Part 68 of 70 — Original Chapter: Chapter 19: Diverting Attention from a Tax Hike
This article forms part of the serialised republication of Panthers, Passion & Politics – The Roger Cowan Years.
In September 2003, while the Treasurer was fighting off the flak generated by the new taxes, Panthers suddenly began to receive adverse media coverage.
When the allegations against Roger Cowan came to light in The Sydney Morning Herald, their timing was politically advantageous for Michael Egan. But was it just coincidence? We know that the government and the Herald were sent the same allegations in 2002. The newspaper had the information for around a year.
Was it just coincidental that the Herald timed its coverage perfectly for the government?1
The two Herald journalists – Anne Davies and Paola Totaro – were to play a big part in the story. In many articles through 2003, Totaro’s by-line carried the title ‘State Political Editor’. In her later stories covering the inquiry, this by-line was not used.
The first major hit on Panthers came in the weekend edition of the Herald, 27-28 September 2003, with the lead story by the two journalists in the paper’s News Review section. The story made allegations about Roger Cowan’s family company and its dealings with Panthers. The Herald ran stories about Cowan and the Club over four consecutive days. In another apparent coincidence, 28 September was the day that former directors Geoff James and John Bateman spoke to Ray Hadley on the radio. James boasted that he and his colleagues had initiated complaints to the DGR.
According to a number of sources from the press gallery and Macquarie Street that Ron Mulock was walking the halls of Parliament around this time, lobbying on the subject of Roger Cowan and Panthers.
Though he did not admit to that accusation when Cowan put it to him at a Panthers 2005 AGM, Mulock said that “questions needed to be asked and answers needed to be given and they haven’t been given over the past 27 years”.
The club industry’s protest rally was scheduled for 1st October, three days after the article appeared. The rally would see 15,000 people march on Parliament House in Sydney. The crowd included club patrons, management and staff, representatives of religious and community groups, entertainers, suppliers, sporting people and federal and state politicians.
George Souris, Shadow Minister for Gaming and Racing, was one of the leaders of the march, as was Pat Rogan. Speaking late in 2005, Souris said,
In attacking the clubs, Labor is attacking its own heartland, I can’t understand this. People that go to clubs are the everyday people out there in the suburbs. The bowling clubs, the soccer clubs, they often provide the only sports facilities for the community in their areas. If the tax forces them to close, those facilities are lost forever.
At the time of the Allen report2, sporting venues maintained by clubs included 1,621 bowling greens, 102 gyms, 325 sporting fields and 338 golf courses. While some clubs own their facilities, others are council owned, and the clubs take responsibility for maintaining them. Panthers’ rugby league ground — Penrith Stadium — is an example. It is held in trust by Penrith City Council, but it has been maintained by the club since Penrith joined the rugby league first division in 1967.
The ten electorates to be hardest hit by the tax were held by Labor.3 Egan was facing a backbench revolt. The day after the rally, a vote was taken in the ALP caucus on a motion to review the tax. The count was 34 all.4
Against that background, the publication of serious allegations against the CEO of the country’s biggest licensed club came at a politically convenient time for the government.
Cowan recalls a further burst of activity by the DGR at Panthers soon after the revelations in the Sydney Morning Herald and wonders whether the government was putting extra pressure on DGR officers.
A few weeks after the October rally, planned changes to the Registered Clubs Act 1976 were announced that would provide broad new powers of inquiry. The new provision became Section 41X.5
George Souris had entered the fight against the new legislation quite early in the picture. In 2005 he said,
41X came in during the campaign against the clubs. It was never part of the Act before 2003. This whole thing with Royal Commission/inquisition inquiry powers [is new]. It’s always been possible to have investigations under the Act. There are investigations going on all the time – about 200 going on now, as we speak. And in appointing Ian Temby, they knew they’d get maximum mileage.
Souris believed that the government needed to discredit the club movement to justify the new taxes, and that they deliberately targeted the highest profile club and its CEO.
What really struck me was the fact that they actually got to the point of creating new legislation. Then they decided. We choose Penrith Panthers, we choose Roger Cowan.
He added,
And then there’s the sub-plot; they were being fed all this crap which gave them the ammunition they needed.
Panthers was going to be one of the worst affected by this tax regime. It would be expected to pay a minimum of $17 million additional tax each year. By the time the tax was fully implemented, the club’s tax would increase from $26 million to $43 million, provided that its revenue remained at the same level.
Apart from being an outspoken critic of the NSW government’s moves against the clubs, Roger Cowan was seen by some in the government as the prime mover behind the Registered Clubs Party6, which formed in the late 90s and ran candidates for the Upper House.
Second on the party’s ticket was Cowan’s son, Stephen.
But Cowan always questioned the wisdom of running candidates representing the club industry.
I was particularly averse to the use of the name Registered Club Party. In my mind, we were on a hiding to nothing. I thought any gains from a win would be marginal, and a loss would demonstrate that the industry was politically weak.
Till recently, I never really held to the common belief that the two million plus club members in NSW could be mobilised to a strong electoral advantage. The government has made such an enormous attack on the industry that circumstances might have changed … they haven’t moved the goalposts, they’ve chopped them down.
In the late 90s, despite his reservations, some people identified Cowan with the new party.
It later became clear that some people within the Labor party were hostile about the entire episode, and to a large extent, they held me responsible. The fact is, I had nothing to do with the decision to form a party. Once it was decided, I felt I had to recommend that Panthers support it. If it had been my choice, there would never have been a Registered Clubs Party.
