A Fading Star

It's always amusing when the media's narrative is thrown into disarray by facts.

The conclusion of the investigation into The Star appears to be just that.

Photo from here

The Star Inquiry has received blanket coverage in Sydney's biggest two dailies - the SMH and the Terror. It had sex, intrigue, gambling, shadowy "high flyers" as well as the hint of corruption - one of the protagonists was employed in O'Farrell's office.

The media must have thought all their Christmasses had come at once - the Labor government provided a constant stream of scandal, and whilst the O'Farrell government has hardly been lily white, there hasn't been the same level of rolling chaos.  This inquiry promised to change that.

The story got significant coverage on television too - Channel 7 news and the ABC's 730 report broadcast stories about The Star that purported to shed light on what was going on.

The Star had to bear some responsibility for the level of the coverage after it leaked some sms's and emails to the media. This was done, presumably, to shift the media's narrative after a number of stories had been published that were not only critical of the casina but also made a number of damaging insinuations.

The level of build-up suggested that the report, once it was released, would be second only to the FWA report into Craig Thomson.

Except, of course, it wasn't. In fact, the report even took time to criticise the media - the executive summary goes so far as to quote the Media Alliance Code of Ethics and insinuated that certain parts of the media had been less than strictly observant of the obligations it imposes.

That was always going to be provocative, given that past form suggests that certain parts of the media cannot be relied upon to read much of any report other than what appears in the executive summary.

Suffice to say, the Terror was less than impressed.

Whilst I'm not aware of any similar piece published by the SMH, their State Political Editor Sean Nicholls linked to the editorial on twitter and said this:

The editorial unloads on Gail Furness SC, the barrister who was given responsibility for producing the report.

The paragraph below puzzled me:

The first sentence has nothing to do with the second - the report explained that whilst the media had breathlessly broadcast allegations about The Star and insinuated a deeply entrenched culture of sexual harassment and drug use, those allegations were contradicted by the evidence presented to the inquiry.

In many cases, the evidence to the inquiry contracted the stories published in the media.  For example:

The below paragraph in the editorial puzzled me:

It's clearly incorrect.  The report was presented with evidence that directly contradicted the allegations made in the media reports. It's possible that the people speaking to the media were lying or misleading the media, and for that there is perhaps some excuse, but either way at least some responsibility must be sheeted back the media outlets that made allegations that were were in fact untrue.

The most interesting part of the editorial is that at no time does it list the allegations that were, in the writer's opinion, made out. They wrote that it was a whitewash - what finding should have been made by the inquiry? Surely if you write a report such as this you would detail a basis for the allegation?

Experience tells us that journalists are usually pretty good at glossing over details that are inconvenient for the position being taken - and this editorial is no exception.

A proper reading of the report shows that, put simply, there was little or no basis for most of the allegations made.  It doesn't take long - the report is only 72 pages long.

There were two main terms of reference:

This is Sid Vaikunta:

Photo from The Australian

The report provides a very detailed account of the steps that were taken in the investigation and looked at whether there was any sign of a cover-up or undue delay in The Star disclosing what had gone on.

The conclusions reached by the inquiry are as follows:

The second issue was a broader one, looking at more general issue surrounding the operation of the casino. This was an particularly controversial issue given that (unsurprisingly) the various allegations were enthusiastically reported by the media.

One example surrounded an allegation where a gambler "abused" a dealer, but the gambler was not removed.  The report indicates that the "conduct complained of does not automatically warrant exclusion."

Another allegation that attracted significant media attention was the allegation that a "foreign politician" had harassed a dealer and that nothing had been done. This allegation had been broadcast on Channel 7.

The facts? Firstly, it transpired that the person who had spoken to Channel 7 had not witnessed the incident, and was in fact no longer even employed by the casino when it occurred.

The incident report produced by The Star showed the following:

The report also has a detailed section about responsible gambling and responsible service of alcohol.  This section was, at least in part, informed by some anonymous information that had been provided to the inquiry.

