Oireachtas Joint and Select Committees
Wednesday, 25 March 2015
Committee of Inquiry into the Banking Crisis
Context Phase
Ciarán Lynch (Cork South Central, Labour)
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As we have a quorum, the committee is now in public session and session 1 this morning is a public hearing with Dr. Julien Mercille, University College Dublin, on the role of the media during the property boom in Ireland in the banking crisis of 2002-07.
I welcome everyone to the 16th public hearing of the Joint Committee of Inquiry into the Banking Crisis. During our sessions this week we are hearing from a number of witnesses on the role of the media during the property boom in the lead into the banking crisis 2002-07 and any changes in approach after the crisis. At our first session this morning we will hear from Dr. Julien Mercille, lecturer at UCD's school of geography, planning and environmental policy. I welcome Dr. Mercille before the inquiry.
Dr. Mercille holds a PhD from UCLA and an MA from the University of Kentucky. His research focuses on global politics, international political economy, US foreign policy, media studies, and the war on drugs, from a critical political economy perspective. He has published extensively on those subjects in peer reviewed journals, book manuscripts, as well as in the media, and appears on television and radio regularly as an expert in current affairs. In addition to his academic writing, he is a regular analyst and commentator for publications such as Asia Times, openDemocracy, Truthout, The Irish Times, The Sunday Business Postand al-Jazeeraamong others. Dr. Mercille is also author of the book, The Political Economy and Media Coverage of the European Economic Crisis: The Case of Ireland.
Before I begin I wish to advise the witness that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the Chairman to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and as they have been informed previously, the committee is asking witnesses to refrain from discussing named individuals in this phase of the inquiry.
Members are reminded of the long-standing ruling of the Chair to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable.
With that said, I invite Dr. Mercille to make his opening comments.
Dr. Julien Mercille:
I will read my statement and we can take it from there. The statement analyses the role played by the Irish media in the property bubble in the years leading to the banking crisis. It discusses also media performance in more recent years. In particular, the statement addresses the following points about which the committee wishes to hear my views: the role in the mainstream media for scepticism about the sustainability of the housing boom or the broader economy; potential conflicts of interest in news content associated with revenues from property sector advertising; consistent promotion of buying over renting in the media; and the prevailing view that there would be a soft landing in the property market. So much of the information presented in the statement arose in my book, as the Chairman mentioned, The Political Economy and Media Coverage of the European Economic Crisis: The Case of Irelandin which more detailed and systematic data may be found.
So for the property bubble before the crash, my overarching point is that news organisations largely convey the views of political and economic elites. It is true that there are many debates taking place in current affairs reporting but they are mostly confined to the range of opinions within the establishment, and thus narrow in relative terms. Most research on the media focuses on journalists' herd mentality and reporters' lack of training in finance. However, I use a political economic framework and identify three main factors that account for the nature of coverage of the economic crisis.
The first is the media's links with the corporate and government sectors, the second is advertising pressures, and the third is sourcing. I will take the three points one after the other.
With regard to the links between the media and the corporate and government sectors, both private and State-owned media organisations largely convey corporate and political establishment views, but for somewhat different reasons. Private media entities are large corporations embedded in a for-profit economic system and are thus part and parcel of the broader market economy. This has several consequences. First, in order to start and successfully run a media company with any substantial outreach, significant financial investments are necessary, which means that only wealthy individuals and corporations are able to do so. Second, media firms are integrated into the market and feel the pressure from bankers, shareholders and directors to generate profits. Links with the broader corporate sector, including political elites, are created and maintained through boards of directors, as well as general business and social interactions. Independent News and Media, which is arguably the dominant media conglomerate in Ireland, owns numerous newspapers, magazines, radio stations and websites here and abroad. Just like other news organisations, its board has included numerous individuals linked with the corporate establishment. The same goes for The Irish Times, whose board has included a CEO of Irish Life & Permanent, a bank deeply involved in the housing bubble, along with members of IBEC and other businesses. Third, the media have a close relationship with the Government. News outlets depend on the State for licences and franchises, and so the Government is in a position to exert some leverage over news coverage. Also, State-owned media are, by definition, controlled by the Government to a greater or lesser extent through funding and appointments of principal officers. During the boom years, RTE had as chairman a director of Anglo Irish Bank, which epitomised the excesses of the Celtic tiger and property lending.
Thus, because the housing boom was beneficial to key sectors of the Irish corporate and political establishment, it was never seriously challenged. Rising property prices directly benefited builders and developers, banks, the Government, property firms and, directly, the broader economy thanks to high growth levels. The Government was able to collect large tax revenues from the property boom through stamp duty, capital-related taxes, income taxes on construction workers and taxes on construction materials. For example, while total property-related taxes accounted for 4% of Government revenue in 1996, they accounted for over 17% by 2006.
My second point concerns advertising. Advertising revenues are crucial to today's news industry. They allow newspapers to be sold for a lower price, making them more competitive. This affects news content, because corporate advertisers tend not to subsidise television programmes or news stories that seriously question or attack their own business or the political and economic system of which they are a part, which would be directly contrary to their interests. One particularly clear example of the significance of advertising to the Irish media is the large amount of funding from property advertising received during the housing boom years. The Irish media went even further in benefitting from property advertising money. They became owners of property websites, acquiring a direct stake in the growing housing bubble. For example, in 2006, INM bought www.propertynews.comand the Property Newsmonthly newspaper - the largest Internet property site in Ireland - and, in 2006, The Irish Timesbought the website www.myhome.ie for €50 million, along with the website www.newaddress.ie, which aims to make it easier for homeowners to move residences. Also, most newspapers published weekly supplements about commercial and residential property, glamorising the whole sector, while glowing editorial pieces about a new housing estate were often miraculously accompanied by a large advertisement plugging the same estate, in the words of Deputy Shane Ross, the former Sunday Independentbusiness editor. Ross also stated that unfavourable coverage of developers and auctioneers in other parts of the newspapers was regularly met by implied threats from property interests that advertising could go elsewhere. Moreover, an Irish reporter stated that journalists were leaned on by their organisations not to talk down the banks and the property market because those organisations were heavily reliant on property advertising.
My third point concerns sourcing. Journalists depend mostly on mainstream institutions for their reports because of limited resources, time constraints and a competitive news environment. Reporters need to connect those institutions that provide a steady flow of news, which in practice means large organisations that have themselves the resources to produce and release such a stream of material. The Government and corporations are two such sources, with the result that their points of view are predominant in the media. They can also deny privileged information to journalists who do not adopt the expected storylines, as happened during the housing bubble in Ireland.
As will be seen, during the bubble journalists relied on numerous experts from the real estate and financial sectors for their stories. The media analysis that follows depends to some extent on whether the bubble could have been identified before it burst and whether the size of the crash could have been reasonably estimated beforehand. The answer is "Yes" on both counts, although the precision of the analysis is obviously greater in hindsight.
There are two main measures to determine whether property prices are in bubble territory: the price-to-earnings ratio and the price-to-income ratio. The Economistmagazine used those indicators to warn about property bubbles around the world early on. In 2002, it stated that the Irish housing market had been "displaying bubble-like symptoms in recent years", and, in 2003, it calculated that Ireland's property market was overvalued by 42% relative to the average of the previous three decades. In Ireland, the economists David McWilliams and Morgan Kelly identified the problem and warned about it early on.
However, overwhelmingly, the Irish analysts and institutions, including the media, maintained that there was no bubble and that the boom would eventually end in a soft landing. Indeed, there is a clear discrepancy between coverage of the housing bubble before and after it burst. Before 2008, the media tended to largely ignore it, and it was only months after it started deflating that reality had to be faced. Once the housing market collapsed, the media simply could not ignore its downwards trajectory, hence the increased coverage. I have included two figures showing the number of articles on the housing bubble that appeared in newspapers by year. On average, The Irish Timeshad 5.5 times more articles on the bubble per year in 2008–11 than in 1996–2007. Similarly, the Irish Independentand the Sunday Independent had on average 12.5 times more such articles in 2008–11 than in 1999–2007. Moreover, the few articles published during the earlier period often denied that there was a bubble. For example, there were articles in The Irish Timesentitled "Study refutes any house price 'bubble' " and "House prices 'set for soft landing'," while the Irish Independent and Sunday Independenthad headlines such as "NCB [Stockbrokers] rejects house value threat from burst bubble," "House prices not about to fall soon, insist auctioneers," "Price of houses 'not over-valued' says new report," and "There is no property bubble to burst, despite doomsayers." In particular, between 2000 and 2007, The Irish Timespublished more than 40,000 articles about the economy, but only 78 of these were about the property bubble, or 0.2%. This is small coverage for what was the most important economic story in those years.
The residential and commercial property sections and supplements presented articles and glossy pictures encouraging readers to buy as opposed to renting. Stories described various properties on sale and were virtually indistinguishable from advertisements. One entitled "There’s a billion reasons to buy" introduced new luxury apartments by noting that they "feature quality designer kitchens with integrated AEG appliances [whatever that is] and stone worktops; top notch bathrooms with ceramic tiles, heated towel rails and chrome fittings". Potential buyers should waste no time, though, as "numbers are strictly limited – you’d want to stake it fast". Articles celebrated Ireland’s newly found pride in entrepreneurialism at home and abroad. One profiled the "ever-bullish Irish property buyer ... looking for the hot new property market", wherever it is in the world. Another article stated: "[I]n Victorian times, it was fashionable for the British to suggest that 'the sun never sets on our Empire'. Now the sun never sets on Ireland’s burgeoning property empire".
The media relied on so-called experts from the financial or real estate industry to describe the market, which thus received almost invariably upbeat analysis. For example, as late as November 2007, The Irish Timesconducted a survey among "property experts" to predict how the market would evolve in 2008. The six experts selected all held high-level positions with property firms. Not surprisingly, their forecast was enthusiastic. A number of journalists simply acted as cheerleaders for the property sector. Many even persisted in rejecting the view that the market had been in a bubble months after it started collapsing. For example, in April 2008, the Sunday Independent conveyed the thoughts of a real estate agent who believed that "[T]he time to buy is now. There is certainly great value in the market at the minute but it doesn’t mean people can dilly dally." Another journalist wrote a book entitled The Best is Yet to Comein 2007 and claimed that "Far from collapsing, our economy and property prices will do more than hold up."All that was required to protect Ireland against a crisis was not to talk about it, because "unless we talk ourselves into one, an economic storm is not going to happen."
Television followed the same pattern as the print press. During the boom, RTE sustained a national obsession with houses by presenting programmes such as "House Hunters in the Sun", "Showhouse", "About the House" and "I'm an Adult, Get Me Out of Here". Leading current affairs programmes such as "Prime Time" also sustained a housing bubble. Between 2000 and 2007, 717 shows were aired, of which only ten, approximately 1%, contained a segment concerned with the housing boom. These shows presented a total of 26 guests or interviewees of whom 11 came from the property or financial sectors, four were politicians from the main political parties, four were journalists, academics or researchers, and three were economic consultants. With respect to their views on the housing boom, only two interviewees said clearly that there was a bubble and that it would burst while the other 24 remained vague, argued explicitly that the housing market was and would remain strong in the years to come, or stated that a soft landing was to be expected if the boom decelerated at some point.
After the crisis, as the property market recovers, especially in Dublin, media coverage has essentially not changed. By this, I do not mean its content is the same as during the pre-crash years. The situation is different and we are not faced with a massive national bubble in the market. Rather, I mean that the media coverage points roughly in the same direction as before 2008. In general, it is the interests of elites that are mostly reflected in editorials and news stories, while those of ordinary people are often left out. This is not unexpected, given that the political and economic nature of the media industry outlined above is intact. News organisations are still corporate or Government-owned entities, advertising still plays a role in generating revenues and journalists still source their stories overwhelmingly from establishment institutions and individuals. One can find a few articles of a more careful or sceptical nature relative to the ongoing real estate boom in Dublin. I surmise that the pre-crisis bubble and its negative consequences are still felt strongly, and this may lead to more balanced coverage, although in relative terms this is a minor trend and, overall, a significant amount of critical commentary is not appearing in the media. The election of a few Deputies with progressive politics has also resulted in more critical coverage when their views are reported.
The fact that media coverage still reflects elite interests may be appreciated by considering analysis and commentary on the following key issues in the housing market. Approximately 90,000 people are on the waiting list for social housing, and there has been a rise in homelessness. Austerity has reduced State investment in social housing as capital expenditure for social housing was cut by 80% between 2008 and 2013. Approximately 118,000 mortgage accounts, 15%, remain in arrears and a number of repossession procedures are ongoing. So-called vulture funds involving mostly foreign investors are buying up large chunks of the property market. The Government has facilitated this by encouraging the establishment of real estate investment trusts, REITs, via generous tax breaks. REITs buy, among other things, property portfolios from NAMA. Vulture funds raise rents to maximise their incomes before they leave the market, after approximately three years, or whenever their real estate assets have increased enough in value in order that they can sell them back to Irish people at a higher price. NAMA promotes a vision of property as a commodity, not as a social good, given that it needs rental growth and seeks to maximise commercial returns.
Media coverage of such issues has reflected elites' views and interests. Coverage has not been extensive and has not foregrounded analysis and opinion that would reflect ordinary people's interests. Relatively little attention has been paid to progressive strategies to address the problems, such as significant public spending on a social housing building programme, NAMA playing a role more directed towards providing housing as a social good, rent controls, making unfinished estates safe and attractive places to live, converting vacant properties into rental units, mortgage debt write-downs and dealing with the issue of homelessness through a redistribution of wealth and power in society. The problem is not that nobody has presented alternatives. The union, SIPTU, has made the case for establishing a social housing REIT. The youth advocacy group, We're Not Leaving, produced a report on problems faced by renters, including deposit retention and low standards of quality in rented accommodation. The Nevin Economic Research Institute has argued for establishing and financing an affordable housing strategy. However, such organisations have not been included in the media to any significant extent. Instead, we often hear the views of developers, bankers and real estate agents and companies that call on the Government to ease the cost burden of construction in order that more houses can be built by the private sector to allow the market allegedly to solve the problems. We also still see stories of buyers telling how they are being outbid when they attempt to buy property.
After the crash, the media also presented the Government's crisis resolution policies in a largely favourable manner, again in line with the views of Irish and global elites. The media enthusiastically endorsed a blanket guarantee and declared it the cheapest bailout in the world. NAMA was called "bold and imaginative" and the "holy grail", while The Irish Timesclaimed it was our "best bet". However, there were progressive alternatives. Strong conditions could have been attached to the nationalisation of banks such as firing their top management, cutting the salaries of top officials, requiring that investment decisions be made with socially useful purposes and establishing strict regulations on banks' operations. A good bank could have been established, as explained in detail by the economist Willem Buiter in the pages of theFinancial Times. After some hesitation, the media endorsed the EU-IMF bailout in late 2010. The Irish Timesargued that:
On one level, intervention by the EU and the IMF is no bad thing. It means that rational decisions on how we can live within our means will now be forced down the throats of the competing interests who have stymied any genuine national response to the crisis.
The accumulation of sovereign debt in Ireland and Europe gave rise to the possibility of default and restructuring. However, the media described a potential default as a "cataclysm",an "evil day", an "unmitigated disaster", "hugely damaging", a "doomsday scenario" and likely leading to intolerable contagion effects throughout the eurozone. However, scholarship on sovereign debt restructuring reveals that countries that decide to cancel the repayment of their debts typically suffer only short-term economic costs and that long-term negative consequences are not significant so that, overall, defaulting often yields positive outcomes, for example, in Argentina and Greece.
The media has also strongly endorsed austerity since 2008. At the outset of the crisis, the media called explicitly for a campaign to educate the public about the need for austerity. The Irish Timeseditors complained that members of the public still did not appreciate the possible extent of the economic downturn and the editors asserted that the Government would have "a major job to do in educating public opinion about unpalatable economic realities and the need for civic discipline". A study I conducted of more than 900 opinion articles and editorials in the five main newspapers between 2008 and 2013 found the following revealing statistic: only 11% of pieces opposed austerity while 58% supported it and the remainder were neutral. The articles' authorship was also significant. More than 200 of the pieces were written by outside writers, not journalists. Of these, 29% were mainstream economists, 28% worked in the financial or corporate sectors and 20% were political officials in the three main political parties in power during the crisis, including only four from the Labour Party with the bulk from the two dominant right-wing parties. The overwhelming majority of writers, 77%, came from elite political or economic institutions. The remainder of authors comprised academics, members of progressive organisations and only 3% were trade union officials. Thus, a conservative cast of writers expressed their views and interests in the media.
Joe Higgins (Dublin West, Socialist Party)
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I thank Dr. Mercille for coming here. In his opening statement, Dr. Mercille said, "my overarching point is that news organisations largely conveyed the views of political and economic elites". When a person opens a newspaper, he or she is faced with a multiplicity of issues, articles, reports, etc. Could Dr. Mercille explain what he means by his assertion?
Dr. Julien Mercille:
The views of elites are topics in the media. Some topics are covered more than others, especially business topics, while topics such as homelessness and deprivation do not receive the coverage they deserve if other views were included to a greater extent. The second part is that whenever a topic is addressed, whether it is homelessness, housing or the financial crisis, the way the topic is interpreted reflects the views of the establishment.
That does not mean that the media just parrot whatever the Government says. It means that it reflects the diversity of views within the establishment. There is a diversity but it is relatively narrow. There are always exceptions. One can always find an article that contradicts what I said but there would only be a few articles. I am talking about general trends and that is very clear.
Joe Higgins (Dublin West, Socialist Party)
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Beginning on page 1 Dr. Mercille said, "Private media entities are large corporations embedded in a for-profit economic system and are thus part and parcel of the broader market economy." He stated on page 2, "Media firms are integrated into the market and feel the pressures of bankers, shareholders and directors to generate profits." Is he saying these factors affect how the media covers the issue and its attitude to the main issues of the day?
Dr. Julien Mercille:
Yes, it affects it to a great extent. Media entities are large corporations. Like any other corporation, if they want to invest in a new project they will have to borrow money, they have to talk to bankers, they have to survive as economic businesses, they have to sell and they have to get advertising. That leads to a series of consequences for their reporting. There are many reasons for that but I shall deal with ownership first. It is owned by large corporations so they have specific interests. We do not have any problem recognising that. A trade union paper reflects trade union viewpoints because they are owned by the trade unions. The same thing applies for the corporate sector.
For advertising, I am not sure whether the Deputy wants me to talk about it right now. Advertisers will not support publications that are contrary to their interests, by and large.
For sourcing, journalists are under time constraints. It is much cheaper to send a journalist to a parliament to collect the views of TDs and other officials than to send a journalist for a one-month trip to rural Ireland to look at the effects of poverty which is much more expensive. By and large, journalists will go to the organisations that have a ready supply of press releases. Those are, by and large, in establishment institutions and that is what gets reported in the media.
Joe Higgins (Dublin West, Socialist Party)
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In the lead-up to the crisis that developed, in 2008 particularly, we had the property bubble where the price of homes escalated massively and there were very large speculative gains made on land deals. Can Dr. Mercille relate what he has just told us to how the media covered those issues and covered the property bubble?
