Paddo Bowls Inquiry 2008 – First media report 2014

In Part One of this series, I gave readers an overview of my investigation into how the NSW government handed over Crown land to developer CSKS Holdings and updated readers on questions asked by Sydney MP Alex Greenwich and Greens David Shoebridge in NSW Parliament last week.

In this story (Part 2), I explain the findings of a 2008 Office of Liquor Gaming and Racing ( OLGR) Inquiry into the Paddington Bowling Club (PBC). The report was published in 2008 but although readers may find it a little hard to believe, this seems to be the first account of its findings. ( If you find another one, let me know so that I can link to it.)

Part 3 will update readers on attempts by Friends of Quarry Street to prevent development of open space on the Paddington Bowling Club site and overturn the deal which gave CSKS Holdings a 50 year lease on the land.  It will also explain how the Paddington Bowling Club was mismanaged in a way to the advantage of the developers.

Part 4 will continue the investigation of events from 2008 until the present time.

Part 2

CSKS wants Woollahra Council to approve a development of a large for-profit child care centre on Paddington Bowling Club (PBC) land it leases from the government on the edge of Trumper Park, a small bushland in inner Sydney. The Centre would replace two tennis courts.

CSKS director Chris Sanchez whose interests have previously been in club catering, hotels and retail development has entered the field of child care by setting up a tiny company Picket Fence ELC Pty Ltd that would run the Centre. Sanchez told me that although he has no experience in child care, he would hire a very experienced director to run the Centre.

Friends of Quarry Street and other residents have lodged scores of objections to the development application, particularly around parking and pedestrian use of narrow Quarry Street which runs alongside the site. But Friends of Quarry Street, other residents and some Councillors say there are also broader issues at stake that affect the entire community.

Tonight Greens Woollahra Councillor Matthew Robertson will move a motion that Council officers should prepare a report on the current state of the CSKS Holdings lease, the rationale for why the NSW Liberal government allowed it to be transferred to the Sanchez company and whether or not the NSW government consulted with the Council.

While some may argue a narrow view that Council should only deal with the development application, Councillor Robertson will draw fellow Councillors attention to the Local Government Act that states that the role of Councillors should be to “protect the interests of residents and ratepayers” and “provide leadership to the community”.

How CSKS got control of valuable Crown land.

Much of the story about how CSKS got control of this land is found in the records of a NSW Office of Liquor Gaming and Racing Inquiry set up in 2007 after Woollahra Council blew the whistle on a decision by NSW Lands to sell the site to the Sanchez controlled company. The SMH and Wentworth Courier published several reports on the Inquiry but the report itself seems to have been missed.

The Inquiry was set up by the then Director of NSW Liquor and Gaming Albert Gardner to investigate the administration of the PBC and whether there had been any improper or corrupt dealings in relation to it. The Inquiry followed a four month police investigation into the club that recommended further investigation.

Barrister Brian Guest conducted the Inquiry that included more than 30 days of hearing. His Inquiry could only make factual findings, leaving it to law enforcement and regulatory agencies to decide what action should be taken on the basis of Guest’s findings.

The Inquiry transcripts trace the story back to the 1990s when the small Paddington Bowling Club ( PBC),like many similar ones, struggled to compete with bigger registered club venues. PBC was just holding its head above water with a bank balance of $200,000.

From St Trinians to Barefoot Bowls – the PBC directors lose control

Bruce Malouf, an ex-Wallaby rugby union player who was involved in the LJ Hooker real estate agency in nearby wealthy Sydney suburb of Double Bay, came up with a bright idea that he sold to the PBC: a new restaurant for the club called St Trinians with waitresses dressed as naughty schoolgirls. The PBC directors agreed on the basis that there would be no financial risk to the club. The restaurant was launched by TV host Kerri Anne Kennerley who described it as the “ new hot and happening pub.” but it failed after a couple of months.

As the Inquiry was told, Bruce Malouf’s renovation costs blew out from $35,000 to $624,000. Much of the money had been supplied by B52 a small superannuation company in name of Malouf’s mother Mavis. Without seeking Liquor and Gaming Administration Board approval, more than $350,000 was spent on poker machines  later disposed of for almost nothing.

The directors still talk today of how shocked they were when the pokies replaced the bowlers’ change room and the bowling club Honour Rolls came down off the walls.