Without getting stuck into the detail, it appeared that many of the allegations were unfounded, exaggerated or  simply distortions of the truth.

There was a detailed section devoted to a line of white powder that was found in a bathroom. An investigation subsequently found that the powder was concrete dust, not cocaine as had been suspected by some.

An ex-employee of the casino made the following allegation:

The facts, it seemed, were substantially different:

The final issue covered was summarised as follows:

Again, the reality was widely divergent:

I'm certainly no great defender of The Star or in fact any other gambling establishment.  In fact, by way of example, I've previously criticised O'Farrell for cutting the taxes payable by clubs on their pokie revenue.

However, when this report is actually read, it seems a fair and balanced review of the evidence that was received in light of the terms of reference. The Terror's editorial appears to be an oversensitive lashing out after some well-deserved criticism.

What this means for Grimshaw, and whether there will be further political fall-out, remains to be seen.

The Star of the Show

Sometimes a story seems to have it's own life.  It starts off small, but before you know it people are drawn into it, and a minor story can suddenly become a very big deal for some very big people.

The scandal at The Star is just that kind of story.  A pretty uninteresting story about another executive whose power had gone to his head now has some of O'Farrell's closest staff suspended without pay, and the opposition calling for the resignation of a minister.

I thought it would be interesting to trace back the way that the story unfolded in the media.

2009: Peter Grimshaw leaves the Star where he was head of publicity and corporate affairs for 16 years.

Photo from the Tele, although I think they nicked it off his LinkedIn page

1 August 2011: Grimshaw forwards an email discussing ethics classes and a proposal for an inquiry into cyber bullying to his partner in breach, of the code of conduct for his office.

O'Farrell: "Pete. Welcome back. I reckon I should join the anti interest rate chorus. It will kill the State's economy. Barry."

Grimshaw: "Thanks! Sounds like China went well. Watching from outside it seems we just need to close off some of the ethics issue as quickly as we can . . . but I don't think the public actually care that much anyhow. Just Nicholls.

O'Farrell: "I agree on interest rates . . . it is a good one to campaign on. Not just for business but for all our voters buying homes. We should find the right forum to raise it.

Grimshaw: "Just another thought I had . . . I reckon it would be worth having a quick inquiry on cyber bullying. We would get families of kids who have been bullied along, maybe come up with some penalties, some guidelines for school kids etc. No downside but it puts us ahead of the pack on social media. Just a thought!"

O'Farrell: "Will talk about ethics. Nothing is going to change. Cyber bullying is a very good idea. Barry."

All the above was forwarded to Grimshaw's partner with the comment: "Barry loves my idea on cyber bullying!"

23 November 2011: Grimshaw has the following sms exchange with his partner:

Grimshaw: "Fuck me. I hope you get rid of Mr Nasty."

GF: "It rests with u. I hate this place. Pls fix it."

Grimshaw: "Only 23 days to go [til The Star licence review is completed].

GF: "I'm not positive."

Grimshaw: "Oh, I am. Say goodbye to Mr Nasty."

Mr Nasty is apparently The Star's managing director, Sid Vaikunta.

2 December 2011: The review of The Star's licence is completed and the report is published.

December 2011: An investigation into Sid Vaikunta, managing director of The Star, begins.

Late December 2011: More SMS's between Grimshaw and his partner about the Star. His partner says that what is needed is "a sexual harassment scandal" and that Grimshaw responds "Exactly. The best thing about these stories is they put in the mind of the papers that [the Star's] not so perfect at all." Another email or sms suggests that Grimshaw has canvassed options with someone called "Norm", believed to be Norm Lipson, George Souris' Media Advisor.

21 December 2011: SMS's between Grimshaw and his partner:

Grimshaw: "How about I tell george [souris?] about sid. That's my job. Then he will ring story."

GF: "I want to keep you clean."

