Fair Game

by Steve Cannane

  CHAPTER 19

  THE PACKER ACQUISITION

  PETER BARNES HAD BEEN stalking James Packer for weeks. The freelance paparazzo had been hired by Sydney gossip columnist Annette Sharp to get the photographic evidence she was so desperate for – confirmation that the son of Australia’s richest man had been recruited into Scientology. Barnsey, as he was known in the game, hovered around the corner of the Glebe laneway where Scientology’s ‘Advanced Organisation’ in Sydney was located. With his long lens camera hidden in his backpack, he patiently waited for Packer to enter or leave the building.1

  Inside the ‘Advanced Org’ Eric Kleitsch had already discovered that James Packer was Scientology’s latest big name recruit. Kleitsch, along with around 30 other Sea Org members, had been commandeered to scrub the car park in preparation for the businessman’s arrival. ‘We were told an important VIP was arriving and we all had to do a white glove clean-up of the garage,’ he says. Kleitsch was shocked when he caught a glimpse of Packer getting out of his black Mercedes. ‘I thought to myself, shit how the hell did they get him?’ Kleitsch says. ‘And what the hell would his father say?’2

  While Peter Barnes waited for his money shot and Eric Kleitsch polished the car park floor with rags and an all-purpose cleaner, 12,000 km away in Los Angeles, Marty Rathbun was in charge of the in-depth operation to recruit the son of Australia’s richest man. David Miscavige took the project so seriously he had the second most senior Scientologist in the world running it. Rathbun was to oversee every level of the operation. As he describes it:

  [In the US] I was his auditor. I was his contact. When he was back in Australia we went through this whole process that I had to supervise directly to take all of the greatest newly trained completely loyal top-flight Australian auditors and brief them and get them all set up to go service him. I had to set up the whole thing at the Advanced Organisation there and they were sending me submissions on the security there and how we would go in the back way and sneak in there and the tabloids could never see him and there would be no connection. I set that whole thing up. I supervised the entire thing.3

  Marty Rathbun achieved many famous victories in his time as Inspector-General of Scientology’s Religious Technology Center. The biggest was convincing the US Internal Revenue Service to grant Scientology tax-free status. But outfoxing Peter Barnes and Annette Sharp, a paparazzo and a tabloid journalist with a mutual love of the stakeout, proved a tough assignment.

  In 2002, James Packer was in desperate need of help. Friends feared he was in danger of taking his own life.4 In a TV interview over a decade later he would admit that during this period, ‘I became depressed and I was emotionally exhausted … I felt isolated, I felt like a failure, you know, it was not a great time in my life.’5 His wife Jodhi Meares had moved out of their luxury Bondi apartment and a disastrous business deal had eroded his self-confidence and strained his relationship with his father, Kerry, who at that stage was Australia’s wealthiest man, worth $6 billion.6

  A few years earlier, the world was at James Packer’s feet. In 1995, he invested $250,000 in One.Tel, a telecommunications company run by fellow Cranbrook old boy Jodee Rich. Soon those shares were worth $5 million.7 Packer was grateful to Rich for making him independently wealthy and giving him the opportunity to move out of the shadow of his formidable father. But in desperation to prove himself to Kerry and gain financial independence from him, James was blinded by Rich’s bluff and bluster.

  Jodee Rich had a history of dazzling then disappointing investors. In the 1980s, the rapid expansion of his software retailing business, Imagineering, led him to be called ‘The youngest and richest self-made millionaire this side of the Indian Ocean.’8 But it all ended in tears. By the end of the decade, shareholders had lost over $100 million and the company’s fortunes had collapsed under the weight of its own debt. The experience did little to temper Rich’s taste for taking risks with other people’s money. In 1998, he decided One.Tel should build its own telephone network, a project that would require a capital injection of at least $1 billion.

  In the beginning, James Packer convinced his father that the family company, Consolidated Press Holdings, should invest $47 million in One.Tel. He then worked on Lachlan Murdoch, suggesting he try and get his father, Rupert, on board. By February 1999, the Packer and Murdoch families had decided to plunge $710 million into One.Tel, acquiring 40 per cent of the company’s shares.9 It was a disastrous investment.