Director Terrence Henville told the inquiry that during this period, “ I, for one, am not a businessman – everything just ran away from us, from the renovations to the bar and poker machines .. We really just lost it.” . The directors pressed the Malouf’s and their managers for financial reports but only occasionally got them.

Bruce also gave evidence that the law was ‘way out of his league’. He became unwell and was hospitalised after which his brother Philip Malouf played a role in managing the Club.

After Bruce recovered, he introduced barefoot bowling which was an immediate success. ‘Paddo Bowls – was no longer for the olds’  As Bruce told the Inquiry: “ They flew in from everywhere…everyone was beering and cheering and playing bowls. “ As one director told the Inquiry, even the GPS (private school) crowd from the upmarket pubs made PBC their base, at least for a while.

While the PBC Directors could see the club was busy, they could not work out why it was still making a loss. They asked to see accounts but never received them.

Evidence was later given that more than $200,000 was missing against which no expenditure was recorded. The inquiry heard that other sponsorship funds which were owed to PBC ended up in other accounts. No income from bowling activities was recorded. When the accounts were later reconstructed, the Club was recording losses.

Although a Malouf company was now effectively running the club, the directors were still liable for its management. They soon got another fright. In August 2000, the Malouf company B52 sent the Club an account for nearly $1,200,000. The directors denied in evidence to the Inquiry, and have continued to insist to this day, that there was ever a loan. Philip Malouf gave evidence that there was a verbal agreement about the loan but the Inquiry found there no evidence for the loan. Guest found:

“There  is no loan document to support the contention and the directors of the club deny that they ever agreed to any financial liability. They are unanimous in view that it was always the case that the Maloufs did everything at their own cost and risk and if it didn’t work out they would walk away.”

This alleged loan for which the Inquiry could find no evidence is the single most important factor in PBC losing control of the Crown lease. It remained on the books of the club until at least 2010 when the club last filed accounts with ASIC. No accounts have been filed since then and there was no Annual General meeting last year.

This supposed unpaid Malouf load to the Club meant that PBC was always in debt however well it traded.

In 2002, the old Directors got another nasty fright. They had been signing cheques to pay group tax  but instead of it being paid, the Malouf appointed managers left the cheques stapled to the chequebook. The directors received letters from the tax department saying they would be personally liable for the tax debt.

Now the Club was in serious trouble. On the recommendation of Philip Malouf, the NSW Supreme Court appointed experienced Liquidator Andrew Wily as an external administrator. When an administrator is appointed, directors lose control of day to day management until a company becomes solvent again. The old directors were told that if they did not agree to the administrator, they would be liable for debts. Thus began one of the longest administrations in corporate history. It was only terminated by Wily when the Crown finally transferred the lease to CSKS in 2011.

At the Inquiry, Wily said that he accepted that the PBC owed the Maloufs more than a million dollars without asking the Directors if they accepted that the debt existed..

Having accepted without investigation that the loan existed, Wily decided that the only way to make enough money to pay the creditors was to “arrange for the Club to purchase the leasehold land on which it was located and then for the land to be sold to a property developer with the proceeds of the sale being used to pay the creditors.”

Wily introduces Sanchez to Paddington Bowling Club

This is when Wily called in his friend developer Michael Sanchez, who had also been a Double Bay real estate agent. Not surprisingly for a real estate agent and property developer Sanchez told the Inquiry: I was more focused on the property side of things.

Q. When you say “the property side of things”,are you talking of the potential for development of the site?

A. Well, the potential for development ….

Sanchez examined the underlying value of the lease that was supposed to be held in perpetuity for the benefit of the public and decided to become involved.

Who is Michael Sanchez? 

An early proponent of high rise in the Eastern suburbs, Michael Sanchez was a successful real estate agent, firstly in Maroubra and later in Double Bay. But over the last ten years, Sanchez, his son Christian and their companies including Benchmark have faced several major business challenges that will be covered in a third report.

Michael Sanchez first caused an uproar in 1989 when he formed a company with the then Mayor of Randwick Council Paul Bayutti and knocked down an old mansion Ostara that was about to get heritage protection in order to make way for a development. Bayutti later resigned from the company.

Sanchez successfully fought off bankruptcy in 1992 after he fell into financial difficulties when he employed Andrew Gibbons who was suspended by the Real Estate Services Council.