Dr. Julien Mercille:
During the bubble years the Irish economy, to a great extent, grew through a housing bubble. A lot of people benefited from that, whether it was the banking sector or the Government through tax revenues or whatever. Corporate Ireland had a stake in that, so that includes the media for all the reasons I have talked about, whether it is through advertising or the simple nature of the corporate media, or the Government's own media, the Government drew benefits from that, and so it led to favourable coverage in general.
Joe Higgins (Dublin West, Socialist Party)
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Media organisations coming before the committee today and tomorrow will tell the committee that the advertising revenues from corporations and big business that they receive do not determine how they cover issues that might touch on the affairs of those corporations. Does Dr. Mercille accept that claim? Does he believe or not that advertising revenue from the property sector influenced how the property bubble was covered?
Dr. Julien Mercille:
Yes, it did. As I said, Deputy Shane Ross said there were explicit threats that advertising would move elsewhere if coverage was negative. Shane Ross is not like a minor journalist. He knows what is going on. We had journalists, and there is a study that I cited, that said explicitly "Yeah, we had pressures from our bosses to give good coverage." The thing is one does not have to find something explicit saying, "The boss made the phonecall to a journalist to tell him to do this and that." It does not work like that. Journalists know very well. In any institution one has rules to play by. One does not need to be told every day by one's boss that one needs to dress like this or that and not to do this and that. If one is in an institution for many years one understands perfectly well. One might not be aware of it but one certainly behaves in that way. If journalists, during the housing bubble, had consistently produced stories saying the bubble will crash and that it is a bubble and all of that, then they would have had a lot of opposition from the media, as we saw with Morgan Kelly. In terms of a lot of those dynamics, it is not about finding a hidden e-mail or something that will say explicitly one needs to behave a certain way. It is just understood within the institution.
Joe Higgins (Dublin West, Socialist Party)
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Dr. Mercille also said that newspaper supplements, in particular, for commercial and residential properties during the bubble "glamorized the whole sector" and that editorial comment, in effect, meshed or merged with the advertisements for property. I ask him to explain that a little.
Dr. Julien Mercille:
One just has to pick up a property supplement and read the pieces. Frankly, when I started doing so I was not even sure if it was a commercial advertisement or if it was meant to be a real article. One cannot really tell the difference and that happens almost every day. A week or so ago one of the headlines on the front page of the online version of The Irish Timeswas, "This mansion has added a new bathroom". That was the news. Yes, it does influence. It meshes with advertising and reporting. In other words, if I had to write an advertisement I would not write it very differently from the actual article that appeared in the supplements, for example.
Joe Higgins (Dublin West, Socialist Party)
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On page 5, Dr. Mercille said, "Television followed the same pattern as the print press." I ask him to elaborate.
Dr. Julien Mercille:
I looked much less at television because it is much harder to get an archive for that. Thankfully, "Prime Time" had all of its programmes online. It removed them after I carried out the study but I do not know if there is a link. At that time it had them so I looked at that in more detail. There were over 700 programmes but I did not watch them all. Thank God, at the beginning of every programme, they say, "We are going to talk about 1, 2 and 3" which meant one just had to watch the first bit. I saved time like that. There was very little coverage of the topic.
I wish to make an important point about the media. When one says that the media sustained the housing bubble, it does not mean that the media every day was saying "There is no housing bubble". A lot of it is just not talking about it, closing one's eyes and saying "Yes whatever. There is something going on." "Prime Time" is a good example because it did not talk about the bubble too much. One had stories about health care, tragedies, political elections or whatever, but few news items on the bubble. When the bubble was covered, like I said, it was mostly by relying on experts from the financial sector, for example.
Joe Higgins (Dublin West, Socialist Party)
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I am sure that "Prime Time" would say, I imagine, that it was even-handed and impartial during the bubble. In terms of the figures Dr. Mercille gave here in regard to the selection of commentators, where they came from or their viewpoints, does he contend that it conveyed a particular view that does not challenge the bubble? Is that what he is saying?
Dr. Julien Mercille:
One could add, a real estate agent that comes and says "Look, I will tell you the truth. There is a housing bubble and don't buy a house." One could always imagine that. It does sometimes happen where one has people in institutions that break the rules. By and large, one can assume that they will talk for their own interests. One should not just assume that and one should just look at what they say. In the case of "Prime Time", one can watch the video and see that they do not challenge. Either they say it is fine, there is no bubble or they just remain vague about it. There is an institutional association in what they say and it is very clear.
Joe Higgins (Dublin West, Socialist Party)
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Dr. Mercille will be familiar with a study that has been quoted in a number of introductions that we have received. The paper is entitled "From Boom to Bust: A post-Celtic Tiger analysis of the norms, values and roles of Irish financial journalists."
It relates to interviews given, for example, by a former group business editor from decades ago of Independent newspapers. In essence, it is summed up in this way:
The commercial viability of virtually all media organisations depends on the smoozing of advertisers. The timid business hack finds himself regularly having to pull or pedal lightly on copy that would otherwise antagonise advertisers.
Is it the contention of the witness that the way the property bubble was portrayed was a factor? A major issue during the bubble was the inflation of house prices for ordinary people, as opposed to investors, that was incredible by any standards. Was that challenged in the course of the bubble?
Dr. Julien Mercille:
Advertisers influenced the content. Usually it is not too hard to explain that to students or people in Ireland and it is pretty obvious because of property supplements. There are other examples. RTE has a radio show about banking sponsored by Ulster Bank. Do we really think there will be critical views on that show about banks? Maybe there will be a bit but one can listen to it. It is about dynamics. One must listen to the programme or read the article - that is about the dynamics - but the explanation is pressure from advertisers.
What was the other part of the question?
Joe Higgins (Dublin West, Socialist Party)
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It concerned inflation in house prices that became a major issue.
Dr. Julien Mercille:
It was discussed. When I say the media had very little coverage of the bubble, it is not that they were unaware of the rise in prices. There were terms such as "affordability is not very good right now" or indications that people are finding it harder to buy houses, or there is a boom. If one is to be serious about an analysis, one must say there is a bubble, which is a dangerous thing. One must go beyond just saying it is hard to buy a house these days. That is not real analysis and is rather superficial. Much of the media discussed the other aspects. In other words, there is no way one could really know there was a bubble by reading the media.
Joe Higgins (Dublin West, Socialist Party)
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Perhaps I will be able to ask two questions in one as I will not be able to come back in. After the bubble burst, how did the mainstream media cover the aftermath and particularly the austerity programmes that were implemented as a result of the crisis? In his introduction, Dr. Mercille referred to vulture funds. He discussed the buying of tranches of residential developments and referred to NAMA. He indicated that "media coverage of such issues has reflected elite views and interests and has not foregrounded analysis and opinion that would reflect ordinary people's interest". I will conclude on those two points.
Dr. Julien Mercille:
With regard to the housing market, right now we do not have a huge national bubble. The coverage cannot be analysed in the same way we did before. There is a spike in Dublin prices but it is not a national issue like before. The media, in general, is the same, as the structure has not changed. There is still advertising and it is still corporate and government-owned. There are more articles of a careful nature. When one sees a boom in Dublin, a journalist does not necessarily jump on it as much as before because of the crash. Perhaps they are a bit more careful. I have not looked at it in any systematic way.
After the crash, the other issues became more prominent, such as austerity. When I or others say the media is in favour of government views, it is not something pulled out of nowhere. The media is very proud about that and says so explicitly. The Irish Timesindicated in 2008, right at the start, that it needed to educate the public about the virtues of austerity. There is no secret there and it was very successful in that task. The media performs extremely well in Ireland if it is judged from that standpoint. It has been very successful in telling people that austerity is the right way to go. There are crisis resolution points.
One can see reporting about vulture funds and other topics but not to the extent one would see if ordinary people's interests were considered to a greater extent. There is good reporting but that is a broader point. In the business press, for example, there is excellent reporting. The Sunday Business Posthas done very good studies on vulture funds because those journalists speak to the business community. Those people need good information and it is not just a case of propaganda being out there. Otherwise, a decision as a business leader or Government leader could not be made. There is very good reporting out there but the twist will usually be written for the interests of the elites. That does not mean it is wrong but it is a particular viewpoint.
Ciarán Lynch (Cork South Central, Labour)
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In the opening statement and during the questioning from Deputy Higgins, Dr. Mercille referred to political and economic factors and the relationship with elites and so forth. I wish to briefly deal with the cultural aspect of this discussion. How does he view the Irish public's relationship with the ownership of property and particularly home ownership?
Ciarán Lynch (Cork South Central, Labour)
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I am asking Dr. Mercille. Is there a particular culture in Ireland that is different or is it the same in other jurisdictions, particularly with regard to the desire to own one's home?
Dr. Julien Mercille:
That is a good question as we hear it all the time. My view is that culture has nothing to do with any of that, or at least very little, as I do not want to exaggerate too much. It is not what drives anything. People react to economic and political incentives and that is what drives them. There has been less home ownership in Ireland, for example. To put it in culture terms is a way to normalise it. It is like saying that Americans are inherently violent because they go to war all the time. That is not right. Incentives were put in place for home buying, such as low interest rates.
Ciarán Lynch (Cork South Central, Labour)
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To use the Chomsky term, is the media involved in a manufacturing of consent around property purchasing? Is it not an Irish cultural thing but rather a media phenomenon that people buy homes disproportionately in Ireland compared with other countries?
Ciarán Lynch (Cork South Central, Labour)
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If we had a different interpretation or narrative, would there be lower rates of home ownership and higher rates of renting?
Dr. Julien Mercille:
A different narrative would help in dealing with those issues. The audience reception of media is not something that can be measured accurately, and one never knows how much people buy into it or not. It may just put doubts in minds but there would be certain influence, just as with advertising.
Ciarán Lynch (Cork South Central, Labour)
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Do you rent or own?
Kieran O'Donnell (Limerick City, Fine Gael)
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Perhaps I should ask what the witness had for breakfast. I welcome Dr. Mercille. The presentation indicates that the views largely conveyed are of political and economic elites. Who are they?
Kieran O'Donnell (Limerick City, Fine Gael)
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Are they not democratically elected?
Kieran O'Donnell (Limerick City, Fine Gael)
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A king is not elected.
Kieran O'Donnell (Limerick City, Fine Gael)
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Or a queen.
Kieran O'Donnell (Limerick City, Fine Gael)
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Dr. Mercille's premise is that the media conveys the views of political and economic elites. The question I am asking him is with a view to backing that up. We are a democracy. People vote. They vote based on views put forward by various political parties. So, by definition, if the media reflects the views of the particular party in power at that time, at some stage does it not reflect the views of the people and, by definition, the readership?
Dr. Julien Mercille:
Yes; that is a good question, because it is something we hear all the time. Again, it is a dominant view in media studies that media content reflects what its readers want to hear or want to read. That is a conservative interpretation of the media, and the reason is that there is a big discrepancy between the interests of elites and the interests of ordinary people. So, for example, one often hears that Irish people just wanted to buy houses in the housing bubble years. Well, maybe at a superficial level, because that has been heard about, but it is not true that what one sees in the media reflects the viewpoints of ordinary people. For example, people have an interest in having a good health care system or a good welfare state, and the media does not say that. People did not have an interest in building the whole economy on sand, based on a housing bubble, to make it very unsustainable.
Kieran O'Donnell (Limerick City, Fine Gael)
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I have read Dr. Mercille's witness statement. Many of his views are personal. I will not go to that area because I regard them as personal views. What we are trying to extract from Dr. Mercille is how the media interacted in terms of our role here, which is the banking inquiry, and particularly in terms of the property bubble. What is Dr. Mercille's view of an alternative model for the media, specifically with regard to property and the banking inquiry, which would reflect a more balanced view in terms of the way the media presents things?
Kieran O'Donnell (Limerick City, Fine Gael)
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Yes. What model would Dr. Mercille like to see in terms of the way the media reports?
Dr. Julien Mercille:
Well, there is the mass media, which is what my study is based on - the mainstream media, consisting of newspapers, radio and TV. There is also something called the alternative media, which is smaller. Much of it is based online. It is the same in every country. That is a good model, in my view, for the structure of the media. So they are not large corporate entities. They rely on advertising to a small extent or not at all, so they raise their funds, for example, from readers only. One can see very clearly the result of that if one reads the alternative media. In Ireland it is not that big, actually, but there are people like Michael Taft, let us say, who writes a blog. If one compares this with the mass media, the difference is like day and night.
Kieran O'Donnell (Limerick City, Fine Gael)
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I do not want to mention Michael Taft. He would have a particular point of view.
Kieran O'Donnell (Limerick City, Fine Gael)
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Michael Taft.
Dr. Julien Mercille:
Yes, just as The Irish Timesand RTE have particular viewpoints. There is a problem with people's understanding involved in this objectivity thing. People say, "You have a viewpoint, but it is wrong." It is not wrong. A viewpoint is fine. It is very hard to write anything with no viewpoint. I have a viewpoint. The Deputy has a viewpoint.
Kieran O'Donnell (Limerick City, Fine Gael)
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With due respect to Dr. Mercille, in his article he speaks about progressive viewpoints.
Kieran O'Donnell (Limerick City, Fine Gael)
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One man's progressive viewpoint might be another man's regressive viewpoint.
Kieran O'Donnell (Limerick City, Fine Gael)
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Dr. Mercille's viewpoint is subjective as well.
Dr. Julien Mercille:
Yes. Some people could say that, for example, invading a country based on no argument is a good thing. Yes, fine, but most people will not agree on that. So the point of the media is to tell the truth. That is it. It is not about balancing viewpoints and here and there. It is about telling the truth. If that was done in the media, one would not recognise the media we have here.
Kieran O'Donnell (Limerick City, Fine Gael)
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What would there be instead, in Dr. Mercille's view?
Dr. Julien Mercille:
There would be a media that does not say austerity is a good thing to revive an economy in a downturn, because we know it is not. There would be a media that says there is a housing bubble when there is a housing bubble. The last 15 years of media coverage would have been completely different if the media had just told the truth. It is not about being left or right or progressive or conservative. It is about telling the truth.
Kieran O'Donnell (Limerick City, Fine Gael)
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In Dr. Mercille's view, if the media had told the truth, would the property bubble have arisen at all?
Kieran O'Donnell (Limerick City, Fine Gael)
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So Dr. Mercille would put the media very much centre stage in terms of being-----
Ciarán Lynch (Cork South Central, Labour)
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That is a leading question.
Kieran O'Donnell (Limerick City, Fine Gael)
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It is so obvious, Chairman, that I have to ask it.
Ciarán Lynch (Cork South Central, Labour)
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It is so obvious that the Deputy has a leading question. That is my difficulty. Do not ask a leading question and I will let you do your job.
Kieran O'Donnell (Limerick City, Fine Gael)
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In Dr. Mercille's view, could one make the point that the media were a contributing factor in the property bubble, or not?
Kieran O'Donnell (Limerick City, Fine Gael)
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It played a role.
Kieran O'Donnell (Limerick City, Fine Gael)
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Dr. Mercille made a very interesting observation that in 2006 - ironically, when the property market was in decline and the crash had more or less happened - both INM and The Irish Timesbought property websites. Did Dr. Mercille do any study examining how a situation had arisen whereby two large media publications had purchased property websites when effectively the market had reached its peak and was on the way down?
Kieran O'Donnell (Limerick City, Fine Gael)
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Did the purchase of those two websites manifest itself in any way in the media coverage of the property sector provided by both of those organisations from 2006 on?
Dr. Julien Mercille:
Again, as I said before, it is not as though there is a particular article and one can see that it is directly influenced by the purchase of this website. My point is broader. On the one hand, there is coverage that is relatively positive, sustaining the bubble, and one sees those interests in the property market. One can conclude or make an interpretation that this would influence their coverage, because they have a direct interest in it. It is in that way. It is not the case that the property website manager calls the media organisation and says, "Can you cover me in that way?". Maybe that happens sometimes, but it is not what I am concerned with.
Kieran O'Donnell (Limerick City, Fine Gael)
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How much time do I have left, Chairman?
Ciarán Lynch (Cork South Central, Labour)
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The Deputy has seven minutes.
Kieran O'Donnell (Limerick City, Fine Gael)
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Dr. Mercille referenced an article in The Economistin 2002, which was followed up in 2003, which said that the Irish market had been displaying bubble-like symptoms in recent years. It calculated that Ireland's property market was overvalued by 42% relative to the average of the previous three years. There were also warnings from some Irish contrarian economists.Around that time The Economistpublished that article, how did the Irish media react to it?
Kieran O'Donnell (Limerick City, Fine Gael)
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Yes.
Dr. Julien Mercille:
There were a few articles but, again, when one does a media study, it is about human affairs, so one looks for big trends. With any article, one can prove anything one likes. There were references, but the reporting that The Economistdid - presenting data every few months - was very different from the type of reporting that the Irish media did, with articles saying something along the lines of "By the way, The Economist, this publication in England, had a little report saying we are overvalued, but there are other interests that contradict that." That is very different reporting. So there was a bit of that, but mostly I would say that the main factor, if I had to pick one, would just be that they closed their eyes. That is more-----
Kieran O'Donnell (Limerick City, Fine Gael)
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Is Dr. Mercille saying it was a case of "See no evil, hear no evil, speak no evil," like the three monkeys?
Dr. Julien Mercille:
If one does not want a viewpoint to be brought to the table, one way is not to talk about it. So there was not too much reporting about that. There was some. Again,The Economistis another good example of my point that it is not about left, right, progressive, or conservative. The Economist is a conservative magazine, but it was serious. It did its job and it provided good information. Every few months there was a follow-up on the bubble, not only in Ireland but elsewhere. That is serious business reporting.
Kieran O'Donnell (Limerick City, Fine Gael)
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Does Dr. Mercille believe the Irish media did not do its job?
Dr. Julien Mercille:
It is not a belief; it is just a fact. I cannot find the equivalent of The Economistin the Irish media. With the exception of David McWilliams, Morgan Kelly and a few others who had some views, this country did not have the same level of systematic analysis. Maybe that can be attributed to a lack of resources because this is a smaller country, but I suggest it was for the reasons I outlined.
Kieran O'Donnell (Limerick City, Fine Gael)
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Does Dr. Mercille believe, on the basis of his studies, that media outlets were aware that there was a problem with property? Was it a sin of omission? Did they simply fail to report on it?
Dr. Julien Mercille:
I do not know. I am not the head of the journalists and media owners. Some of them were probably deluded and said "no, there is nothing". Others who might have been aware said "look, it is going well now, let's go with it". I do not know. The question of whether they were disingenuous or just deluded is a separate one. It was probably a bit of both. I do not know.
Kieran O'Donnell (Limerick City, Fine Gael)
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Thank you, Chairman.
Ciarán Lynch (Cork South Central, Labour)
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I call Senator O'Keeffe.
Susan O'Keeffe (Labour)
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Could Dr. Mercille give us a little insight into the role of public relations companies in liaising between journalists and their clients?
