As former managing director Michelle Guthrie considers legal action against the ABC, leaked details of Justin Milne’s conduct may aid her fight. By Mike Seccombe.

Guthrie dismissal triggers chaos at the ABC

When the news of the sacking of ABC managing director Michelle Guthrie broke on Monday morning, some of the national broadcaster’s most senior staff were quick to pile on.

Far too quick, it seems, as the week’s events transpired.

One of the first to put the boot in was Sally Neighbour, executive producer of the flagship current affairs program Four Corners. “Excellent decision,” came her terse tweet, within minutes of the board announcement that Guthrie had been terminated.

Also quick to denounce the outgoing MD was Jon Faine, host of ABC Mornings in Melbourne, who ripped in to Guthrie on air at length, calling her appointment an “astonishing fail”, accusing her of having “no interest” in journalism and of having been reticent to “take on her role as a champion for this organisation”.

Others joined the chorus of condemnation. 

One who did not; however, was Matt Peacock. When The Saturday Paper contacted the veteran journalist a few hours after the event, he counselled restraint. Unlike the others, Peacock had inside knowledge. For five years, until April 2018, he was the staff-elected representative on the ABC board.

“To dance on her grave,” he said, “shows poor understanding of the complexities here. This is a lot more complicated than it seems. People should be careful what they wish for. What comes next could be worse.”

And indeed, what came next was worse, much worse, as some of those complexities began to reveal themselves. Within 48 hours, the issue was not just the performance of Guthrie, but the performance of the ABC board chairman, Justin Milne, and indeed the entire board, so assiduously stacked over several years by the Abbott–Turnbull government.

Quite suddenly, Guthrie was being widely seen as the – albeit flawed – hero who had stood up for the independence of ABC journalism in the face of political pressure. It now appeared the real villain of the piece was Milne.

The shift came on Wednesday morning when Fairfax published a leaked email sent to Guthrie by Milne on May 8 this year demanding the sacking of a senior reporter, Emma Alberici.

The story quoted the email: “They [the government] hate her. We are tarred with her brush. I think it’s simple. Get rid of her. We need to save the ABC – not Emma. There is no guarantee they will lose the next election.”

Milne said the email was a fragment and taken out of context.

“I've never provided instructions that anyone should be sacked,” he said.

If the reaction to the news of Guthrie’s sacking was surprise, with a degree of gloating, the reaction to the revelation of Milne’s email was outrage.

ABC staff held mass meetings and unanimously called for Milne to stand down as chairman until the allegations had been investigated.

An extraordinary cross-section, from the Greens on the left of politics to Andrew Bolt on the extreme right, deemed Milne’s position untenable. As did a succession of current and former heavy hitters in the media, including former ABC managing director and board chairman David Hill. Labor’s position rapidly firmed, from a call for an inquiry on Wednesday to a judgement on Thursday that Milne should go.

Furthermore, the initial report about the email was quickly followed by a series of apparently well-sourced – but not, or at least not yet, documented – allegations of interference by Milne in other cases where the government was unhappy with the national broadcaster, but he was resisted by Guthrie.

Sundry media, including Fairfax, Guardian Australia, the ABC itself and Rupert Murdoch’s News Corp – suddenly, risibly concerned with the protection of ABC journalistic independence – carried similar and damning accounts of Milne’s political meddling. They reported that he had sought the removal of the ABC’s “out of control” political editor Andrew Probyn and tried to stop Triple J from changing the date of the Hottest 100 from January 26.

The Saturday Paper has spoken to multiple senior and trusted sources who attest to the accuracy of those accounts. An on-the-record account of Milne’s alleged interferences may come via the departmental inquiry into the affair, ordered on Wednesday by Communications Minister Mitch Fifield, but probably it will not. Such internal government investigations are not noted for revealing embarrassing truths. Still, the very fact the government moved so quickly suggests it’s both taking the matter seriously and is fearful of political damage.

On Thursday morning, Fifield held a media conference to reannounce the inquiry and to deny that he, Malcolm Turnbull and other members of the government had ever improperly interfered in the ABC by seeking to have anyone sacked. When asked if he thought Milne should retain his chairmanship, Fifield was less than supportive.

“Well,” replied Fifield, “it’s a matter for every high office holder to continually assess whether they retain the capacity to effectively discharge the duties of their office.”

Labor and the Greens are pushing for a Senate inquiry, which holds a much greater chance of getting to the bottom of things, as does the upcoming appearance of ABC management before the Senate estimates committee.

Most tantalising of all, though, is the prospect of legal action against the ABC by its former managing director.

In a statement released shortly after her sacking, a “devastated” Guthrie complained she had been unjustly fired.

