Cinema Chain Denies Party Donations Linked To Project

The Age

Friday February 7, 1997

DAVID WILSON and THOM COOKES

Two weeks before Christmas 1995, the American-owned company Reading Australia announced plans for Melbourne's first megaplex cinema development.

It was big and bold: a 25-screen project costing $35 million, the largest in Australia, on busy Burwood Highway in east suburban Burwood.

And for the first time the big cinema chains, Village and Hoyts, faced a cashed-up US competitor in what had been traditionally their back yard.

When the project was launched on 6 December there was barely a ripple of public excitement: a five-page press hand-out was picked up by one radio and one television station but there was barely a mention in the daily press.

On 14 December, however, the Premier, Mr Jeff Kennett, appeared to offer qualified support when he wrote to Reading: "It sounds like a very exciting and ground-breaking complex and I look forward to being kept closely informed of future developments."

Over the next few months, Hoyts, Village, the big shopping centre developers and owners, and local traders and residents began a long and eventually successful lobbying campaign against the project.

It also emerged this week that for much of the time the project was under public planning consideration Village Roadshow and its subsidiaries poured hundreds of thousands of dollars into the coffers of the federal and state Liberal branches.

The Village group filed documents detailing the donations only on Wednesday.

The managing director of Village, Mr Graham Burke, yesterday released a brief statement rejecting any link between the donations and the desire of Village Roadshow to see the Reading proposal scuttled. He said an "administrative oversight" was responsible for the details not being lodged on the due date - 17 November 1996.

Mr Burke was adamant that the donations were solely for the Liberal branches to help fight the federal election campaign through February and the state campaign through March.

"Our support for the Liberal Party is based on our democratic right and what we believe is the responsibility of companies to do all in their power to ensure good government," he said in a statement issued to The Age.

"Our businesses operate right across Victoria and Australia and if the country is in poor economic shape so in turn is Village and its shareholders."

Mr Burke dismissed as "absurd" any possibility that the donations could be connected to the Reading proposal.

Investigations by The Age show that the first of the donations, $50,000, went to the federal Liberal branch in December 1995. The Reading proposal was announced on 6 December.

In January 1996, a further $50,000 was donated to the federal branch. The federal election was called on 27 January.

The Reading proposal was approved by the City of Whitehorse on 29 January despite objections from Village, the other big cinema chain, Hoyts, local traders and residents.

On 8 February, now having been more fully appraised of the project, Mr Kennett again wrote to Reading. In the letter, he said he was concerned about the project as it was not in an established retail development and stood out "a bit like a sore thumb". He added: "I am not sure it makes planning sense."

The coalition won the federal election of 2 March. In the same month, Village donated $100,000 to the federal Liberal branch and $163,000 to the state Liberal branch.

Two subsidiary companies, Austereo Limited and Roadshow Distributors, also made donations in March. Austereo gave $100,000 and Roadshow $125,000 to the state Liberals.

The state election was called on 5 March with the Liberal-National Party coalition being returned to office on 30 March.

In April, Village gave a further $200,000 to the federal Liberals.

Towards the end of April, the Minister for Planning, Mr Maclellan, "called-in" the Reading project. This meant that appeals to the Administrative Appeals Tribunal against the Whitehorse Council approval would not go ahead. He appointed a three-member panel to examine planning policies relating to cinema complexes based in activity centres, such as shopping centres.

The $788,000 donated by the Village group made it the largest corporate donor listed in the Australian Electoral Commission reports - almost double the second-largest, the HIH insurance group, which channeled $453,000 to the Liberals.

Last Monday, the Australian Electoral Commission released annual returns of donations above $1500 made to political parties and listed individuals and companies that made donations over $1500.

In the Liberal Party lists, Village Roadshow, Austereo and Roadshow were listed as donating a total of $788,000.

But the commission held no record of the three companies' donations to the Liberal Party. These should have been filed by 17 November last year.

The commission did, however, hold a Village Roadshow return, dated 11 November, showing that it had given a total of $75,000 in two donations to the New South Wales branch of the Australian Labor Party.

In August, the Government-appointed panel, after hearing various submissions, issued a report that megaplexes be restricted to activity/shopping centres. The Government accepted the panel's recommendations. This doomed the stand-alone Reading project.