Dr. Julien Mercille:
It is not something I know a lot about, to be honest. I think there is a reference in the book to how they would link journalists with developers or construction businesses and make it clear that access would be cut if something not very nice was published about a developer or a company. I would not really know more than that about the matter.
Susan O'Keeffe (Labour)
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According to page 2 of the statement that Dr. Mercille has submitted to the committee today, Independent News and Media "is arguably the dominant media conglomerate in Ireland" and "just like other news organisations, its board has included numerous individuals linked with the corporate establishment". Dr. Mercille might expand on that idea by commenting on those people and the role they played. What role did they play? Did the fact that such people were on these boards have an influence?
Dr. Julien Mercille:
It depends on the media organisation. Boards mostly play a role in orienting the general direction of the newspaper. They do not do the reporting on the ground. If the board of a newspaper is filled with trade unionists, that newspaper's coverage will probably be more pro-trade union. We would not have an inquiry about that because everybody would understand it. When the board of a newspaper is filled with people from the banking sector and other elite sectors, the newspaper's coverage will be influenced in that direction. We cannot stay at that point, however - we need to look at the actual coverage. There are people in business and in the establishment who care about the truth. Such people exist. After we looked at the coverage and saw that the housing bubble was pretty much covered favourably, we examined the interests of the people on the board. It was clear to us that they drew benefits from the entire process. We were able to make an interpretation on that basis. That was one dynamic among others.
Susan O'Keeffe (Labour)
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Having looked at the coverage and at the board, would Dr. Mercille's interpretation be that this can be matched? Is that what he is saying?
Dr. Julien Mercille:
Yes. There were directors of banks on the boards of newspapers when journalists were deciding what to write about housing. I do not think I have ever spoken to those people. Maybe I did; I am not sure. It is about making a connection. The committee has to rely on the actual coverage. Otherwise, it is a bit more speculative.
Susan O'Keeffe (Labour)
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Dr. Mercille has spent time looking at coverage. He has cited the numbers of articles that were written by various people. Others of us have not done that. Is Dr. Mercille satisfied, having done that exercise, that there is a correlation between the profile of the boards of the main newspapers and the profile of their coverage of this issue?
Dr. Julien Mercille:
Absolutely. Thousands of articles are published every day. It is not like every single article links to the interests of a certain guy. In general, we understand that this is what happens. If the board of a student newspaper was filled with students, student interests would come first in the newspaper. We would all understand that very clearly.
Susan O'Keeffe (Labour)
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Does Dr. Mercille think the journalists who did not write at all about what was going on - he suggested that they ignored it - contributed more to the crisis than those who denied the bubble? People in the latter group could be referred to as the deniers. Which group was more significant? Did they have an equal impact or a shared impact on what happened? The groups are quite different.
Dr. Julien Mercille:
Yes. It is a good question. Again, it is impossible to give a clear or precise answer. I would say that in the case of the housing bubble, people just chose not to talk about it. The "Prime Time" report is a good example. Not many of the shows that were about the bubble denied that it was happening. It is just that there were very few shows about it. The graph I have presented to the committee contains two figures that show the same thing. I think I have mentioned that a few articles about the bubble appeared before 2008. The articles in question were not necessarily critical of what was going on or warning about it. Many of them said "you may have heard there is a bubble out there, but it is not true - we talked to experts and rest assured it is fine". This does not even mean they were talking about it. In most cases, I would say it is a question of denial. The same point applies to a lot of things. When was the last time it was on the front page that the US military has been using Shannon Airport for many years? It is not as if the media is saying "no, the US is not there"; it is just that we do not talk about it. The same point can be made about deprivation or about the health care system. We are never told that a great deal of money could be saved by having a public health care system. Much of it is just not addressed. When it is, the views of elites are usually taken as a driver. Again, this does not mean it is wrong or right - it just means this is the viewpoint that is being heard.
Susan O'Keeffe (Labour)
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In Dr. Mercille's experience and research, would he have spoken to people who offered evidence of journalists being subjected to strong or small interference from corporate types who were saying "that is not a great way to be going" or "actually, we do not want to use that story"? Did he experience any of that when he spoke to people?
Dr. Julien Mercille:
I thought the Shane Ross evidence and the other article were very good. The job was done for that, so I did not talk to as many people. I will give another good example that is more about the passiveness. A senior RTE journalist who was trying to show me that it was not the media's fault, and that it was the fault of the economists or whoever else, once told me how he works. He said that when looks at his mobile after he comes back from lunch, he might have received 12 press releases from the banking sector. He said he just copies them down as his article and that is it. He argued that this shows he is not guilty, but is merely reporting the views of the banks. That is a very good example of passive reporting. It is actually a robot view of a media environment in which journalists do not even think, but just copy what they get on their mobiles. At one level, one could put the blame on journalists and others and suggest that they should think a bit. However, it is very rational for media organisations to behave in this way because it saves them a lot of money. As such organisations operate in a profit-driven system, they might go bankrupt if they do not act in this manner. There are rational reasons behind their behaviour.
Susan O'Keeffe (Labour)
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I thank Dr. Mercille.
Ciarán Lynch (Cork South Central, Labour)
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The next questioner is Senator Michael D'Arcy.
Michael D'Arcy (Fine Gael)
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I welcome Dr. Mercille. If he was to classify himself on the political spectrum, would he put himself on the left, in the centre or on the right?
Michael D'Arcy (Fine Gael)
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Is Dr. Mercille sure he would not like to come over to this side of the House and ask the questions?
Dr. Julien Mercille:
Is the Senator suggesting that I should ask questions of all of you? What I mean is that the left-right thing can be misleading. A journalist on the right like David McWilliams is not a Marxist. He is maybe more on the right. He is a very serious analyst. The same thing applies to Morgan Kelly. He is a very serious analyst. Someone might be on the left, but that does not mean he or she knows anything. I would rather go with looking for the truth and being progressive. It is a safer answer here.
Michael D'Arcy (Fine Gael)
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Dr. Mercille has said that media outlets are there to tell the truth.
Michael D'Arcy (Fine Gael)
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He wrote previously on a blog that newspaper outlets have financial and property sections, but no poverty or homelessness sections. How many newspapers would be sold if a homelessness section existed?
Michael D'Arcy (Fine Gael)
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Would their circulation go up or down, in Dr. Mercille's opinion?
Dr. Julien Mercille:
If they had a poverty section they would sell more, depending on how it was covered. If it was covered in a progressive way, mentioning, for example, that this is a very unequal country, it would threaten the power structure in Ireland. Someone who is interested in maintaining the unequal structure of power here and elsewhere, and who is not irrational, will not want everybody to have all the information they want about it.
Michael D'Arcy (Fine Gael)
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Are media outlets not also going concerns - businesses - that have to pay wages and employ people?
Dr. Julien Mercille:
That is why some people would say journalists are incompetent. For me, it is a more structural issue. As the Senator said, these are businesses which have to raise money through advertising. There are not many other options. If one wants another system with alternative media, then it is a completely different thing with different reporting, not the same pressures such as advertising and, more than likely, journalists will be paid less.
Michael D'Arcy (Fine Gael)
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What about inconsistent positions by commentators to which Dr. Mercille referred over a period?
Dr. Julien Mercille:
At one level, a journalist is under time constraints. A few inconsistencies are not a problem. One cannot expect someone to have 1,000 articles all sharply in line with the same position. I do not have a problem with any viewpoint, be it conservative or progressive, as long as it is serious, has quality and is trying to find out something interesting. In the Irish media one has pub talk discussions or just fillers for the newspapers. One could have the same conversation with a friend anywhere and it might not be very relevant. One sees inconsistencies because there is not really a clear viewpoint. They will just talk randomly with people shifting their views pretending they said that.
Michael D'Arcy (Fine Gael)
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Should financial and property sections be excluded from the print media?
Michael D'Arcy (Fine Gael)
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What is Dr. Mercille’s opinion of the media’s reporting of elites referring to talking down the economy as being like borderline treason?
Dr. Julien Mercille:
We heard that message of do not talk it down and if you do so, it is your fault if it collapses. The economy is not determined by talking about it. You might expose an inconsistent message. However, someone writing about the housing bubble will not result in it suddenly crashing. We had one before and it was bound to collapse. It is called flak. If one has a viewpoint that challenges power, then one will get a lot of criticism from people in power.
Ciarán Lynch (Cork South Central, Labour)
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I want to reshape things for a moment because we are falling into a general discussion. The lead-up to the property crash and the financial and banking crash happened over a good number of years and was multifaceted with many dynamics. The period of the guarantee, however, is a very significant period in terms of a timeline. How does Dr. Mercille view the media’s coverage of the guarantee in the lead-up to it, the day it was announced and the period afterwards?
Dr. Julien Mercille:
The guarantee was received favourably by the media. This is the overarching point because, again, it was a decision of most of people who had a say in this such as decision-makers. The media rallied towards that. It was one of the most aggressive measures in Europe to deal with the banks and the media thought it was great. Some people said Ireland would become a model of financial innovation for others to follow.
Ciarán Lynch (Cork South Central, Labour)
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I remember driving up to the Dáil on the morning of the guarantee, listening to RTE’s 2FM and the late Gerry Ryan dealing with the issue. This was not the normal subject matter of that station. Did Dr. Mercille do an examination of the various shows during the two-week period of the guarantee and the proportion of those which were in favour or against it?
Michael McGrath (Cork South Central, Fianna Fail)
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Dr. Mercille went to a lot of trouble to analyse the various articles and editorials across the main newspapers and arrived at certain conclusions about the balance of coverage in the lead-up to the crisis in particular. Is there evidence that those with contrarian views who could see the crash coming could not get such articles published?
Dr. Julien Mercille:
The main two were Morgan Kelly and David McWilliams. There were a few others who were not systematic enough to be analysed. In the case of Morgan Kelly, the story goes that before publishing his first article, it was rejected by a few newspapers and he had to do a bit of work to get it out finally. On “Prime Time”, he was shown on one side of the table and the flak was coming from the other side. Even if Morgan Kelly had been wrong, that would not be the point. At least he tried to do something serious and it turned out he was right.
Michael McGrath (Cork South Central, Fianna Fail)
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He was heard but Dr. Mercille is arriving at conclusions which are critical of the media because of what he regards as unbalanced coverage in the lead-up to the crisis. That presupposes there were voices that were contrarian in nature but could not get a platform. Is there evidence of that?
Michael McGrath (Cork South Central, Fianna Fail)
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Maybe the media were reporting these views.
Dr. Julien Mercille:
They were not. The Economistwas across the Irish Sea and its article on the bubble was ignored mostly. That raises another question about the economics profession in this country. How many economists seriously looked at the housing bubble? I know Morgan Kelly and a few others did. It is not just the media but academia.
Michael McGrath (Cork South Central, Fianna Fail)
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How can one criticise the media if there is not any evidence that they denied a platform to people with alternative views who saw the crisis coming? Who are they and what is the evidence that they could not get heard?
Michael McGrath (Cork South Central, Fianna Fail)
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He got heard.
Dr. Julien Mercille:
If one gets heard after working on it for some time, it is not the same as being welcomed and actively sought. The media could have reprinted the article from The Economistor quoted Dean Baker, one of the top economists in the world, who called the bubble in 2002 very systematically and precisely. He has never been mentioned anywhere in the Irish media. Why would the Irish media not do a bit of work to find those few analysts? The Deputy is correct that there were more people among the experts saying there was no bubble. That is because they are also part of elite institutions, and the media is just one factor in that.
It would not have been hard for the media to do their homework, however. If it had been a one-time event over six months, one could have argued there was no time. However, this was over several years and there is no excuse for not having enough time. If you did not know what a housing bubble was in 2001, you had a few years to learn about it. Journalists are not just recorders of others’ views. They have to think on their own.
Michael McGrath (Cork South Central, Fianna Fail)
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Has Dr. Mercille any examples of articles that were rejected and simply could not be published?
Michael McGrath (Cork South Central, Fianna Fail)
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Is it Dr. Mercille's opinion that the mainstream media organisations which he examined have a corporate view on these issues and do not just see their role as reporting the news and providing fair and impartial analysis? Does he believe they are pursuing an agenda?
Dr. Julien Mercille:
Of course, which is why there is a business section, a finance section and a property section but no poverty section. If we say the media do not have a corporate view point we must say a trade union newsletter does not have a trade union viewpoint, which is a bit hard to sustain as an argument. It does not mean it is wrong; it just means it is the corporate viewpoint. Sometimes it is right.
Michael McGrath (Cork South Central, Fianna Fail)
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Is it Dr. Mercille's view that the commercial interests of the media organisations influenced their editorial policy?
Michael McGrath (Cork South Central, Fianna Fail)
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Where is his evidence for this?
Michael McGrath (Cork South Central, Fianna Fail)
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Why would it be in the media's commercial interests to advocate austerity?
Michael McGrath (Cork South Central, Fianna Fail)
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On page 1 of Dr. Mercille's opening statement he makes the point that private media entities and large corporations were embedded in a for-profit economic system and thus are part and parcel of the broader market economy, and he outlines the consequences as he sees it of this. What are the alternative economic systems to which he refers implicitly when he states they were embedded in a for-profit economic system and the broader market economy? What is the alternative in his view?
Michael McGrath (Cork South Central, Fianna Fail)
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Specifically the issue of a for-profit economic system as opposed to what?
Dr. Julien Mercille:
We can talk about socialism or whatever and that is fine, but we could just have capitalism with a human face which is what some people talk about. We could reduce the profit incentive. We could go much further, to the progressive end of the spectrum and be more decentralised, with a deep democracy as opposed to voting for the same two or three parties every four years with not much input from popular opinion. One could take a greater part in the economic decisions which affect one's life. It is about democratising the country.
Michael McGrath (Cork South Central, Fianna Fail)
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They are called elections.
Dr. Julien Mercille:
Elections are a very superficial form of democracy because one votes only once every four years for two parties which are essentially the same. It is a very limited form of democracy. There are other forms of democracy where one can have more of a say in economic terms and political decision-making. This is drastically different and has nothing to do with electoral democracy.
Sean Barrett (Independent)
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Dr. Mercille is very welcome. According to an earlier article he wrote, only two of the journalists who wrote about the crash in Ireland were qualified in economics. Was this part of Dr. Mercille's studies or have I mistaken him for a different author?
Dr. Julien Mercille:
I mentioned it. The claim is the journalists were not well qualified to cover financial or economic issues. If they were better trained or went back to school they would have been better. I would downplay it as an explanation. Of course the more knowledge one has about economics the better one is at understanding issues and that is fine, but journalists are generalists and cannot be expected to be experts on every topic they cover. They know enough to study and have a good grasp of some issues and maybe get the right expert to explain to them what is going on if they do not understand. If all Irish journalists were retrained and made do a PhD in economics in a university anywhere it would not have helped that much because much of the economics profession was not active in warning about the bubble.
Sean Barrett (Independent)
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Does the lack of training about which Dr. Mercille has spoken not leave them hugely vulnerable to the PR sector? Not knowing the stuff they reproduce the PR handouts after lunch, like Dr. Mercille said in an earlier example.
Dr. Julien Mercille:
There could be a situation where one could say if journalists were trained they would be more sceptical, but it could also be the other way around that if journalists were trained in finance they may internalise the views, just like stockbrokers who are trained in finance who internalise them. It depends on the type of economics they learn. If they learn progressive or alternative economics from Paul Krugman or David Harvey it would be very different from learning from more mainstream economists. It depends on what is learned as supposed to learning something.
Sean Barrett (Independent)
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In his studies of the articles, did Dr. Mercille ever come across any article which stated house prices were lower which was really good news?
Sean Barrett (Independent)
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I am asking whether in all of his studies in this period did anybody say low house prices means they are more affordable which is good news?
Sean Barrett (Independent)
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Is there a danger that we are taking this topic too seriously? If, on the advice of a racing correspondent, I continuously back slow horses do I blame him or her, the media or myself for not absorbing information and deciding to go for faster horses? Should I decide correspondent Bloggs is unreliable in my investment policies with regard to going to Leopardstown?
Ciarán Lynch (Cork South Central, Labour)
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It is an analogy.
Dr. Julien Mercille:
If one assumes people should make their own decisions and cut through the propaganda in the media then what is the purpose of the media? Is it to confuse issues so people can practice their critical thinking skills and decide to take five hours in a day to uncover the truth? One cannot blame people to the same extent as the media, for the simple reason those who have a job work 40 hours a week and cannot be expected to spend so much time digging into every issue. That is my job, so I could be taken into account and journalists are also paid to do so. For other people it is different.
Sean Barrett (Independent)
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On page 6 Dr. Mercille criticises real estate investment trusts, REITs. They were also heavily criticised in the Seanad debate on the Finance Bill. What would Dr. Mercille do about them?
Dr. Julien Mercille:
They could be regulated much better. I do not know about all the legal issues involved, but how easy it is for outside investors to just buy up chunks of the market could be restricted. They could be held to the same regulations and have the same safeguards for people in their homes. It is about regulating.
Sean Barrett (Independent)
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Dr. Mercille started his career in Magill, and several times during these hearings we have examined Canada as an example of a country which did not have a banking crisis. It also seems it did not have a public finance crisis. Are there any lessons from Dr. Mercille's studies in Magilland watching this environment?
Dr. Julien Mercille:
Canada had a more regulated banking system; certainly that is one lesson and perhaps the most important. Now it is very big on austerity, but this is not a lesson as it would be looking at Canada making the same mistakes again. There is a housing bubble in Canada. I have not looked at it in any detail but analysts state it is growing and unsustainable.
Marc MacSharry (Fianna Fail)
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Dr. Mercille motioned RTE had a chairman who was a director of Anglo Irish Bank. Is it his contention this had an impact on the editorial policy within RTE?
Dr. Julien Mercille:
It does not work like that in real life. It is not that a director calls a journalist or editor and states he or she had better do it like that. Perhaps this happens sometimes, I do not know. It is an institutional analysis. If an institution's board of directors is filled with people with affiliations to the banking sector and other sectors one can really see it will influence their decisions in the same way as if it were filled with 12 Marxists.
You could probably say that a newspaper could be Marxist in orientation and nobody would ever even question that. Again, just to remain at that is not enough because it is an interpretation, but when you look at the coverage that matches those interests, then you can see they made the decisions on orientating the broad guidelines of the media content.
Marc MacSharry (Fianna Fail)
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Would it be Dr. Mercille's view that in the newsroom in RTE, if a journalist was considering what to write about a bank, they would say to themselves "John, whatever you do, do not-----
Ciarán Lynch (Cork South Central, Labour)
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That is quite leading. The Senator cannot ask the witness his view. He can ask for an opinion upon something, but you cannot preface it with "Is it your view". That is a very leading question.
Marc MacSharry (Fianna Fail)
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On the basis of what the witness said about the complexion, for want of a better word, if the director of bank A was also the chairman of news agency B, would there be an innate, unwritten policy or action of journalists in that organisation to reflect copy that would be other than negative to that bank? Is that correct or is it incorrect?