Looking back, it was probably a tactical error, but the government reaction is still difficult to understand. It is just one example of some of the spitefulness that existed within the Carr government. To me, none of this seemed to fit the image of the traditional ‘light-on the-hill’ party built by, and for the working man.
But I was once warned in no uncertain terms, over a completely different issue, that this party does not forgive, or forget those who oppose it. The warning came from someone who should know – a former deputy premier of NSW, Ron Mulock.
Cowan says he always tried to ensure that club management worked with the industry regulatory bodies in a spirit of open and honest co-operation. Phil Bennett, who was an inspector for the Liquor Administration Board – the forerunner of the DGR – in the seventies, bears this out.
‘Roger was usually very co-operative in his dealings with the LAB’, said Bennett.
He always used to put his hand up. He was a man of conviction, and if he believed something was wrong, he would always stick his hand up and say so. He didn’t always go with the flow, but he always tried to work with the department to educate officers about new trends and innovations, which most LAB people saw as positive.
Glenn Matthews confirmed this:
We were always totally open with the DGR – still are. Roger always maintained that it was best to work with them and co-operate fully. We had such good systems in place that everything was easy to track anyway.
The result was what Cowan describes as ‘a very good working relationship with the department and its principal officers’. Cowan says they worked out quite quickly that the investigations in October 2003 related to elections and amalgamations. Geoff James’ call to Ray Hadley had confirmed the origin – and the timing – of the complaints, and also that a second letter had been sent in June of 2003.
An unnamed source gave Cowan details of the June letter. It was worded much more strongly and threatened that the matters would be taken to ICAC (NSW’s Independent Commission Against Corruption) unless urgent attention was given by the DGR to the original allegations. It seemed that the Footy Five were not about to let the matter die.
But most of the complaints had already been investigated, and the DGR had taken no action. We knew that there were allegations related to Phyro, and several questions about that subject had been answered. The new legislation relating to salary disclosures was in the pipeline, so I assumed the DGR would want more when that came through. I was still not really concerned. I could see no areas where we would have anything to answer.
During the investigations into my own situation, the inspector made one appointment [to see me] on the pretext of verifying the accuracy of salary disclosures given by the club. He made it sound routine, and said they were carrying out the same exercise with the top 50 clubs. This appeared quite logical, given the new legislation.
Very soon into the interview, his questions made it quite obvious there were broader objectives in play.
One of the criticisms levelled at Roger Cowan is that for a man of his talents and business acumen, he has, at times in his life, been incredibly trusting, even naïve. This time things suddenly began to fall into place in his head, and he started to become concerned.
It became obvious in the mad flurry of publicity and investigations that I needed to take some good legal advice. The gist of it [the advice] was that the combination of recent events made it very foolish to continue our policy of openness and co-operation with the DGR.
This caused some conflict for me. I asked for a meeting with Darryl Freeman from the DGR and reiterated my preference to maintain our policy of openness. But I also needed to protect my own interests. Yes, they had a right to expect my co-operation, but I questioned their right to go on a wild fishing trip into my affairs.
I explained my suspicions that the DGR was under pressure to find anything, no matter how minor, to discredit me and thus to discredit Panthers.
A few weeks after the October rally, planned changes to the Registered Clubs Act 1976 were announced that would provide broad new powers of inquiry. The new provision became Section 41X. Despite his experience, when the inquiry began Cowan still did not have personal legal representation. The Club was represented by Terrence Lynch.
I appointed my own legal representative a few weeks after the inquiry commenced, when I belatedly came to understand that my interest and the interests of the Club were quite separate.
To receive new Parts and occasional project updates by email, you may subscribe below.
Readers who hold recollections, documents, or material relevant to this history are welcome to contribute via the Commentary & Contributions page.
Project Updates
Receive updates when new parts are published.
- In Part 67 we noted that the very well respected journalist, Paola Totaro, worked in Bob Carr’s team for period between 1988 and 1995.
↩︎ - The Allen Consulting Group’s 2004 report, commissioned by ClubsNSW, examined the economic and community contribution of registered clubs in NSW and the potential consequences of the proposed gaming tax increases. The report was also discussed in Part 67.
↩︎ - Speaking in the NSW Legislative Assembly on 15 October 2003, Liberal MP Anthony Roberts (Member for Lane Cove) claimed that the electorates most heavily affected by the proposed gaming tax increases were held by Labor. He identified Cabramatta, Penrith, Bankstown, Lakemba, Smithfield, Mount Druitt, Tweed, Parramatta and Strathfield, stating that the affected electorates contributed approximately $807 or more per voter. (NSW Parliamentary Hansard, Legislative Assembly, 15 October 2003.)
↩︎ - Under NSW Labor’s caucus rules, a caucus majority could require the government to reconsider a Cabinet decision. A motion was put seeking to reopen negotiations over the proposed gaming tax thresholds. The vote was tied at 34–34. As the motion failed to secure a majority, it was defeated, leaving the government’s position unchanged.
↩︎ - Section 41X of the Registered Clubs Act 1976 provided for formal inquiries into registered clubs. The provision was introduced in 2003 and later repealed in 2011. Its significance is discussed in Part 66.
↩︎ - The Registered Clubs Party was established in the late 1990s to represent the interests of the registered-club industry in NSW politics. It contested seats in the NSW Legislative Council but did not achieve electoral success. Its involvement in state politics became another source of tension between the industry and the Labor Government. ↩︎