Village directors have remained unavailable to be interviewed and spokesmen for the federal and state branches of the Liberal Party have also refused to discuss the donations with The Age.

The chief executive of Reading Australia, Mr John Rochester, said there was nothing he could say about political donations except that his company does not make them. He would not comment on the letters from Mr Kennett to Reading, first disclosed in The Age in August.

When The Age sought comment on Monday on the donations, Village would not return telephone calls. Telephone calls on Tuesday were also not returned.

On Wednesday, The Age wrote letters to the chairman of Village, Mr Robert Kirby, the deputy chairman, Mr John Kirby, and Mr Burke. The letters sought details of the dates and amounts of the donations to the Liberal branches, why they had not been lodged with the AEC and further comment.

Despite an assurance that the group would facsimile a letter of response by Wednesday, none eventuated.

Yesterday morning, The Age was told that Mr Burke, the two Mr Kirbys and the group general manager, Mr Peter Foo, were unavailable. But at 9.30 am a secretary identifying herself as Lynne telephoned and issued the following statement.

"Mr Burke didn't read the letter until last night. The information (provided by The Age) is incorrect. We have complied with all the statutory requirements. We do not care to comment on the other issues at this time. Mr Burke is engaged all of today."

The Village group lodged its returns at 4.15 pm on Wednesday. The details were sent by facsimile to the AEC head office in Canberra. These details, which provide the month and amount of donation, are publicly available.

In a five-paragraph statement to The Age, Mr Burke said that in no way was the Village group trying to keep the donations secret, instead dismissing it as an "administrative oversight that, once brought to the attention of the company secretary, was immediately corrected".

HOW THE CURTAIN CAME DOWN ...

1995

December (date unknown): Village Roadshow donates $50,000 to Liberal Party of Australia.

6 December: Reading Australia announces plans for a 25-screen, $35 million free-standing mega-cinema complex in Burwood, the largest in the southern hemisphere.

14 December: The Premier, Mr Jeff Kennett, writes to Reading describing the project as sounding ``very exciting and ground-breaking".

Letter dated 14 December 1995

Dear Mr Alston

It sounds like a very exciting and ground breaking complex and I look forward to being kept closely informed of future developments.

Yours sincerely,

Jeff Kennett

1996

January (date unknown): Village donates of $50,000 to Liberal Party of Australia.

1-14 January: Hoyts and Village and several of Melbourne's major shopping centre owners and developers and some residents lodge objections to the Reading plan.

27 January: Federal election announced.

29 January: City of Whitehorse approves the Reading project.

8 February: Mr Kennett writes again, saying he was concerned the project was not part of an established retail development and stands out ``a bit like a sore thumb". ``I am not sure that it makes planning sense."

Letter dated 8 February 1996

Dear Mr Alston

I am concerned your project does not fit into an established retail development and it therefore stands out, a bit like a sore thumb. I am not sure that it makes planning sense. Obviously the City of Whitehorse have a different view.

Yours sincerely,

Jeff Kennett

Late-February: Hoyts, Village and shopping centre owners lodge separate appeals over the approval decision of the City of Whitehorse to the Administrative Appeals Tribunal.

28 February: Village announces plans to double the size of its cinema chain in Australia in a $350 million expansion in suburban shopping centres.

March (dates unknown): Village donates $100,000 to the Liberal Party of Australia and $163,000 to the Liberal Party of Victoria. Austereo Limited, which is controlled by Village, donates $100,000 to the Liberal Party of Victoria. Roadshow Distributors, a Village subsidiary, donates $125,000 to the Liberal Party of Victoria.

2 March: Federal Liberal-National coalition wins election in landslide.

5 March: Victorian election called.

27 March: Village and Hoyts announce ticket-price war slashing entrance charges by up to half - but only in Victoria. The Australian Competition Consumer Commission chairman, Professor Allan Fels, says price cuts partly reflect the arrival of Reading in Victoria.

30 March: Mr Kennett wins the Victorian election.

April (date unknown): Village donates $200,000 to Liberal Party of Australia.

23 April: The Planning Minister, Mr Rob Maclellan, confirms he has ``called-in" the Reading plan and sets up a three-member committee to review state planning laws covering cinema-based entertainment complexes.