Dr. Julien Mercille:
It is correct but I want to emphasise that it is not as if the journalists are thinking: "Oh my God, I wish I could report this but my director would not be happy." There might be some of that in any institution, whether it is the media, the military or a political party. Anybody who has been in that institution for a number of years is very well aware of the rules, where you can go, where you cannot go and how far you can criticise this person or that person. We all know that in our working lives. Some journalists might be completely comfortable with that and never even realise there are constraints because they agree with them all. Other, more critical journalists are well aware of that. They know where the line is and know how far they can go and what the repercussions will be. I am not in their heads, so I cannot give specific examples of thinking like that, but it is the same in any institution. There is nothing special about the media in that.
Marc MacSharry (Fianna Fail)
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When Deputy McGrath was seeking examples of people who were suppressed, the witness mentioned Morgan Kelly as an example. Could Dr. Mercille outline which news agencies specifically suppressed Morgan Kelly?
Ciarán Lynch (Cork South Central, Labour)
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No, he cannot.
Ciarán Lynch (Cork South Central, Labour)
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No, we are not going into the specifics of that. It is an allegation. I do not know if the witness can even answer that. I ask the Senator to be general.
Marc MacSharry (Fianna Fail)
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The allegation was not made by me.
Ciarán Lynch (Cork South Central, Labour)
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You made the allegation.
Marc MacSharry (Fianna Fail)
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No, I did not.
Ciarán Lynch (Cork South Central, Labour)
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We will clarify the situation. Is it your belief, Dr. Mercille, or can you explain to this committee, where views were edited, censored or suppressed, which were contrary to what was considered to have been the mainstream view of the sector at the time? I will give Senator MacSharry back some time later.
Dr. Julien Mercille:
The story about Morgan Kelly is that he tried to publish his article and it was rejected and he then went elsewhere. Beyond that, on television, I think it is RTE, there is a classic clip of him getting a lot of flack and criticism for saying there is a housing bubble. Many real estate agents were given voice to contradict what Kelly was saying. That is the way the censoring worked, not just by saying: "No you cannot do anything." He was brought in and then there were a lot of articles saying he was wrong. That is how discourse works.
Ciarán Lynch (Cork South Central, Labour)
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Is this research you have done or just anecdotal opinion you are giving to the committee this morning?
Ciarán Lynch (Cork South Central, Labour)
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Yes.
Ciarán Lynch (Cork South Central, Labour)
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So this is an observation of yours. You have not researched this.
Ciarán Lynch (Cork South Central, Labour)
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When I asked you the question earlier about the guarantee and the media coverage, I would have an opinion about that but I would not have actually researched it. I would have listened to different shows. There is a difference between researching something and the empirical evidence that underpins it and coming before this inquiry and giving an opinion on something. I am asking if is this an opinion or if it is something you researched.
Ciarán Lynch (Cork South Central, Labour)
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Okay, thank you very much.
Marc MacSharry (Fianna Fail)
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I do not want to upset the Chair, but perhaps he could bear with me on this. If this inquiry were different and we were in a position to name names, would the witness clearly have a name to give?
Marc MacSharry (Fianna Fail)
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An organisation or individual who specifically blocked the publication of Morgan Kelly.
Ciarán Lynch (Cork South Central, Labour)
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Please, Senator MacSharry, I will give you as much time as you like but do not create an impression here this morning. When we move to the nexus phase of this inquiry, names will be used and they can be used quite explicitly and in detail. We have a very experienced and expert research team working on our behalf which is preparing us for the nexus phase where we will be dealing with names. In this part of the inquiry, which is the context phase, which the members decided to do to give a broader context, we as a committee agreed we would not name individuals as we would do so in the nexus stage. I would not be trying to create by the back door any illusion that there is a restriction on this committee in not being able to name individuals. We will be able to do so in the nexus phase. I would certainly not be putting witnesses in a position this morning and inadvertently trying to tease that out of them when they were forewarned that they would not be doing that this morning.
Marc MacSharry (Fianna Fail)
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I understand.
Ciarán Lynch (Cork South Central, Labour)
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Nor would I be creating an illusion for the public either that this committee will not be able to name names.
Marc MacSharry (Fianna Fail)
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Of course. I look forward to us being able to name names.
Ciarán Lynch (Cork South Central, Labour)
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Just make sure when you are speaking that you are aware of the terms of reference and that you are not accidentally creating that impression.
Marc MacSharry (Fianna Fail)
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No. I do not want to create the illusion either, that there is not a clear fact for the record here today, that this witness would say a journalist would block-----
Ciarán Lynch (Cork South Central, Labour)
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Yes, but he is not a nexus witness and his testimony is outside that scope. If he is asked to name any person at this stage, he should say it was dealt with in his opening statement this morning.
Marc MacSharry (Fianna Fail)
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Can we name an organisation?
Ciarán Lynch (Cork South Central, Labour)
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No. I am asking that there would not be naming for the moment. I ask the Senator to please return to the line of questioning that we have.
Marc MacSharry (Fianna Fail)
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Am I allowed to ask for a yes or no?
Ciarán Lynch (Cork South Central, Labour)
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You can ask any question that is the same for any other member of this inquiry. That is in the terms of reference.
Marc MacSharry (Fianna Fail)
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Just so we are crystal clear, was Morgan Kelly's article blocked by somebody, yes or no?
Marc MacSharry (Fianna Fail)
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That is good. Does the witness have any evidence to suggest that Government agencies or the corporate world lifted the phone to the editor of a news agency to say, "Do not print that, do not follow that line, or we will pull advertising"?
Dr. Julien Mercille:
The best is the one I wrote about in Shane Ross's book and in the paper by academics who interviewed journalists - Shane Ross was a journalist himself - who said that there were clear warnings by agencies and by advertisers. They interviewed journalists who said they were aware that if they did this, then they could not do that, and I thought it was a good illustration.
Marc MacSharry (Fianna Fail)
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I have a quote from The Bankersby Shane Ross: "Unfavourable coverage of developers and auctioneers in other parts of the newspapers was regularly met by implied threats from property interests that advertising could go elsewhere." There is, however, no example in the book. Has the witness an example?
Marc MacSharry (Fianna Fail)
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We are talking about implied threats. Without naming names, are there any examples?
Marc MacSharry (Fianna Fail)
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It is accepted then. It is a rumour. There is no hard evidence, is there?
Ciarán Lynch (Cork South Central, Labour)
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You are leading. The question you want to ask, Senator-----
Marc MacSharry (Fianna Fail)
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Is it true or false?
Dr. Julien Mercille:
When one does not want to have evidence, one tactic is to push back the questioning. If I told the committee a name, it would ask if I had seen them in person, how long was the meeting, did I ask two questioners to make sure, did I verify the facts and did I look at phone records?
Marc MacSharry (Fianna Fail)
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Is the only evidence the Shane Ross quote I just gave?
Dr. Julien Mercille:
No, there are the journalists who were interviewed in that paper, I do not know how many there were.
A few journalists who were interviewed were asked the questions the Chairman raised, including whether they felt any pressures and so on. It is not as if one needs 200 journalists to say that. It is already very good to have a few who say something very important and go against the grain. That is how research is done.
Ciarán Lynch (Cork South Central, Labour)
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Is there a difference between hearing what might be a contrarian view in the mass media and the manufacturing of consent, which is the Chomskyite term? Dr. Mercille will be familiar with the term "manufacturing consent". Chomsky's theory is that the mass media takes a position and moves the public from one position to another. Is there a difference between the publication of a Morgan Kelly article, so that a newspaper can say, "Well, we published that," and what might be considered the manufacturing of consensus, or a broader narrative editorial position that is not reflective of views such as Morgan Kelly's?
Dr. Julien Mercille:
The idea of manufacturing consent does not assume anything about audience reception. It could be the case that the media are really putting a viewpoint but nobody is buying it, or it could be the opposite, with everybody buying it. It has nothing to say about the audience; it just looks at the media. We are talking about human affairs, so one always has contrarian views, either whistleblowers or exceptions. There are critical people in the Irish media, but it is about looking at the trends. That is what my argument is about and what we based our study on.
Pearse Doherty (Donegal South West, Sinn Fein)
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Cuirim fáilte roimh Dr. Mercille. On page 19 of his book, The Political Economy and Media Coverage in the European Economic Crisis: The Case of Ireland, he states that the media also have a close relationship with Government, which is able, to some extent, to pressurise them to conform to its viewpoints. Will Dr. Mercille give the committee his opinion in regard to that relationship, with specific reference to the banking crisis? Was the Government able to pressurise the media to conform to its viewpoints?
Dr. Julien Mercille:
For the State-owned media entities, the Government has a role to play in appointing officers and funding the media organisation, so it is in that way. In my study I did not really look at RTE, because it does not have a printed archive. The general principle is that any Government regulation or legislation surrounding media activities is related to that as well. I re-emphasise that it is contextual. The Government will set in place certain contextual constraints or whatever. It is not that the Prime Minister calls some journalists to say they had better report on him really well. If the Prime Minister did that, the media might do the opposite, just to show the politicians that they are autonomous and warn them not to push it too far. That is not to say there are no calls or informal conversations in that regard.
Pearse Doherty (Donegal South West, Sinn Fein)
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Dr. Mercille spoke to the committee about the reliance among sections of the media on official reports from the Government and larger organisations. He talked about why some journalists have relied on such reports. How best can one prevent that type of reliance on State information in the media in the future, if that is a concern?
Dr. Julien Mercille:
One could always talk about micro-solutions like training journalists not to do that or to do more investigations, but that will not work unless we change the structure of the media. It has to be more democratic, in a way. There are alternative media, and the comparison with the coverage in the mainstream media is like day and night. That is true in any country. If one had an ideal media structure in the mass media, it would be closer to the alternative media, with no or little reliance on advertising, for example, or funding through foundations as opposed to commercial interests, with the size of organisations kept small as opposed to having big corporations. All of that would lead to better coverage automatically. It is much more about the structure. "Diversity of the media" is a phrase we often use. The more diverse the media is, the more likely it is that one will hear different viewpoints.
Pearse Doherty (Donegal South West, Sinn Fein)
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In his book, Dr. Mercille talks about a Celtic tiger discourse. What does he mean by this phrase? Does it have any relationship to the Irish banking crisis? Will he tell us what he means by that phrase?
Pearse Doherty (Donegal South West, Sinn Fein)
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Dr. Mercille also said in his book that he rejects the idea that there was a conspiracy at the heart of the way things worked in relation to power and the media. Instead, he said that his conclusions depended directly on the normal workings of the corporate world and not a conspiracy subverting it. Will he explain that? I know he has touched on this. I think Dr. Mercille mentioned that it is not necessarily bosses telling their employees what they can and cannot do. Will he explain what he means when he says it is not a conspiracy?
Dr. Julien Mercille:
That is a good question, because one often hears that it is a conspiracy. A conspiracy is a few guys in a dark room who take decisions outside the normal channels. The media are not a conspiracy but are institutional. If one asks any corporate leader, he or she will say what I said - that we have a structure, we have to increase market share, we have to raise revenues and so on. That leads to certain incentives. For example, if someone wants to cut costs in a newspaper, will he send his journalists for an hour to the Parliament to collect press releases and write a few articles very quickly, or will he send them to rural Ireland for a month? It is much more expensive to do the second. If he did not work in an environment based on profits he could do the second, but if he is competing with other organisations that will cut costs in that way, it leads to a reliance on organisations or the establishment.
Pearse Doherty (Donegal South West, Sinn Fein)
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Dr. Mercille states in his book that in general elites act rationally and the decisions they make reflect their own interests. What does he mean by this statement? Are elites rational or irrational in the crisis? Will Dr. Mercille give reasons for his answers?
Dr. Julien Mercille:
We often hear in Ireland and elsewhere that the Government is crazy, does not take the right decisions and so on. I do not believe a word of that. For example, the media were very rational in their coverage, according to their own interests. If one judges them from the interests of ordinary people, it is a different thing. They took the decisions they took because there was a benefit in that; people drew benefits from the housing bubble and from austerity. It is a very rational thing. It is not that people are running around like headless chickens and taking measures. There are some irrational decisions but they are more anomalies. By and large, it is rational. People in power would not be there if they were not rational; they would be elsewhere.
Eoghan Murphy (Dublin South East, Fine Gael)
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I thank Dr. Mercille. It is one thing to feel pressure as a journalist or to believe something has been implied to a journalist, but it is another thing for the journalist to actually act on it. Does Dr. Mercille have any specific evidence of a journalist changing what he or she was going to write or report based on the threat, either specific or implied?
Eoghan Murphy (Dublin South East, Fine Gael)
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By any interests.
Eoghan Murphy (Dublin South East, Fine Gael)
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Does Dr. Mercille have any evidence himself?
Eoghan Murphy (Dublin South East, Fine Gael)
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From any information given to him or from his research, directly interviewing people, have journalists said to him-----
Eoghan Murphy (Dublin South East, Fine Gael)
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Yes.
Eoghan Murphy (Dublin South East, Fine Gael)
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In Dr. Mercille's own study, with regard to discussions with journalists or investigations into how journalists can be affected by elites, he does not have an example of that.
Dr. Julien Mercille:
No, not that I recall. Again, the point is not that every journalist is called every morning by Sherry Fitzgerald and told to report properly. It is not that, and for the same reason that the leader of a political party does not have to call every member every day to direct him or her to vote with the party. The members understand what is required because they are part of the institution. A journalist who does not understand this will not last long in the main media sector.
Eoghan Murphy (Dublin South East, Fine Gael)
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Is Dr. Mercille speaking about implied rules of the game within a profession?
Eoghan Murphy (Dublin South East, Fine Gael)
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Dr. Mercille believes that ownership of media impacts upon editorial decision-making and media coverage. Does he have any evidence of a media owner interfering with an editorial decision or reportage by a media organisation?
Dr. Julien Mercille:
No. Again, an owner will hire people who are like-minded, so that he or she does not need to call them every day and interfere. That is the whole point of it. An owner would not hire an editor whom he or she felt they would have to interact with every day. No owner would waste their time doing that and so he or she hires like-minded people.
Eoghan Murphy (Dublin South East, Fine Gael)
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Can I take from what Dr. Mercille just said that editors are not independent-minded and exist only to impart the views of their owners?
Dr. Julien Mercille:
I understand what the Deputy means but that is not the right way to put it. The right way is to say there will be an alignment of interests of people working in the organisation with that organisation's interests. If those are their views, one could say they are very independent in terms of those views. They are not constrained every day.
Eoghan Murphy (Dublin South East, Fine Gael)
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So, a business owner leads to an editor with business interests or interests in terms of reflecting the business community or a certain industry in a particular light.
Eoghan Murphy (Dublin South East, Fine Gael)
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In terms of different types of ownership, for example, State broadcasters, is it the case that the persons in charge within the State broadcaster reflect the Government point of view?
Eoghan Murphy (Dublin South East, Fine Gael)
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Would that stand up to scrutiny, in terms, for example, of coverage by RTE of the Government over a range of issues?
Eoghan Murphy (Dublin South East, Fine Gael)
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In terms of Government's attempts to achieve certain policies, Government representatives and politicians are challenged robustly every day by RTE on television and radio as to their viewpoints in that regard, often to the point that it undermines the Government.
Dr. Julien Mercille:
That is a good question. Again, there is challenge and challenge in relation only to tactics. If Government is being challenged about its spending cuts and the point is made that instead of particular cuts, taxes should be raised, that is not a fundamental challenge. It is akin to the US military wondering whether it should invade Iraq with the air force or by way of boots on the ground. It is a very tactical debate among elites. It is not a fundamental challenge.
Eoghan Murphy (Dublin South East, Fine Gael)
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It is not for me to disagree. I cannot go there. I have one final question in relation to other forms of ownership, such as trusts. We are all familiar with trust ownership of a media organisation, as is the case in respect of The Irish Times. How are we to understand that a trust has an influence over editorial decision-making when a trust is made up of a number of different people?
Dr. Julien Mercille:
The trust represents the commercial interests. The Guardianin England is also owned by a trust. It is not the only factor. Sometimes it does not correlate perfectly. One could say that The Irish Timesis more liberal on social issues and that this could be linked to the fact that it is owned by a trust. Again, that is only one factor in a range of factors. If one wants to have a drastically different media organisation, the alternative media provide a very different example. It is easier to contrast because there is less-----
Eoghan Murphy (Dublin South East, Fine Gael)
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By way of clarification, I take it Dr. Mercille is not implying that because The Irish Timesmight take a socially liberal point of view on an issue, its ownership is a better model and is not influenced. Is he making a correlation between the political viewpoints and then drawing the conclusion that, therefore, it does not have a negative influence on how it is edited?
Dr. Julien Mercille:
What I am saying is that with a less commercial, profit-driven political economy of an organisation, one would expect viewpoints that are less in line with, say, the corporate communities. There are other factors that could cancel or reinforce that. It is a bit of a picky dynamic. A clear opposition in two systems in the form of alternative media versus normal mass media would ensure different views.
On the Deputy's other question of trust or non-trust ownership, the differences are smaller.
Ciarán Lynch (Cork South Central, Labour)
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We need to move on. I call Deputy John Paul Phelan.
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I welcome Dr. Mercille to the meeting. I have a couple of questions for him arising out of his statement in which he criticises very strongly the Irish media for its opposition to default on sovereign debt. What in Dr. Mercille's view are the immediate consequences for a country that defaults on its national debt?
Dr. Julien Mercille:
The literature on sovereign debt default is pretty extensive. The consensus is that for a country that defaults on sovereign debt, there are negative impacts in the short term, although not nearly as many as people tell us. However, the same does not apply in all cases. There is no magic rule. I gave the example earlier of Argentina, which did default. According to the literature, while the initial impact of that was negative, it was followed by good growth. Does this mean Ireland should have defaulted? Default is a broad term. One can default a little or completely. Again, Ireland is different from other countries. The point I was making is that if there is good evidence that the consequences of default would not be that bad, then the idea should at least be up for debate. It does not mean that default should be called for all over the place, rather it means that it should be considered.
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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My second question relates to the point made by Dr. Mercille in his statement that scholarship on sovereign debt reveals that countries that decide to cancel the repayments of their debt typically suffer only short-term economic costs. Does Dr. Mercille think that people in Argentina and Greece believe they have typically suffered only short-term economic costs?
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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What about Argentina?
Dr. Julien Mercille:
The situation in relation to Argentina is interesting. Growth there was very striking. The European media and, in particular, The Irish Times, reported it in a very biased way. Default by Argentina occurred in 2001. On the tenth anniversary of that default The Irish Timesreport in that regard referred to people running around the streets of Argentina with machetes full of blood, which they had used to slaughter cows because they had nothing to eat. Thus, the image we have of default is blood in the streets and people running around with knives.
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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It is a serious image.
Dr. Julien Mercille:
That is not how one analyses the political economy of a country. Reports of people running around after cows is not serious analysis. Argentina grew by approximately 8% every year for eight years. Even half that level of growth in Ireland would ensure re-election of the party in government for the next 20 years. People would be very happy. That is not to suggest that because that is what happened in Argentina, the same would happen in Ireland. However, the issue should at least be on the table for discussion.
