The Real Utegate Scandal


Over four extraordinary days in late June, Rupert Murdoch’s flagship, The Australian, and his capital city dailies in Sydney, Melbourne, Brisbane and Adelaide waged war on Prime Minister Kevin Rudd and Treasurer Wayne Swan — armed only with a forged email.

They savaged Rudd on the grounds that he had lied to parliament and that he and Swan had improperly lobbied for government financial assistance for a Queensland car dealer who was a mate. They were heady charges and their front-page treatment across the News Ltd stable sent a frisson of excitement through the ranks of the embattled Coalition.

The orchestrated media campaign was music to the ears of Opposition Leader Malcolm Turnbull — if he could damage fatally the Rudd-Swan team then a voter recovery suddenly seemed possible, especially if there was an early election as widely predicted. The aggressive ambition of Turnbull plus the zealotry of the regime-changers in the editorial chairs at News Ltd made a toxic combination.

There was, of course, one small snag in this breathtaking power play: the sole piece of evidence upon which the political assassins were relying — an email sent by a senior member of Rudd’s staff to a Treasury official named Godwin Grech — was a fake, a concoction, a fraud.

Until the Australian Federal Police raided Grech’s Canberra home and seized his computer and its electronic entrails, Turnbull and Murdoch’s newspapers sang from the same song sheet — or email — alleging that Dr Andrew Charlton, Rudd’s senior economic adviser, had sent a message to Grech, the Treasury official in charge of organising a financial guarantee package for the credit-squeezed car industry, requesting he give special treatment to a Brisbane car dealer named John Grant.

The situation was complicated because Grant had given Rudd a 1996 Mazda utility truck, aka the "Ruddmobile", to use as his campaigning vehicle in recent elections and there was no doubt that the glad-handing, knockabout car salesman had dipped into his pocket more than once to help his mate "Ruddie".

Yet the record showed that Grant — along with many other car dealers and dealerships — had made representations to the Government; that Grant had not received special treatment; and, indeed, had not received a cent from the Federal Government.

None of these essential facts fazed the News Ltd editorial offices. Murdoch’s papers crystallised the Prime Minister’s link with Grant into "UteGate" and a scandal leading to the highest elected office in the land was born.

Sydney’s Daily Telegraph gave notice of its "exclusive" with the front-page headline on June 19, "Car Deal: PM In Spin", accompanied by this startling revelation: "The Daily Telegraph has learned of a correspondence trail involving the office of the Prime Minister and Government officials responsible for a $2 billion scheme to help cash-strapped car dealers."

National Political Correspondent Steve Lewis produced further revelations the following day in another front-pager, "Rudd’s Car Crisis", which read: "The Rudd Government last night launched a full inquiry into the UteGate affair amid increasing pressure on Prime Minister Kevin Rudd and Treasurer Wayne Swan to resign."

The early editions even published a mock-up graphic of the alleged email between Charlton and Grech. In their haste, the News Ltd embroiderers actually got the name of the email recipient wrong. It read "Godwin Grant". Turnbull fumed that Rudd and Swan were guilty of "a shocking abuse of power", adding: "The Prime Minister and the Treasurer have used their offices and taxpayers’ resources to seek advantage for one of their mates and they lied about it to parliament."

Over the weekend of 20–21 June the country’s mass media focused on the email that was driving a stake into the heart of the Rudd Government, with the Prime Minister calling on the Opposition Leader to come clean and produce it.

Turnbull began to look shaky when he declared that he had never seen the email and that it had not been distributed to the media by him or anyone from the Opposition. He told commercial radio on 20 June: "We did not. No one in the Opposition provided the text of that email to the News Limited newspapers."

Over on ABC Radio, Rudd sensed blood: "Mr Turnbull has sought to smear my reputation as Prime Minister, and that of the Treasurer, which is his argument — backgrounding editors across the country, and you know this to be true, over the last couple of weeks, saying that they have a smoking gun against the Government, that it is this email which drops me directly in it."

The issue was settled a few hours later when the federal police issued a press release stating categorically that the email was a fake and that Grech, whose home had been raided, was assisting them with inquiries.

News Ltd’s follow-up coverage was extraordinary.

