The Murdoch Archipelago

by Bruce Page

  Geographical separation between Murdoch and the Whitlam administration favoured an ideological separation. It must have become obvious that the government he had wished to represent as something like his own creation was very deeply disliked by powerful people in the United States. Richard Nixon and Henry Kissinger were in 1973 still the greatest of these – Nixon’s regime was in the overweening moment just before its fall – but the feeling was not theirs alone. Coalition Australia had been a happy certainty for America’s keenest Cold Warriors, particularly in the readiness of Canberra’s overseas intelligence service (ASIS) to lend the CIA a hand with causes few other allies fancied, such as the harassment of Salvador Allende.

  So happy was the Agency with the arrangement that its officers thought the Coalition must win the 1972 election, and it was a short step from disappointment to seeing Whitlam as another ‘Marxist’. (He did terminate ASIS’s Chilean links.) If Whitlam personally didn’t return the paranoia, some of his colleagues visibly did and gave reason for unease about Australia’s political reputation. Probably this had no profound ideological dimension, but Murdoch’s nationalism, which he was otherwise keen to advertise, did not run to any sophisticated appreciation of the Australian–American relationship.

  Eric Walsh and the ALP matchmakers tried hard to preserve amity, geography notwithstanding. At least Murdoch was in New York, which contained something Whitlam did deeply admire – the United Nations. And in January 1974, when Whitlam was to address the General Assembly, Walsh seized the chance to set a dinner date. Navigating his hotel lobby that evening, Whitlam again exercised his talent for alienating Murdoch. He found David Frost free for the evening, and decided that the television inquisitor would be a more amusing dinner-companion. He told Walsh to move Rupert to breakfast. Whitlam probably didn’t realise his offence – didn’t realise that Frost was both the man who had begun (as Murdoch saw it) the ‘character-assassination’ causing his troubles at London Weekend, and then the one to step in and resolve the situation. Murdoch was doubtless relieved that News Ltd’s investment did not vanish. But even a man less touchy than Murdoch might dislike being rescued by the apparent author of his distress. Walsh still recalls the postponed gathering as his least favourite morning meal.

  Meanwhile, there were initial manifestations of a controversy with dangerous potential: the ownership and exploitation of mineral resources. News Ltd was a member of the Alwest consortium, led by Reynolds Aluminum of the US, which aimed to develop Australian bauxite deposits, but faced opponents inside the ALP. Some of these did not want the ecosystem harmed. Others wanted it harmed under purely Australian indeed public – ownership. Their combination was irresistible, and in March 1974 the Cabinet rejected the scheme. Whitlam did not personally oppose Alwest, but it was remote from his style to explain that to Murdoch. ‘Rupert wanted to be treated as a confidant, and Gough just wouldn’t be in it,’ says Menadue. The Australian chastised the government’s natural-resources policy, and Murdoch described as ‘irresponsible’ the Labor sympathisers who suggested the paper was less than objective.

  In November 1974 Walsh managed to bring Whitlam and Murdoch together for a dinner which passed off fairly amicably. It was held at the Prime Minister’s official residence, The Lodge, and Murdoch was in Canberra to update on Australian politics. Publicly, amity was preserved. Privately, things were changing. During the same month, Murdoch presided at a gathering where the downfall of Whitlam’s government was discussed, in terms remarkably close to the event which took place twelve months later. A curious drama of newspapers and constitutional politics was in the making. This of course was Watergate year: it was three months after Richard Nixon’s resignation.

  There are powerful similarities between the events of Watergate and the events known in Australia as the ‘Dismissal’, or more angrily as the ‘Coup’. Also, there are vital differences. The great similarity is that newspapers, and the people running them, were decisively involved each time – as was to be the case in the British government’s crisis of 1986 (see Chapter 12 below). But there were profound differences between the motives and conduct of these newspaper controllers.

