Cirrus@Austlit

CASH FOR COMMENT

Centring on commercial radio, this was a scandal about media ethics. In May and June 1999, on ABC Television’s Media Watch, Richard Ackland claimed that John Laws, then a prominent Sydney talkback radio host, had ameliorated his previously critical comments about banks as a result of a secret agreement with the Australian Bankers’ Association.

The Australian Broadcasting Authority (ABA) initiated a formal investigation to determine whether there had been any breaches of the Broadcasting Services Act 1992 (BSA) or the Commercial Radio Codes of Practice. More allegations surfaced about other broadcasters and stations in Melbourne, Adelaide and Perth.

After a 19-day hearing, the ABA found that Sydney’s 2UE had failed to correctly identify political matter, had by withholding relevant facts compromised accuracy and fairness in current affairs programs, and had presented advertising as program material. The hearing began before a panel of the ABA comprising David Flint, the chair of the ABA, and another member, Michael Gordon-Smith. During an adjournment the week before the republic referendum, Flint—who was also the convenor of Australians for Constitutional Monarchy—appeared as a guest on the programs of John Laws and Howard Sattler, another talkback host also being investigated. After widespread criticism, Flint stood aside from the hearing. Two other ABA members, Kerrie Henderson and Ian Robertson, joined the panel and Michael Gordon-Smith presided over the remainder of the hearing. The report found five breaches of the BSA and 90 breaches of the codes. The investigation revealed that the Australian Bankers’ Association had arranged to pay $1.35 million, split between John Laws and 2UE. Laws’ share was $500,000.

Separately from 2UE, John Laws and another 2UE talkback host, Alan Jones, had entered into other contracts that affected their on-air behaviour. Both had contracts with Optus (Jones for $500,000; Laws for $825,000 per annum) and with Qantas (Jones for $100,000; Laws for $200,000). Jones had contracts with Walsh Bay Finance Pty Ltd ($200,000), the State Bank of New South Wales ($350,000) and the Walker Corporation ($250,000). Laws had contracts with the Australian Trucking Association ($200,000), the Registered Clubs Association of New South Wales ($200,000) and RAMS Home Loans ($250,000).

The ABA imposed conditions on 2UE’s licence, requiring the disclosure of commercial agreements between sponsors and presenters. After further investigations found breaches at 6PR Perth and 5DN Adelaide, the ABA decided there was a ‘systemic failure to ensure the effective operation of the industry’s self-regulatory codes of practice’ and used its power under the Act to impose standards on the whole industry, requiring that advertisements be distinguished from program material, that presenters’ agreements be disclosed and that compliance programs be maintained.

The scandal and the adverse findings had little effect on the ratings of the presenters or politicians’ support for their programs. In 2002, Jones accepted ‘a very significant equity offer’ and moved from 2UE to rival 2GB. 2UE changed hands, bought first by Southern Cross Broadcasting and then by Fairfax Media.

When the BSA was amended in 2006, it provided the ABA’s successor, the Australian Communications and Media Authority (ACMA), with a wider range of enforcement options, including the power to institute civil proceedings and to accept enforceable undertakings from licensees. Laws opposed the regulations and began ringing a cowbell when mentioning sponsors. His failures to comply with the regulations, including several on his last day on air before (temporary) retirement, led eventually to the first civil penalties case under the Act and a pecuniary penalty of $360,000 imposed on 2UE. In 2004, after further controversy including the disclosure of letters between him and Jones dating from before the hearing, Flint resigned from the ABA.

Questions about the transparency of other commercial agreements continue to surface on Media Watch.

REF: R. Johnson, Cash for Comment (2000).

MICHAEL GORDON-SMITH