«COMMERCIAL RADIO INQUIRY Report of the Australian Broadcasting Authority Hearing into Radio 2UE Sydney Pty Limited February 2000 Sydney ISBN 0 642 ...»

On reflection, we believe that the two areas likely to yield the most benefit are on-air image enhancement, and in-house training.469 Ms Davis proposed that, in the case of a story breaking involving the State Bank, either the Bank would contact Mr Jones or he would contact the Bank for a full, open briefing. She envisaged that Mr Jones would then ‘handle the issue on-air in any way which he feels is right, while in full possession of all the facts’.470 In evidence, Mr Bold, Marketing Manager (Group Incentives and Sponsorship) at Colonial State Bank, said ‘that view has never been expressed to me and I’m quite surprised by it’.471 Mr Bold said that the terms of the agreement between Mr Jones and the State Bank did not require Mr Jones to provide positive editorial comment: any such provision was an ‘add on’.472 The Panel is of the view that while Mr Bold may hold that view, he was not involved in the negotiation of the 1996 agreement, nor its implementation. Mr Bold was only involved from the date of the 1998 agreement, 19 October 1998, when he was appointed to the position of Marketing Manager (Group Incentives and Sponsorship).473 Agreement in principle appears to have been reached by the end of July 1996 and formal contracts were prepared during August.474 In a letter from Mr Harry Miller to Ms Davis on 29 August 1996, Mr Harry Miller noted that in anticipation of the formal contract, Mr Jones was already ‘very vigorous in promoting the State Bank’s cause’.475 The 1996 Agreement On 10 September 1996 the State Bank entered into an agreement with Belford Productions Pty Limited and Mr Jones for a term of 2 years.476 The annual fee was $350,000.477

The services to be performed by Mr Jones included:

CSB.0007.1230 CSB.0004.0580 CSB.0004.0580 Transcript, Mr Bold, p. 257.

Transcript, Mr Bold, p. 263.

Transcript, Mr Bold, p. 254.

CSB.0004.0584; CSB.0004.0585 CSB.0004.0603 CSB.0004.0664; CSB.0006.1024 Clause 4 – CSB.0004.0664; CSB.0006.1024 ♦ promptly conferring with State Bank personnel in relation an event or circumstance which might detract from or adversely reflect upon the reputation or goodwill of State Bank or the Colonial Mutual Society and refraining from public utterances until after such conference; and ♦ acting ‘with professional skill as a consultant to State Bank with a view to promoting, enhancing and improving the reputation and goodwill of State Bank and its products’.478 The 1998 Agreement On 19 October 1998 State Bank entered into a second agreement with Belford Productions and Mr Jones. This was for the period commencing 1 July 1998 and ending on 31 December 2001.479 The annual fee was $433,000.480 Mr Jones’ obligations in the event of an event which might adversely affect the State Bank’s

reputation were identical to those under the first agreement.481 In addition, Mr Jones was:

♦ required to appear in at least three television advertisements per annum;

♦ make up to 8 public appearances per year presenting an agreed position on an issue of relevance to the State Bank; and ♦ was to act ‘with professional skill as an advocate for and consultant to Colonial State Bank with a view to promoting, enhancing and improving the reputation, image and goodwill of Colonial State Bank and its products and services’.482

Events Subsequent to the 1998 Agreement

Some time in March 1999, Mr Bold took over the role of administering the 1998 agreement with Mr Jones. Through Mr Bold’s communications with Mr Jones, the State Bank hoped to ensure adherence to the terms of the agreement and that it derived value for money therefrom.483 However, Mr Bold was at pains to stress in his evidence that he did not think that the agreement obliged Mr Jones to say anything on-air favourable to State Bank,484 and that where Mr Jones did so, this was an ‘add on’.485 The sending of weekly updates to Mr Jones by the State Bank stopped around the time of the Media Watch program on 12 July 1999486 although as at the date of the hearing, the Agreement remained in operation.

Attitude of the State Bank of NSW to the Performance of the Agreement Mr Bold gave evidence that he was never told that he should keep the agreement with

Mr Jones confidential, adding:

Clause 2 – CSB.0004.0664; CSB.0006.1024 CSB.0004.0655 Clause 4 – CSB.0004.0655 Clause 2(a) – (b) – CSB.0004.0655 Clause 2(c) – (h) – CSB.0004.0655 Transcript, Mr Bold, p 262.

See for example Transcript, p 286-289.

Transcript, Mr Bold, p. 263.