11 June 1996: In a submission to the committee, lodged by its lawyers, Deacons Graham and James, Village opposes the Reading plan and urges that the long-held Government policy of confining big cinema projects to activity/shopping centres be retained. Other parties, including the rival chain Hoyts, shopping centre developers and owners and a residents action group also lodge objections. Professor Fels argues that planning guidelines should not be able to be used as a legal mechanism by incumbent firms to prevent competition.

21 August: Committee report released arguing that megaplexes such as Reading's be limited to existing or future shopping-commercial centres and dismisses the views of the ACCC.

24 August: Reading announces it will concentrate on projects in New South Wales and Queensland.

27 August: Mr Maclellan formally announces the Government will not allow the Reading scheme to go ahead.

11 November: The company secretary of Village Roadshow, Mr Philip Leggo, sends an annual return to the AEC disclosing that the company made two donations totalling $75,000 to the New South Wales branch of the Australian Labor Party. These were for $50,000 on 8 January and $25,000 on 15 March.

17 November: The due date nominated by the AEC for the lodging of all annual returns relating to donations.

1997

3 February: Australian Electoral Commission releases disclosure returns from political parties, associated entities and individual donors above $1500 for the financial year 1995-96. The federal Liberal Party and the Victorian Liberal Party release details showing a total of $788,000 in donations from Village, Austereo and Roadshow. There are no disclosure documents lodged by the three companies detailing donations to the Liberal Party.

4 February: The AEC confirms to The Age that no details of donations to the Liberal Party had been reported by any of the Village group companies to the AEC. Numerous telephone calls by The Age are not returned by Village group executives.

5 February: After further calls were unsuccessful, The Age facsimiles identical letters to the chairman of Village, Mr Robert Kirby, the deputy chairman, Mr John Kirby, and the managing director, Mr Graham Burke. The letter asks for details of dates and amounts of donations and points out that the Village group must disclose all donations above $1500. No response is provided. The Age asks the AEC to provide any information lodged by the Village group.

5 February: The Village group sends facsimile details all Liberal Party donations to the AEC's head office in Canberra. The Age - at a fee of $10 - is given the material.

6 February: The Age telephones the Village group but is told that Mr Burke, the two Mr Kirbys, and the company's group general manager, Mr Peter Foo, are unavailable.

At 9.30 am, The Age is telephoned by a secretary saying that she has since spoken to Mr Burke, who wanted to make the following statement. ``Mr Burke didn't read the letter until last night. The information (provided by The Age) is incorrect. We have complied with all the statutory requirements. We do not care to comment on the other issues at this time. Mr Burke is engaged all of today."

At 10.50 am The Age sends a three-page facsimile to Mr Leggo, the company secretary. The letter asks questions relating to the reporting of donations, whether the company intended to try to keep the donations secret, and where The Age was ``incorrect" in its first letter.

At 2.05 pm The Age was telephoned to say that Mr Burke was in Sydney but would facsimile a reply.

At 2.40 pm Mr Burke, the Village managing director, sent The Age a facsimile denying the company tried to keep the donations secret. ``This would be ridiculous as, of course, we are aware that political parties make a full and complete disclosure. It was an administrative oversight that, once brought to the attention of the company secretary, was immediately corrected. It is absurd to suggest that there was any possible connection with the Burwood development as this was the subject of a lengthy independent tribunal inquiry chaired by respected members of the community. We and others made detailed submissions to this inquiry. Our support for the Liberal Party is based on our democratic right and what we believe is the responsibility of companies to do all in their power to ensure good government. Our businesses operate right across Victoria and Australia and if the country is in poor economic shape so in turn is Villages and its shareholders."

DONOR TO POLITICAL PARTIES
ANNUAL RETURN
Donor Details
Name of person or organisation
Roadshow Distributors Pty Ltd
Name            Date of Donation   Value of Donation   Date declared
Liberal Party          Dec '95              $50,000                   5/02/97
Labor Party            Jan '96              $50,000                11/11/96
Liberal Party           Jan '96              $50,000                  5/02/97
Labor Party            Mar '96              $25,000                11/11/96
Liberal Party          Mar '96             $125,000                  5/02/97
Liberal Party          Mar '96             $163,000                  5/02/97
Liberal Party          Mar '96             $100,000                  5/02/97
Liberal Party          Mar '96             $100,000                  5/02/97
Liberal Party          Apr '96             $200,000                  5/02/97

© 1997 The Age

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