A few years later, Maroubra residents campaigned against Benchmark’s plan for high rise apartments. As the well known journalist Elisabeth Wynhausen who died last year reported in the Sun Herald at the time, Sanchez attracted attention when he sent a barrister along to a residents’ meeting who disrupted proceedings. A group of men dressed in Benchmark t shirts were also in attendance. When some of those opposing the development claimed they felt intimidated, Sanchez’s solicitor explained the men’s presence was intended to remind residents that jobs were at stake.

In 1998, Sanchez and his wife Lynette acquired a 50% share in a huge development in Port Melbourne on an old publicly owned site. When Macquarie Bank with whom he had already had a dispute became involved in financing the project , one of its senior officers Bill Moss objected to Sanchez being involved. Sanchez sued the Bank and so began a series of court actions that would eventually result in a humiliating loss for Sanchez. The Victorian Supreme Court found in 2002 that Sanchez’s evidence was unsatisfactory and it found that there was a consensus that Sanchez should be removed in the “sense that neither he or any interest associated with him should have ownership or a controlling interest.” This was a significant set back for Sanchez.

Wily, Sanchez and Kirk get together

Back in Paddington, Sanchez called in another long term business associate and planner Brian Kirk who according to Inquiry evidence was also a business associate of Wily. As meeting minutes referred to at the Inquiry showed, Kirk represented Sanchez in early discussions about an agreement with the club and in later negotiations with the government.

Kirk also became President of PBC and remains so today. He signed the document transferring the land to CSKS on behalf of the Club in December 2011 and has provided planning advice for the current development. He told me he could see no conflict in his roles. ( I will report more on Kirk’s role as President of the Club in a later story.)

After several meetings, It was agreed that Sanchez’s company Woollahra Gardens ( now CSKS Holdings) would pay the club $50,000 for an option to purchase the land if the government agreed to sell it to the Club. Sanchez also paid the Maloufs $200,000 and took over the so-called loan on their behalf. The Maloufs were now out of the picture.

Sanchez brings in daughter Vanessa Sanchez and husband Marcus Levy

But there was more to the deal. Sanchez required that PBC hire his daughter Vanessa Sanchez and her husband Marcus Levy to run the club. The jobs were not advertised and neither of them had any experience in clubs.  Levy was made Secretary of the Club but also formed a management company that ran the club. Vanessa also formed a company that was paid high fees for her work for the Club.

An agreement between Wily, PBC and Woollahra Gardens ( CSKS Holdings) was signed that allowed Sanchez’s preferred arrangements to proceed.

Wily suspended for four months

In 2004, Wily had to be replaced by another administrator from his company after he was fined and suspended as a liquidator for four months for failing to detect a fraud and to identify losses which should have closed a business. He was also found to have broken the Corporations Act in a number of company administrations and failed to lodge minutes of meetings and reports within required time.

Payments to Marcus Levy and Vanessa Sanchez

The Inquiry examined in detail payments to these Marcus Levy and Vanessa Sanchez companies. ML Management received $1,378,889 over 4 years and $245,183 worth of frequency points from purchasing goods for the Club.  Levy resigned as secretary manager after the Inquiry was announced but in 2007, Wily agreed to pay him even more money. As was pointed out to Levy at the Inquiry, under Section 41L of the Registered Clubs Act, a secretary of a club or his or her relatives cannot enter into contracts with that club. Levy resigned his Secretary role when the Inquiry was announced.

Vanessa Sanchez’s company VS Management Pty Ltd also received $686,737. Vanessa told the Inquiry that she did not actually receive these payments but instead was paid a wage out of other family accounts. She told the Inquiry that she did not really understand bigger business issues and that her father was in control.

Marcus Levy and Vanessa Sanchez did improve turnover at the club introducing more corporate bowling. In their opinion, their high fees were justified because they would not benefit from  ’goodwill’ they were building in the club.

Guest summarised it in his questions to Marcus Levy this way:

Q. ML Management? A. Yes.

45 Q. Really, to boil it down, as I see it, the club has to make a profit of $480,001 before the club gets $1 profit? A. Correct.

The report found that “looked at objectively the consequence of the arrangements with Mr Levy’s management company, ML Management (NSW) Pty Ltd is that the majority of the financial benefit of the turnaround has gone to Mr Levy via ML.”