“While my contract permits the board to terminate my employment without cause and with immediate effect, I believe there is no justification for the board to trigger that termination clause,” the statement said.

“I am considering my legal options.”

At the time, those legal options appeared to be nil. But that was before Milne’s email leaked, and the other allegations about his behaviour had come to light.

As one source with detailed knowledge of the dysfunctional relationship between the chairman and the managing director said: “Michelle is gone in significant part because [she and Milne] had fallen out. Part of the reason for the falling out is that Michelle actually did stand up when he wanted various people sacked.”

That source, and others who know Milne well, also described him as overbearing, apt to bluntly dismiss those who did not agree with him and wilfully, usually jocularly, politically incorrect. He allegedly referred to Guthrie dismissively as “the missus”. Milne says he can't recall using that term.

If Guthrie were to take legal action she may argue that she was not actually sacked “without cause”, as her contract provides, but for cause – that cause being that she had displeased the chairman by trying to defend the independence and integrity of the ABC against political interference.

Legal action has yet to be confirmed, although Guthrie has hired lawyer Ruveni Kelleher of the firm Johnson, Winter & Slattery, which specialises in employment and anti-discrimination law, as well as barrister Kate Eastman, SC, described by The Australian Financial Review as “one of Sydney’s most aggressive sexual-discrimination barristers”.

It is rare for senior executive firings to go to court. In the usual course of events, people in such positions are given a large sum of money to keep quiet and go away. It’s an arrangement that suits both sides: the departing executive is financially enriched and allowed the dignity of resignation, and the organisation avoids the prospect of a public airing of dirty laundry.

But these are exceptional circumstances. While it is understood that Milne and the board did seek agreement with Guthrie about the terms for a quiet departure, after she was formally told two weeks ago that she was to be dismissed, a dignified exit was never possible. Too much information about her perceived inadequacies was already in the public domain.

Guthrie’s failings were well known for a long time, and cruelly detailed again in numerous stories after she was sacked. Data from ABC staff engagement surveys had shown the plunge in morale under her tenure, her embarrassing performances before Senate estimates had been widely reported, her reluctance to publicly defend the organisation against political attack had been noted. The bad programming decisions had upset the ABC audience. The damning anecdotes had circulated about her lack of interest in the news and misunderstanding of the role of journalists.

One such story recounted a meeting with the reporter heavyweights of Four Corners in late 2016, in which Guthrie suggested “more positive profiles on successful business leaders” and questioned why a recent report on children in detention on Nauru had not included “happy children”. After a long pause came the reporters’ answer: because there were no happy children.

Milne, on the other hand, was largely unknown before this week. To the extent that he had a public profile, it was as a strong defender of the ABC.

Back in June, for example, in an op-ed in The Sydney Morning Herald, he offered a spirited defence of the organisation: “Australians should not be fooled by the current battle being waged against public broadcasting,” he wrote.

“Fringe political interests, populists and commercial media all have a shared interest in weakening the ABC and confining it to market failure activities.”

The contrast between his outspokenness and Guthrie’s public diffidence was duly noted.

There is nothing diffident about Milne. Several people who know him and have worked with him impressed that upon The Saturday Paper.

“Forceful,” they said. “Doesn’t suffer fools gladly.” “Prefers to talk than to listen.” “Competitive and ambitious.” Nobody was as dismissive as the “well-connected” anonymous source quoted by Fairfax this week: “[He] thinks he is the smartest guy in the room … That is unlikely in most rooms, but given the gigs he has got he is definitely the luckiest.”

Others have been kinder. In July, former Telstra chief executive and current NBN chairman Ziggy Switkowski called Milne “the father of broadband” in Australia in an admiring profile in The Australian Financial Review.

And, unquestionably, Milne is a man with a far-sighted view of information technology. In the mid 1990s, he ran Microsoft’s Australian operation before moving on to OzEmail, where he worked with Malcolm Turnbull and helped Turnbull amass his fortune.

More recently Milne has taken on a portfolio of company directorships, including the chairmanship of the accounting software company MYOB – a position that is particularly relevant to the current controversy. The major reason the government “hated” Emma Alberici was over her reporting and analysis of the Turnbull government’s proposed corporate tax cuts. Alberici not only cited evidence suggesting the cuts would not, as the government claimed, flow through to higher wages for workers, she quoted tax statistics showing that many companies paid little or no tax under the current arrangements. One of the examples she used was MYOB.

On the face of it, the ABC should have been well set up, with a tech-savvy managing director and chairman. Guthrie’s own corporate experience, working with Google, was a big factor in her being hired as MD. “We didn’t want a Fred Hilmer,” said a former board member involved in her selection, referring to the former Fairfax boss, under whose tenure that media company was slow to recognise the importance of adapting to technological change.

