Boyos banished when Barangaroo boomerangs back

Feb 16, 2021

But the fact is that a reformed Crown board will be sailing full steam ahead to take up the licence from an unresisting NSW government.

Justice Patricia ‘Paddy’ Bergin’s report finding that Crown Casino is not, as presently structured and governed, a fit and proper person to operate a casino in NSW has occasioned much satisfaction, if little surprise. What a pity, however, that it was one of such limited scope, offering little insight into all of the underground relationships between politicians and big businessmen, or about important legal questions of the personal and professional responsibility of senior captains of industry.

One of several people who emerge from the affair without any apparent blemishes on their character is Crown Casino chairman, Helen Coonan, a former Liberal Minister for Communications, now fated, if the Bergin report is to be followed, with the doleful task of cleaning up the mess left by years of mismanagement by some other directors, senior managers and even one-time controlling shareholder James Packer.

Coonan, a member of the Crown board for nine years and chairman of directors for the past two, cannot apparently be faulted for not really knowing what was going on. That is because she was being misled, and made the mistake of believing misleading or false things told to her by the chief executive officer, other senior executives, and a number of board managers (often associated with the Packer empire) whose functions and duties had become mixed up when they became actively involved in the business.

Bergin, sitting as the Commissioner of Inquiry under the NSW Casino Control Act, thought it “appropriate to observe” that Ms Coonan’s heavy reliance on the now-departed CEO Ken Barton “has unfortunately been misplaced. However that misplaced reliance should not be seen as a flaw in the chairman.” No, No. No.

“Ms Coonan has demonstrated the qualities that are necessary to have taken her to the leadership role of Crown, and is exquisitely aware of the depths of the problems within the company of which she is now chairman.

“Ms Coonan accepted the serious corporate failings of Crown and notwithstanding those corporate failings is willing to, as she put it, stay the course. That commitment in the circumstances of the evidence that was exposed … is no small matter. The burden of reformation will be great.

“The review of the chairman’s evidence demonstrates that her character, honesty and integrity has not been and could not be called into question. The [Casino] Authority would be justified in accepting any commitment or undertaking given personally and/or on behalf of Crown that may be proffered by the chairman in respect of the future operations of Crown…”

Crown chair Helen Coonan conflicted in role of ombudsman chair

It’s an extraordinary encomium, and a handy reminder to those with any experience of royal commissions, inquiries and other bodies with duties to protect the public interest.

Bergin asked whether the Crown Casino management (including through its Melbourne and Perth operations), were fit and proper persons to be entrusted with a licence to operate a casino in Sydney.  They were not, for a range of reasons, including inadequate and always somewhat reluctant controls on money laundering by organised crime, association, through junket operators, with Chinese triads and other organised crime figures, including in the illegal export of money from China, and because of a clear breach of an explicit undertaking that the casino would have no links with Stanley Ho, the Hong Kong casino operator.

Perhaps those who drafted the terms of reference guessed that such an outcome was inevitable, given media disclosures, vehemently denied by casino directors, of course, of its slack management and controls. But the powers that be did not want the casino dream to die, of course. No, no. Justice Bergin was also asked to turn her thoughts to how Crown could, with better systems and management reform itself to the point that it became transformed into a fit and proper person. In making recommendations about this, Bergin, and later the casino control authority, have made it clear who has to go. They include some directors, some managers, and at least the power and control on the board of James Packer. But he cannot sell his shares to any old person, let alone anyone he explicitly promised, as a condition of the original deal, would not be allowed any role in the casino, its profits, or its modes of operation.

But Ms Bergin has not confined herself to saying who should be out. She’s also identified those who should be allowed to survive on the board, so they can rebuild the enterprise. From the Commissioner’s remit, this is primarily confined to helping the owners open and manage the hideous Barangaroo edifice at Darling Harbour, supposedly as a high-stakes resort for large “whales” — filthy rich people, mostly from the Orient, wanting to gamble away large fractions of their wealth.