The Quarry Bistro

The Inquiry also inquired into Quarry Bistro Pty Ltd which provided catering for the club.  The Inquiry found this company had no written agreement with the Club and paid no rent or commissions to the club. A large amount of money that was spent at the Club on food flowed into Quarry Bistro Pty Ltd.

Wily was asked whether he made any inquiries about the arrangements with Quarry Bistro and he responded that he hadn’t done so and had left such matters to Levy.

An ASIC search shows that Michael Sanchez’s son and daughter Christian and Vanessa Sanchez were directors of Quarry Bistro, which was fully owned by Christian Sanchez during this period.

In 2007, the Sanchez family set up Benchmark Hotels for the purpose of investing in hotels including the Allawah Hotel. ASIC records show that both Michael and Christian Sanchez were directors of Benchmark Hotels which at one stage was fully owned by CSKS Holdings. Andrew Wily is now the appointed liquidator of Benchmark Hotels.

Marcus Levy later bought the Lansdowne Hotel in Chippendale. He and Vanessa Sanchez also took up a contract to manage the Crest Hotel bar in Kings Cross. They were still involved there at the time of the murder of Sydney businessman McGurk who was reported to be interested in buying the hotel at the time of his death. At this time Michael Sanchez was reported to be also interested in buying the hotel but as his business interests unravelled, the sale never proceeded.

Land sale knocked back – Tony Kelly becomes the Minister for Lands

Sanchez had originally hoped that he could buy the PBC land reasonably quickly. The first knock back came in November 2003. Tony Kelly becomes Minister in 2004 and two months later application to buy the land was resubmitted.

Evidence at the Inquiry showed that negotiations to persuade the NSW government to sell the land were costly for the Club. Between 2004 and 2007. PBC paid $92,797 on trying to buy the land, This included bills for for lawyers, surveyors valuers and $10,000 for ‘consultants’. Sanchez told the Inquiry that Kirk was the person who conducted the negotiations along with other unnamed consultants. Part of this evidence was given in confidence after barristers representing Sanchez objected that the matter was commercially sensitive.

The sale was finally approved in 2006 and Sanchez told the Inquiry that as far as he was concerned it would have gone ahead if it had not been for Woollahra Council persuading the Labor government to back out of the deal and set up the Inquiry.

But Sanchez was not taking ‘no’ for an answer. He told that Inquiry that Kirk was continuing to hold negotiations directly with the “Minister’s office” and also approached the Leader of the Opposition Peter Debnam. Debnam had publicly opposed the sale.

The Guest Inquiry report was finalised in 2008. According to a Council document, some public servants in Liquor and Gaming recommended that it be tabled in parliament but the Minister declined. However, PBC was required to post it on its website.

In the following months, then MP for Sydney Clover Moore, Greens MLC Lee Rhiannon and Woollahra Council all asked the Labor government questions about what action would be taken.

In July 2008, the then Minister for Gaming Graham West replied to a question from Greens Lee Rhiannon: The “Director of Liquor and Gaming is currently reviewing the report and other information obtained in the course of the Inquiry to determine if there have been any breaches of State or Commonwealth Law, or grounds for taking complaint action against the Club.”

If you were to assume that the Inquiry would prevent the land transfer to CSKS or that the accounts would be adjusted to reflect the lack of evidence for the loan, you would be wrong. Although the MInister for Trade and Investment Andrew Stoner has not answered questions about what actions were taken, it would seem no prosecutions were laid.

Despite a healthy income, the Club could never make enough money to pay of the million dollar debt. So the PBC stayed insolvent and under Wily’s administration.

PBC is required to hold an Annual general meeting each and lodge financial reports with ASIC. No accounts have been filed since 2011 when the 2010 report explained that no annual general meeting had been held due to “complex and drawn out negotiations with the state government”.

Kirk who signed this report told me that the Club is now going ‘quite OK’. Asked about the failure to file accounts with ASIC and hold regular Annual General Meetings, he said “I suppose we have been a bit tardy, we are finalising them now.’ He said, “I don’t see that as a major difficulty…I am making sure we get on top of that’. He declined to tell me the identity of the accountant.

Then, on the last business day in 2011, the Lands Department with the approval of Minister Stoner allowed Brian Kirk and Christian Sanchez to transfer the prized site. Although Woollahra Council was not informed, PBC was now CSKS’s tenant. We do not know what officers of the Lands Department or the Minister knew about the state of Sanchez family business affairs at that time because the Minister has so far declined to answer any questions about that as well.

