By Stephen Mayne
Friday’s Crikey examined the conflicts of interest facing Bob Carr,
Simon Longstaff and Ron Walker and we promised a more in-depth
examination of such conflicts. Well, after pondering this issue for
much of the weekend, here is a list of our ten favourite ongoing conflicts of
interest at the moment. There will doubtless be many more so send your submissions to [email protected]
Bob Carr: after handing over billions in value to Macquarie Bank as NSW Premier, signs up as a consultant two months after retiring.
Macquarie Bank: separating management from ownership in its various
satellite funds whereby huge fees are paid to Macquarie by third party
investors relying on Macquarie to act in their best interests as
Eddie McGuire: being an inside player as Collingwood President and an outside commentator and journalist through The Footy Show and calling games for Nine. Of course he chooses to promote Collingwood interests and denigrates rivals.
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
Larry Anthony: Was Minister for Children and Youth affairs until
losing his seat at the 2004 election, but now sits on the board of ABC
Learning which receives about $1 million a day in funding from the same
department which Larry used to run.
Jessica Reif Cohen: Merrill Lynch’s News Corp analyst has been
a major booster of the stock for many years and she has received
special access to executives and company information. Merrills have
also profited enormously from News Corp, including from
being lead broker to the Fox float in 1998. All those “buy”
recommendations from Jessica helped keep the News Corp price high as
it issued $25 billion worth of stock financing a slew of acquisitions.
Shame there has been no share price performance at all since 1998.
Terry Mackenroth: Played the tough guy Queensland Treasurer handing our great slabs
of hinterland for development, then retired and six weeks later joined the board of Brisbane-based developer Devine Ltd.
Ron Walker: continuing as a Liberal Party influence peddler whilst
supposedly the independent chairman of Fairfax. Pocketed a clear profit
of more than $70 million from PBL takeover of Crown Casino and is now
meant to negotiate a possible Fairfax merger with PBL when James Packer
described the appointment of his friend and ally as an “inspired
The NRL: With News Corp as a 50% shareholder, it is difficult to expect The Daily Telegraph and The Courier Mail
to objectively cover the game. Similarly, Kerry Stokes is alleging that
Seven’s superior offer for the NRL television rights was rejected by the NRL
because of the Murdoch conflict of interest, which extends to dealing between the Packer-Murdoch Premier Media and Foxtel.
NSW Gaming: Huge donors to the NSW ALP creating a difficult
conflict of interest whereby the party finances have to be weighed up
against the public interest. The weight of donations contributed to NSW
having 10% of the world’s poker machines at one point. Conflicts
extended to things like the Penrith Panthers sponsoring John Laws who,
for some reason, was never much of a gaming industry critic.
Gunns Ltd: Anyone wanting to log in Tasmania has to fill
out a Forest Practices Plan. Under self-regulation, an employee of the
timber company can draw up the plan, certify it, and then ensure that
the logging complies with the rules, the Forest Practices Code. This
means a Gunns employee working on a Gunns coup where Gunns wants to
log draws up the plan, certifies it and then hacks away.
Five favourite conflicts from the past
Steve Vizard: Telstra director who undercut the telco by snapping up
AFL Club internet rights with Eddie McGuire and also offered internet
deals cheaper than Bigpond through another business he founded, Virtual
Communities. Also had the temerity to sit on the Melbourne Cricket Club
committee as it negotiated with Channel Nine over AFL rights at the
same time as Telstra was in heavy negotiation with the AFL to buy the
Lloyd Williams: Was chairman of Crown Casino and the
shareholder in its manager, Hudson Conway, at the same time as he sat
on the VRC Committee and was deputy chairman of the then state-owned
Victorian TAB during privatisation negotiations in 1993-94. All the while, his
fellow Crown director and substantial HudCon shareholder Ron Walker was
in charge of securing major events for Melbourne – events which boosted
Crown’s occupancy and turnover. Walker even told Williams he’d secured
the Grand Prix when rival casino bidders had no such prior knowledge.
John Howard: accepted an industrial relations consultancy with
law firm Clayton Utz in the early 1990s whilst he was shadow minister
for Industrial Relations.
Westfield: Frank Lowy’s shopping centre empire used to have no
independent directors on its separate trusts. The Lowy family owned 30%
of the manager and developer of its centres, Westfield Holdings, but no
meaningful interest in the likes of Westfield Trust, which actually
owned the centres. Therefore, the Lowy family was effectively
writing its construction and management contracts with itself. No
wonder shares in Westfield Holdings increased 20 fold in 20 years
whereas units in Westfield Trust barely tripled over the same period.
gave an additional $5 million to the Royal Australian College of GPs
for a new Canberra headquarters one week before quitting as Health
Minister in November 2001 and then signed up as a consultant a few
weeks later, eventually receiving a $382,500 payout.