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Court in the Act
5 November, 2008  
The wonderful world of PR

Greg Baxter is the former flack merchant for the disgraced asbestos merchant James Hardie. Nowadays he spins for Uncle Rupie at News Limited. Bret Walker had this “non-defendant” in the box during the ASIC case against former Hardie directors and execs. Image making gets unstitched by masterful cross-examination


PR people are supposed to have a grip on the message. That’s what the spin business is all about.

Bret Walker did a marvellous job sending the spin anti-clockwise while Greg Baxter was in the box last month during ASIC v Peter Macdonald and 11 Ors – the action against James Hardie executives and directors.

Baxter these days is the corporate mouthpiece for the House of Murdoch and its various manoeuvres for world domination, including the “Right To Know” campaign.

And talking of the right to know, News Ltd’s national daily, The Australian didn’t think its readers had any right to know about Baxter’s evidence, because it didn’t report it.

It certainly is a horrible sight when a PR man is out of his comfort zone, where he cannot control the message, where fluff has to surrender to truth.

So it was with Baxter in the box.

Walker is counsel for Peter Shafron, James Hardie’s general general counsel at the time of the restructuring of the company and the attempt to shift its asbestos liabilities into a separate “medical research and compensation foundation”.

The thrust of the cross examination concerned a media release issued in 2001 that (falsely) claimed the foundation had sufficient funds to meet anticipated future claims.

The release also contained a disclaimer that “readers should not place undue reliance on such statements”. At first Baxter insisted he “had no responsibility at all for settling the terms of the document”.

Others were responsible for that and in fact if only he had been allowed to write it, it would have been different.

Later he denied this and said there was no “material difference” between his preferred wording and what ended up in the media release.

It was a long and unhappy journey.

Walker: Of all the people involved with the James Hardie companies at that time, you are the one most responsible for the terms of that document, aren’t you?

Baxter: I wouldn’t say so.

Q: Who would you name as being more responsible as an individual, of all the people involved with the companies at that time, than you for the terms of that document?

A: Mr Macdonald.

Q: Anyone else?

A: Mr Shafron.

Q: What, more responsible than you?

A: Yes.

Q: And that’s a serious and considered answer that you have given?

A: Yes.

Q: And it comes about, does it, because of the involvement you say Messrs Macdonald and Shafron had in settling the terms of that document; is that right?

A: Yes.

Q: Did you have any responsibility for settling the terms of this document?

A: I had responsibility for drafting the document.

Q: Did you have any responsibility for settling the terms of this document?

A: No.

Q: So that your name appearing as senior vice-president corporate affairs is to, so far as you recall, direct people to somebody whose involvement included no responsibility for settling the terms; is that correct?

A: No, the use of my name on the release was to refer media and investment analysts to me to call if they had questions in the first instance.

Q: But they would be calling somebody who, on your sworn evidence this morning, had no responsibility at all for settling the terms of the document; is that right?

A: Correct.

Q: And what do you say to the suggestion that the answers that you have now given twice concerning the degree of your responsibility for settling the terms of that document are out and out lies today? What do you say to that?

A: Well, I reject that.

[snip]

Walker: Looking at it now, as a professional in investor relations, you accept, don’t you, that the disclaimer destroys the main message

Baxter: No.

Q: The main message is, ‘There will be sufficient funds to meet future claims’ – isn’t that right?

A: Yes.

Q: The disclaimer says, ‘That may not happen’, doesn’t it?

A: Yes.

Q: In your world, is there not a contradiction between those two statements?

A: No.

Q: I suggest to you that means your world is morally cock-eyed; what do you say to that?

A: Well, as I said, the disclaimer did not alter my view about the need for the statement to be accurate.

Q: Mr Baxter, the first statement, as I shall call it, is the message that you have agreed from the text of the release, ‘There will be sufficient funds to meet all claims in the future’; you accept that, don’t you?

A: Yes.

Q: That was a message which you, as an investor relations professional, had crafted in order to serve what you regarded as the company’s purpose; is that right?

Q: Well, I’m not sure who crafted it.

A: You crafted it, didn’t you?

A: I’m not sure.

Q: You are the most senior investor relations professional who had any input into the text of that document, aren’t you?

A: Yes.

Q: You were the person who took responsibility within the company hierarchy for that release, weren’t you?

A: I’m sorry, I would have to say no, unless you can tell me what you mean by ‘responsibility’.

Q: You don’t seriously have any problem with the word ‘responsibility’; you are just fencing, aren’t you?

A: No.

Q: Do you understand it?

A: Do I understand what?

Q: The word ‘responsibility’, Mr Baxter.

A: Yes.

Q: You have used it in your affidavit a number of times and I will remind you of each of them – you know that, don’t you?

A: Yes.

Q: Just understanding it as ordinary English, answer this question, please: within the company hierarchy, you were the person who took responsibility for the text of that release, weren’t you?

A: Yes.

* * *

Baxter was also cross-examined by Tom Bathurst QC and Dick Whitington QC for four other directors Brown, Gillfillan, Hellicar and Koffel. He was recalled days later by Peter Wood, counsel for director O’Brien.

In 2004, the NSW Special Commission of Inquiry into James Hardie’s compensation foundation heard that Baxter suggested in an email to then chief executive Peter Macdonald, the first defendant, that the announcement of the foundation to handle compensation should be made as part of a financial briefing for the third-quarter results.

“We would not webcast this briefing live as we usually do and we would explain this is due to the technical difficulty for which there have been several precedents,” his email said.

He was named Australian Investor Relations Officer of the Year for three years in a row for his work with James Hardie.

Upon Baxter’s departure from the company in 2004, CEO Peter Macdonald said in a media release:

“He has been a key member of my group management team and has been instrumental in developing the high standards of disclosure and communication for which the company now enjoys a strong reputation.”