  Just over a year later, the dot.com bubble burst on Wall Street. By May 2000, One.Tel had lost a third of its value on the stock market. By the end of June it had lost $291 million for the financial year and spent $775 million in cash. In January 2001, as he recovered from a lifesaving kidney transplant, Kerry Packer called in James and Jodee Rich for a meeting. The pair were harangued for three hours. ‘You ran out of cash at Imagineering,’ Kerry said to Jodee, ‘and you’re going to do it again. I was right and now the markets are telling me I was right. You blokes never listen to me.’10

  One.Tel continued to haemorrhage money. A few months later, with Kerry back in hospital and too sick to attend a key meeting, he asked one of his lieutenants to tell Rich the whole debacle would cost him ‘his right testicle’.11 That month an emergency board meeting was held and Jodee Rich was forced to resign from One.Tel. James Packer and Lachlan Murdoch killed off the business. Kerry blamed James for losing $400 million of the family company’s money. James had lost his financial independence and his father’s respect. Kerry was not the kind of man who would let him forget it.

  If you want an illustration of how tough Packer men can be on their sons, look no further than how Kerry’s father, Frank, treated him. As a child Kerry had been sent interstate to board at Geelong Grammar School. One summer holiday he returned to the family home in Bellevue Hill after a long train trip from Victoria. Instead of being welcomed with open arms, Kerry was chastised for forgetting his tennis racquet. To teach him a lesson Frank put the young boy on the train back to Geelong. The round trip was over 2000 km. It was days before young Kerry returned home for his family holiday with tennis racquet in hand.12

  When James was at his lowest point after the One.Tel debacle, Kerry was hardly sympathetic. In 2001, when the family company made its first ever loss, James was the one who had to announce it to the public and apologise to shareholders. One of Kerry’s trusted former lieutenants told biographer Paul Barry that Kerry ‘left him hanging out to dry’.13 James withdrew from running the company, even though he was executive chairman. ‘James was completely fucked,’ a Packer company executive told journalist Richard Guilliatt. ‘He went from one of the most confident executives in the world to a complete mess.’14 It took a year for Kerry to realise his son had even had a breakdown.15

  Into the void left by his father stepped Hollywood superstar Tom Cruise. Following his divorce from Nicole Kidman, Cruise was back in the game as an enthusiastic proselytiser for Scientology. He took the young businessman under his wing and suggested he try some of Hubbard’s techniques. As James told TV journalist Mike Willesee over a decade later:

  Tom Cruise reached out to me and it was a surreal thing. I’d met him once or twice, only once or twice, and he was in Australia and we got together. I think he could tell that I was in pain … and he invited me to his house to go skiing with him at Christmas – probably in Christmas, 2001, so six months after One.Tel went broke – and we spent a couple of weeks together and subsequently, he was just an amazing friend to me.16

  While James Packer is eternally grateful to Tom Cruise for his support at a time when others were missing in action, the mission may not have been entirely altruistic. Marty Rathbun, who was in charge of the operation to recruit and keep James in Scientology, told me that it was all a part of a grander plan. Locking in James was the first step in a bid to recruit Lachlan Murdoch, son of Rupert, the media magnate whom Scientology blamed for triggering the Anderson Inquiry in Victoria in the 1960s. As Marty Rathbun told me:

 
Tom and myself and Miscavige all were impressed with the idea that he was very tight close friends with one of Rupert Murdoch’s sons and so the idea was, in Tom’s concept and Dave fully endorsed it, and so did I, was to win Jamie over and ultimately get our claws into News Corp. It would be the greatest coup of all time because it was perceived by Scientology, in our files, which were extensive, that Murdoch was an incredibly important player because of his involvement or perceived involvement with the Inquiry.17

  Marty Rathbun knew intimately how obsessed Scientology was with Rupert Murdoch. In 1981, he had been seconded to join an elite, secretive Scientology team known as the Special Project. Rathbun’s first task on that operation was to get across the details of all the law suits filed against Hubbard and to help gather evidence that the FBI had infiltrated the intelligence wing of the Guardian’s Office and convinced its agents to commit crimes.18 This meant meticulously making his way through the organisation’s secret files.

