· Foreword by Roger Cowan
To see a 40 year career come to a climax of consistent attacks by a small group of locals, the state Labor government and The Sydney Morning Herald was a huge disappointment. Working through those events for this book, raised the awareness of the extent of the dishonesty that motivated the calling of the Inquiry and there was other dishonesty too.
· Chapter I: Introduction
Because of Cowan’s involvement in the industry, a history of Panthers intertwines with the history of the club movement and Rugby League. The real story here is the growth of Panthers from a nearly bankrupt, tiny club to a business that became a significant part of the club movement in NSW, and which eventually became the target of some dirty politics.
The principal actors during the period leading up to the dirty politics included a group who became known as the Footy Five; past and present members of the NSW state Labor government; a former NSW deputy premier; and The Sydney Morning Herald.
· Chapter II: From Small Beginnings — Rugby League Takes Off in Penrith
Rugby league came to Penrith around 1912. In 1956, the Penrith club was the first junior rugby league club to be granted a liquor licence, and its first registered club building was completed the same year. The building at first had six poker machines – three sixpenny, and three one shilling machines. When the 60s arrived, the club committee began a push to join the league’s new inter-district competition – later to become Second Division. It was the responsibility of the registered club to fund rugby league, but at the end of the 1964 season, Cowan was astounded to find that there were insufficient funds to pay the Second Division team.
· Chapter III: Roger Cowan
Childhood experiences and the things that our parents do, and instil in us, shape the people we become. The man who took over management of Panthers had characteristics that would help him succeed, and some that would bring him down. One side of his personality was a workaholic who was not bound by conventional thinking and who welcomed ‘getting out of the square’. On the other side was a tendency to delay, sometimes for too long, decisions that would hurt others. Then there was the ‘red blanket’ waiting far beneath the surface and making its risky appearance at inopportune times. Crucially, there was the desire for privacy in his personal and financial affairs, a strong degree of introversion, and a determination to push for what he believed was the right thing to do, even if it meant trying to convince others again and again and again. Some of these tendencies would make life very difficult in time.
· Chapter IV: Insolvency to First Division in One Year
Cowan was elected to the committee of the Registered Club and became treasurer. The Club was in financial difficulties. When the management job was advertised he was convinced in his own mind that he could put systems in place to make it profitable. So he offered to resign from teaching and manage the club on an agreement that would be terminated if the club was not profitable within 3 months.
That was October 1965. The Board agreed, and Cowan remained in the position continuously for almost 40 years.
· Chapter V: Building the Basics – Business Principles and Property
A big part of the early successes back in 1966 involved attacking the internal and external scams that were rife in clubs at the time, particularly in the area of the gaming machines. In the seventies, things were not going so well for Cowan on the football side of things. He had to deal with a committee that was often difficult. It would not be until 1984 that the dream of a more effective rugby league structure would be realized.
When he first floated the idea of buying the Mulgoa Road property in 1971 for more than $2M, most people thought Cowan was crazy.
· Chapter VI: Building a Culture – by Accident and Design
Evidence given by some of the Footy Five at the Temby inquiry – and carried through in newspaper stories at the time – suggested that Roger Cowan had a dictatorship mentality. Some Cowan critics interviewed for this book echo that view. ‘Cowan always had yes men on the boards’, they said. ‘He was used to getting his own way and resented anyone who questioned his proposals or ideas.’
That’s an interesting comment, but is it true? What was the dominant culture of the club?
Between 1984 and 1990, the number of employees tripled and sales quadrupled. That level of growth brought pressures that had not been previously experienced. In 1990, the combination of a painful back problem and the Penrith Panthers’ first grand final were the catalysts for major change.
· Chapter VII: The 16 Year Struggle to Streamline Rugby League
THE PENRITH RUGBY LEAGUE CLUB has experienced two very dark periods in its 50 year history. The first was in 1986, when a Penrith detective headed a police raid on the club. Two decades on, the NSW government embarked on a similar mission.
In the 70s the registered club was going from strength to strength but the football side of things was struggling. In 1974, the year that Roy Masters came to Penrith, Mike Stephenson and Bill Ashurst also came. Success still did not come. Cowan’s growing frustration with a system that he considered wasteful, inefficient and noted only for a succession of failures fuelled his determination to unite the two clubs. By the end of 1983, the football club reached its lowest level yet. The Board decided that Cowan’s role would be expanded to include both the registered club and the rugby league club.