Transcript, Mr Bold, p. 299.

It was known in the marketplace, especially over the last six to eight months, 12 months, and it has been reported in the paper as well.487 Mr Bold gave evidence that, while it was hoped that material sent by the State Bank of NSW

to Mr Jones would be used on air:

It was an add on. I suppose I was grateful for any publicity we would get, as any commercial publication would be. But clearly it was outside of the agreement that we had with Alan Jones.488

WALSH BAY FINANCE PTY LIMITED (WALSH BAY FINANCE)

Negotiation of the Agreement On 23 October 1997 the NSW State Government entered into an agreement concerning the redevelopment of Walsh Bay with Walsh Bay Properties, a partnership comprising Mirvac Pty Limited (Mirvac) and Transfield Australia (Transfield). Walsh Bay Finance is a company jointly owned by Mirvac and Transfield.

In May 1998 there were discussions between Walsh Bay Finance and Mr Harry Miller concerning the Walsh Bay Finance partnership’s use of Mr Jones’ consultancy services. On 29 May 1998, Mr Harry Miller was advised by Mr Robert Hamilton, Managing Director of Mirvac and Mr Tony Shepherd, Chief Executive, Project Development at Transfield, that Walsh Bay Finance ‘would like to advise of our intent to proceed with your proposal’.489 Mr Harry Miller was also given a ‘Media Fact Sheet’ setting out ‘Key Issues’ concerning the Walsh Bay development.490 The Agreement The terms of the agreement between Mr Jones and Walsh Bay Finance are embodied in a letter signed by Mr Jones and representatives of Walsh Bay Finance dated 1 June 1998.491 Mr Jones was to be retained from 1 June 1998 to December 15, 2001 on the condition that the agreement was to cease if the Walsh Bay project did not proceed. The fee payable was $200,000 per annum.492 Mr Jones services were retained in order to assist ‘with the development of key media relationships and the general promotion of Walsh Bay and its scheme for redevelopment’.

Regular briefing sessions of Mr Jones were to be arranged by Mr Harry Miller.493 Transcript, Mr Bold, p. 257.

Transcript, Mr Bold, p. 263.

AJ.0006.1141; Exhibit 78 AJ.0006.1142; Exhibit 78 AJ.0006.1144; Exhibit 78 AJ.0006.1144; Exhibit 78 AJ.0006.1144; Exhibit 78 Attitude of Walsh Bay Finance Pty Limited to the Performance of the Agreement Mr Mann of Mirvac was content with Mr Jones’ performance under the agreement, and agreed that Mr Jones had behaved as Mann had hoped he would.494 The agreement was current at the time of the hearing.

WALKER CORPORATION LIMITED (WALKER

CORPORATION) The Agreement On 1 June 1997, Walker Corporation, entered into a consultancy agreement with Belford Productions Pty Limited and Mr Jones. This was for the period commencing 1 June 1997 and ending on 31 May 2000.495 The annual fee was $250,000.496 There was also an incentive fee based upon the share price of Walker Corporation.497

The obligations of Mr Jones under the contract were the following:

♦ the live reading on-air of commercials for Walker Corporation to be broadcast during the radio program hosted by Mr Jones;

♦ the making of comments and statements from time to time during the radio program hosted by Mr Jones (when live read advertisements are to be read by Mr Jones) about Walker Corporation in accordance with any schedules agreed between Mr Jones and Walker Corporation;

♦ the conduct of interviews with officers of Walker Corporation during the radio program hosted by Mr Jones from time to time; and ♦ the attendance at not more than four functions hosted, sponsored or supported by Walker Corporation during any year provided that the relevant functions do not conflict with any commitments made by Mr Jones to attend functions or host a radio program or conduct any promotions under his contract with 2UE.498 These obligations were expressed to be subject to other provisions of the agreement, namely

that:

♦ Mr Jones and Walker Corporation will meet from time to time to agree on a proposed schedule of statements or comments to be made by Mr Jones in relation to Walker Corporation or its business during the radio program hosted by Mr Jones;

♦ Walker Corporation and Mr Jones will meet from time to time to agree upon a schedule for any of the officers of Walker Corporation to be interviewed by Mr Jones during the radio program hosted by him on areas of relevance to Walker Corporation or its business. The duration and content of the interviews will be mutually agreed between Transcript, Mr Mann, p.1473 Clauses 1.1, 2.2 – Exhibit 79.

Clause 4.1 – Exhibit 79.

Clause 4.2 – Exhibit 79.