  Though there are Nixon sympathisers who cannot be reconciled, the Watergate investigations of the Washington Post can be – should be – represented as a case of First Amendment obligations discharged as properly as an imperfect world dare expect. Conspicuously, the threads running through the Watergate story are disclosure, civic courage and lack of foreseeable reward. There is a perfectly fair sense in which Watergate did enhance the commercial strength of the Washington Post, but only as the after-product of passage through a deadly-seeming storm. And the Watergate process rested on an earlier decision in which the paper’s financial existence was put on the line in defence of an editorial principle.

  In June 1971 the New York Times began publishing the Pentagon Papers, the remarkable set of documents which proved that ‘every administration after Second World War had enlarged America’s commitment to … South Vietnam and … hidden the true dimensions of the enterprise and its own abundant doubts about the prospects for success’. The Nixon administration obtained an injunction which halted the Times after three instalments, and began a prosecution under the Espionage Act. It was a furious, determined attempt to impose censorship on the American press.

  At this point the Post also received a set of the Pentagon documents and its own legal threats from the government. The paper’s editorial staff believed with passion that the government’s legal actions made it imperative for the Post to publish. But the circumstances were peculiarly risky, because the filing for the first public issue of stock in the Post company was just being completed. In one of them Katharine Graham, the publisher, had to warrant that no outstanding litigation was likely to reduce the value of the business.

  The advice of the lawyers working on the issue was stark. Postponing the stock issue was scarcely an option, for it would heavily damage financial credibility. For it to go ahead, the routine warranty had to be given; but, if the paper then became involved in litigation with the government such as to damage its profits, investors could sue to get their money back with ruinous consequences. Therefore, the Pentagon Papers story had to be suppressed. After intense debate with her editors, and a second set of lawyers, Mrs Graham chose to publish.

  Both the Times and the Post defeated the government’s legal actions, and far more easily than at first seemed possible. Not for the first time it was shown that the press in a democratic society does better to avoid the kind of backward step Murdoch took in Adelaide. From Judge Murray Gurfein, a famous restatement of the First Amendment was evoked: ‘A cantankerous press, an obstinate press, a ubiquitous press, must be suffered by those in authority … This has been the genius of our institutions throughout our history.’ Ben Bradlee’s judgment is that, if Graham’s decision had gone the other way, the Watergate process would not have been carried through, that the 1971 precedent was necessary to sustain morale when Nixon and Attorney-General Mitchell made their tolerably plausible threats to destroy the Post.

  It is untrue to say that a newspaper’s editorial independence conflicts permanently with its existence as a business. Rather, the business value of an authentic paper rests on its independence. But it is a curious kind of asset, one which can be preserved only by proving that in many quite probable circumstances it will be thrown away. It need not always be proved in such an extremity as the Post faced in 1971 – an accumulation of lesser precedents will often serve. For instance, the London Sunday Times revealed in 1964 that a television company controlled by the Thomson group – owners of the paper – had become a cover for gun-running and mercenary recruitment. Thomson absorbed the commercial harm without complaint; any other precedent would have inhibited the growth of the paper’s investigative capacity, described below in Chapter 8. Such risk is the natural price of independence.

  Though the Post’s editorial column under Mrs Graham showed Democratic allegiances rather than
the Republican ones of her father Eugene Meyer – and it never endorsed Richard Nixon – no sensible reading suggests that partisan advantage significantly motivated its Watergate reporting. The Post’s part in the fall of Nixon was central, but the mechanism involved was disclosure. The paper simply published, as swiftly as it could, everything it knew and reasonably suspected about the activities of the Committee to Re-Elect the President. Some of this was inaccurate, but more of it was correct. And quite certainly the Post never held any matter back to lessen or increase the likelihood of Nixon’s fall. Murdoch in America watched the process, and by his own account thought Nixon was unfairly treated.

  Disclosure may seem at first glance an act of power, but – as the Introduction states – it generally surrenders power. Once information is disseminated, its authors have slight influence on the effect produced. They can express opinions, but these carry no decisive weight. Not all who call themselves journalists subscribe to the ethic involved – though it is indispensable – and honourable people from other backgrounds may fail to grasp it.