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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Fair enough. I grew up running around after cows in Kilkenny, although not with a machete. In Dr. Mercille's view, what section of Irish society would have suffered the most if we had gone the Argentinian route?
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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On what section of society would default by Ireland have impacted most?
Ciarán Lynch (Cork South Central, Labour)
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Dr. Mercille is not an economist.
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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His statement contains extensive quotations about economics.
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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My question is what section of society would have been impacted most?
Dr. Julien Mercille:
Usually when there is an economic disturbance, people at the bottom will suffer more because they have less to start with, but, if for the next eight years they benefit, then that is not to say that it is a magic solution at all. There are costs but it is more about the positive impacts after that.
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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Is Dr. Mercille an economist?
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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Has Dr. Mercille any qualification in economics besides political economy?
Ciarán Lynch (Cork South Central, Labour)
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How does Ireland rank comparatively with other jurisdictions in examining, monitoring and reporting on different aspects of society in a balanced way?
Ciarán Lynch (Cork South Central, Labour)
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Yes.
Dr. Julien Mercille:
Again, one significant fact here is that we do not have a left of centre media outlet in the mainstream. We do not have the equivalent of The Guardianin London, for example. Many other countries have something like that so, in that way, Ireland would be more conservative in the media landscape and perhaps a little more like the US in that regard. We hear all the time about balanced reporting and fairness and that is what people learn in journalism school but that is not the way to put it. It is about reporting the truth. To give an example that is a little out there, one could report in one's article that there are very good things about Nazi Germany and the reasons. However, if some people do not like it, it would be weird. It is about telling the truth as far as one can determine it. Sometimes it is a grey area. There are various viewpoints and, therefore, it is not just about being balanced. It is more about telling what people care about and the media are good at that. When we talk about the influence of readers, the media pays attention-----
Ciarán Lynch (Cork South Central, Labour)
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I would like to bring Dr. Mercille back to the comparative aspect rather than having a general discourse about the media. There is The Guardianin Britain and further to the left, there isL'Humanitéin France, which has a strong connection with the communist party there and so forth. By Dr. Mercille's admission, it does not matter whether a newspaper is left or right wing; the issue is whether the reporting is accurate and logical. How does Ireland compare on the accuracy of its reporting as opposed to the blend of ideological positions in the mass media?
Ciarán Lynch (Cork South Central, Labour)
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That happened in the US and Britain as well.
Joe Higgins (Dublin West, Socialist Party)
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One of the studies Dr. Mercille relies on, as well as his own study, was published in the Irish Communications Review, Vol. 12, 2010. It was conducted by three academics from Dublin City University and was entitled, "FROM BOOM TO BUST: A post-Celtic Tiger analysis of the norms, values and roles of Irish financial journalists". What was the importance of that study? What were the findings of the academics based on what the financial journalists told them?
Dr. Mercille will be familiar with another study by Mr. Bourke in 2008 entitled, "Ethical Trends and Issues in Irish Journalism 1973 to 2008". In that study, a former group business editor of a major newspaper in the 1980s is quoted regarding the issues touched on by Dr. Mercille in his presentation and discourse with the committee. He said:
Behind every organ of media, there is an owner, manager or agent who seeks to protect an interest. When those interests become wide ranging and extensive, the scope for comment on these and parallel interests of proprietors becomes increasingly restricted.
Does that sum up what Dr. Mercille has said? Would that be an accurate reflection?
Dr. Julien Mercille:
It would. One can always add detail to that but the study the Deputy mentioned was good because it answered all the questions I was asked this morning about giving examples of journalists or editors who felt constrained by property interests or advertisers. That is why it was very good. It is rare that one can get insiders who will say how it works in reality and be critical.
Kieran O'Donnell (Limerick City, Fine Gael)
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Dr. Mercille referred to property-related taxes in the context of GDP in his statement. Did he get an opportunity as part of his research to examine the growth in advertising expenditure as a proportion of total income of newspaper outlets and how much of that was property-related?
Kieran O'Donnell (Limerick City, Fine Gael)
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Does Dr. Mercille know by how much it increased based on his research?
Dr. Julien Mercille:
The way the data are reported is one has direct advertising revenues. The main part of that based on my understanding is property. It is not the only one but it is the main part. That dropped from €160 million in 2007 to €65 million in 2014. The property element would be smaller than that but it is the main chunk of it from my understanding.
Kieran O'Donnell (Limerick City, Fine Gael)
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What was the figure in 2002?
Kieran O'Donnell (Limerick City, Fine Gael)
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So it increased by at least 60% or 70%.
Kieran O'Donnell (Limerick City, Fine Gael)
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Did Dr. Mercille review the coverage of property in individual newspapers and other publications between 2000 and 2007? Was there a difference in the way they dealt with the issue and the Irish market?
Kieran O'Donnell (Limerick City, Fine Gael)
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Was the research restricted to The Irish Timesand theIrish Independent?
Kieran O'Donnell (Limerick City, Fine Gael)
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So Dr. Mercille just looked atThe Irish Times,Irish Independentand Sunday Independent?
Kieran O'Donnell (Limerick City, Fine Gael)
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Did Dr. Mercille find a difference in their approaches?
Ciarán Lynch (Cork South Central, Labour)
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Dr. Mercille's graphs are explicit and they highlight the mirroring between different news agencies in respect of advertising revenue. While the revenues fell in 2010 and 2011, they seem to be significantly out of scale with revenues prior to 2008.
The turn in property values took place in or around 2009.
Kieran O'Donnell (Limerick City, Fine Gael)
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In the articles.
Ciarán Lynch (Cork South Central, Labour)
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In articles, okay. There seems to be quite significantly more coverage from 2009 onwards, even though, according to Dr. Mercille's theory this morning, there is a particular position that people had around property. In the 2008 to 2011 period, what was the key message coming out of the media? Was it that they were reporting on the crisis or that it was business as usual and there would be a soft landing? Dr. Mercille is quite explicit in his graphs. There is a flow along and all of a sudden, there is a volcano of reportage taking place. According to Dr. Mercille's examination, what is the overall message that was coming through in the media?
Dr. Julien Mercille:
It is interesting. As the Chairman stated, it started deflating in 2007. It took the media quite a few months, even a year, before catching up with that. Of course, when the bubble burst, in 2009 and 2010, one could not really deny it. In those reports, in 2009, 2010, 2011 and after, they are not denying there is a bubble. They are saying, "The market crashed", or whatever.
The interesting part relative to the Chairman's question might be 2008, when it is deflating but people are still saying, "No, no, no, it is just temporary and it will rise back up". At one point, in 2012, in all that, of course-----
Ciarán Lynch (Cork South Central, Labour)
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Does Dr. Mercille's examination of media behaviour in his book The Political Economy and Media Coverage of the European Economic Crisis: The case of Ireland, which I referenced in my opening comments today, extend up to 2008 or 2011?
Ciarán Lynch (Cork South Central, Labour)
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It goes up to 2013. It goes beyond that period.
Ciarán Lynch (Cork South Central, Labour)
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Is there anything further Dr. Mercille would like to add before we bring matters to a conclusion this morning?
Ciarán Lynch (Cork South Central, Labour)
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I thank Dr. Mercille for his participation with the inquiry today. It has been an informative and valuable meeting which has added to our understanding of the factors leading to the banking crisis in Ireland.
I propose that the committee suspend until 11.55 a.m. at which time we will resume with the next session, which is with Mr. Harry Browne. Is that agreed? Agreed.
Ciarán Lynch (Cork South Central, Labour)
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The committee of inquiry into the banking crisis is now in public session for session 2. This public hearing is a discussion with Mr. Harry Browne on the role of the media during the property boom in the lead-in to the banking crisis in the period 2002 to 2007.
At our sessions this morning, we are focused on the role of the media during the property boom in the lead-in to the banking crisis in the period of 2002 to 2007 and any changes in approach after the crisis. For the next session, I welcome Mr. Harry Browne to the meeting.
Mr. Browne is a lecturer at the school of media, Dublin Institute of Technology, as well as an activist and journalist. His journalism has appeared in numerous publications, including The Irish Times, Villagemagazine, The Sunday Times, Irish Daily Mail, Evening Herald, Sunday Tribune, The Sunday Business Postand The Dubliner. He has made numerous appearances as a guest on radio and television programmes. He has been a consulting editor on the multicultural newspaper Metro Éireann. His history research at Harvard, BA, and Columbia, MA, addressed Irish migrants in Britain and the United States and he has also studied US-based Italian-language journalism from the early 20th century. He is currently examining newspapers' neoliberalism in ongoing PhD research in the department of English, theatre and media studies at NUI Maynooth.
To commence with the more formal part of today's proceedings, I wish to advise the witness that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. If he is directed by the Chairman to cease giving evidence on a particular matter and he continues to so do, he is entitled thereafter only to qualified privilege in respect of his evidence. The witness is directed that only evidence connected with the subject matter of these proceedings is to be given and as he has been informed previously, the committee is asking witnesses to refrain from discussing named individuals in this phase of the inquiry.
Members are reminded of the long-standing ruling of the Chair to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable.
I invite Mr. Browne to make his opening comments to the inquiry.
Mr. Harry Browne:
I thank the committee very much for the opportunity to speak with it today.
In starting, I should note that although the arguments and conclusions that I will bring to the committee today in this statement are certainly my own, some of the research that I will cite here is not and I will endeavour to make that clear. Indeed, Dr. Mercille would have been a major source for this statement were it not that the committee had already heard from him for two hours already.
I will endeavour to mention other researchers whose work I am drawing upon, but I should also note that a fully referenced version of the statement has been furnished to the committee, with a works cited list, and I will also be making a link to that public on social media later today.
Print and broadcast media in Ireland played a difficult-to-measure but almost certainly significant role in the inflation of the property bubble and the legitimisation of risky behaviour by the financial services sector in the lead up to the crisis of 2007 and 2008. It did so partly by ignoring or marginalising scepticism about these phenomena. I will focus in my statement on the newspaper industry and I will argue that this socially destructive role should be understood not necessarily as a failing of Irish newspapers but, to some extent, as a feature, one that flows predictably from commercial media's structural relationship with the corporate forces that benefitted from the bubble. While this relationship is of very long standing and continues to some extent to this day, I will further argue there were certain aspects of the development of newspapers in the 1990s and early 2000s, which were particularly acute here in Ireland but also experienced elsewhere in the world, that made them especially vulnerable to domination by those forces and weakened the capacity of journalists to play the critical, adversarial and investigative role that most of them do undoubtedly value. Within journalism and in research about journalists, that value is often referred to under the rubric of "professionalism," a term that encompasses a set of principles and performances that supposedly drive journalists to seek the truth impartially and to question the powerful doggedly. The values are captured in such largely symbolic documents as the National Union of Journalists Code of Conduct and the code of practice of the Press Council of Ireland. I will not endeavour to romanticise the journalism of an earlier age, which had plenty of its own problems, many of them involving the limits and shortcomings of professionalism itself. However, over the last 30 years or so, those principles have been widely understood to be increasingly at risk all over the world, with particular features of the media landscape endangering them. Daniel C. Hallin, a leading American scholar of journalism, has written, "For the most part I don't think journalistic professionalism is breaking down from the inside, by journalists becoming less committed to it; instead [Hallin continues] I think professionalism is being squeezed into increasingly smaller niches within the media field."
It is my contention that in Irish newspapers we can literally see that squeeze occur over the period between about 1990 and 2007, as the physical construction of newspapers changed. There was an inscription of an unquestioning pro-business ideology, in practice, onto increasingly large advertising-heavy portions of the newspaper - indeed, sections that owed their existence precisely to advertising, including the ever-growing business finance, property, and lifestyle sections, dedicated to the advertising of, respectively, recruitment, real estate, and consumer goods and services. Even the most scrupulous of newspaper editors, I contend, came to see those sections as a realm of, at best, what one might call "professionalism lite" where soft treatment of the rich and powerful was expected. Even if one worked in the niches where full-blown professionalism still held sway - the journalists who filled news pages and provided political coverage, for example - it was hard to miss the message that was embedded in that big colourful product about your employer's relationship with financial institutions, property interests and other corporate bodies. Those supplements were, after all, paying the bills. When The Irish Times Limited infamously paid €40 million for myhome.iein 2006, it appeared to confirm the company's dedication to what increasingly looked like its core business - the advertising of property sales.
There is a piece of research that has already been cited today in which a group of Irish financial journalists, speaking on condition of anonymity to a team of academic researchers who published their findings in 2010, discussed this relationship. One of them said, in that research by Fahy, O'Brien and Poti:
Much of the mainstream media seems to me to be very conflicted because of their reliance on real-estate and recruitment advertising. That doesn't mean reporters consciously avoid writing bad news stories, but it's hard to run against the tide when everyone is getting rich.
Another stated explicitly that journalists "were leaned on by their organisations not to talk down the banks [and the] property market because those organisations have a heavy reliance on property advertising".
In 2006 I interviewed dozens of journalists about The Irish Timesat that time. One of them, who was retired from that newspaper, said:
In the mid-1980s ... we had a series investigating the truth behind buying and selling property. Can you imagine that now?
That was in 2006. Now, the idea that certain parts of the Irish newspaper industry were professionally compromised territory was already in the air as early as the 1980s. The former business editor from Independent Newspapers, cited in that same research that we have discussed, and to whom one of the Deputies has already referred, recalled a lunch from that period where journalists and stockbrokers gathered to mark the appointment of a new president to the Irish Stock Exchange. The journalist recalled the event to a researcher many years later. He stated:
The lunch went well and all the proprieties were observed, until, during the port, the topic of mutual dependence came up in the conversation. "What do you mean mutual?" a rubicund and slightly tipsy broker ventured. "The business pages are ours. We own them."
The editor continued his recollection:
Trudging back to the office, however, I admit an icy feeling was coursing through my veins. Maybe, the chap with the English public school accent was right. He was implying that we [journalists] were lazy, dependent and largely uncritical. More chillingly still, maybe our employers (who shared the same gentlemen's clubs with the brokers) were happy with such an arrangement.
That was in the 1980s. By the time of the Celtic tiger, this compromised turf of business and financial journalism had expanded many times over, both in the volume of pages produced and in the number of journalists employed. In that research cited earlier, the author summarised the views of several of the Irish financial journalists whom they interviewed, and this is an extensive quote from that research:
According to journalist F, because of the need for regular contact with financial sources, "some journalists are reluctant to be critical of companies because they fear they will not get information or access in the future". Journalist E ... believed that some journalists had become "far too close to their sources": They viewed them as friends and allies and essentially became advocates for them. Their approach was justified editorially because many developers and bankers limited access to such an extent that it became seen to be better to write soft stories about them than to lose access. Extremely soft stories would also be run to gain access too ... Journalist B criticised daily financial journalism for being "almost entirely press release and stock exchange disclosure based[.]" ...
The report continues: "... Journalist F noted [that] it was "well known that some PR companies try to bully journalists by cutting off access or excluding journalists from briefings".
The sort of ambivalence that this engenders about telling good tough stories while maintaining source relationships is not unique to financial or property journalism; it is present throughout journalism. However, as the role and prominence of those sorts of journalism increased in the 1990s and early 2000s, their particular compromises of professionalism played a proportionately bigger role in newspaper coverage of these important areas of the economy and society. Their growth was not inevitable, nor was it unique to Ireland. It was part of an international development in the newspaper industry that sought to diversify papers' content and appearance to make them more attractive to advertisers and, to a lesser extent, to readers. In the United States in the late 1980s and early 1990s this came to be known as "total newspapering", with a de-emphasis on news and - this is the "total" part - an effort to break down the traditional barriers between editorial and commercial considerations. A study of this phenomenon, also known as "market-led journalism," in the 1990s carried the cautionary title, "When MBAs rule the newsroom." This was already worrying journalists cited in British research during this decade:
Among journalists there are fears that the delicate balance between the self-interest of capitalist media owners and the "public interest" motives of journalism has been upset ... Some journalists have come to believe that the news is being stolen from them.
This market orientation does not express itself merely in the growth of financial and property journalism but in the explosion of entertainment, lifestyle and consumer-oriented sections and stories. As one scholar summarises it - again, I quote this from Hanitzsch:
When market orientation is high, journalism gives emphasis to what the audiences want to know at the expense of what they should know ... Audiences are not addressed in their role as citizens concerned with the social and political issues of the day but in their role as clients and consumers...
These developments in newspapers did not happen by accident or in isolation. They were a vital cultural component of the larger global development of politics and economics over the last several decades that we have come to call neoliberalism. The great historian and student of that phenomenon David Harvey writes: "Neoliberalization required both politically and economically the construction of a neoliberal market-based populist culture of differentiated consumerism and individual libertarianism."
It is important to note that I do not believe we should blame most journalists either individually or collectively for this situation. Nor have journalists been its obvious beneficiaries. Even in Ireland, where the booming economy helped newspaper circulation and profitability to remain healthy past 2000, a journalistic culture of increased workloads, casualisation, rapidly changing technological expectations and declining real rates of pay was in place throughout the industry even before the wider bust of 2007-08. When I did that series of interviews with newspaper journalists in 2006, many of them told me that their capacity to engage in critical scrutiny of Government and business was overwhelmed by the day-to-day pressures of filling ever more space in print and online.
The job of careful consideration and analysis of events was largely left to a small coterie of editors and senior political writers who were generally believed to have risen to those posts through a combination of caution and conservatism. As research outside Ireland has also suggested, journalists who continued to feel that they should be doing hard-hitting, critical scrutiny of powerful institutions felt disempowered from doing so. It is not surprising that a reputable transnational "scorecard" of journalism's coverage of the financial crisis found that in Ireland, most stories were episodic and short of analysis. These conditions have, if anything, deteriorated further in the intervening years of collapsing circulation and desperate digitisation.
Such conditions also provide the context for the increasing power of the public relations industry. As noted above, the capacity of PR officers to give and withhold the information that hard-pressed journalists require in order to do their work gives them an inevitable influence over content to the benefit of their State and corporate clients. An even more insidious form of PR influence comes in the form of "flak", which is the negative attention and pressure that comes upon journalists when they attempt to report on sensitive stories. In theory, flak can come from any side of a story. In practice, most of it comes from the sides that can afford to generate it at a volume and with a social standing that catches the ear of editors.
For reasons of space, and because it was not a specific part of the brief, I have not greatly addressed the question of media ownership in this statement, although I am happy to do so hereafter. The enormously high concentration of media ownership in this State is, of course, a major danger and fundamental public concern. However, ownership of media cannot tell the whole story about it. The Irish Timesis owned by a trust but has not been immune to the commercial pressures discussed here. RTE, which is genuinely dominant media outlet in this State, is owned by the people of Ireland but its role in broadcasting non-news and current affairs based "property porn" in the Celtic tiger years certainly bears scrutiny. It is worth saying that both RTE and newspapers did break many scandals although they were less likely to raise systematic questions about the state of the economy and the housing market.