  Rathbun ultimately found out there was no FBI conspiracy, but he did discover a whole lot more about the organisation as he sifted his way through hundreds of filing cabinets at the Guardian’s Office in Los Angeles. Included in the files were dossiers in which Rupert Murdoch featured prominently:

  One of the first things I did in 1981 was to read the big conspiracy folders and everything L. Ron Hubbard said about it, and Rupert Murdoch was right up there with the heads of banking and the heads of the pharmaceutical industries as the sort of James Bondian Mr X villains.19

  It is drilled into Scientology’s followers, and in particular its leadership, that its critics are never forgiven nor forgotten. As Hubbard wrote in 1959 in his Manual of Justice: ‘People attack Scientology, I never forget it, always even the score. People attack auditors, or staff, or organisations, or me. I never forget until the slate is clear.’20 When it came to Rupert Murdoch, the slate was far from clear.

  In the early 1960s, in the years leading up the Anderson Inquiry in Victoria, Murdoch’s Melbourne tabloid Truth crusaded relentlessly against Scientology. It held Hubbard up to ridicule referring to his creation as Bunkumology. While delivering the AN Smith Lecture in Journalism in 1972, Murdoch boasted that ‘as a result of Truth campaigns the practice of Scientology has been legislated against’.21 It was one thing that the Scientologists and Murdoch agreed upon, that his newspaper had been responsible for triggering the first ban on Scientology in the world.

  According to Rathbun, this was at the front of their minds when Cruise told him and Miscavige that he was in close contact with James Packer. ‘You can understand what it was like when Tom goes, “Hey, Jamie Packer is best friends with Lachlan Murdoch.” It was like man! We were actively talking about this, that this would be the coup of all coups to get the son of Rupert Murdoch! We thought he was potentially the guy who was going to help take over the evil genius Murdoch’s empire.’22

  Tom Cruise did not respond to any of the allegations made by Marty Rathbun about James Packer’s recruitment. His long-time lawyer Bert Fields told me via email: ‘His not responding should not be taken as an indication that any of the allegations are true.’23 The Church of Scientology via their Sydney lawyer Patrick George stated in an email: ‘The Church denies the allegation that it attempted to use James Packer to recruit Lachlan Murdoch, together with the other allegations concerning Mr Packer.’24

  In the early 1990s, Tom Cruise had been silent when Scientology needed him most. When TIME magazine published its damaging exposé, The Thriving Cult of Greed and Power, Cruise was nowhere to be seen. Scientology’s aggressive public relations counter-attack was done without assistance from its most high profile member.

  As Rathbun puts it, through targeting Packer and Murdoch, Cruise had an opportunity to make amends, ‘He stood by while we were taking the TIME magazine shellacking and when we went and got the IRS exemption he wasn’t part of any of that, so he was really keen to make up the damage,’ says Rathbun. ‘He was already friends with James and he knew the guy needed help and he sort of in his own way was kind of doing that as a friend, but he originated that this was an incredibly important, potentially influential, person.’25

  The plan not only fitted in with Hubbard’s policies in relation to seeking revenge on critics. It squared with another pronouncement made by Scientology’s founder. In 1969, Hubbard issued a confidential policy titled ‘Targets, Defense’.26 The policy was designed to create a defense perimeter around Scientology insulating it from continual attacks. The policy stated that the targets on which they should invest most of their time should include ‘taking over the control or allegiance of the heads or proprietors of all news media’.27

  Targeting James Packer and getting to the Murdochs became the number one priority for Scientology. Rathbun, the second in command in Scientology’s hierarchy, and the man who brought Cruise back into the fold just a year earlier, was assigned to be James Packer’s auditor and point man:

  Jamie would come to the Celebrity Centre and Tom was there. I was intensively auditing Tom, I had Penelope Cruz getting audited and we had the (Cruise/Kidman) kids getting indoctrinated on PTS/SP (Potential Trouble Source/Suppressive Person) – but the big project that we were working on was Jamie and so Jamie would come by from time to time when he was in the States and we would after session go up to the President’s suite – it’s the penthouse suite at the Celebrity Centre – Tom had it reserved for that entire several month period.28

  The Scientologists were desperate to impress Packer. They had their second in command play the role of James’s auditor and key contact. They had their number one celebrity hang out with him in the exclusive President’s suite at the Celebrity Centre. Back in Australia, they put their foot soldiers to work, with around 30 Sea Org members assigned to scrub the car park at the Advanced Org building in Sydney in preparation for his arrival.