5 January: Grimshaw's partner forwards an email marked "Private & Confidential" to Grimshaw.  The email collates Vaikunta's response to the allegations made against him. It included the following: "Sid was asked if he asked you if you were wearing a bra? He did not recall this. He said it might have been said in the spirit of what everyone else was talking about but he did not think he was inappropriate,"

6 January: Grimshaw SMS's the following to his partner: "Woke to a text from barry (who went to annie last nite) saying . . . heard some great goss about sid last night ... the fact he heard something at star is interesting."

9 January: Grimshaw emails partner to say "[Norm] reckons [the first woman to complain] should lay a police complaint. That would sew it up. She does not have to proceed with it but it's strong if the police are involved."

2 February: The Star announced that Vaikunta, has been dismissed over his ''behaviour in a social work setting''. The Star informs the Casino, Liquor and Gaming Control Authority.

Photo from SMH

2 February: Souris messages the following to Grimshaw: ""Don't worry I've told Barry about Sid but not mentioned [Grimshaw's partner] . . . You've been a friend for years and were supportive of me last year and you will never lose my loyalty. G.

2 February: Grimshaw also sends this SMS's to his partner

Grimshaw: "Norm said he has only said what (ILGA) have told his office but he is going to zip it. So sorry if this is causing u trouble . . ."

Grimshaw: "From george . . . I asked him to ensure u r not mentioned . . . Don't worry."

GF: "Do you believe him?"

Grimshaw: "Yep, he will do all he can to keep you out now." 

10 February: The Herald reported that Mark Brown, an American executive, has been "around" for four weeks, leading to speculation The Star had been planning to terminate Vaikunta for some time. 

15 February: The Tele reports that "Mr Vaikunta was sacked after attempting to kiss one staff member during a limousine ride and propositioning another at a staff function and that the two incidents were just a couple of days apart."

15 February: O'Farrell discovers that Grimshaw's partner is a complainant against Vaikunta.

16 February: The Herald reports that a "senior human resources manager" who had informally complained about Vaikunta was fired on her first day back after stress leave for "revealing confidential information about the circumstances of Mr Vaikunta's sacking" The "senior human resources manager" is Grimshaw's partner

16 February: The Tele reports that the CLGCA will launch a new investigation into The Star's reporting obligations and the new allegations.

18 February: O'Farrell's chief-of-staff Peter McConnell pleads with the Tele not to reveal the name of Grimshaw's partner. They agree.

19 February: The Tele reveals link between the woman who complained about Vaikunta and Grimshaw - they are partners. This is the first time that O'Farrell and the Liberal government have been linked to the story.

19 February: O'Farrell denies any knowledge of the Vaikunta allegations before Vaikunta was dismissed

From the Tele's story

2 March: The SMS messages between Grimshaw and his partner are leaked to the media. Robertson calls for Grimshaw and Norm Lipson to be stood aside.

2 March: O'Farrell admits having heard rumours about Vaikunta weeks before the company announced that he had been sacked after the message he sent about having heard "goss" about Vaikunta is released.

2 March: Robertson refers the matter of the emails and sms's to ICAC and calls for Grimshaw and Souris's media adviser, Norm Lipson, to be stood down.

4 March: News breaks that O'Farrell's chief of staff intervened in the Star scandal to prevent Grimshaw's partner's name being released.

5 March: O'Farrell stands down Grimshaw without pay (apparently after he volunteered to do so) pending an investigation.

6 March: Souris admits that he concealed from O'Farrell the identity of the complainant. Robertson calls on Souris to resign.

Will anyone lose their job over this?  Perhaps not. Surely Souris would not, given there doesn't appear to be a great deal he did wrong. Same goes for Lipson.

Grimshaw is another matter - he did forward confidential documents to his girlfriend, so it may well be that O'Farrell decides to cut him loose. The problem is that Grimshaw and O'Farrell apparently go back a very long way:

Amazing how some stories can change.

Rolling the dice

There is a good reason that Sydney is called Sin City.