The committee has asked me to address potential conflicts of interests among media organisations. Based on much of what I have said here, it is tempting to conclude that there was no real conflict of interest at all but rather a congruence of interests between media organisations and the developers and financiers who were advertising with them cashing in handsomely on a speculative bubble. While there would be some truth in such a conclusion, it would also be excessively simplistic because journalists and the organisations that employ them do also have an interest in producing strong stories that challenge conventional thinking, afflict the comfortable and comfort the afflicted. Indeed, nothing in what I have said here should be interpreted to mean that they do not sometimes do precisely that. The purpose of this analysis is not moral condemnation but to understand why, in the specific context of Celtic tiger Ireland and also beyond that context, the structural congruence might have been stronger and more influential than the sense of ethical conflict. While much of the professional practice of journalism is conducted with an acute awareness of "how it should be done", nonetheless, a host of other influences determine the shape and content of the journalistic product leading to biases in favour of, for example, "talking up" the economy and the market, home ownership, property investment and the soft landing. How this happens is complex and contingent located where newspapers find themselves - at an intersection of daily events, longer term history, commerce, design, technology, routine, process, pressure and, not least, economic and political power. This intersection is traversed by the workers in a newspaper on a daily basis.
Ciarán Lynch (Cork South Central, Labour)
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I have a few questions. What does Mr. Browne mean by "property porn"?
Mr. Harry Browne:
By "property porn", I mean the programmes and feature articles that were part of the life of magazines and newspapers here that encouraged readers to constantly think about going higher and higher up the ladder - to think about getting that bigger house and how they were going to decorate their apartment in Bulgaria. It is a widely used term that refers to that sort of programming and editorial material.
Ciarán Lynch (Cork South Central, Labour)
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Could Mr. Browne briefly outline the principles of professionalism attributed to journalism generally that he discussed in his opening statement and the National Union of Journalists code of conduct? Are they one and the same thing or are they separate? What sectors of the media do they cover? Do they just cover print, radio and television or do they include online media coverage? Could Mr. Browne explain how journalism is regulated as a profession in Ireland and the role of the Press Council of Ireland and the Office of the Press Ombudsman in that regard? Are they bound by the same regulatory codes and standards?
Mr. Harry Browne:
I will do my best to answer that question. In the absence of other clear professional markers, a code of conduct - an idea that journalists are truth seekers who try to be impartial and who challenge powerful institutions - defines journalism, at least as far as many journalists are concerned. In another sense, it could be argued that some of that is also window dressing - a kind of high language that masks the chaotic reality of producing programmes and publications on a daily basis. In other words, it could be argued that it is a myth or a series of myths that does not necessarily have a lot to do with the day-to-day publishing of a website or magazine.
As the Chairman suggests, they are in some sense codified. The National Union of Journalists code of conduct is guidance for its members. The code of practice of the Press Council of Ireland has somewhat more weight. It is a voluntary code publications are encouraged to sign up and give their commitment to and encompasses fairness, balance, respect of the rights of the people about whom they write and accuracy. The Office of the Press Ombudsman and the Press Council were set up primarily by the newspaper industry in some ways to fend off more statutory regulation that was threatened to some extent by these Houses. They are essentially voluntary codes, although there is some statutory backup for the Press Council. In effect, this is an element of protection for communications with the Press Council. They have fairly weak enforcement methods. Publications are not obliged to sign up to them. In order to take a complaint to the Office of the Press Ombudsman, people need a certain standing in respect of the story. They cannot simply complain that a story is inaccurate. They must complain that it is inaccurate and that its inaccuracy affects them. Property editorial and journalism that is hard to distinguish from advertising, which were discussed this morning, do not really come up in respect of the Office of the Press Council.
Broadcasting is a very different story. The Broadcasting Authority of Ireland, BAI, has real and significant powers in terms of the regulation of RTE and the private broadcasting sector and has a code of fairness, objectivity and impartiality in news and current affairs which it is often quite aggressive in enforcing. Broadcasters are generally quite knowledgeable about the requirements they have under that code. The code relating to the press is a far less powerful instrument.
My interest is less in these assertions than in structural facts. Just as light-touch regulation in the economy was not a mistake but was built into the system of breaks and incentives that were established here to attract and reward capital, light-touch journalism to some extent was a predictable feature of the changing face of the industry since the 1980s. It does not require a conspiracy to undermine the standards codified in some of those documents we have talked about - just a set of institutional changes that made those standards less significant in many areas of journalistic work.
Marc MacSharry (Fianna Fail)
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I thank Mr. Browne for coming before the committee. I would like to talk about his time at The Irish Times. What were the themes and areas he wrote about while he worked there?
Mr. Harry Browne:
How much time do we have? I covered a lot of areas. I was an editor in the education section for a large portion of my time there. I worked in the newsroom doing general reporting for a time. I did a lot of feature writing and arts coverage. I reviewed film, theatre and books. I was the radio critic and had a column for many years. I also edited a media studies page aimed at secondary school students.
Marc MacSharry (Fianna Fail)
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Did Mr. Browne ever experience editorial interference?
Mr. Harry Browne:
Of course, that is part of the structure of any news organisation or indeed any organisation. When one says editorial interference, meaning did anybody in a position of power in the organisation ever suggest that I should or should not do something in a certain way - yes of course.
Marc MacSharry (Fianna Fail)
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Apart from guidance and mentoring as I am sure any boss would provide, was there ever a line the witness took which he was advised to adjust, for any reasons which were unusual?
Mr. Harry Browne:
Touching a little on the ownership question in a slightly askew way - we have already said that The Irish Timesis owned by a trust but the major rival to The Irish Timesis owned by a large organisation. On the media studies page which I have already mentioned, we did a full page exploration for young people on the issue of media ownership. We had a large photograph of the proprietor of the rival organisation in question. That particular page and some of its statements came under attack in that rival publication. One of The Irish Timeseditors came to me the following week after that and said "Maybe it is a good idea to not pick a fight with that particular organisation in that particular way. Carry on but let us not go there in terms or raising questions about ownership of a rival organisation."
Marc MacSharry (Fianna Fail)
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Did the witness ever have any experience of corporate interference where a particular line was adverse to advertisers? Did an editor ever ask him to be more commercially sensitive?
Mr. Harry Browne:
No. I cannot say that I did. I was editor of a supplement called Education and Living. Its purpose was to cover the education sector. There was a long-term hope in the paper that it would attract advertising, particularly recruitment advertising for the education sector. Occasionally there were discussions about finding ways to do stories which would make the supplement fit the needs of the sector, so it would understand that while it is good to advertise in Friday's business section, they should also advertise in Tuesday's education section. The myth of the firm wall between editorial and advertising, that nobody from one side ever looks into the other side, is just that, a myth. The discussions certainly took place, but I cannot say that it ever impinged directly on my practice except for the example I give.
Marc MacSharry (Fianna Fail)
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Apart from his own personal writings, would the witness have been aware, in his time with The Irish Timesor in his research since, of any situation where there was a threat to withdraw advertising or a threat carried out, because of an editorial line pursued?
Mr. Harry Browne:
There was a case I am familiar with, and which I have reported on since I left The Irish Times, of a senior journalist within a newspaper that no longer exists, who was relieved of his position after a piece ran under his jurisdiction which was lightly mocking of a prominent property advertiser. That advertiser approached the managing director of the newspaper directly. Consequently, the journalist's employment was terminated within 24 hours. Examples of this are not copious. For the reasons discussed previously, journalists usually understand the lines that they need to be careful about crossing, but that is a good example of someone who crossed the line and paid with his job.
Marc MacSharry (Fianna Fail)
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It is certainly a relevant example. We cannot mention names or organisations but can the witness say if that happened in the property boom era we are looking at?
Marc MacSharry (Fianna Fail)
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That is very good. The Chair mentioned oversight and the Press Council and codes of conduct. In Mr. Browne's view, are they sufficient or are they insufficient in practice?
Marc MacSharry (Fianna Fail)
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That is fine. Do the codes of conduct which exist between the National Union of Journalists and papers such as The Irish Times, which I believe has its own internal code, govern things like gifts or junkets?
Mr. Harry Browne:
That is a very good question. At times they have and at times the guidelines tend to fade. For most of the time I was in The Irish Timeswe had a very active ethics committee comprising editorial staff from the paper, and a close eye was kept on who was paying for trips and who was paying for lunch. There was a strong feeling that journalists should pay their own way or they should not take part at all in certain activities with potential sources or potential subjects or stories. I know that some newspapers continued to try and hold the line on that sort of activity. To be honest, the overwhelming practice in the industry is fairly lax in that respect, whether or not there are written codes in place that suggest it. The code of practice of the Press Council of Ireland does not make specific reference to it.
Marc MacSharry (Fianna Fail)
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Without mentioning names or organisations, would the witness have been aware, in his own career, of the bestowing of a gift, tickets for the Champions League for example?
Marc MacSharry (Fianna Fail)
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Property interests? Does the witness mean giving property?
Marc MacSharry (Fianna Fail)
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I do not want to misunderstand the witness, and I know we cannot talk about names and I will not, but is the witness saying that property was given to somebody?
Marc MacSharry (Fianna Fail)
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We are not talking tickets to a match now. Are we talking bricks and mortar?
Marc MacSharry (Fianna Fail)
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In the experience of the witness, was there a direct correlation between that instance and maybe positive writings?
Ciarán Lynch (Cork South Central, Labour)
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You are into specifics now.
Ciarán Lynch (Cork South Central, Labour)
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You could be talking adversely now.
Mr. Harry Browne:
I would prefer not to make a statement along those lines. I believe it is fair to say that the majority of journalists working in the property area would not be engaged in anything remotely resembling corrupt practices. Conflict rarely arises in the relationship between property developers, estate agents and the journalists working in those areas. There is not really any need for the showering of gifts. There is a shared interest in property journalism as traditionally understood in the property supplements. There is a shared interest in the promotion of property sales. I believe that in some respects, property journalism sometimes gets bashed a little too hard in these discussions. It is a genre in itself and in some ways can feature some of the most beautiful writing in journalism. Most readers understand what property journalism is and can see it for what it is.
My concern about property supplements is not so much the journalism that was in them, or the relationships that existed between individual journalists and the interests represented there, but the insidious effect their very existence had on larger aspects of newspapers. For example, it is one thing to have property supplements saying that one should buy a beautiful home in Ballsbridge, but it is another thing to have the business advice column treating homes and houses as just another asset class that people are invited to invest in. I believe in some ways that is more insidious.
Marc MacSharry (Fianna Fail)
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In Mr. Browne's experience, is there a demonstrable correlation between, and are there instances of, positive writings and the bestowing of gifts?
Mr. Harry Browne:
It is a kind of virtuous circle. In the fields of fashion, property and certain aspects of business coverage, there is a kind of routine, low-level bestowal of gifts.
There is a famous quote about journalism which I can never remember precisely, to the effect of why would one bother bribing a journalist when one sees how easy it is to get them to write exactly what one wants for free. That characterises the relationship between business interests and journalists much more clearly for me than any notion that there is a sort of corruption even at a low level.
Marc MacSharry (Fianna Fail)
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Does Mr. Browne think there were instances?
Mr. Harry Browne:
Yes. As I was saying, the correlation is a sort of virtuous circle; that the journalists who are known to write nice things were invited along and they might be given a sample product, a nice lunch or whatever. One did not have to be doing the journalism as a direct response to the lovely dessert one got and the delicious wine that accompanied it, but one might have been getting the dessert wine because of the lovely coverage one had been giving to date.
Marc MacSharry (Fianna Fail)
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In terms of supplements in newspapers, for example, property supplements - Mr. Browne said he edited an education supplement - has it become the practice and is it a new phenomenon that supplements are about telling the story of the commercial interests relevant to that or is it a critique? Is it a cut and paste thing from the brochures of the corporates representing those sectors or is it an investigative critique suggesting that one should go to college A instead of college B because, buy house A instead of house B because, as perhaps it should be? Does Mr. Browne feel that it has become a scenario where it is cutting and pasting more from the brochures of the corporate world rather than the kind of professionalism in journalism that he referred to earlier?
Mr. Harry Browne:
Generalisations are always dangerous. Certainly, if one picks up a business supplement of an Irish newspaper one will find interesting critical analysis of the activities of business people, within a certain critical framework that I would describe as a narrow ideological one in the sense that we were discussing earlier with Dr. Mercille. There is real critical journalism in business and education supplements. We did not have a client base in the same way-----
Marc MacSharry (Fianna Fail)
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I am just finishing now.
Ciarán Lynch (Cork South Central, Labour)
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This will be Senator MacSharry's final question.
Marc MacSharry (Fianna Fail)
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Yes, it is. To stay with the education example, if college A had a full-page advertisement and college B had an eighth of a page, would the editorial reflect that these days?
Marc MacSharry (Fianna Fail)
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I use that as an analogy.
Mr. Harry Browne:
I think it would be fair to say that journalists would be critical, outside of the very explicit supplements like special reports on property that are designed to be ad magnets. Sometimes the distinction can be a little unclear. I picked up The Sunday Business Postthe other day. It is a wonderful newspaper, but as one flips through it there are certain pages that focus on this or that and one can see they have essentially been designed as ad bait. When one sees something like that, there is an element of a pretty direct correlation between the advertising and the editorial. On the other hand, I think that, by and large, for instance in a business supplement in the Irish Independentor The Irish Times, I do not think the journalists are looking down to the bottom of the page to see who made the larger ad in order to determine who gets the better coverage.
Ciarán Lynch (Cork South Central, Labour)
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Did Mr. Browne use the term "ad bait"?
Ciarán Lynch (Cork South Central, Labour)
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Could Mr. Browne explain what that is?
Ciarán Lynch (Cork South Central, Labour)
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We will rob it from Mr. Browne.
Mr. Harry Browne:
Sometimes it is called advertorial. One sets up a subject matter where one believes there will be a sectoral interest in advertising with that particular subject. Sometimes one does it in partnership with an outside institution. The phenomenon of special reports is essentially a series of opportunities by which newspapers and outside bodies form a kind of partnership to produce pages that will then attract advertising from particular sectors. It is very widespread and it is seen as somehow okay because it says in very small writing that it is a special report.
Ciarán Lynch (Cork South Central, Labour)
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Would an example of that be a national newspaper deciding to focus on a region such as west Kerry-----
Ciarán Lynch (Cork South Central, Labour)
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-----and all of a sudden then hotels, restaurants and bars in the area would advertise?
Mr. Harry Browne:
That is right. It is done specifically for that purpose. The great international example of a kind of scandal around this area was when The Los Angeles Timesin 1999 did a supplement with a big convention centre in Los Angeles, the Staples Center. It was a very large magazine of 168 pages. It was ad bait. It was designed to attract lots of advertisers to that supplement. That would have been fairly commonplace, but then it emerged that the profits from the sale of advertising for that supplement were actually being shared between the newspaper and the Staples Center itself. That was seen as somehow crossing an ethical line that the supplement itself did not.
Ciarán Lynch (Cork South Central, Labour)
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I thank Mr. Browne and call Senator Susan O'Keeffe.
Susan O'Keeffe (Labour)
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I ask Mr. Browne to forgive my voice as my throat is a bit dry. On page 2 of his statement, Mr. Browne talks about the print and broadcast media ignoring and marginalising scepticism about the property bubble and lending practices of financial institutions. Is he able to tell us a little bit more about that, because it is very specific and they are quite strong terms?
Mr. Harry Browne:
Yes, I think to some extent this subject was ventilated a bit in the earlier session as well about examples of really suppressing or ignoring. I have not done the research the previous witness has done in this area so I will be speaking more in generalities. I believe that journalistic professionalism in its purest version would call journalists not only to say, well, what does the Government say or what does the leading expert in the leading Irish university department have to say on this topic. I would say that real journalism means that one goes and finds the dissident. One goes and finds the voices of those who are critical of the status quo.
The idea of journalism as a challenge to power can only happen if one is seeking out the expertise to challenge that power, and if one is seeking out the voices. Dr. Mercille has covered some of this ground. One had The Economistnot Red Peppersaying in 2002 that the Irish economy was clearly overheating and that there was a bubble in property here. One had, by and large, Irish journalists working in the area choosing not to make that the main topic of conversation on television programmes and in newspaper articles for as long as that bubble was to continue. To some extent I think the burden of proof is on the other side, if the Senator does not mind me saying so; that in effect journalistic institutions would need to show that they systematically sought critical voices and to amplify and understand those reputable voices, mostly from outside the country, that were raising these fundamental questions about the state of the economy. I am not necessarily talking about who got an article on their desk and said, "No we are not taking that, it is too critical of the economy". I am talking about what I think is a fundamental journalistic duty, which is always to look for the other voice, the other perspective.
Susan O'Keeffe (Labour)
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Just to be clear, is Mr. Browne saying in that period of time that we are discussing, that there was not enough of what he described as real journalism?
Susan O'Keeffe (Labour)
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Indeed, Mr. Browne referred in his submission to, "Even if you worked in the niches where full-blown professionalism still held sway (the journalists who filled news pages and provided political coverage, for example)". Is Mr. Browne making a difference between the full-blown professionalism of those journalists and the sort of journalists who were writing on the property pages, or am I misunderstanding him?
Mr. Harry Browne:
No, Senator O'Keeffe is understanding my distinction. What I am saying is that even in those areas where one was not under the same direct commercial pressures or there was not the same expectation, for instance as there would be if one was being profiled in the business supplement of a major Irish newspaper, one can usually be pretty sure that it will be a nice, soft piece. That was certainly true, but probably a little less true since the collapse. Maybe we will get to that. It was certainly true during the time of the Celtic tiger.
What I am saying is that in addition to there being areas of the paper that did not come under the same sorts of commercial pressures, the people who worked in those areas none the less would get the message that those commercial sections put out. We may talk a little bit about how much money those sections were actually worth, but they were very significant. We were told repeatedly that those sections paid the bills in a newspaper.
V00100 type: 14 -->One comes to understand that it is where interests lie. That is not to say, of course, that political journalism is somehow immune to the same kind of source relationships and sensitivities that business or property journalism has. I do not want to come to Leinster House and pretend it is a big revelation that sometimes journalists are given a story in exchange for soft coverage. It is something I bet happens around here sometimes. That is the distinction I was making.
Susan O'Keeffe (Labour)
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When media organisations can point to examples where they published a so-called contrarian view, am I correct in understanding that this was not enough? If somebody came up with a contrarian view, would better journalism have pursued a more contrarian view or to see if the person was correct in what is put out there?
Susan O'Keeffe (Labour)
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As Mr. Browne was working as a journalist in that environment, what signal was sent out when two of the major newspapers bought property websites?
