfield.
“He (Levy) was retained by and reported to our corporate head office in Sydney to advise on the UK retail market, to flesh out the shape of that market and to identify business opportunities that might suit Westfield’s scale of operations,” it said.
The company opened offices in London four years ago. Through takeovers, it has built up assets worth about £500m and is now among Britain’s biggest retail operators.
Last month, Westfield representatives met Lord Falconer, minister for housing, planning and regeneration, who toured the company’s shopping centre in Swindon, which has been earmarked by the government for urban regeneration. Ministers have the ultimate say in deciding planning issues and can overrule local objections.
Westfield has a reputation for winning political friends by making donations and hosting dazzling parties in America and Australia, where it is well established. Last week, it made no secret of the fact that it was seeking political influence in Britain.
“We have spent a long time working with local authorities and central government in terms of building and developing relationships, which should bode well in getting planning permission,” said Allen.
“I’m developing relationships with ministers within the DTI (Department of Trade and Industry) and other departments on a one-to-one basis. A relationship in the UK comes down to my influence with the central government.”
Allen described Westfield as “a very aggressive, very opportunistic company”. “As a group, we all have various levels of contacts,” he said. “If our people can utilise those contacts, well, that’s good.”
Downing Street, the DTI and the Department for Transport, Local Government and the Regions refused to say whether they had spoken to Westfield.
Levy is a familiar figure in the corridors of power. Not only does he have a seat in the Lords and play tennis with the prime minister, he is also Blair’s special envoy to the Middle East.
Despite his position, Levy escapes the rigorous disclosure requirements applying to MPs and ministers. Members of the Lords are supposed to reveal payments for lobbying or for advice on parliamentary matters but until last week were not obliged to disclose business income with no bearing on their official duties.
Levy shares common interests with Frank Lowy, Westfield’s 71-year-old founder, who is ranked Australia’s second richest man after Kerry Packer, the media magnate. Levy and Lowy are both self-made men with a strong interest in Jewish charities, Israeli politics and the Holocaust.
Not all of Westfield’s developments have been welcomed. In Nottingham, critics fear its £400m plans to double the size of a shopping complex will create a concrete monstrosity in the town centre. Its £200m plans to expand a retail complex in Belfast have also run into objections. Its other sites are in Guildford, Tunbridge Wells, Derby and Bury.
In America the company has made political donations of more than £600,000 mostly to Republicans and to Democrats in Los Angeles, where it has its US headquarters. In Australia, where an estimated one dollar in 10 spent on shopping goes through a Westfield shopping centre, it has contributed tens of thousands of pounds to the Liberal and Labor parties.
Levy is no stranger to controversy over his finances. Two years ago, it emerged that he had paid only £5,000 in income tax in 1998-99 despite having assets worth millions.
Tax questions are also being raised about this latest transaction. Levy did not charge Vat on the £100,000 fee, explaining to Westfield that the consultancy work was “outside the scope” of British sales tax.
Tax experts say that would be the case only if the work were carried out for an overseas client. If the beneficiary of the work was Westfield’s British arm and a company spokesman confirmed it was Vat should arguably have been paid. “The work should not have been zero-rated if it was for the UK subsidiary,” said Mike Warburton, senior tax partner at Grant Thornton, the accountancy firm. “Customs and Excise may be very interested.”
Levy’s office said he had followed tax advice from accountants. “In this matter, he (Levy) was reporting to an Australian company in Sydney and was advised that Vat was not applicable,” it said. He had given up the consultancy with Westfield on February 15, it added, before parliamentary rules were tightened on peers’ disclosure of outside interests.
A joint statement issued by Levy’s office and Westfield said: “Lord Levy has never undertaken political or government-related work on behalf of Westfield. Any meetings Westfield had with ministers or officials were entirely arranged by Westfield themselves and Lord Levy was not involved. Lord Levy has considerable business experience and has a wide knowledge of the property sector and the major figures in it.”
Additional reporting: Nick Hellen; Paul Ham, Sydney; Dipesh Gadher; Eleanor Cowie
Now, let’s take a look at Ian Verrender’s award winning piece in the Sydney Morning Herald from December 1998.