But even though the goal of unity was now reality, at the end of 1983 the Board remained precariously balanced. It would put some events in motion that led to a police raid on Panthers.
· Chapter VIII: A Tale of Injustice
IN 1986, Roger Cowan was driving back from Sydney when he received a phone call from the Club. The call was to advise him that about 12 police and officers from the Liquor Administration Board, (the LAB) had arrived at the Club.
Cowan was asking himself how it had come to that point? The connections started to fall into place for Cowan after the first police interview.
Four months later, newspaper headlines and TV bulletins revealed that Cowan had been charged with four counts of fraud. But the charges had nothing to do with the original investigation and letter of complaint.
· Chapter IX: An Urgent Need for Research and Change
One of the biggest milestones in the history of the Penrith Rugby League Club was relocation to Mulgoa Road in 1984. In the years immediately following, the Club experienced phenomenal growth. Within four years, annual sales quadrupled, to $65 million. And the Club had 850 staff.
A Harvard University research into the difficulties of growth brought about significant changes in the structure of the club.
The members approved the formation of a property trust that will open up enormous opportunities for the club and its many properties. It almost lost that chance. At one stage the Club was on the brink of losing half the potential of the property trust. The amalgamation story involves allegations of management lies, broken promises, back door takeover fears and preservation of power bases. The ensuing conflict could have cost Panthers more than $200 million.
In a way, the ailment began with a fiery difference of opinion – the possibility of a rugby league merger between Parramatta and Penrith.
· Chapter X: A Narrow Escape from Football Oblivion
In 1997, a set of criteria was established, which would be used to reduce the number of teams in the competition down to 14 by 2000. Panthers’ management team had three options under consideration, and wanted to have them all in place by the time the decision was announced. One was to negotiate a favourable merger with another club. The second option was to buy the naming rights of another club. The other option was to prepare for a legal fight based on the fraudulent activities of some clubs in their claims under the criteria.
By July 1999, Panthers had no strategy in place other than to demand the right to be selected using arguments that had already been discredited. The Footy Five, with their numbers on the Board, and supported publicly by Ron Mulock, had moved to gag all discussion.
· Chapter XI: A Strange Response to a Lifeline
THROUGH THE FIRST HALF of 1999, Penrith sat at 15th in the NRL criteria. The deadline for amalgamations was midnight on 31 July. On 31 July Cowan called a special meeting to advise the Board that there had been an offer that would give the Club a lot more time. The reaction was mysterious. Calling the meeting deepened the division on the Board.
The bad luck that dogged North Sydney throughout the 1999 football season became the saving grace for Penrith. Norths’ stadium on the Central Coast was supposed to open for the start of the 1999 season, but it rained in Gosford almost non-stop for months.
· Chapter XII: The Anti-Football Myth
BRANDING COWAN AS BEING ANTI RUGBY LEAGUE was a strategy by some opponents for getting the high ground emotionally. Many events could highlight some serious doubts about who was really working against the interests of rugby league at Penrith. Sometimes emotional arguments are not as they seem. They started from the first night of his appointment.
· Chapter XIII: Amalgamation, Not Takeover
Cowan took quite a bit of convincing to look seriously at amalgamations. He was becoming concerned about the deterioration in the board room. It was taking a lot of his focus and causing stress. Convincing the Board was difficult and frustrating. The outcome was a policy bound by tight board controls.
A memorandum of understanding was an integral part of each amalgamation but subsequent events and evidence to the Inquiry indicated a serious difference in a basic understanding of what was intended. As the Club continued along the amalgamation path, the divide between management and some directors grew. Panthers’ amalgamation strategy was also attracting State Government attention.
For Panthers it has been an unbelievably successful strategy – one that was embarked upon with consensus between board and management. Why then was it the basis of some of the most costly and bitter disagreements?
Not Your Everyday Amalgamation
The Port Macquarie Panthers story had secret meetings and bomb threats, vandalism and office bugging, threatening phone calls, 19 faceless men, and, of course, who let the dog out? The town split down the middle. Gaming and Racing Minister Richard Face became involved and asked the DGR to look into the situation. It could have been clarified with just one phone call: a copy of the M.O.U. could have been available to anyone who requested it. There was nothing secret about it.
The 19 faceless men would have made a killing and they fought hard to discredit Panthers.
Some politicians did too. They had no excuse. They had a responsibility to get to the truth before taking sides – and all it needed was a phone call.