Turnbull, who had been feted as a caped crusader for truth and justice only days earlier, was thrown to the wolves. Cynically ignoring their own explicit involvement in the whole email scam, Murdoch’s papers thundered across the land: "Turnbull’s fake email nightmare" (The Australian); "BACKFIRE — Turnbull wounded as Utegate email exposed as fake" (Daily Telegraph); "UTE BACKFIRE — Fake email turns the tables on embattled Turnbull" (Brisbane’s Courier-Mail); "WHAT A CAR WRECK — Ute-gate fake email backfires on Turnbull" (Melbourne’s Herald-Sun), "GRAND FAKE AUTO — Ute-gate: Email didn’t exist, pressure on Turnbull" (Adelaide Advertiser).

Grech underwent a similar News Ltd makeover. Hailed as a courageous "whistleblower" on the weekend, poor old Godwin Grech, the man with the Dickensian moniker, suddenly became a dysfunctional "mole" who was sick, reclusive and eccentric, according to unnamed neighbours and colleagues. The email affair is now in the hands of the Commonwealth Auditor-General and the federal police.

The question remains: how did News Ltd’s editors, its senior correspondents in the Canberra Press Gallery and political commentators become parties to such an inept, misguided and ludicrous scam to ambush the Australian Prime Minister and his Treasurer and try to force them out of office?

With the simple use of time-honoured journalistic checks, the email would have been revealed as a forgery. By way of comparison, when Australian conman Peter Foster told the British Daily Mail in 2002 that he had emails from Cherie Blair about the purchase of two investment units in Bristol, the Mail did not publish them until it had conducted three independent forensic tests. Obviously, the most stringent scrutiny was advisable in dealing with the convicted fraudster, but the Mail demonstrated in this case the elementary practices of proper journalism.

So why didn’t News Ltd’s operatives do their job?

Rudd addressed the lapse in professional standards at a press conference two weeks ago when News Ltd reporter Matthew Franklin asked him about UteGate. His response was unusually scathing — and marks the first time in living memory that an Australian PM has criticised the Murdoch press. For that reason alone, Rudd’s reply is worth quoting at length:

"I think, what a number of people have said to me, Matthew, around the place is where have we kind of got to when you have major papers like the Daily Telegraph, the Courier-Mail and the Adelaide Advertiser running on their front page that the Prime Minister of the country is corrupt, and then, secondly, the editors it seems not having sighted any original document in terms of this email, and thirdly, it turns out that that email is a forgery. I would have thought a few people would want to know how all that happened, what sort of journalistic checks were put in place for that to be the case, or is it simply being sort of airbrushed from history?"

The email hoax comes hot on the heels of another News Ltd fiasco. On 15 March this year, Murdoch’s largest selling newspaper in Australia, the Sydney-based Sunday Telegraph, published nude photographs of Pauline Hanson. The go-between was Sydney paparazzo Jamie Fawcett who received a $15,000 fee for supplying photographs allegedly taken in 1975 by a former Australian army officer named Jack Johnson. Sunday Telegraph editor Neil Breen splashed the pictures across several pages as did Murdoch’s Sunday tabloids in four other State capitals.

The coast-to-coast coverage arrived one week before the Queensland state election in which Ms Hanson was standing as an independent candidate in the outer Brisbane seat of Beaudesert. How much her political comeback was stymied by the censorious uproar caused by the nude pictures is anybody’s guess, but she was soundly defeated.

For almost a week after the publication of the steamy portfolio of Hanson photos, Breen defended their authenticity. Only when faced with incontestable proof that the photos weren’t of Hanson did Breen finally back down. In May he published a signed 57-word, three-paragraph apology to Ms Hanson which concluded: "We have learnt a valuable lesson." Last month, a private, out-of-court settlement was reached with Hanson.

She has been paid off but Breen, one of Murdoch’s rising stars, remains the editor of the Sunday Telegraph. At the National Press Club in Canberra in early July, News Ltd’s chief executive in Australia, John Hartigan, defended the group’s coverage of UteGate: "I’m more than happy with the quality and standards of the reporting," he declared. "We ran with the story because it’s in the public interest."

Most newspaper readers in Australia would be unaware of these facts because they weren’t covered in News Ltd papers — no surprises there — and they were almost totally ignored by the Fairfax papers as well. The ABC — apart from the highly commendable and sharp observations of Media Watch presenter Jonathan Holmes — was also silent on the Murdoch papers’ involvement in this affair.

News Ltd wants both scandals buried as quickly as possible because it has more important items on its agenda. In particular it is seeking a greater share of Foxtel, the pay TV monopoly which it currently shares with James Packer and Telstra, and is anxious to soften up the Rudd Government to make its case.

This is a classic case of what Rudyard Kipling once described: "Power without responsibility — the prerogative of the harlot throughout the ages."

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.