(The Shoebridge and Greenwich parliamentary questions and a Woollahra Council report would provide some answers.)

Michael Sanchez certainly knows what he thinks. He told me the Inquiry was an “utterly fruitless exercise. It was an expensive undertaking by OLGA ( office of Liquor and Gaming) which showed nothing other than the club was being run immaculately – in fact the template that was shown was the template that should be used in all clubs. That was the upshot of the Inquiry. It was a wasted exercise . You read it and tell me what you think…”

I have read it and in my third report, I will further explore the affairs of PBC, what the Council were told by the NSW government about the transfer of the PBC lease to CSKS Holdings and the business activities of Michael and Christian Sanchez during the period leading up to the transfer.

Note: Let me know if you know more or find  inaccuracies in this report. My blog applies the MEAA code of ethics. I strive for accuracy and will correct any errors. I can be contacted on or on Facebook or Twitter. I’m always interested in receiving more information. Some minor editing changes were made after this article was first published on March 10, 2014.

Woolworths supermarket – not welcome on my corner

Today’s a sad day for many in our neighbourhood because a Woolworths supermarket, which many in our community didn’t want, has opened its doors at the end of my street on the boundary of Newtown and Erskineville in inner Sydney.

I speak as one of hundreds of residents who fought a five-year campaign against the supermarket. There were always a few others who supported it, arguing it would avoid a short walk to King Street to shop or that it might be cheaper than our local shops. And while I and others don’t plan to use Woolworths Erko, I doubt it will close through lack of business as newer residents may come to accept that the supermarket parked on the corner was always there. Auctioneers may even spruik it as a neighbourhood attraction. Aware of community resistance,store managers have already mounted a ‘community relations PR campaign. I’ll come back to the details later.

My purpose in writing this piece is to highlight the way that big business and developers can override a majority of residents who want to have a say in shaping their environment. It’s also to express my hope that nearby Erko village survives the competition to its ‘fruit and veg’ shop, florist, delicatessen, bakery and newsagent. We need more than real estate agents and pubs in our village. Up in King Street, local butchers and a fish shop gave way to clothes stores years ago.

If you’ve lived in Sydney for a while, you may know the building that I’m talking about because for many years, the old box factory called The Hive was headquarters for Sydney’s Mardi Gras. Each year, a few months before the festival, Mardi Gras groups would occupy the vacant building to build their floats. We used to look forward to the glimpses of colourful floats constructed during evening and weekend workshops and the final afternoon when everyone set off for the Oxford Street parade. Eventually, the Mardi Gras moved on and the building lay vacant again.

There’s a strong history of community action in our area. In the Depression, local residents organised unemployed movements and rent strikes from these streets. In the early 1980s, some residents remember when they blocked the streets to get road closures to lessen through traffic. Later we had a community campaign to save a small site for a park on busy Erskineville Road. After building unions placed a ban on the site, the campaign for what was eventually called Green Ban Park was successful. It’s ironic that Green Ban Park, a symbol of community victories stands opposite the new supermarket, which for some of us will always remind us of the campaign we nearly won.

Mardi Gras headquarters

Mardi Gras headquarters

After the Mardi Gras moved out, we understood that the site would eventually be redeveloped. No one wanted a permanently empty building. We successfully objected to an initial proposal for apartments because the building height seriously disturbed the low-rise streetscape in our part of Newtown/Erskineville.

In 2008, the developer came up with a new proposal – this time, a supermarket. A serious campaign led by the Friends of Erskineville group began. There were packed public meetings that passed unanimous motions, as well as sausage sizzles and trivia nights. 4000 people signed a petition and hundreds wrote letters.

For some residents, parking was the most serious issue. As visitors to our area know all too well, parking is a huge problem. Inevitably, there will now be more trucks and cars.

But many also saw it as an issue of social planning for community needs. We argued that we have no need for another supermarket in our area. We already have two medium sized and two small supermarkets, all within very easy walking distance. There are two huge shopping centres with supermarkets and other shops easily accessible by bus. Existing supermarkets have already driven away the butchers, fish shops and most of the fruit and vegetable shops in our area. There are markets not far away on Saturday and Sunday.

Eventually Sydney City Council rejected the supermarket application. The developer appealed to the NSW Land and Environment Court. In January 2009, the proposal was rejected.