  John Thadeus Delane, under whose leadership The Times laid it down that ‘the Press lives by disclosure’, puzzled his political friends when he refused to see documents ‘in confidence’ – that is, as part of a deal saying it would only trouble him when he gained the same information unconditionally. And Kay Graham describes in Personal History the bitterness caused when her husband Philip, as the Post’s publisher, suppressed a story of Ben Bradlee’s about racial segregation in Washington swimming pools. By using it as leverage, Graham – formerly a lawyer – forced the city to desegregate its pools. Bradlee and his colleagues approved the end, as citizens, but considered the means professionally disgraceful. Mrs Graham – trained as a reporter – says that in her own time as publisher, after Philip’s death, she never herself did likewise.

  And disclosure imposes its particular emotional costs. There was a lonely period when the Post’s honest competitors could not imagine its Watergate story was true. ‘Not even my most cynical view of Nixon,’ wrote Max Fraenkel of the New York Times, ‘had allowed for his stupid behaviour.’ Was it in support of a fantasy, Mrs Graham, Bradlee and their colleagues wondered, that Nixon’s promises to strip their company of its broadcasting licences and bury their paper in punitive litigation were being faced (the famous ‘tits in the mangle’ jibe)? On his re-election in 1972 there seemed every possibility that he could fulfil them. Instead, of course, came an electrifying drama – the classical proof that in a democracy disclosure can generate huge and unpredictable impacts. To this the Dismissal, and Murdoch’s role in it, is a sub-text – one which illustrates the development of his method.

  Though in substance a figure of the centre-left like Bill Clinton or Tony Blair, Gough Whitlam was temperamentally remote from their circumspection. His maxim in trouble was ‘Crash through or crash’. It might have formed a bond with the gambler in Murdoch, except that Whitlam likes people to have firmly held views, and grows bored when they are not in evidence. Incaution often served him well. He became leader of the ALP because he dared to invade old sectarian minefields which others avoided (and which turned out to be inert).

  In government, matters were more complicated. Much of the country’s presentday social complexion derives from reforms which Whitlam forced through – and without him Australia might have become a coelacanth among nations. But doing so alienated the conservative elite which had ruled since the 1940s – and whose values are Murdoch’s emotional default settings, whatever tactical populism he engages in. There were symbols involved, some with heavy sentimental content. Whitlam launched a civil honours system designed to compete with – and eventually replace – that provided by the English Court from its medieval inheritance. And as Canberra, like Whitehall, had been a place where a whole lifetime could be the run-up to putting KCMG or KCB after a man’s name and ‘Sir’ in front of it, there was disquiet over substituting the mere Order of Australia.

  Nor was that all of it. The novelist Patrick White had just won the Nobel Prize for Literature, and Whitlam – after much effort – recruited White as the Order’s inaugural Companion. If he thought at all about White’s open homosexuality, he was probably amused by the notion of picking off two orthodoxies with a single stone. Intricate fictions like Voss and Riders in the Chariot the Canberra mandarins were ready to leave to the Nobel committee. But it was another thing when the man declared as Australia’s most distinguished citizen was – a poofter, and one refusing to conceal it. Symbolic degeneracy was accompanied by financial troubles and in those days connections between sexual and fiscal immorality were widely assumed – dramatising the belief that Australia’s economy was exposed to socialist disorder. There was a little justice in this, though from today’s perspective the injustice is more apparent.

  Whitlam’s unforeseen affliction was the economic turbulence of the early 1970s, touched off by US deficits from the Vietnam War, and amplified by the ‘oil shock’. The oil-producing nations quadrupled prices, and all the world’s cash seemed to be flowing into Arabia. After fifteen placid years, the technicians of Australian finance had slight experience of managing under stress, and after twenty-three years in opposition the ALP’s ministers had none of managing the technicians. But the period was one in which few governments handled themselves well.