Mr. Harry Browne:
I had left The Irish Timesand was working as an academic by the time those purchases occurred. As I indicated in my opening statement, that signalled that this would be the core business. To some extent, that is not unreasonable as a suggestion. The main revenue source for newspapers up until very recently has been advertising, and within the advertising spend, approximately two thirds was from recruitment and property. They were roughly equally balanced, as I understand it. It was clear that by 2005 or 2006, newspapers were having trouble getting into this new online area. The Competition Authority had no problem with The Irish Timestaking myhome.ieas there was no competition issue because the newspaper had failed to bring its role of advertising property through print into the online sphere. In effect, the signal was just an amplification of the signal from a 48-page property supplement, which was in evidence since the late 1990s. That is fundamental to how those newspapers survive economically.
Susan O'Keeffe (Labour)
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Mr. Browne mentioned "flak", or the insidious form of public relations, PR, influence. Will he draw that out? Many people listening and watching would not understand the relationship here, where the public relations person interacts between journalist and client. I have an understanding of it and I have experienced that flak. Perhaps it would be useful to explain that a little.
Mr. Harry Browne:
Flak, of course, does not have to come from a PR person and can come directly from an organisation or individual that feels aggrieved or potentially aggrieved by a particular line of questioning or story. PR does the flak for a person and it is part of the job. When an organisation employs a PR person, it is not just to produce press releases, organise briefings or take journalists to lunch where necessary. It is also in the expectation that where there is negative coverage or potential for negative coverage, the PR person will work to fend it off, minimise it or block it if possible. This might entail telling an editor it is not a good idea. An issue I have experienced personally and which Deputy Clare Daly has raised in the Dáil relates to the BBC World Service doing a short item about U2's tax affairs and the perception of that in Ireland. I have written a book about one of the members.
Ciarán Lynch (Cork South Central, Labour)
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I have enough on my plate with the banking inquiry without getting into the pop world.
Susan O'Keeffe (Labour)
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In the witness's experience, was it the case that there were different levels of PR behaviour? For example, were some PR organisations or companies better at that kind of activity, were some less good and were some known for that activity? Is that not the case?
Mr. Harry Browne:
I am sure that is the case but it would be beyond my specific experience to discuss that. The PR people I dealt with were great and it would be a real slur against public relations to suggest that somehow it is the opposite of journalism, the evil empire or the dark side. I know that on a Thursday afternoon, when I could really do with a photograph for page three of my supplement, there were a couple of PR companies that would be pretty good at giving me a call and saying there was a nice story and a picture that could probably be used. For the most part, PR people do their job well when they understand how journalists need to do their job. There may be insidious behaviour, with information being fed on behalf of a corporate client, but in some respects it was not a destructive force that prevented me from doing stories that flak has potential to do.
Susan O'Keeffe (Labour)
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Mr. Browne told us the story in which he stated "maybe our employers, who shared the same gentleman's clubs with brokers, were happy with such an arrangement". Are such personal corporate connections relevant to people understanding the role of the media?
Mr. Harry Browne:
I was thinking about this earlier this morning when we discussed the question of who sits on the boards of different media organisations. Most journalists I know are pretty ignorant about who sits on the board of their organisations. The question of what kinds of stories are written is mostly connected with whether the editor will go for that or whether a different editor should be spoken to. These are the normal workplace relationships. That kind of high-level stuff is not what may be encountered.
Susan O'Keeffe (Labour)
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The editor might encounter it.
Mr. Harry Browne:
Exactly, and the editor might in turn reward journalists, promote them or look favourably on the people who do what conforms to the interests of the people in that social circle. That can involve small favours of reviewing so-and-so's book favourably because she regularly has lunch with the editor's brother. That sort of issue always gets talked about.
Susan O'Keeffe (Labour)
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The people watching and listening may not be aware of that. Is the witness generalising or speaking from his own knowledge?
Mr. Harry Browne:
I am absolutely speaking from my own knowledge but I am by no means suggesting that it is the overall and overwhelming determinant of the content of newspapers. It is one element that can sometimes arise. In the course of 12 years at The Irish Times, I may have heard a conversation along those lines 12 times. In none of those cases did I regard the demand being made as particularly onerous or problematic. Rather, it was one which flowed naturally enough from a set of relationships among elites, as we mentioned earlier. It was understood on those rare occasions that part of our job was to occasionally directly serve those interests when they were brought to our attention. The more insidious part is the extent to which we did not know we were being asked to serve particular interests but our work was being guided in ways that served those interests nonetheless.
Susan O'Keeffe (Labour)
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Is that effectively what happened?
Susan O'Keeffe (Labour)
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The witness has been inside and outside as an academic and practitioner. How would he look back at that period and judge whether the media has served us well as members of the public in these matters?
Mr. Harry Browne:
I am glad to bring it back to these matters. I apologise for drifting into Bono and other issues. My overall assessment is made in the opening statement. I reiterate that we should distinguish between the interests of media institutions and those interests, including commercial interests, that we have discussed, as compared with the interests of journalism. It is possible, although slightly romantic, to make a distinction as to what we do as journalists. I have done my best journalism in the 13 years since I stopped working full-time within a media institution.
I think we can say that it is possible to do journalism despite the larger interests of those organisations and that we, as journalists, do our best journalism when we are not worried about those interests and when the institutions make space for us to do that work.
Ciarán Lynch (Cork South Central, Labour)
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Thank you very much Mr. Browne, and thank you for returning back on that U2 thing because we would like to find out what we are looking for rather than going into that area.
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I welcome Mr. Browne. I have a couple of questions. On page 5, Mr. Browne briefly refers to ownership issues in the media in general and media outlets, and he has referred to the fact that he did not go into any detail on it, but does he believe that ownership factors had an impact on the coverage or lack of coverage of the issues that were prominent before the housing bubble came to its ultimate collapse?
Mr. Harry Browne:
My view, and it is not an especially well-informed one, would be that the direct impact of ownership in this particular area would be very difficult to identify. In other words, the wider interests of the individuals and companies that owned major media outlets in the State are not necessarily easily made congruent with those of the property industry. We did not have large property developers who owned newspapers. Anglo Irish Bank, to name one randomly selected institution, was not a major shareholder in any of those companies, which is not to contradict the point I made earlier about the basic structural relationship that arises from the advertising that that sector brought to bear in property and also in recruitment. The financial sector was a huge source of funds in recruitment advertising in newspapers, so I think that there again remains that structural question but it is not a direct consequence of the specific ownership of any specific media company.
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I was going to ask Mr. Browne about property porn, that quote as well from page 5. Is Mr. Browne stating there that RTE had a particular agenda in running those particular programmes that he referenced or that they were just reflecting the kind of wider view of the public at the time of interest in property-related matters?
Mr. Harry Browne:
That is a very good question and I think that while RTE is not entirely immune to commercial considerations, it clearly is a dual-funded broadcaster and it gets considerable financing from advertising. Some of those programmes would have got sponsorship from building societies and things like that so there would have been some direct agenda, yes, an agenda that matched up advertising with content, in those areas, which were non-news areas, non-current affairs areas. I am not suggesting that RTE invented that agenda particularly for commercial purposes. As the Deputy suggests, it was part of a wider cultural phenomenon and one that arose directly from the economic interests of the institutions that were trying to encourage people to get on that ladder, keep buying, get on that ladder, keep buying, soft landing, etc.
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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My final question again relates to page 5 and I want to put a quote which Mr. Browne partially referenced earlier in another answer. He notes that PR officers have, "The capacity to give and withhold the information that hard-pressed journalists require in order to do their work gives them an inevitable influence over content, to the benefit of their state and corporate clients." Does Mr. Browne think that that power ever works in reverse in the sense that PR persons are reliant on the journalist to get their particular point of view across in a publication or in broadcast media?
Mr. Harry Browne:
I think I understand the Deputy's question. He is suggesting that, in a sense, the journalists can get more out of a PR because of what they have to offer, that, "No, you are going to have to give me more on that story, you are going to have to give me another angle, I need more information, because you are trying to get me to cover and I have potentially got three minutes on the news that I can do with this and if you want that three minutes you are going to have to give me more." Sure, of course, the relationship is clearly a two-way stream and, again, one does not have to go far beyond the precincts of these premises to understand how that kind of relationship can work. The PRs do not hold all the power.
There is a very good book about the recent history of American journalism by John Nichols and Robert McChesney called The Death and Life of American Journalism, I think, and it has a chart in the back that traces the employment in the PR industry and the employment in journalism from about 1980 to 2008. In 1980 the two bars are roughly equivalent. There are just about the same number of PRs working in America as there are journalists. As one moves through the 1980s and 1990s the PR bar keeps growing, the journalism bar wobbles and starts to shrink and by 2008 there are about three or four times as many PRs as journalists in the United States. That indicates to me a kind of a change in the ecology of this entire relationship and one in which the capacity of journalists to scrutinise the kind of information that is coming from this vast apparatus of public relations is weakened and the capacity of the PRs to kind of push information on journalists who have more and more that they have to try to deal with, contend with, and publish is strengthened. So although the Deputy is right in suggesting that the power clearly can work both ways and journalists do have what one might call currency in the transaction, they nonetheless find themselves, I think, increasingly on the less pleasant end of that transaction.
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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Is there not an overlap, or a huge overlap, anecdotally at least, between the PR-type role and the media-type role-----
Ciarán Lynch (Cork South Central, Labour)
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You are running out of time. This is your final question.
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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-----in terms of a movement of people back and forth?
Mr. Harry Browne:
Sure, a revolving door. There was a time when it would have been considered once one moved into PR there was no going back. I think nowadays most people who go into PR probably do not want to go back because the money in journalism is so much poorer than it is in public relations. Speaking as a journalist who sometimes writes press releases for causes and organisations that I support, I am delighted, as I am sure any of the committee members would be, when journalists cut and paste my press release and put it straight into the paper with somebody else's name on it. That is great but it is not very good for journalism.
Ciarán Lynch (Cork South Central, Labour)
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Thank you very much. Senator Sean Barrett has six minutes.
Sean Barrett (Independent)
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I welcome Mr. Browne. Did Mr. Browne ever come across in his work - because there are stories on this that have reached the committee - a fast track, certainly by two building societies, and perhaps banks, towards mortgages for journalists?
Sean Barrett (Independent)
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The section that Mr. Browne has on page 5 states, "Journalists who continued to feel that they should be doing hard-hitting, critical scrutiny of powerful institutions felt disempowered from doing so." Is that not just life? In all fields of activity one must have courage, one must have convictions, one will encounter obstacles. I know it is a wrong analogy but let us say that Kerry footballers and Kilkenny hurlers are not exactly waiting to hand over the titles next year, so are journalists being a bit self-pitying when they say things like that? Go on and do the story and stop worrying about who will not like it.
Mr. Harry Browne:
If who will not like it is the person who pays one's salary then one does have to be concerned and if one's salary is not, in fact, a salary at all but a daily shift rate that one hopes one will get again next week if one is invited back then, yes, one does have to be very concerned about who is going to like it. Essentially, the changing structure of journalistic employment means that it is more dangerous and difficult to try to do those sorts of things. The fact is that the journalists that I interviewed, many of whom were saying those sorts of things for that research in 2006, were for the most part staff journalists in national newspapers, so they would not have had quite the same pressures that I have just referred to but, nonetheless, would have felt the heavy hand of how many stories they have to file on a given day. One needs to file three times a day now with the online thing.
There is a sense that one can stand up for oneself. Hopefully, that is part of the ethics that journalists are supposed to carry into the field. However, the reality is, as in any institution, it is a risky proposition.
Sean Barrett (Independent)
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I would prefer Bob Woodward and Carl Bernstein who are also among Mr. Browne’s heroes.
Mr. Browne referred to the capacity of the public relations, PR, officers to give and withhold information that hard-pressed journalists require to do their work. He also referred to the growth of PR to being four times the number of journalists in the United States. I recall Mr. Browne’s distinguished predecessor, the late Paul Tansey, with whom I worked to reduce air fares in and out of this country. We regarded the PR outfits in the airlines as our enemies and were quite proud to treat them as such when we took them on. What has happened since in that now journalists reprint PR hand-outs as if they were real news?
Mr. Harry Browne:
I do it myself and have done it today but I am always suspicious of the line that in the old days we used to be so much better, hard-hitting and critical. The real change in the direction of the empowerment of PR is, as I outlined, the changing ecology of the information flow. PR is referred to as the enemy and there is talk of going to the dark side when journalists cross over to PR. It is one of the few acceptable ways within journalism for us to actually say we have this ethics element, we are not PR, we wear this badge called journalism which scrutinises information critically and just does not cut and paste it. Otherwise, journalists would sound self-righteous but at least we have PR to compare ourselves to. There is this very closely related industry that is somehow ethically different that we use as a way of flying our own flag.
The fact is that the access that PRs can control is very important to journalists. If one does not have that access and one’s rival in another publication does, then one’s editor will ask if one offended the PR. Some editors would be delighted one offended a potential source in some way and tell one to keep offending him. Other editors will say they would prefer if they had that story the other newspaper had.
Sean Barrett (Independent)
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Regarding the lunchtime booze incident that Mr. Browne described, are there not ethical rules that state a journalist should get the story on the new president of the Stock Exchange and not waste time eating and drinking with these guys?
Mr. Harry Browne:
What a shame it would be if there was never a chance to have lunch with sources.
We talked earlier about the existence or otherwise of ethics codes and their enforcement or otherwise in newspapers. At the same time, we are talking about human beings with relationships which are in some respects ongoing and necessarily have a social component. Again, I do not have to go far beyond this building to ratify that. The full quote from that lunchtime story includes a bit where the journalist said to the broker who claimed they own the business pages, that the hell they did. That was an instinctive pushback from the journalist at this bald assertion by the broker. It is possible to have an antagonistic challenging relationship with someone one must deal with regularly. It is difficult but it is possible.
Sean Barrett (Independent)
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I am glad Woodward and Bernstein did not want to have lunch with Richard Nixon and just did the story.
Pearse Doherty (Donegal South West, Sinn Fein)
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Is it correct Mr. Browne contributed to a book published in 2013 entitled Great Irish Reportageby John Horgan?
Pearse Doherty (Donegal South West, Sinn Fein)
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Michael Lewis was one of the contributors, the author of “When Irish Eyes are Crying” for Vanity Fair. Is Mr. Browne familiar with this piece?
Pearse Doherty (Donegal South West, Sinn Fein)
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In that piece, originally published in March 2011, he quoted Morgan Kelly extensively. Michael Lewis stated when Morgan Kelly submitted his now quite famous 2007 article which appeared in The Irish Timesin September of that year, he had also submitted it to another national newspaper and a Sunday national newspaper. One sat on it. As for the other, the editor wrote back to say he found the article offensive and would not publish it. What would lead an editor to make such a statement on an article like that?
Mr. Harry Browne:
My knowledge of that story of the rejection comes from the same source, namely, Michael Lewis’s article. I have no particular inside information about this. An editor would reject an article because of the overwhelming consensus among Irish elites in 2006 and 2007 - probably in some sense a stronger consensus in that period when things looked like they might be a little bit shaky - that we need to hold the line and not talk down the economy.
There is no question that newspaper editors have a keen sense of their responsibility. "Responsibility" is sometimes a dangerous word to use in journalism. The best journalism is often quite irresponsible, saying what needs to be said and finding truths that need to be told. If I were to put myself in the mindset of an editor who would reject that piece - I hope I would never have been that editor - I would have done so on the basis that it was irresponsible, undermining of the economy and in itself a potentially dangerous act to publish it. That is how I would imagine an editor would justify it to himself or herself. Of course, I am trying to put myself in a position. Clearly, we know it was one of the most important prescient pieces of journalism at the time.
Pearse Doherty (Donegal South West, Sinn Fein)
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Would an editor use the term “offensive”?
Mr. Harry Browne:
I can only speculate that offensive referred in a sense to the extent to which Professor Kelly’s critique was a critique of everyone who had failed to see what he could plainly see. Essentially, the article was politely saying how foolish everyone had been in not recognising the existence of this bubble. In a sense, it was a critique of a large swathe of professional and academic economics in Ireland and, of course, of the media for its insistence on not recognising what The Economisthad recognised many years earlier and what David McWilliams was writing.
Pearse Doherty (Donegal South West, Sinn Fein)
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The Vanity Fairarticle refers to a PR guy telephoning the head of a department in a university to write a learned attack on Morgan Kelly’s piece. From where would such a suggestion come?
Pearse Doherty (Donegal South West, Sinn Fein)
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The article states:
The public relations guy at [blank] called the head of the department of economics and asked him to find someone to write a learned attack on Kelly’s piece. (The department head refused.)
From where could that have possibly come? Is this a university protecting its own interests?
Mr. Harry Browne:
That comes from the fact that there were people within that university who were implicitly criticised by Kelly’s piece. It would be quite commonplace for PR people to be thinking about damage limitation, putting opposing voices up so that if someone on one’s side has been hit, one finds some way to hit back. It does not seem especially unusual to me.
Pearse Doherty (Donegal South West, Sinn Fein)
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In his opening statement, Mr. Browne said he interviewed dozens of journalists in 2006 about the direction of The Irish Times. Could he give the committee some details about those interviews and the findings?
Ciarán Lynch (Cork South Central, Labour)
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That is one more question.
Mr. Harry Browne:
It is not particularly relevant to the work of the committee, although it might be. I was doing a very long piece for The Dubliner about the political direction of The Irish Timesand the question of whether it had essentially moved to the right in the course of the years of the boom. In so far as it related to how that political orientation was related to its structural relationship with corporate interests, it is relevant. The general view of the people I interviewed inside and outside The Irish Timesis that there had been a perceptible move to the political right in the outlook of the paper during that time. The general view was that this largely reflected an entrenchment of the view of Irish political elites in a more conservative and neoliberal direction during the Celtic tiger period.
Michael McGrath (Cork South Central, Fianna Fail)
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Mr. Browne is very welcome and I thank him for his time. Does he think that the newspapers provided adequate space for contrarian views in the lead-up to the crisis? Does he think the coverage properly reflected the balance of views that were in society in terms of property and housing?
Mr. Harry Browne:
That is a two-part question. Did it reflect the balance of views that were available among the usual voices one would draw upon? The coverage probably did reflect that balance. Did it reflect contrarian views? No, it did not. This goes to the question of how it is that journalists measure what is a valid view to seek out and report. There has been some discussion here about the extent to which the economics profession called it or did not. I know economists who still argue about this quite a lot. I think I said earlier in response to Senator O'Keeffe that there is a duty to go beyond reflecting the views that are extant among the elite voices in society. I grew up in a liberation theology household in the US. My father, who had been a priest in New York, was always quoting the Conference of Latin American Bishops of 1968 which said that the Catholic Church should have a preferential option for the poor. In some respects, journalism should have a preferential option for the poor and in this case, for the marginalised and for the dissent. It should be looking for the voice that is challenging the elite perspectives. It should be seeking not just the educated views of economists, but the direct experience of people. Again, that is a romantic view of what journalism should be that is distinct from the interests of the institutions that largely sustain journalism. It is also one that should at least in part be a guide. In retrospect, it would have meant that Irish newspapers could be holding their heads up a little higher than they are able to do here this afternoon and tomorrow about how well they covered the underlying structural problems in the economy.