The Westfield body snatcher
Betty Goodridge’s grandmotherly demeanour belies a quick mind and an active interest in the affairs of her local area.
So when she opened the letterbox at her North Strathfield home in July last year and pulled out a leaflet decrying a proposed redevelopment of the disused Arnott’s biscuit factory at Homebush into an entertainment and office complex, she felt compelled to act.
Ms Goodridge wrote a letter to the leaflet’s authors, an anonymous group calling itself the North Strathfield Residents’ Action Group, as did a number of other residents.
“I have written as suggested to the Minister of Planning and the Mayor of Concord, protesting against this proposal, and would like to join your group,” she wrote. “I previously lived in the Liverpool area, where the Westfield group not only killed the main street trading but was allowed to buy and build across the main street.”
Betty Goodridge was a victim of a cynical campaign of manipulation orchestrated by senior members of one of Australia’s biggest corporations. For years, she, and hundreds like her, unwittingly have been campaigning not on behalf of their local communities but in the interests of the big end of town.
The anonymous author of the leaflet was not a concerned local resident. He was Ken Hooper, a hard-nosed political lobbyist based in leafy Woollahra and a man well versed in the art of massaging public opinion.
Hooper was Nick Greiner’s press secretary when he was premier. He writes the John Laws radio program, currently embroiled in the cash-for-comment scandal. He works behind the scenes on Laws’s pay television show. And for a brief time last year, he was pulling the strings behind Kerry Chikarovski’s ill-fated State election campaign.
In recent years, however, one of Hooper’s main clients has been the Westfield group, the company controlled by billionaire property developer Frank Lowy.
There has been no suggestion Mr Lowy is personally involved.
The Herald has accumulated a dossier of confidential internal memos and documents linking Hooper to Westfield. They detail his clandestine involvement in at least four highly sophisticated but bogus campaigns to kill off proposals for rival shopping centre developments.
One concerned a rezoning at Parklea Markets; two others related to Woolworths developments at Five Dock and South Granville. All were abandoned and Woolworths sold at least one of the sites.
Woolworths executives declined to comment on the case but admitted they were concerned about the revelations.
As part of those campaigns, Hooper organised and funded resident action groups and concerned shopkeepers’ groups, created false identities, misled local newspapers and actively lobbied the State Government.
In a dramatic twist this week, following a bizarre year-long battle in the Federal Court, lawyers for one of the Westfield companies finally admitted that Ken Hooper was on the Westfield payroll. It is an admission likely to send shockwaves through the corporate sector and the State Government and possibly spark a new round of huge damages cases.
Woolworths senior executives this week refused to comment on the matter but indicated they were extremely concerned by the revelations.
The State Government also is likely to be unhappy about the matter, given that its Department of Urban Planning often has used existing Westfield shopping centres as the centrepiece for Sydney’s retail development blueprint.
Betty Goodridge is equally unhappy: “I had no idea they were involved. I think it is very wrong and I am very angry about it.”
A short time after she sent her letter to a post office box at North Strathfield, Ms Goodridge received a telephone call from a man inquiring whether she would like to take on the role of spokesperson for the group. As a former campaigner against Westfield developments, her credentials were impeccable. She wisely declined, saying she didn’t have time.
Installing genuine locals to run the campaigns was a well-honed tactic for Hooper by that stage. In 1995, a well meaning local doctor turned up at a public meeting organised by a group of “shop owners” protesting about a proposed Woolworths development on the site of the old Hicraft carpet factory in Five Dock.
“I received some stuff in the mail and turned up to find out who the mystery character was,” the doctor told the Herald. “When no-one appeared, I decided to take over the campaign.”
“Hoops”, as he was known around State Parliament, was fond of deriding political rivals during his days in Mr Greiner’s office as being “in more trouble than a one-legged tap dancer”. But for most of the past year, it is Hooper who has been on the hop.
Seph Glew and his partner, Paul Tresidder, bought the massive Arnott’s site, a stone’s throw from the Olympics complex at Homebush Bay, in November 1997 with grand plans to transform the grimy industrial complex into an office, entertainment and retail complex, and in February last year approached Concord Council with a rezoning application.
