The so called ‘Cash for Comment Mark II’ has taken a dramatic turn, with a leaked document, injunction threats, scathing criticism of the ABA and Chairman, David Flint, and more emerging on Telstra’s sponsorship of Macquarie’s Alan Jones.

Here is a full transcript of the latest developments from the ABC’s ‘Media Watch,’ and the link at the bottom of this page will take you to the leaked report:

“Welcome to Media Watch. I’m David Marr. Earlier today Macquarie Radio tried to bump us off, but here we are after all.

Alan Jones’ Sydney station did not want us to discuss in any way an Australian Broadcasting Authority document, leaked to us last week.

It’s a feisty draft report of the ABA’s investigation into Telstra’s sponsorship of Jones’ breakfast show and the near miraculous conversion of Jones from critic to warm friend of the mighty telco.

And, it really makes you wonder if the ABA ever had the ticker to take on the nation’s most influential broadcaster.
Last week, I said:

So how was Jones’ conversion achieved? It’s the absolutely fundamental question in all this, but not a question the ABA answers or even explores. – Media Watch, 12 April

But I was wrong. The leaked document, prepared last December, proves that question was explored – at length and in such vivid detail that it’s hard to understand why the ABA board decided, in the end, to exonerate all parties without further investigation.

When we asked the ABA about the report late last week, they, too, threatened us with an injunction. And alerted Jones, Telstra and Macquarie Radio.

Meanwhile, the Authority’s General Manager, Giles Tanner, briefed us about the preparation of the report:

…basically, this work was done inside the legal and policy team of the ABA – Giles Tanner, statement to Media Watch, 16 April

by what Tanner described as:

… junior and middle levels of the staff body – statement to Media Watch, 16 April

… reporting to him and the ABA’s chief lawyer, Jonquil Ritter. They were not happy with the direction of the report and Tanner confirmed that neither was silverback chair of the ABA, David Flint.

By this time, Flint had already told Mediawatch Jones was in the clear:

… there is nothing that would indicate any breach of standards or the code – Media Watch, 20 October 2003

After that appearance on Media Watch, Flint told his amazed colleagues at the ABA that his comment was an honest mistake, but he left this personal vindication of Jones uncorrected on the public record.

Weeks later, he found himself reading this draft report that was very far from clearing Jones.

It contained a sharp analysis of the techniques Jones used to fend off commentary, hostile to Telstra’s interests on his breakfast show:

On the limited occasions when alternative viewpoints were expressed by callers to the program, Mr Jones did not allow such viewpoints to remain unchallenged and, in effect, denied or undermined their opportunity to be heard – ABA Draft Report into Telstra Sponsorship of Alan Jones’ Program, December 2003, p46

As a result, the ABA investigators had made a preliminary finding that Macquarie Radio had breached the broadcasting codes:

… by not making reasonable efforts or allowing reasonable opportunities for significant viewpoints, on controversial issues of public importance concerning Telstra, to be presented – ABA Draft Report, December 2003, p50

Another uncomfortable surprise for Flint must have been a second preliminary finding that Macquarie Radio had breached the codes by allowing Jones to broadcast this in October 2002:

…you would have read for some weeks now, that because one rather unworthy media outlet chronicled that I was on the payroll of Telstra, that that became perceived wisdom all across the country. Every newspaper across the country printed it. And, of course, it has been designed to damage, and of course, I’ve never had a cent from Telstra in my life – Alan Jones’ Breakfast Show, 2GB, 25 October 2002

The ABA investigators were concerned that Jones’ listeners couldn’t judge what weight to give this claim. His listeners couldn’t know how intimately he was involved with Telstra – in negotiating the deal and in the day to day broadcasting of his show. Nor that:

… there was a significant increase in Mr Jones’ salary when he moved to 2GB which appears, at least in part, to have resulted directly from his ability to attract Telstra’s sponsorship – ABA Draft Report,
December 2003, p13

And, what was the sponsorship deal all about? Not just buying ads, according to this consultant’s email to Telstra Marketing:

… I know there are non-media reasons for signing this deal, but we really need to stress that this does not represent value and we are paying more than we estimate market rates to be for this airtime – ABA Draft Report,
Email from Georga Payne, Buying Manager, Optimedia, December 2003, p28

The December report found, essentially, that Telstra, Jones and Macquarie had found a way around the cash for comment rules:

… the available evidence suggests that the key parties – that is Macquarie Radio Network, Telstra and Alan Jones – structured the commercial agreement of 17 July 2002 to fall outside the regulatory requirements of the Act so that they were free to act, albeit carefully, in a manner inconsistent with the policy objectives of the Act insofar as transparency, accountability and fairness were concerned – ABA Draft Report, December 2003, p13

But, note those words ‘available evidence’. The ABA investigators wanted – and needed – more evidence. A decision had been made, somewhere at the top of the ABA, that this would be a documents only investigation.

But, how could the ABA investigators pin down the conversations and understandings which they suspected were at the heart of the Telstra deal – by only looking at documents?

For instance: Telstra had wanted a written guarantee that Jones would stop doing what he’d been doing for years – putting the boot into Telstra. Macquarie Radio refused to give it, but the December draft observed:

… in light of the warm relationship that developed between [Macquarie], Jones and Telstra executives, and the corresponding level of support for Telstra that Jones broadcast in his programs after July 2002, questions arise concerning whether or not Telstra’s intention was eliminated altogether or merely converted to a request or an understanding between the parties – ABA Draft Report,
December 2003, p27

Exactly. And the December draft can be read as a plea by the investigators to be allowed to pursue those questions.