  ERIC KLEITSCH WAS SEVEN years into a 12-year stretch on the Sea Org’s punishment camp, the Rehabilitation Project Force (RPF), when he was ordered to clean the basement car park in the Scientology building in Glebe. Kleitsch’s RPF sentence is almost unsurpassed in Scientology history. ‘I think there are only one or two people in America who have been on longer than me,’ he says.29

  Kleitsch was considered a troublemaker within Scientology circles. ‘I was not a meek follower of Hubbard who did everything that his seniors told him,’ he says. ‘I questioned things.’30 When two Scientologists who’d had mental breakdowns were detained in a caravan on an isolated property, Kleitsch kicked up a stink, threatening to take the story to the media. ‘I was RPF’d to keep me quiet,’ says Kleitsch. ‘I was pissed off. I told them what they were doing was completely illegal.’31

  When the operation to clean the car park began, Kleitsch was given a pile of rags, a mop and some all-purpose cleaner. The work was dirty and monotonous. He scrubbed the car park floor, wiped down walls, cleaned out the inside of the dumpster with bleach and removed any junk that had been stored in the basement. ‘There were around 30 of us,’ Kleitsch says. ‘We worked all night and until lunchtime the next day.’32

  Upstairs in Scientology’s three-storey Advanced Org things were just as hectic. Orders had come in from Scientology headquarters in the US that everything had to be in top shape in preparation for a special visitor. Only a handful of people were briefed about who was coming.

  Sea Org member Dean Detheridge was one of those in the loop. He had been called in urgently to help install hidden audio and visual recording devices in a special room upstairs. ‘I was asked to install the equipment in one particular room that I was told would be used to do the Director of Processing (DoP) interviews on Packer,’ says Detheridge.33

  The former Scientologist says that at the time it was highly unusual for these kinds of personal conversations to be recorded. ‘DoP interviews aren’t usually recorded for the average Joe Blow,’ says Detheridge, ‘but Miscavige’s RTC (Religious Technology Center) would have been all over Packer’s actions – and would definitely want the in
terviews recorded.’34 In a statement, Scientology’s lawyer Patrick George said, ‘The allegations attributed to Eric Kleitsch and Dean Detheridge are denied.’35

  Down in the basement car park the cleaning crew was none the wiser as to who was going to be the beneficiary of all their hard labour. On the RPF you are forbidden from initiating conversations. ‘We were just told an important VIP was arriving,’ says Kleitsch.36

  As a former undercover operative for the Guardian’s Office, Eric Kleitsch was adept at uncovering secrets. Twenty years earlier, he had infiltrated the Labor Party in South Australia and gleaned important information about its plans to overturn the ban on Scientology. Now stuck on Scientology’s chain gang, scrubbing dumpsters and sweeping floors, Kleitsch was about to find out just who that VIP was.

  The plan was for James Packer to be able to drive straight into the basement car park and avoid detection from the tabloid media or any common grade Scientologists. But on one occasion Kleitsch caught a glimpse of the young mogul. His mind immediately turned to Kerry Packer and what he might think of his son dabbling in Scientology. ‘From what I had read his father was not someone you would want to trifle with,’ Kleitsch says. ‘He was a very tough man who always got what he wanted.’37

  By discovering Scientology’s big secret, Kleitsch had landed himself in big trouble. He was soon given the Sea Org’s ultimate punishment. ‘I was sent to the RPF’s RPF for being in the same space as Packer,’ says Kleitsch. ‘I was in there for a month.’38

  When Kleitsch returned to the standard RPF, he was back on car park cleaning duties, making sure the basement garage passed the white glove test. The Church of Scientology describes the RPF as a ‘voluntary program of spiritual rehabilitation’.39 But Kleitsch says it was nothing of the sort. ‘On the RPF we were treated like animals,’ he says. ‘Like slaves, really.’40