It is several kilometres from Westfield’s Burwood complex, which is being rebuilt.
In June, however, leaflets were dropped in letterboxes around the area by a group identifying itself as the North Strathfield Residents’ Action Group.
“Stop this development now. Protest to Concord Council before it’s too late,” the first leaflet screamed.
No address or contact number was included on the initial leaflet but a fortnight later a second one was distributed, headed: “People power can give us homes not cinemas and shopping malls.”
A professionally produced newsletter followed, signed by “Kay Mayson”, warning of the danger of drug peddling near shopping centres. Kay Mayson was, in fact, Katherine Mason, a director of Hooper Communications.
Alarmed by what appeared to be a growing tide of community resentment, the two developers began canvassing public opinion and, quite by accident, unmasked Ken Hooper as the architect of the scheme.
Hooper intitially denied the allegations through his lawyer, threatening the developers with defamation action should they link his name to the action group.
But in a remarkable turnaround last November, Hooper – in a letter written by another firm of lawyers – admitted to running the entire campaign.
He denied, however, that he was working for anyone other than himself, claiming he was involved purely for personal reasons, inviting them to seek damages directly from him.
Unconvinced, Mr Glew and Mr Tresidder launched action against Hooper in the Federal Court under the Trade Practices Act, under the sections dealing with false and misleading conduct. Their aim was to unmask Hooper’s client.
Since then Hooper has engaged a platoon of some of the best legal minds in the country in a desperate bid to keep himself out of the witness box.
For 14 months the case has been bogged down in legal technicalities. Hooper has refused to lodge an affidavit, he has fought tooth and nail to have the case dismissed and has gone so far as to launch a constitutional challenge to a Federal Court order that he must stand as a witness.
At times, up to 16 barristers and solicitors, some acting for the Crown, crowded into the Federal Court to argue the highly technical case. Hooper has lost four times, most recently in an appeal before the Full Bench of the Federal Court. Undaunted, Hooper’s legal team has threatened to take its constitutional challenge all the way to the High Court.
But Hooper’s campaign began to unravel a month ago. One of his underlings, James Photios, became worried that he would become embroiled in the escalating legal battle and, in September, approached Westfield director Mark Ryan, seeking an indemnity.
“I believe such indemnity to be fair and reasonable, as the work was carried out by me upon instructions emanating from or approved by Westfield Ltd and for the benefit of Westfield Ltd,” he wrote.
In a terse reply a week later, Westfield Ltd company secretary Chris van der Laan denied any knowledge of Mr Photios ever working for the company, adding that should Mr Photios “take any action which causes this company to suffer any loss or damage, appropriate legal proceedings will be instituted against you”.
The threat didn’t work. Mr Photios, a non-practising solicitor who is the brother of Hooper’s partner, Katherine Mason, handed over all his file notes to the two Arnott’s site developers and last week filed a damning affidavit, which was read into the the latest Federal Court proceedings.
The affidavit detailed Hooper’s and his own involvement in the campaigns, repeatedly alleging their actions were approved and funded by Westfield.
He also claims in the affidavit to have had a conversation with Hooper in which the lobbyist told him: “I would send bills to Westfield and I would receive in the mail Reserve Bank of Australia cheques payable to cash for the amounts of my bills, with a `Westfield with compliments’ slip.”
It was a bombshell. For the first time, lawyers for Westfield turned up at the proceedings and on Thursday, after the company name repeatedly was bandied about in court the previous day, wrote to lawyers representing the Arnott’s site developers.
The letter said: “During the course of the hearing [yesterday] questions were raised as to the identity of the particular company in the Westfield Group which engaged Mr Hooper.
“I am instructed to inform you that it was Westfield Ltd. Should your client wish to institute proceedings against that company, I am instructed to accept service.”
The letter was signed by Robin Speed, a partner in the small legal firm of Speed and Stracey. Westfield Ltd is a wholly owned subsidiary of Westfield Holdings, which owns and operates 29 shopping centres in Australia and a large number throughout Asia and the Pacific.