· Chapter XIV: Board Frustrations on the Rise
The situation in the boardroom continued to deteriorate. It became what has been described as ‘horrific’. Cowan tried – through board management seminars, recommendations to board meetings, and the employment of consultants – to get the Board to clarify the cause of conflict. The Five say they were trying to get Cowan to ‘come under the direction of the Board, and to work within the parameters that they set’. But they did not identify any of the ‘parameters’ that they wished to impose.
The problems in Panthers’ boardroom were exacerbated by the rugby league merger issue.
Barry Walsh stepped into the chair, but in many ways, he lacked the power of the position. In the Temby inquiry, he told DGR counsel Vickie Hartstein, ‘I never had control of the board’. The Five had the numbers, and they used them.’
Panthers’ group CEO Glenn Matthews describes the board meetings as dysfunctional.
· Chapter XV: Confidentiality – Dysfunction – Conflict
2000 AND 2001 should have been years of high optimism for Panthers. The Club had emerged from the tumult of 1998–99 without its rugby league team being eliminated from the competition or being forced to merge with Parramatta. The new NRL competition was underway, and the Club was about to complete its first two amalgamations.
But the situation in the boardroom was still tense.
A membership fee deadlock was broken using tactics that would never have been considered in the open environment of the old Panthers. It demonstrated how confrontational life in the boardroom had become by July 2002.
The relationship between certain members of the Board, and some managers, including Cowan had reached a stalemate. Yet nobody made an effective move to defuse the situation.
In 1999 a seminar was held involving the full Board and all the senior managers. It was a perfect opportunity for any director to make suggestions about management issues, accountability, or the elusive parameters that crept into the evidence at the Inquiry.
A letter from Cowan was circulated that contained an offer giving the Board the opportunity to consider his contract at an end. The Board took no action on this letter, which just added to the confusion.
· Chapter XVI: The Fear of Reverse Takeover
Claims that the Club was in danger of a reverse takeover led to costs far in excess of a million dollars. It could have been much worse. There were some close calls. One of these would eventually have cost Panthers far in excess of a hundred million dollars, perhaps double that. David Meidling is on the Port Macquarie Panthers advisory board. ‘I can confidently tell you that reverse take over was a furphy, probably developed by some people as a type of scare tactic. It had absolutely no basis of fact in Port Macquarie during the lead up to the amalgamation, or any time after.’
If the Footy Five were acting, as they claimed, from a genuine fear for the interests of Penrith members, they were seriously misled.
· Chapter XVII: Aborting an Election
Early on the morning of Friday 22 March, voting was stopped at Penrith, two days early. Roger Cowan was extremely concerned at what Panthers was doing to the other clubs. The opinion of Coles and Lynch was presented to the Board at a meeting on 23 April. It was not even discussed. Steve Bowers warned the Board that their solution would probably cost more than $400,000 and suggested a way it could be resolved for no more than $25,000. The Five scoffed at his estimated costs but, as it turned out, Bowers had underestimated the final cost.
The Lighter Side of an Aborted Election
The probable result of the aborted election was easily calculated and turned out to be the source of some merriment in the management camp. The result was no surprise to management but it would have staggered the Five had they known.
· -Chapter XIX: The Footy Five Make Their Play
At management meetings, serious consideration had been given to the possibility of calling an extraordinary meeting to make the members aware of the degree of dysfunction at the board/management level. The Weekender made the people of Penrith aware for the first time that there was a serious problem at Board level. It made the staff of the Club aware of the situation for the first time. The constitutions of both the football club and the registered club were amended and it seemed that the sitting board was in the box seat to be re-elected.
Barry Walsh says the Five ‘kept shooting themselves in the foot’. It was a ‘comedy of errors’.
· Chapter XIX: Diverting Attention from a Tax Hike
When Michael Egan brought down his 2003 state Budget on 23 June, it contained massive tax increases on registered clubs. The announcement caused great consternation across the community and triggered massive protests including two rallies in Sydney. When allegations against Roger Cowan came to light in The Sydney Morning Herald, it was good news for Michael Egan. We know that the government and the Herald were sent the same allegations in 2002. The newspaper had the information for around a year. Was it just coincidence that the Herald timed its coverage perfectly for the government?
A few weeks after the October rally, the DGR announced that planned changes to the NSW Registered Clubs Act 1976 would give it broad new powers of inquiry. This part of the Clubs Act is section 41X.