The Mardi Gras (on this weekend, for those of you not in the know) still takes place every year despite Fred Nile's fervent prayers. High-flautin' professionals swan about the city every weekday, and most evenings revellers spill out of clubs and hotels with little regard for other people.

And, gazing over Darling Harbour, we have The Star.

Photo from here

The Star is Sydney's only (legal) casino.  What that means is that whilst you can barely turn left or right in Sydney without seeing a venue bulging at the seams with pokies, The Star is the only place you can play table games.

Today this report appeared in the Herald.

I don't know whether journos and editors are intentionally picking unflattering photos of James Packer, or if he just does not photograph well, but I have not seen him look good in a photo for a long time. As you can see, the trend continues here.

Anyway, it was O'Farrell's reaction that interested me, and enraged a number of people on Twitter today.

Those of you who read this blog regularly and follow me on Twitter will be familiar with my views on pokies. Suffice to say I would very happily see them outlawed tomorrow, and if two out of every clubs went bankrupt I'd still call it a win.

But table games (I mean true table games - not those electronic table games that clubs and hotels have) are somewhat different, at least in terms of perception. For one, they are legal only in The Star - given I seldom if ever go there, I seldom see them. Further rightly or wrongly, there is a perception that table games are far more likely to attract the high-flyer - the player who can afford to lose the money.

Having said that, I'd encourage you to read this excellent post by Greg Jericho which portrays table games in quite a different light.

Let's have a look at some actual stats though, taken from the Productivity Commission's most recent report into Gambling in Australia.

Page 7 of the report

The following paragraph is taken from a paper entitled "Responsible Gambling: Legal and Policy Issues", and whilst it is a little old is provides a particular statistic that I thought was interesting:

That stat was drawn from the Productivity Commissions 1999 report into Gambling in Australia.

The following table is from that same report:

From section 3.16

So, if approximately 10% of people have played a table game, and approximately 3.5% of them have experienced problems, we're talking 0.35% of the population. That sits in comparison with pokie numbers: 38.6% had played and 9.2% had experienced problems, or 3.5% of the population.

That's a very quick and probably quite unreliable calculation - but it gives you an idea of the comparison. What it amounts to, for the purpose of this piece, is that table games are a far smaller problem than pokies.

Having said all that, I still think O'Farrell's position is cause for significant concern. Why?

First of all, I think it is inevitable that a new casino will result in more money being lost, and more problem gamblers pouring their saving away. The gambling industry is not a zero-sum game. The exact numbers will of course be a matter of much conjecture if this proposal goes anywhere, but they must move in that one direction.

Weighed up against that harm, what are the benefits?  Let's look at what O'Farrell nominates.

- "Extra life". This is a nothing statement - any new business, attraction or facility will add "extra life".  There is no need for it to be a casino.

- "World class hotel, generate jobs". It is not clear why the casino would be a an essential part of any new hotel. There must be dozens of hotels in Sydney that do just FINE without any gambling profit.  As for jobs, I have am not really interested in providing more jobs funding by taking money off problem gamblers. Heck, I'm barely interested in protecting those that already exist and depend on problem gamblers.

- "Boost tourism".  This is an odd statement.  I'm happy to be proved wrong, but I find it hard to perceive how a second casino can boost tourism. 

I certainly understand that a first casino can have that effect. No doubt there are travellers in this world who will choose to travel to Sydney over another destination because it has a casino. Of course, putting a value on that tourism and inflow of money and weighing it against the damage caused by the presence of a casino is almost impossible, but I appreciate that the benefit exists.

A second casino, however, is more difficult to justify. Are there really people who will say "What?  They have TWO casinos? This I have to see."

Like I said, if someone can point me to research that suggests otherwise, happy to be proved wrong.  But it seems ridiculous.

Above all that though, it is the eagerness with which O'Farrell has responded to the idea that concerns me. Why is he so keen to make this second casino happen? Does he have any intention of weighing up the potential for damage? Is the relationship with Packer cause for concern?