But, whether directly or through associated entities, Crown already runs casinos in Perth and Melbourne, and the way these have been (and will in future be) run inevitably affects assessments of its character. All the more so in a situation where it has been shown that controls have been slack, and that management has had a tendency to resist any reforms unless someone is looking.

Luckily for them, the well-paid, well-equipped and much vaunted independent “cops on the beat” have been singularly unsuccessful in discovering much in the way of managerial malfeasance or incompetence, and they haven’t found many crooks allowed into the casinos. Governments, of whatever stripe, loudly speak of such controls when wowsers or others who deplore the extent of gambling immiserating Australia are always apt to talk of how their tough probity controls deny even the possibility of association with crime.  Indeed politicians may really want casinos to be squeaky clean, given that they are, or ought to be, very profitable even then.  Government is deeply hooked on revenue from gambling taxes, and is little inclined to listen to complaints about the impact of addiction to gambling on Australian families.

From the headlines one could be deducing that James Packer gambled and lost. He had demanded the extremely valuable site from an extremely pliant government, and was given it without any competitive tendering. Successive NSW governments had, indeed, guaranteed a monopoly to a rival casino, Star, but even that was torn up once Packer had the Liberal Party – the party of Coonan – stand and deliver. Packer was getting what he wanted, but always had to satisfy a not terribly hard inquisition that he was a fit and proper person to run it, that he could be relied on to keep out criminals and money launderers, and not form combinations with operators believed to have connections with organised crime.

But the fact is that a reformed Crown board will be sailing full steam ahead to take up the licence from an unresisting NSW government. Packer may no longer be the prime beneficiary (although he will have been allowed to take his profits).  The high-rolling whale theory may yet again be demonstrated to be a furphy – as it always is. But there will be enough mugs, mostly locals, willing to blow their money, casually adding to the revenues of the NSW government.

One should not be surprised that some on the board, including Helen Coonan, are found to be of high character and reputation, if, apparently, a bit too dopey to realise what is really going on. It was always thus, especially when the business was intrinsically a bit dodgy – as gambling is.  One gets a few of the great and good to sit in the board, certifying almost just by being there that all is on the level. Such a person of unblemished reputation would obviously have nothing to do with anything shady, after all.

The Coonan Conundrum: Crown chair in a morass of conflicts

Alas, some of the modern great and good do know a thing or two about governance and demanding answers. Another of the Crown directors, also a stayer, is Jane Halton, at least while she is not saving Australia from the pandemic, advising Scott Morrison about putting on the gas, and being on the ANZ Bank board.

Ms Halton (at one time in the report called Ms Horton) was a late arrival at the board, but quickly busy in asking questions. Unlike Helen Coonan, she clashed a bit with Bergin, until Bergin warmed to her. Coonan and Bergin are of similar background and culture and know each other’s “types” from top to bottom. Bergin was on the NSW Supreme Court until, fairly recently, she became statutorily senile. After giving good inquisition as counsel assisting at extravaganzas such as the Wood commission into crooked cops, she gave the NSW RSL a well-deserved thrashing for its rotten leadership a few years ago. Coonan was at the bar before going into politics; her husband, Andrew Rogers, is a former NSW Supreme Court judge.

Bergin thought that Coonan, Jane Halton (formerly Secretary of the Commonwealth Health Department, and later, of Finance) and another independent director Antonia Korsanos, were the “core of the changing character of the company on which the Authority would be justified in relying for honest, open and fair dealing in the future…”

“It was certainly true that Ms Halton and counsel assisting were at odds on more than one occasion. It is also the case that Ms Halton was a touch argumentative,” the older woman said condescendingly. “However the clear impression was that she was doing her best to give truthful evidence in difficult circumstances, but failing to adhere to the process of simply answering the question. Ms Halton had a somewhat unfortunate penchant for anticipating questions and providing information that was not quite responsive to the question … Her self-assessment of speaking too much and thus irritating people was quite disarming.

“Ms Halton presented as a person who is most comfortable with being and feeling in charge of the agenda … Ms Halton may have felt rather negative about her experience in the witness box [but] certainly left it with her integrity intact.’’

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