How the wealthy throw their weight around

by | Mar 6, 2012 | Business

Wayne Swan is in dispute with Andrew Forrest and Clive Palmer. Photo: Alex Ellinghausen

Rupert Murdoch has never sued. He has never even complained about an article in the press.

It is true that Murdoch has a global media empire to defend his honour, and his interests. Nonetheless, in the absence of legal assaults on the media and complaints, the press baron is peculiar. When it comes to billionaires threatening and suing for defamation, Murdoch is the exception to the rule.

Wayne Swan is right. Billionaires – and not just billionaires but big companies, too – deploy their wealth to swing political outcomes in their favour.

Antagonist … Andrew Forrest. Photo: Tony McDonough

The Minerals Council spent $7 million or so on an advertising campaign against the government and its mooted mining tax, and managed to depose an elected prime minister, Kevin Rudd, in the process.

Billionaires don’t just have the wherewithal to buy the best-connected lobbyists in Canberra, or phalanxes of PR people to coax the media, they also have the muscle to shut down negative comment.

Here’s a rough tally of billionaire defamation:

And another … Clive Palmer. Photo: Glenn Hunt

Iron ore magnate Andrew Forrest has a live writ against The Sydney Morning Herald relating to a story about his company Fortescue’s controversial Chinese contracts.

The outspoken Clive Palmer has not sued the media for defamation but has spent millions suing governments and other parties to support his corporate agenda.

Palmer’s nemesis du jour, the chairman of Westfield, Frank Lowy, has also had his run-ins. Football Federation Australia, of which Lowy is president, recently sued The Age for imputations in a story about Australia’s soccer peak body and its bid to host the World Cup.

As with fellow billionaire Gerry Harvey, Lowy commands huge advertising dollars. The mere suggestion that some of this advertising might be withheld, or might go elsewhere, can be enough for editors to at least exercise caution.

This goes for corporations as well, and especially large retailers that spend up big on advertising.

For his part, Harvey has pulled millions in advertising spending from one media organisation, citing negative coverage in its business pages as the reason.

Then there is Australia’s richest person, Gina Rinehart. An avid user of lawyers. Rinehart, who recently became the largest shareholder in Fairfax and who has also built a substantial stake in the Ten Network, has not sued for defamation. But the threat of constant correspondence from her lawyers has put publishers and editors on notice.

Rinehart’s lawyers have taken constant issue with the way press stories are written. For instance, they took issue with a recent report about the fight with her children, not because the facts of the court report were wrong – they simply detailed what had transpired in court – but because they wished to correct what had actually been said in court.

James Packer sued Fairfax over its coverage of OneTel a few years ago. Lawyers at Fairfax, News Ltd and the ABC are constantly mindful of the potential threat from Packer family interests as the late Kerry Packer was a prolific suer who once sued Fairfax four times in a fortnight.

The threat of defamation has tempered press coverage of billionaires for decades. Alan Bond once sued The Age for a business section opinion piece about Bond Corp being a house of straw. It was. And small shareholders lost money when it collapsed.

Whether true or not, press allegations about powerful corporate interests are often tempered and sometimes eliminated by the spectre of a possible defamation action.

This is merely another aspect of their power that puts billionaires on another footing altogether compared with other Australians.


Michael West

Michael West

Michael West established to focus on journalism of high public interest, particularly the rising power of corporations over democracy. Formerly a journalist and editor at Fairfax newspapers and a columnist at News Corp, West was appointed Adjunct Associate Professor at the University of Sydney’s School of Social and Political Sciences. You can follow Michael on Twitter @MichaelWestBiz.

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