Could Packer catch a falling Star?

The Power Index

Sydney's Star casino scandal presents a few quick lessons for all those involved. The most important of which concerns the elephant in the high-rollers' room: James Packer.

First: NSW Premier Barry O'Farrell has lousy judgement to have hired Peter Grimshaw as his communications director. From the evidence presented to the Independent Liquor & Gaming Authority so far, it would appear Grimshaw behaved unwisely and disloyally while he was employed by Star, and that he later breached the Premier's confidence and the code of conduct for ministerial staff by passing on sensitive emails and commercially-sensitive information to his girlfriend.

Second is that O'Farrell displayed lousy judgement by not sacking Grimshaw as soon as these allegations were made public. (The Premier has suspended him.)

Third is that the Premier's warm embrace of James Packer's plan to build a new super-luxury casino for high rollers at Barangaroo – using Star's licence – now looks like part of a wider strategy to get someone else running Sydney's casino business.

According to text messages sent by Grimshaw, and read to the ILGA inquiry yesterday, O'Farrell took a set against the owners of Star as far back as 2010, while he was still in opposition. In one text, Grimshaw told his girlfriend that O'Farrell planned to give the casino's management a "wake-up call". In another, he suggested O'Farrell wanted to "smash" Star.

But fourth, and possibly more interesting than all of this, is the role of James Packer in the Star affair. The billionaire casino owner called up journalists at the Daily Telegraph and Australian Financial Review yesterday to say that heads must roll at Echo, Star's owners, for their "pathetic" corporate governance in leaking information to the ILGA inquiry.

Naturally, they were only too happy to deliver the message.

Students of NSW history may remember that James fronted the Packer family's unsuccessful bid for the Sydney casino back in 1994, which ended in far nastier allegations by the Packers about the unsuitability of the winners, led by US casino operator Showboat, to hold the casino licence.

They may also remember that it was James who kicked off the Sydney bid with a phone call to one of Premier John Fahey's ministers to say, "The old man told me to call...This is the message: if we don't win the casino, you guys are fucked."

Perhaps the ALP opposition could ask the current premier what discussions he has had with Packer about Star and the Sydney casino licence since late 2010 when, according to Peter Grimshaw, O'Farrell appeared to be contemplating an assault on Star and its owners. They might also ask whether O'Farrell gave Packer any pledge of support.

This article first appeared on The Power Index on April 3. Republished with permission.