Then Deputy Lord Mayor Marcelle Hoff welcomed the court’s decision saying it was a win for residents who fought hard against the inappropriate development:

“The planning controls at Erskineville are designed to encourage smaller scale retail to service the local area and hence retain a village quality. A large supermarket would have changed the area’s character and generated significant traffic on the village’s already congested streets.”

We breathed a sigh of relief. But there was a catch. Although it had rejected the proposal, the Court found that a supermarket was permissible on the site and could provide benefit to the area. The argument was that the ‘specific proposal’ did not overcome ‘fundamental concerns’ that there would be a ‘significant number of non-local customers who are highly likely to come to the supermarket by car’ which would ‘result in the erosion of the village character and result in a loss of amenity for residents’.

Some of us were still optimistic that the developer might fail to find a supermarket chain that would take on the site and hoped that housing with a few small shops might still be a possibility. But instead, the next proposal was for a smaller ‘up-market’ supermarket with apartments upstairs. The ‘up-market’ tag was meant to appeal to increasingly gentrified Newtown. Most residents were not impressed. Once more, we were back in old Erskineville Town Hall for a public meeting. As reported at the time:

The meeting was attended by 122 residents, and was unanimous in its condemnation of this proposed new supermarket plan. It is fair to say that our community is outraged that we have to go through the demanding process again, after Council took many months to assess and reject the original Development Application, this decision being upheld by an extensive Land & environment Court case.

Former City Councillor, Michael Mobbs who has led a group developing a sustainable plan for nearby Chippendale, argued at the time that the new Erskineville supermarket threatened local business owners because it would take between 13 and 50 per cent of local business, seeing local profits stagnate and shops shut.

“A drop in trade of 13 per cent would stop the organic growth of Erskineville and eventually cause the death of existing small businesses …. In my view, we can only have sustainable cities if we have sustainable villages. And now it looks as though Sydney won’t have a sustainable city because this small Erskineville project is the ultimate test of the city’s capacity to keep and restore villages; judging by the planners’ report this project will bring it to an end and prevent the vision being obtained.”

Many agreed but this time, the temper of the campaign was less optimistic. People were beginning to feel that whatever they did, the developer would win out. The proposed ‘niche’ supermarket seemed to be about the same size as other nearby medium-sized supermarkets.The developer also now organised a small group of local supporters. When the proposal was considered by Sydney City Council, speakers were limited and the meeting was constructed as if there were two equal sides. While nobody denied there was division, the majority were still strongly opposed. This time Clover Moore’s Independents and the single Liberal supported the supermarket. There were two votes against – one Green and one Labor.

A condition of the development was that trolleys, which would encourage shoppers wanting to use cars for big loads, were banned. This was used by Councillors to justify their support in the face of such fierce community opposition.

After the meeting, many agreed with one resident who was quoted in the South Sydney Herald:

“This decision has seriously disappointed me, not merely because we will get an unwanted up-market supermarket on our corner which is far more likely to lessen competition than increase it, but because it cynically manipulated the idea of democratic participation and made a mockery of the idea of independent advice on traffic and social economic impact.”

The Sydney City Council slogan of City of Villages suddenly seemed empty.

By Monday night this week, the once gaily graffitied walls of the supermarket were uniformly grey, smelling strongly of fumes of fresh paint. Inside, food was sitting on the shelves. The floorspace looks approximately the same size as the other local supermarkets, although not a mega one like down the road at Broadway. I could see the slightly wilted flowers that will compete with two different florists and other supermarkets selling flowers less than 400 metres away.

But Paul Howard, who was a key leader in the Friends of Erskineville campaign, has been quietly keeping an eye on the supermarket. He noticed shopping trolleys, already lined up just inside the door. He took a photo and sent it to the Council.

The disappearing trolleys

The disappearing trolleys

Yesterday, I was also taking photos when I was greeted by two store staff. I explained that, while not holding the staff in any way personally responsible, I strongly opposed Erko Woolworths. They were very understanding and said that they wanted to ‘work with the community’. They showed me a mural on the wall. When I wasn’t sure what it was, they explained it was a copy of the first Mardi Gras float. It’s part of making us feel comfortable with our new neighbour. Close to the door are three boxes where you can vote for one of Erko Public School, St Mary’s Catholic school or Erko community garden as your preferred charity. Three local causes will share $1000 a month. They also considering for paying people to paint a “really good” community mural.You can call it PR – or ‘just fitting in’.