“We wanted somebody with the expertise to survive the digital disruption.”

Yet there were problems. Apart from the increasing personal antipathy between the two, the politics were hard.

As Milne alluded in his SMH opinion piece in June, powerful forces have a “shared interest in weakening the ABC and confining it to market failure activities”. It’s fair to assume Milne was referring to the commercial media – the Murdoch media most prominently – that does not want the ABC enabled to compete for the growing digital audience. News Corp’s unceasing attack on the national broadcaster is not only ideological, but also commercial. Untrammelled by the constraints of fairness or impartiality in the ABC's charter, the Murdoch press has often been accused of giving governments favourable coverage if the government concerned is sympathetic to Rupert Murdoch’s business objectives.

In order to survive, though, the ABC has always had to exercise soft power. Guthrie’s predecessor, Mark Scott, was good at it. She was not. In an interview on ABC News 24 on Monday, Milne referred to that weak point, saying in a way both understated and pointed that Guthrie’s relations with government were “possibly an area that could have been better”.

In the same interview, Milne emphasised the importance of persuading the government to come across with more funds to allow the national broadcaster to meet the “overarching challenge” of digital modernisation, as audiences shift rapidly online. He called it “Project Jetstream”.

“Jetstream,” he said, “will be expensive, it will require support from the government of the day for it.”

Only later, after the leaking of his email to Guthrie, did people make the link.

As former ABC managing director David Hill succinctly put it, in pursuit of government favour, Milne had been prepared to “offer as a sacrificial lamb one of the ABC’s top journalists” in Alberici.

Others made the same point. The ABC veteran and host of Insiders Barrie Cassidy referred to a specific line in Milne’s email to Guthrie – “we need to save the ABC – not Emma” – as exposing the political calculation of his intervention.

“He was prepared to throw overboard a journalist simply because the government doesn’t like that journalist, and the board wanted to stay in the good books of the government,” said Cassidy.

Through his long ABC career, “on and off since 1979”, said Cassidy, “I’ve never had the sense that management hasn’t been behind me and others.”

Quentin Dempster, a former ABC journalist and staff representative on the board, also said it was unprecedented.

He told ABC Radio that “of course” there had been times during his tenure on the board when complaints surfaced about particular journalists or stories.

But, said Dempster, “Other chairmen have been able to say to enraged prime ministers ‘we’ll deal with your complaint in due course’.

“The proper way for a board member to behave was to raise the matter with the chief executive and let them investigate in accordance with procedural fairness.”

For 36 hours, as the storm grew around him, Milne, the tech wizard and political fool, held on. But more savvy people knew he was done for. The Age’s Tony Wright was one.

“No chairman of any major organisation, let alone the nation’s supposedly independent broadcasting corporation, can be so witless as to send an email – an email, for pity’s sake, traceable forever! – effectively admitting he is doing the government’s dirty work, and expect to survive,” he wrote on Wednesday.

And so, in the space of a few days, the ABC has lost both its MD and board chairman. It’s safe to say those who care about the institution, both staff and audiences, will not mourn their demise.

But, as Matt Peacock warns, be careful what you wish for, because what comes next may well be worse. Whatever their failings, Guthrie and Milne were at least committed to driving the ABC into the technological future.

It’s worth remembering that the rest of the ABC board is still there. This is the group that backed Milne against Guthrie, even after she shared with them the evidence of his political interference. It’s worth remembering that this government ignored the process set up under the previous Labor government for arms-length, merit-based selection of board members. Instead, it filled the board with people who have little or no expertise in public broadcasting – excepting, of course, the staff-elected director, Jane Connors.

The chair of the Minerals Council is there, along with the head of the rural lobby group AgForce, a couple of accountants and a tax lawyer. The only person with any media background is Peter Lewis, a former chief financial officer for Seven West Media.

Stacking the ABC board has been a long bipartisan tradition, although more egregiously practised by the conservative parties.

There is a strong case for reforming the process. The progressive think tank, The Australia Institute, has produced a set of options, suggesting a cross-party parliamentary committee to oversee appointments. It also advocates removing the capacity for a minister to bypass the process of arms-length selection by an independent panel, which has repeatedly been done by this government. And it suggests expanding the board to include an “audience-supported member”.

The ABC is too important a national institution to be manipulated for political advantage. If nothing else, this tawdry saga has demonstrated that.

This article was first published in the print edition of The Saturday Paper on Sep 29, 2018 as "Guthrie dismissal triggers chaos at the ABC ".

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Mike Seccombe is The Saturday Paper’s national correspondent.

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