Last week’s confected linking of Paul Keating to the presidency of the International Monetary Fund by Fairfax was cover for an unlikely push for Peter Costello to the position, says the former prime minister.

Keating was deeply unhappy with the story, by Peter Hartcher, which linked Keating and Costello to the position, including a claim by an unnamed “confidant” of Keating’s that he would be interested in the job.

Keating says he is anything but interested in the position. He is currently chairman of the International Advisory Council of China Development Bank, with a balance sheet that is three times that of the World Bank. And Keating believes the IMF and the World Bank are at the nadir of their influence, particularly given the rise of China.

“After its most recent increment last year, the IMF’s reserves were increased from $250 billion to $500 billion,” Keating told Crikey. “China’s foreign currency reserves now stand at over $3000 billion — because the Chinese will not allow the IMF to do to them what it did to Soeharto in 1998.”

In Keating’s view, the G20 was now the effective superintendent of the international monetary system, not the IMF.

The former Prime Minister believes last week’s story was cover for a Costello candidacy, and suggests former Costello adviser and now News Ltd commentator Niki Savva played a role in convincing Hartcher to include Keating as a figleaf for Costello’s ambition for the IMF role.

Savva rejected the claim today. “I cannot remember the last time I spoke/communicated with Peter Hartcher,” said Savva. “It has been many many months. The first I knew of his piece was when it appeared in the newspaper, so I have not been part of any campaign.”

She says her one comment on the issue has been to note  Keating and Costello would be good in the role, and that neither is likely to end up in a New York court on s-x charges.

Hartcher also rejects Keating’s claim. According to Keating, after Hartcher reported Keating’s comments about US Treasury Secretary Timothy Geithner in a Chatham House session at the Lowy Institute in 2009, he has refused to deal with the senior Fairfax journalist. When Hartcher contacted him for the article, he declined to provide a response, and says Hartcher neither then nor by email asked whether he was interested in the position.

However, Hartcher hit back at Keating. He told Crikey Keating’s claim about the “Chatham House” Lowy Institute function was wrong — Keating’s comments are on the Lowy Institute website. “This is the first I’ve heard of this Chatham House claim,” Hartcher said.

According to Hartcher, he didn’t get the chance to ask Keating about his interest in the position because Keating spent 20 minutes attacking Fairfax, including over its Barangaroo coverage (the Herald has been campaigning strongly against the redevelopment, in which Keating has been closely involved) before hanging up on him. Claims of Savva’s involvement, Hartcher says, are “complete fiction”.

Costello hasn’t commented publicly (his office was unable to respond to Crikey by deadline) but is said to be very interested in the IMF position and is understood to have lobbied two government ministers strongly over it. Costello’s post-politics career has been limited to a Labor appointment to the Future Fund, a role on the World Bank anti-corruption committee and a position with low-profile corporate advisory outfit BKK.

Longtime friend Michael Kroger spruiked Costello’s credentials for the role in The South China Morning Post on the weekend, and Julie Bishop backed Costello in Hartcher’s piece.

But Keating dismissed Costello’s suitability for the role. “People at the top table abroad have a pretty good understanding as to who was responsible for reform in the Australian economy. They know it wasn’t him.”

The former prime minister is also unhappy about The Sydney Morning Herald’s refusal to run his response and sees it as consistent with its campaign against him over the Barangaroo redevelopment. The Herald refused to run a letter from Keating criticising the story and Hartcher’s handling of it:

On Thursday 26 May the Herald carried a front page story that I was interested in being a possible candidate to succeed Dominique Strauss-Kahn as head of the International Monetary Fund. The story has no basis in fact. It is a complete fabrication by your columnist Peter Hartcher. I gave Hartcher no indication that I was in any way interested in the position; in fact, he did not even put the question to me. In the story Hartcher relies on ‘a confidant of Mr Keating’. And who might that be? This is the oldest trick in the journos’ book; putting words into the mouth of some supposedly connected anonymous person. The Hartcher story again illustrates that the Sydney Morning Herald has no premium on truth and accuracy in reporting.

Paul Keating, Sydney

Instead, Fairfax proposed its own Keating response back to him.

Dear Mr Keating,

We would like to present your point of view on the letters page. Would you therefore consider agreeing to the following:

Dear Sir On Thursday 26 May the Herald carried a front page story that I was interested in being a possible candidate to succeed Dominique Strauss-Kahn as head of the International Monetary Fund. Contrary to the implication of your report, I would not be interested, if asked, in the managing director’s post at the IMF.

Keating has so far declined Fairfax’s offer to rewrite his own letter.

Peter Fray

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