But what about the trolleys that were supposed to be banned? They said they hadn’t been told they were banned and that they have been put out of the way ‘for now’. In any case, they explained that the offending metal frames on wheels are not actually ‘trolleys.

Paul Howard has written to the Council asking for answers about the trolleys and other traffic issues that have never been resolved. I guess, like me, he declined the invitation to join a store gathering this morning.

Grassroots campaigns continue. Since 2001, there has also been a campaign against serious over development on the Ashmore Estate, further into Erskineville. Coal Seam Gas (CSG) mining threatened nearby Tempe. After a statewide grassroots campaign, CSG company Dart Energy pulled out of not only inner Sydney, but the whole of Australia.

I won’t be shoppng at Woolworths and I hope our local businesses survive. To be honest I’m not a fan of our supermarket duopoly of Woolworths and Coles. And now, we have an even bigger fight on our hands as the NSW O’Farrell government is planning new laws which will wipe out our right to raise objections to projects like the one on the corner. Rights of objections are too messy and timewasting for developers who’ll be able to do what they like more quickly. Forget the Community.

So much for the Liberal Party’s election promise to restore power to communities, not that most of us round here had much faith in them at any stage.

400 groups have already joined the Better Planning Network,which
is campaigning against the O’Farrell government proposals. If you want to know more visit

Fairfax smoozing Packer puts independent journalism under pressure

Fairfax’s SMH journalists have been amongst the few to probe the NSW O’Farrell’s government backing of James Packer’s plan for a new hotel casino in Sydney. Reporter Sean Nicholls broke a story about how the government had changed the rules for “unsolicited proposals” in a way that made it easier for Packer to avoid a competitive tender. So I was shocked when I opened the SMH on Saturday and found a plug for a story by Packer pitching his casino plan labelled as an ‘exclusive’ and ‘news’. There were several independent reports inside the paper, but online, Packer’s free promo was number three while other pieces were buried further down the page.

I am not suggesting that SMH should refuse to publish an opinion piece by Packer but this incident which followed Fairfax’s Australian Financial Review’s pushing of the plan through exclusives and a recent AFR business dinner at which Packer was the keynote speaker.

Concerned about the possible threat to independence of reporting, I wrote another piece for New Matilda:

Packer’s PR Coup

Packer’s Casino Present

In late October, New Matilda began our series on James Packer’s proposal for a new casino in Sydney. I worked on this series with Lawrence Bull.

Through its media management strategies and political networks across the NSW Liberal and Labor Parties, Packer had been able to make his casino seem like a foregone conclusion. He has achieved first stage approval for a second casino in NSW from the Premier Barry O’Farrell without any independent or public scrutiny.

The deal however has not yet been finalised. Casinos require licenses for which owners pay fees and taxes on turnover and there are processes for checking to see whether those proposing to run them can pass a “fit and proper test” and financial scrutiny. But the NSW government led by Barry O’Farrell is planning to by pass these laws and work through the ‘unsolicited proposals’ procedure which avoids a debate about whether the community wants another casino or not. O’Farrell has appointed ex head of the Commonwealth Bank David Murray to examine the proposal in the second stage of the approval process. It is very likely there will be allowance for public submissions. Public submissions would be allowed if the procedures set down the NSW Casino Control Act were followed.

Packer’s proposed hotel with casino is part of Barangaroo, a huge Lend Lease development on publicly owned land near old Sydney docks. The likely site is on what is known as Barangaroo South where it would be built near the water, along six three commercial towers and a residential development.

To really explain this story, we needed to provide some history rather than simply a blow by blow description of the game which clinched the deal.

The story goes back to the early 1990s when Kerry and James Packer were bitterly disappointed when they failed to win the tender for Sydney’s single casino. They kicked up a hell of a ruckus and got some help from the Labor party but couldn’t win over the Casino Control Authority which had been set up to regulate the newly legalised casino industry. ( If you are interested in this aspect, read Paul Barry’s book, Who Want’s to be a Billionaire? )

You could say however that the story of Packer’s Liberal party links goes back even further than that to the days of notoriously corrupt Liberal Bob Askin government whose successful election campaign in 1964 was directly funded by James’s conservative grandfather, the media boss Frank Packer. Bob Askin used to play poker at Frank ‘s home. James’ uncle, Clyde, was a NSW MP.