· Chapter XX: The Reaction to a Fruitless Inquiry
Nearly all the evidence had already been heard when Minister Grant McBride introduced a bill to amend section 41X. The new law would extend the terms of reference of the inquiry and increase its threatening attitude towards clubs.
Grant McBride had one final present for Panthers leading up to Christmas 2004. Towards the end of question time on 9 December he reported to the House on Temby’s report. How he could get it so wrong is a mystery. But his error fits neatly with the theory that the real intention of the inquiry was to discredit the club industry.
The Instrument of Appointment inaugurating the inquiry first appeared on the DGR website in May 2004. Temby delivered his report to Ken Brown on 8 December 2004. The allegations remained on the DGR website as apparently unanswered accusations until March 2006.
· Chapter XXI: The Panic Amendment
Vicki Hartstein’s brief covered issues relating to the Club. She submitted a report which criticised a number of people, especially some directors on the Panthers Board. Panthers’ legal team, led by Bernard Coles QC and barrister Terrence Lynch, took their objection to the Supreme Court on 17 August 2004. Justice Hamilton made a direction restraining Ian Temby from making a finding of corrupt or other improper conduct by any person in respect of the Penrith Rugby League Club. His decision took reputation into account. If a person is found corrupt after an inquiry, the label sticks even if innocence is proved at a later hearing.
The Club’s lawyers had to protect a number of people from such a threat, but the government wanted the headlines. Cowan had opposed the strategy of going to the Supreme Court, believing it would be of great benefit to the Footy Five and potentially damaging to him. Months into the inquiry, there had been no evidence of dishonesty or corruption.
Before the Supreme Court handed down its judgment, Grant McBride presented an amendment bill in what must have been an attempt to circumvent the decision expected from the Court. The bill contained provision for a club to be forced to bear all government costs of an Inquiry. In Panthers’ case, this could have added $1.5 million to the $800,000 it had spent to that point. The injustice of it was not lost on many politicians.
· Chapter XXII: Royal Commission Powers
The Registered Clubs Act 41X legislation explicitly gives inquiries the powers of a royal commission. The DGR can take action against any club or individual based on nothing but unsubstantiated accusations, no matter how frivolous or how doubtful the credibility of those making the allegations. An inquiry can be called just in the hope something will turn up.
Our political system is celebrated for its constitutional safeguards. But any majority government can give itself these powers, and use them to silence dissent, weaken opponents, and punish subjects who have made its task of ruling difficult.
A person charged with murder, rape, drug peddling or other serious crimes is protected by a set of legal rights developed over hundreds of years. Under the powers of a Royal Commission, those protections disappear.
How does such an inquiry affect the individual? Cowan has described it as the worst time in his life.
· Chapter XXIII: A Royal Commission into Corruption at Panthers
THE Director of Liquor and Gaming appointed Ian Temby to preside over an inquiry for the purpose of investigating certain allegations about corrupt or improper conduct in relation to the Penrith Rugby League Club Limited. Six allegations were listed. The First five were nonsensical. There is no other way they could be described. The sixth one might have been justification for Royal Commission status if there had been sufficient evidence to indicate a web of corruption that would have been difficult for normal investigative and judiciary processes to uncover. What was that evidence?
The inquiry was not genuinely about the allegations at all. The allegations were there to trick people into thinking there was something to inquire into.
· Chapter XXIV: Truth and the Media
The Sydney Morning Herald’s campaign against Cowan started four days before one of the rallies against the new state government poker machine taxes. The Western Weekender kept its most vicious attack until after its owner had given evidence. Both papers gave favourable treatment to the Five.
· Chapter XXV: It Just Doesn’t Add Up!
ALL THE FACTS in this book can be substantiated by people or documents. But there are still some things that do not make sense.
· Chapter XXVI: The Panthers Legacy
Panthers has been a pioneer in many areas during the past forty years. A scheme focused on school children is an example of that pioneering spirit. A big part of the club’s legacy is Penrith as it is today. Panthers has played an enormous role in the community and has worked with the local council on many successful projects. Some, such as the CDSE, have had state wide implications.
Education by Experience.
Roger Cowan was asked if he could identify anything in particular that stood out as important parts of the management philosophy of Panthers during his 40 years at the helm. He responded with 3 that he favoured. There is a common thread running through them. Each one has quite a lot to do with the need to manage evolutionary change rather than merely cope with it and they are all about people.