Clause 3.1, Schedule 2 – Exhibit 79.

Walker Corporation and Mr Jones. Walker Corporation agreed to make available its officers for such interviews as required;

♦ Walker Corporation acknowledged and agreed that nothing in the agreement required Mr Jones to agree to make particular comments or to interview particular officers on specific topics if Mr Jones forms the view that to do so would be detrimental to the radio program hosted by him, or to Mr Jones or to 2UE. Walker Corporation also agreed that Mr Jones was not required to make comments or interview officers if he was directed by 2UE not to do so.499 Events Subsequent to the Agreement On 24 February 1998, Mr Jones sent a fax to Mr Harry Miller regarding a press release from

Walker Corporation. Mr Jones said:

I notice the press release from Walker Corporation talking about the net profit before taxation of $18.6 million, an increase of 107%.

They are boasting about all of that. Are we being paid enough!! Let’s face it, they wouldn’t be in the public place without moi! Tell me what you think?500 When questioned whether Mr Jones had in his mind the share price incentive when he wrote the fax, Mr Jones said that ‘I think you can gather by the exclamation marks and the peculiar language I was jesting’.501 The agreement was current at the time of the hearing.

Clause 5.1 – Exhibit 79.

AJ.0003.0544 Transcript, Mr Alan Jones, p. 1492.

Schedule 9: Mr Laws’ Agreements

AUSTRALIAN BANKERS’ ASSOCIATION (BANKERS’

ASSOCIATION) Negotiation of the Agreement On 22 May 1998, Mr Stewart, who had recently commenced working for the Bankers’ Association, wrote to Mr Laws suggesting that he may have a potential sponsor for a series of short radio scripts on Australian historical topics which he had written (and in which he had endeavoured to interest Mr Laws and 2UE earlier in the year).502 On 13 May 1998 Mr Aveling, the Chief Executive of the Bankers’ Association, appeared on the John Laws Morning Show. The interview went better than Mr Aveling had feared it might,503 given that the Bankers’ Association regarded Mr Laws as one the banks’ harshest critics.504 Mr Aveling subsequently proceeded to promote to the Bankers’ Association Council the idea of sponsoring key media opinion leaders to assist in the improvement of the banks’ image and also of sponsoring a John Laws radio project for the next year. This was done through a series of letters and proposals of 24 May 1998,505 18 August 1998,506 8 October 1998507 and 23 October 1998.508 In the 8 October paper Mr Aveling noted:

The objective is to reduce the negative comments about the banks by John Laws from the present average of four a week to nil; concurrently, to receive positive comments from Mr Laws (over and above the paid advertisements); and by doing so, to shift Australians perceptions of, and attitudes towards, banks.509 Independently, Mr Bob Miller had initiated negotiations with Mr Stewart by phoning him on 24 September 1998 and inquiring whether the banks might wish to do some advertising using Mr Laws.510 Mr Bob Miller is the managing director of Australia Street Consulting Pty Limited, an advertising agency, and was seeking to become the agent for the Bankers’ Association in an advertising arrangement on 2UE.511 Mr Stewart had not previously met or spoken to Mr Bob Miller.512 Negotiations between the Bankers’ Association, Australia Street Consulting Pty Limited and 2UE continued throughout October, November and JL.0003.0607; JL.0003.0608; JL.0003.0615; JL.0003.0617; JL.0003.0621, Ex.6 para.2.

Transcript, Mr Aveling, pp.55, 74.

Transcript, Mr Stewart, p.107.

BANK.0001.0053.

BANK.0001.0071.

BANK.0001.0167.

BANK.0001.0192.

See also Transcript, p.56.

Transcript, Mr Stewart, p103, Mr Bob Miller, p 580.

Transcript, Mr Bob Miller, p 569.

BANK.0001.0128; BANK.0001.0136.

December513 and Mr Laws was kept informed about their progress by Mr Bob Miller514 through Ms Borgo.515 On 4 November 1998, the idea of using the historical scripts written by Mr Stewart was raised in a meeting between Mr Aveling, Mr Stewart and Mr Bob Miller.516 A further meeting between these three and Mr Laws ensued on 8 December 1998. 517 On 23 December 1998, Mr Bowd of 2UE met with Mr Stewart and Mr Bob Miller.518 On 5 February 1999, Mr Aveling wrote to the Bankers’ Association Council519 and to nonmember retail banks,520 reporting that negotiations had been completed for a package (split between Mr Laws and 2UE) costing $1.35 million.