Links between senior Labor figures and the Packer family are just as strong as Liberal ones.

In the first story, we look at how the impression that the second casino was a fait accompli has been achieved and review some of the relevant political background. There is also a chart showing the current shape of Packer’s complicated business empire. At the top of the Chart is Consolidated Press International Holdings (CPIH)  and behind that the family trusts where the private profits end up. Sadly we can’t tell you much more as the trusts are secret.

We start the second story in February this year when James Packer’s announced that he proposed to ‘gift’ Sydney with a 6 star casino/resort on the public land part of Barangaroo. This announcement was made through an exclusive interview on the front page of the Australian Financial Review.  We look at how the Liberals and Labor locked in behind Packer.

Supporters of the casino repeat James Packer’s claim that his casino will be an economic winner for the people of NSW. But has anyone seen a copy of the Allen Consulting Group report on which he relies? As Greens John Kaye said in an interview I did with him,  consultants will come up with what is required and will limit their findings to what questions are posed. We wanted to know if Premier O’Farrell had seen a copy of the report at the time he endorsed the proposal, just two days after Packer had formally announced it. At the time, O’Farrell said that Packer had mentioned his desire for the casino on a number of occasions when they met. So when did the plan really get hatched? It could even have been back in the days of the Labor government which was repeated to be on the cusp of awarding Packer with a casino back in 2007. We’d like to know the answers to these questions, but unfortunately O’Farrell preferred not to answer them.

Why we posted the O’Farrell questions

I think that part of independent Journalism should let the public know when people won’t answer their questions. It should be part of the extra transparency offered by online publishing. So New Matilda published the questions. If you have any suggestions about how to get the answers put up a comment on New Matilda, or send me a direct message to call you via twitter @Wendy_Bacon or email to New Matilda or me at

Questions we put to O’Farrell

The Packers’ Liberal party links go back a long way but the family’s connections to Labor are just as impressive. We compiled a list of people in their current network across business, media and politics. You can also find out how much the Crown directors are paid. I was also struck although not surprised to see that they get free services at the Crown casinos in Perth and Melbourne. When you think about how much rooms and food might cost, this item alone could be worth many thousands on top of the annual income from directorships.

Team Packer

The next story in our series focused on how casino regulation is supposed to work in NSW and how O’Farrell’s plan to “get on with it” removes a lot of safeguards put in place to protect NSW against organised crime and corrupt influences which have a history of targetting casinos. If NSW wanted to have a new casino, the first move would have been to amend the Casino Control Act to make it possible to have more than one casino in NSW. At the moment only one is allowed. After that the procedure is set out very clearly in the Act. You call for expressions of interest, then hold a tender which involves detailed checking of applicants. The unsolicited proposals legislation raises risk of improper influence and has few of the safeguards in the Casino Control Act.

We also look at the the Independent Gaming and Liquor Authority‘s ongoing investigation into whether Packer’s company Crown should be allowed to raise its shareholding from 10% to up to 25%. Through a public submission, Stephen Mayne has raised some significant issues which he wanted the Authority to follow up during its inquiries.  There are lots of issues the inquiry could explore – but will they?

Red Tape cut for Packer 

Communities planning rights under attack from NSW government

A big issue in the NSW state election in 2011 was the Part 3A planning law which handed development consent for many major projects over to the Minister for Planning backed up by selected panels of experts. Councils and communities felt betrayed by Labor and hoped for something better from the Liberals, who promised to return rights to the community. Now eighteen months later, those same communities and Councils are fighting proposals put forward in an O’Farrell government  Green Paper that look even worse.

Here’s my summary of the issue in New Matilda.

Big Plans for Development in NSW




Meet The Inner-City Coal Seam Gas Drillers

When I first heard that there were plans for a coal seam gas company was planning to drill a short way from where I live in Inner City Newtown, Sydney, I could barely believe it but I found out that it is deadly serious.

This story is about how the same company is planning to drill in Newtown and at the heritage town of Catherine Hill Bay. Many people know about how Catherine Hill Bay residents are fighting Rose Corporation’s large residential subdivision development ( Nicole Gooch and I dealt briefly with this in an earlier article on New Matilda) but few know that Dart Energy are planning to drill both at Catherine Hill Bay and St Peters, near Sydney Park.  Read the full article on New Matilda.