  In fact much timely change was under way, with effects persisting today: school, university and healthcare funding was reformed; progress on native land rights ceased being symbolic and started being substantial; sexual injustice was attacked; telling investments were made in arts and sports. But at the same time ministers with roots in the ALP’s state-socialist past nurtured fantasies which they strove to hide from Parliament especially Rex ‘Strangler’ Connor at Minerals and Energy. And officials mourning conservative hegemony acted as if obstructing their own government was the cause of civilisation. Overall it looked messy.

  By early 1974, much of Whitlam’s legislation was blocked by conservatives in the Senate (the upper house) after passage in the Representatives (the popular house). Boldly, he used a provision of the Constitution which provides for ‘double dissolution’ of both houses in a deadlocked Parliament, and fresh elections. They were set for May.

  James Hall was now editor of the Australian (Owen Thompson had been right to worry about ‘acting’ rank when he vaulted into Deamer’s shoes) and Ken May transmitted Murdoch’s instructions: play it ‘straight down the middle’. On polling day, consequently, the Australian endorsed nothing. One senior journalist wrote about his decision to vote for the Coalition. Another wrote ‘Why I Shall Be Voting Labor’. Doubtless this 90-degree recalibration – after 1972’s 180-degree bias – was refreshing to the Coalition. All the same the ALP easily won the House, with the Senate staying close balanced. However, when deadlock is followed by double dissolution and re-election, the Constitution allows a joint session of Representatives and Senators, where the more numerous lower house can override the upper. Thus Whitlam cleared the legislative logjam.

  And it was now imperative for the government to get its act together. With this in mind Whitlam at last asked Murdoch for a favour – of a very unusual sort. He wanted John Menadue released from his role as manager of Murdoch’s newspapers, so that he could become head of the Prime Minister’s Department – the post known in Britain as Secretary to the Cabinet, and regarded in both countries as the preserve of mandarin bureaucracy. (The President’s Chief of Staff is the nearest American equivalent, but due to the separation of powers does not have quite such pivotal influence.)

  Murdoch was asked by Whitlam – unknown to Menadue – to promise reversion of employment. That doubtless was a concession Murdoch was more than happy to make, for Whitlam’s request amounted to lavish fruition of a longlaid policy. Menadue had been an aide to Whitlam before joining News in 1966, and had always known his recruitment was political. ‘I don’t think Murdoch really knew what to do with me, but he wanted to be involved in the political process
, and my background and contacts interested him.’ Similarly to Woodrow Wyatt a decade later – a case in which Margaret Thatcher played the Whitlam role – Menadue was hired as the link into political structures Murdoch considered important. That he turned out to be an exceptional businessman and administrator was simply a bonus.

  Murdoch now had his graduates organising the government and (with Walsh as press secretary) running its communications. The cloud over things, though, was uncertainty about Whitlam’s longevity in power. Alongside Menadue several other talented outsiders were recruited to revive derelict official empires. But conservative discontent only increased at the sight of a radical government which might be efficient enough to deliver. Surely the Constitution did not allow such things?

  Australia’s Constitution blends from British and American elements a compound with explosive properties special to itself. Like America’s, it consists of a specific document, with a court (High, not Supreme) deciding interpretation. With the nation creating the Representatives, and the states creating the Senate, American resemblances run more than skindeep. Yet the Australian system at the same time resembles the British, in relying much on unwritten custom and moral precedent (more so in the 1970s than it does now). And in an essential respect it seems exactly British: the Australian executive is ‘responsible’, holding great and unseparated powers, which are instantly lost without a majority in the popular house. Here Representatives and Commons are close kin.

  There is a curious myth that this Constitution was imposed from Britain. Actually, it is an intensely local growth with many democratic virtues. But the notion of the executive being subject to recall – something America’s founders fenced round with numerous precautions – creates ambiguities in federalism, where states must be represented as well as people. One of Australia’s federal architects said that if responsible government didn’t kill federation, it would happen the other way round. And in the 1970s this looked a prescient call.