How? By using the ABA’s power to summon Jones and those executives involved in the Telstra deal:

… to attend before a delegate of the ABA to answer questions on oath – Broadcasting Services Act, s173(a) & 174(1)

It’s not uncommon. Last year, Jones was examined on oath, in private, to solve the riddle of his ownership of Macquarie Radio.

But, the ABA was not going to let anyone be grilled about the Telstra deal. After Flint and his General Manager saw the December draft report, it was decided there was no point pursuing, let alone expanding the investigation.

Tanner told Media Watch he found:

… a fair bit of barking up the wrong tree and tendentious tone in places that really wasn’t warranted by anything that we had or would be likely be able to get – statement to Media Watch, 16 April

Tanner felt the board would rather discuss the adequacy of current regulations than:

… pursue so many rabbits down holes – statement to Media Watch, 16 April

So, the report leaked to Media Watch never reached the board. It’s not clear if anyone from the board other than Flint actually read the thing.

Tanner told Media Watch, a report taking a very different direction went to the board in January. There were then more changes:

… because the board actually had a lot to do with the final shape of the report and a lot of views – statement to Media Watch, 16 April

The ABA’s verdict on Jones and the Telstra deal emerged finally a couple of weeks ago. The Telstra deal got a big tick and the vindication of Alan Jones was now official.

Among the many unanswered questions we sent the ABA late last week was this:

… Is it appropriate for Professor Flint to be involved in this investigation after expressing and allowing his pre-judgement of the investigation to be published? – Media Watch letter to the ABA, 15 April

We analysed the ABA’s published report at length on Media Watch last week. But now, we also have the December draft in our hands we can see what was lost when the “fresh direction” was mandated before Christmas.

Documents went. Arguments disappeared. The Jones’ story was boiled down to bare bones. The final verdict is much, much friendlier to Jones than the leaked document.

Before Christmas, the plain fact that he ran an overwhelmingly Telstra friendly show spelt trouble for Macquarie Radio. The December draft reversed the facts to argue the principle:

… if 95% of air time is anti-Telstra and only 5% pro-Telstra, it might be inferred that reasonable efforts had not been made to present significant viewpoints – ABA Draft Report,
December 2003, p41

But, in the final reckoning, the ABA said the only effort Jones had to make was to invite listeners to comment, from time to time. The invitation was enough. He didn’t even have to put them to air:

… in the absence of any evidence that the producer of the program filtered out negative calls or that callers with different viewpoints were cut off more quickly than callers who agreed with Mr Jones, the ABA cannot find a breach of the Code – ABA Investigation Final Report, p47

At times, the ABA’s final report descends to making excuses for Jones. They said it was ‘arguably’ misleading of him to claim on air that he’d never had a cent from Telstra. But:

… he was, with some emotion, defending himself against the specific allegation that he was on the Telstra payroll – ABA Investigation Final Report, p52

Somehow, they thought it went to Jones’ credit that his listeners knew enough to know he was bullshitting. They would know he was an owner of the station, said the ABA, and know Telstra was paying Macquarie Radio to sponsor his show:

… for these reasons, and on balance, the ABA considers that the relevant broadcast was not misleading – ABA Investigation Final Report, p52

So, Macquarie Broadcasting was found to have committed no breaches of broadcasting codes and standards.

We asked Derek Wilding, Director of the Communications Law Centre, which lodged the formal complaint against Macquarie Radio 18 months ago, to assess the ABA’s final verdict in the light of the document leaked to Media Watch:

… a much narrower approach to compliance with the Commercial Radio Standards has been taken in the final report, with less attention to the public interest objects of regulation that might demand enforceable changes in industry practice – Derek Wilding letter to Media Watch, 16 16 2004
-Read Derek Wilding’s analysis of the leaked report

Telstra does not pay Jones. It pays Macquarie Radio to sponsor Jones’ show. But, even the narrow final report of the ABA recognises that Telstra was – and is – getting value for money here.

Last week, we called this Cash for Comment Mark II. It’s a big issue in the industry. But, the final report of the ABA recommends no changes to broadcasting standards to protect us from these deals.

Giles Tanner told Media Watch the board:

… shied away from any finding…they felt that was a bit of a Pandora’s box – statement to Media Watch, 16 April 16

Yes, and it’s already wide open. Why is the ABA flinching? Who do they think they’re dealing with here?

Why don’t they get to the heart of these deals. The ABA told us the leaking of this report:

… really compromises our ability in future to obtain this kind of information as willingly, and to obtain the cooperation of parties as willingly, as we’ve been able to obtain it – Giles Tanner, statement to Media Watch, 16 April

Sorry Giles, we don’t buy that. These people aren’t your friends – and they’re not giving you willing co-operation. You get what you get because there’s an act giving you power to demand documents and examine witnesses. They use the law to protect their interests.

That’s why Macquarie Radio went to the NSW Supreme Court this morning to try and stop us giving this inside account of the ABA’s half baked investigation into Jones, Telstra and Macquarie Radio.

Until next week. Good night.”