Michael McGrath (Cork South Central, Fianna Fail)
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Were contrarian voices knocking on the doors of the newspapers looking for space and coverage to articulate their views? Mr. Browne said he does not believe adequate expression was given to those contrarian views. Were they out there seeking an opportunity to be heard and were they not given the platform?
Mr. Harry Browne:
I am not in a position to say for sure that there were op-eds coming in that were being rejected. We know the example of Professor Morgan Kelly. This was a piece from a very senior and estimable academic that was nonetheless rejected on the grounds that it was dangerous and offensive. I go back to my point that newspapers should be actively seeking contrarian views but I think that the people who could have offered those views probably could have done better. People sometimes point to the ESRI reviews and say that if one reads them very carefully, one can see that they were calling the bubble. We should not have had to read them very carefully. They should have been calling it louder and should have been offering those op-eds to the newspapers.
Michael McGrath (Cork South Central, Fianna Fail)
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Does Mr. Browne think that the commercial interests media organisations had in the property sector through property advertisements influenced their editorial position?
Mr. Harry Browne:
Yes. I gave a one-word answer but it was in subtle ways that still need to be teased out by more research. Obviously, there is what a newspaper says in its editorial but there is also the kind of news it chooses to cover and the kind of voices it chooses to amplify. Those choices tended largely to reflect the structural relationship between the media organisations and those commercial sectors. Dr. Mercille has probably done more of the close research that bears that out. There is more to be done in that area.
Michael McGrath (Cork South Central, Fianna Fail)
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In his opening statement, Mr. Browne commented on the changing face of journalism and the pressures that are there now in terms of the emphasis on the volume of output and the speed of output given the strong online presence. To what extent does he believe that this takes away from the capacity of journalists to engage in critical analysis of stories and that the emphasis is on getting the story out there?
Mr. Harry Browne:
Hugely, there is good international scholarship on this that suggests that those kinds of pressures were being brought to bear while newspapers were still quite profitable and before there was an online presence to compete with. If one looks at the book I referred to earlier or Flat Earth Newsby Nick Davies, which is based on research from scholars from Cardiff University, there is a clear sense in which journalism has become more like what Nick Davies calls "churnalism" in recent years. I am always surprised by how much the public does not realise the extent of the crisis print journalism in particular finds itself in. The fall in circulation is only outstripped by the fall in advertising revenue. The Irish Timeshas wound down the pension plan so I will get something like 40% of the pension I was promised when I left the newspaper in 2002. The Irish Timeshas done this because of the trading situation in which it finds itself. We talk about newspapers being large companies. The Irish Timesis now quite a small company. The advertising revenue in all national newspapers in 2014 is less than half of what it was eight years ago and this is from digital as well from print. Digital advertising is still a relatively small proportion of that.
Kieran O'Donnell (Limerick City, Fine Gael)
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In his reply to one of the first questioners, Mr. Browne spoke about how a journalist had been demoted in the newspaper. I presume he was talking about The Irish Times.
Ciarán Lynch (Cork South Central, Labour)
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The Chair is in control here. Mr. Browne was very general so I ask the Deputy to bring himself to order. That is a leading question and it is the second time today I have picked the Deputy up on leading questions. If I hear a repetitive leading question, I will move on to the next questioner. The clock is running.
Kieran O'Donnell (Limerick City, Fine Gael)
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In what year did that particular incident happen?
Ciarán Lynch (Cork South Central, Labour)
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We are now moving into the specifics of this. That issue has been dealt with.
Kieran O'Donnell (Limerick City, Fine Gael)
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Did it send out a signal within the newspaper establishment that if someone steps outside the normal view, there would be consequences?
Mr. Harry Browne:
I do not want to get into the specifics of this case nor am I saying which organisation it took place in respect of my direct knowledge of the message that went through any organisation. There was a general feeling around the industry that these sorts of relationships should be monitored carefully.
Kieran O'Donnell (Limerick City, Fine Gael)
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In his opening statement, Mr. Browne that the acquisition byThe Irish Timesof myhome.iein 2006 indicated the extent to which the print industry entered the property sector. From his knowledge of and research into the particular issue, how was acquiring a property website at a time when the property market had virtually reached a peak and was on a downward trend viewed at the time in the industry and the publication itself?
I refer to the interlinks in the industry and the property sector.
Kieran O'Donnell (Limerick City, Fine Gael)
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I am asking Mr. Browne's view. What was the view generally?
Mr. Harry Browne:
I think there was some concern that this might have been unwise and that both the valuation and the sectoral move it represented was dangerous. However, there was also a sense that it was a fit and that there were obvious synergies to be had. In effect, The Irish Timesrepresented the pinnacle of the traditional print advertising for property and hoped to bring that reputation and revenue capacity onto a new platform. I cannot say I had a million conversations about in 2006 when it took place, but there was a mixed view. From journalists there was some concern in the sense that this was a non-editorial product being acquired. It is one thing to have a big property supplement. It is another to have a website which is, essentially, just the advertising part of a property supplement. It is not like buying a local newspaper, which The Irish Timeshad done, or buying a glossy magazine, which The Irish Timesdid. This was actually taking something which was really a non-editorial product.
Kieran O'Donnell (Limerick City, Fine Gael)
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Was it considered by the Competition Authority at the time?
Mr. Harry Browne:
There was a very quick summary decision by the Competition Authority. It did not raise any competition issues and the then Minister for Enterprise, Trade and Employment approved it. It did not go to a phase two process. It was dealt with very quickly. As I said earlier, the reason there was no competition issue was that the newspaper had not yet brought its role in print property advertising into the online sphere. Essentially, they were complementary rather than potentially competing areas.
Kieran O'Donnell (Limerick City, Fine Gael)
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In his research, did Mr. Browne have an opportunity to look at the growth in revenues vis-à-visadvertising, in particular property advertising and newspaper sales in various publications?
Kieran O'Donnell (Limerick City, Fine Gael)
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There are two things.
Ciarán Lynch (Cork South Central, Labour)
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A final question, Deputy.
Kieran O'Donnell (Limerick City, Fine Gael)
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What proportion of its income was from advertising and how much of that was property related? What impact does Mr. Browne believe that had on how the newspaper industry operated in terms of coverage?
Mr. Harry Browne:
Typically, for the larger newspapers in Ireland, advertising traditionally through the period of boom and for many years before that had been something like two thirds to 75% of the revenue stream of the newspapers. Fundamentally the business of newspapers is selling readers to advertisers and, to a smaller extent, selling newspapers to readers. In the memoir of a former editor of a national newspaper, he referred to research done in his newspaper and that two thirds of the advertising revenue was property and recruitment which were roughly equally spread. Recruitment is not to be overlooked and was a source of a vast area of relationships with the financial industry, in the same way that the property sections reflected relationships with estate agents. The recruitment sections, to a great extent, represented relationships with finance as well as with other industries.
For example, in 2001 there was a huge downturn in advertising revenue in newspapers, in particular The Irish Times, which was based fundamentally on a fall in recruitment rather than problems in the property market. If one breaks it down, two thirds plus of revenue in newspapers comes from advertising. Of that, two thirds comes from recruitment and property together. One gets a broad picture of the situation. If one looks at the steady rise of that through the boom and then the collapse since, one gets another sense of how important it has been to newspapers.
Michael D'Arcy (Fine Gael)
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Mr. Browne is very welcome. In his opening statement he said that the then The Irish Timeseditor Douglas Gageby stood up to them. What is his opinion on the subsequent editors?
Ciarán Lynch (Cork South Central, Labour)
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We are not looking for a value judgment of personalities here, Senator. You can talk about the general editorial position or management but we are not going into specifics at this stage of the inquiry.
Michael D'Arcy (Fine Gael)
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The question, Chairman, concerns Mr. Browne's view and opinion on whether subsequent editors stood up to them. I think it is a relevant question.
Ciarán Lynch (Cork South Central, Labour)
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I will give latitude a bit of latitude but I ask Mr. Browne to be measurable in his response.
Michael D'Arcy (Fine Gael)
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I ask for a general observation on The Irish Times.
Mr. Harry Browne:
A general observation. What the interviewee suggested - he was not off the record but I will refrain from mentioning his name - that the balance of forces within the newspaper was such that in the mid-1980s when he edited a critical series on property, the commercial side of the house could come in and say, "Don't do that. Why are you doing that?", and the editor would say: "This is our area." That hard wall is widely seen as having been, to a certain extent, breached in both directions.
One of Mr. Gageby's successors writes in his own memoirs that he sometimes regrets that he did not take more of an active role in the management side of the company, as opposed to just the editorial management of the newspaper. I mentioned the Los Angeles Timesearlier. When a new publisher came in there in the 1990s, he said he was going to take a bazooka to blow away the wall between commercial and editorial considerations. That was a more dramatic view of a kind of an idea that was widespread within the newspaper business at the time that said the editorial side has to think business, the business side has to think editorial and we are all in this together.
It was possible for a time in many national newspapers here for senior journalists to do an MBA and get funding from the newspaper to do it. In some respects, for people outside journalism that might seem perfectly normal. One is a manager within a company and one's company wants one to get a better qualification in management. From the point of view of a journalist, it is more problematic because an MBA is training in a certain kind of ideology as well as being training in the capacity to manage. That breach was much more widespread by the 1990s and beyond.
Michael D'Arcy (Fine Gael)
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Mr. Browne also states that in 2006 many of the journalists told him that their capacity to engage in critical scrutiny of Government and business was overwhelmed by the day-to-day pressures of filling ever more space in print and online. Has journalism been dumbed down?
Michael D'Arcy (Fine Gael)
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Mr. Browne was a working journalist. We have discussed influence, which may be too strong a word. I will use the term "coercion".
Ciarán Lynch (Cork South Central, Labour)
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That is even stronger. Can you come back?
Michael D'Arcy (Fine Gael)
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Wait until you hear the question. Can I ask Mr. Browne his view on the elite, to speak in very strong terms? On one occasion a very senior politician spoke about suicide. Can I ask Mr. Browne's view, as a practitioner and as somebody who is now an academic, how that influence or coercion impacts upon journalism?
Mr. Harry Browne:
It is a good question. It is almost a question about human psychology as much as it is about journalism, because at some level it seems to me that particular politician in question went too far. There was a gut reaction among a lot of people who said: "We are not going to let him say something like that. We are going to say the things." In other words, instead of the effect being that those people should all commit suicide if they are so negative about the economy and making people shut up, the effect was to make people think it was important to say something.
It is, perhaps, important to say something now, to be in solidarity with the people who are being accused of being depressing about the economy. There is not a simple answer in that regard. At the point of the unravelling of the crisis it probably had the effect of sparking more critical journalism rather than suppressing it.
Michael D'Arcy (Fine Gael)
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Was Mr. Browne ever approached by an advertiser who, rather than withdrawing advertising, was attempting to coerce publication of an article, with the potential to have advertising placed?
Ciarán Lynch (Cork South Central, Labour)
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Returning to the main terms of reference of the inquiry and some of the matters that have arisen, Mr. Browne used the term "light touch journalism" this morning.
Ciarán Lynch (Cork South Central, Labour)
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The term "light tight regulation" has been mentioned many times during the term of the inquiry. Taking the two terms together, has Mr. Browne in his experience as a journalist or from information available to him, ever come across gatherings or dinners hosted by the banking industry, which included members of the Central Bank, the Financial Regulator or officials or board members of same, at which it was stated that this was a manifestation of the light-touch regulation process?
Ciarán Lynch (Cork South Central, Labour)
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Fair enough.
Joe Higgins (Dublin West, Socialist Party)
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It is stated on page 4 of Mr. Browne's opening statement in relation to the role of journalists during the bubble that a journalistic culture of increased workloads, casualisation, rapidly changing technological expectations and declining real rates of pay was in place throughout the industry even before the wider bust of 2007 and 2008. Features such as casualisation, declining rates of pay, etc., in other areas of the economy were routinely referred to as a race to the bottom. In Mr. Browne's view was a race to the bottom being manifested within the media organisations during this period and, if so, how does this relate to how coverage of the bubble was treated?
Mr. Harry Browne:
I have spoken a little about what I think are some of the consequences of casualised work and the difficulties of reporting critical stories while on a shift rate. I think, however, what the Deputy is asking is if the media industry exemplifying some of the worst excesses of the neoliberal period, is in itself something that affects coverage.
Joe Higgins (Dublin West, Socialist Party)
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That is one aspect of it. The other aspect is the effect on journalists and what they produce.
Ciarán Lynch (Cork South Central, Labour)
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I ask members and the witness to check their mobile phones as somebody's phone is causing interference.
Mr. Harry Browne:
I have already outlined what I believe were the effects. Some journalists continued to do well throughout the period in question and to some extent have done well since. The fact that journalism is characterised by certain structural changes that in ways resemble other industries should in some ways be seen as an opportunity for journalists. I say that not as a booster. Journalists who know the world of casualised labour, the world of falling wages and the world of precariousness may be in a better position to write about those realms than are journalists who are comfortable professionals-----
Joe Higgins (Dublin West, Socialist Party)
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Would they not be in a more vulnerable position as well?
Mr. Harry Browne:
Yes. They are also in a more vulnerable position in so far as the institutions in which they might hope to earn a living writing about precariousness and low wages are themselves vulnerable because they have interest in maintaining their precarious position. As I said, I am by no means being a booster about it, it is a pretty terrible situation. I send graduates out into this world on a yearly basis and it upsets me greatly to do that.
Joe Higgins (Dublin West, Socialist Party)
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Does this not put those journalists in a position whereby they feel weaker in terms of standing up to an editor in relation to a particular story?
Joe Higgins (Dublin West, Socialist Party)
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Mr. Browne referred in his introduction to a development in the United States in the late 1990s which others have called total newspapering and described this as an effort to break down traditional barriers between editorial and commercial considerations, referring to an Underwood study and then to market-led journalism. What are the implications of this process for, for example, how the property bubble would be covered?
Mr. Harry Browne:
The practice of having supplements that exist effectively to attract advertising clearly comprises the traditional idea of editorial integrity in newspapers. The journalists who write for them could, if they were freelance journalists, be working on the property supplement one day and have to put on their ethical hat a little bit crooked because they would be aware of the need to report in a particular way for the property supplement. Without bashing them, because they did some beautiful writing, some of the masters of euphemism in property supplements are extraordinary literary achievements. The journalist would then have to straighten his or her hat again when required to work on the news pages. This sort of compromise on a daily or weekly basis among journalists is not something that can be sustained as an ethical stance or as a way of pursuing what is, I think, a vocation rather than only a trade. Absolutely, it has huge consequences.
Joe Higgins (Dublin West, Socialist Party)
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The role of the banking inquiry is, among other things, to examine cultural and other factors and practices that were evident pre the crisis and that led to the crisis. In Mr. Browne's experience and based on his academic studies, does the media bear no responsibility or some level of responsibility for the development of the bubble and the subsequent damage done?
Mr. Harry Browne:
In media studies, the question of what is the effect of certain kinds of coverage is a very controversial area. There is no sense in which scholars accept the notion that if one injects a 48-page property supplement into the blood stream of the readers they are all going to turn into mad property buyers. There is nothing as straightforward as that. There is no question that the property supplement was itself seen as an index of the boom, as was the case in regard to the recruitment supplements. It is impossible to gauge precisely the effects of the journalism. It would be ridiculous to suggest it had no effect whatsoever. It was a huge part of the cultural manifestation and cultural conversation that happened that had deeper structural economic roots.
Joe Higgins (Dublin West, Socialist Party)
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I thank Mr. Browne.
Eoghan Murphy (Dublin South East, Fine Gael)
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Following on from Deputy Higgins's last question, if we accept that ownership and sources of funding for media outlets had an unwanted impact on how the crisis was covered and on coverage pre-crisis and subsequently, what changes need to be made in terms of the funding structure and ownership of media, outside of things like philanthropy and so on?
Mr. Harry Browne:
I have done some critical scholarship about philanthropy for journalism. I have my own questions about philanthropic foundations and the agendas that they might bring in funding journalism. I do not see philanthropy as a cure all. The amount of money involved is nothing compared to what the market can bring or what the State can bring. Ultimately, what we want is a plural media. We want space for alternatives, something that brings us past mere professionalism and understands that journalism should be challenging and can be partisan and still be honest.
It seems to me that the distinction I was making earlier between journalism and the commercial institutions that support it is one that is worth pulling apart. I do not think we have to concede that, just because the institutions have these structural relationships to power, journalism itself is doomed to being dominated by stenography for the power.
It happens in many places around the world where media get public support. One does not have to look beyond Ireland, of course. The most important media organisation in this country is one that gets paid for out of the licence fee. That is a model that is in place in large parts of the world. It is the best media organisation in the country by some distance as well. It has many, many faults but it does an awful lot of things and it does a good 30% of them very well.
Ciarán Lynch (Cork South Central, Labour)
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We are broadcasting this live, so Mr. Browne can keep it up.
Ciarán Lynch (Cork South Central, Labour)
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I assume that we are 15% of the 30%.
Mr. Harry Browne:
I think it is really likely that we cannot rely on the private commercial institutions to do the job anymore because of the fundamental unravelling of the business model that has sustained them. Short of a perfect society, I think that some mix of market and public support is necessary and important. We see it in Finland, for example, and people are always citing Scandinavian examples. There are hundreds of euro per capita spent on direct and indirect subsidies to publications. So not only can we talk about licence fees to public broadcasters, we can talk about, as already exists in Ireland, lower tax rates for newspapers - VAT on papers is low here for example.
Eoghan Murphy (Dublin South East, Fine Gael)
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I am going to run out of time. As there is a commercial aspect to media in this country, do we need to introduce laws to protect ourselves from the negative influence of commercial interests? I am talking about media ownership concentration and concentration of advertising for a particular sector. Do we need to ban property supplements?
Eoghan Murphy (Dublin South East, Fine Gael)
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Are there ways we can protect both journalism as a profession and the public from negative commercial interests in the media?
Mr. Harry Browne:
There are ways. I grew up in the United States and the American in me is very resistant to ideas of state controls, even though the United States was one of the first countries to introduce subsidies for media and made it much easier to publish and distribute newspapers going back to the late 1700s and 1800s. I support those kinds of things, but on the idea that one would ban this or restrict that, I think I would prefer to see a situation where we are using carrots rather than sticks, where one incentivises non-profit news production, for example, with various kinds of breaks and various kinds of subsidies. We are a long way from having that discussion and obviously this is not exactly the forum for it. I think there are a lot of better ways to run a media system than the one that we have got at the moment.
Ciarán Lynch (Cork South Central, Labour)
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We will conclude. I will do summaries, but before doing that I will invite Senators MacSharry and O'Keeffe to ask closing questions.
Marc MacSharry (Fianna Fail)
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It is a two-part question. I again thank Mr. Browne. Earlier during my questioning he outlined an instance where somebody was given real estate for positive commentary. Did I understand him correctly in saying that?
In modern times raw news reportage has given way to views and opinion, which is in the period we are looking at here. In Mr. Browne's view, does it amount to cheerleading the property boom?
Mr. Harry Browne:
On the first point, the statement I made stands on the record.
On the second question, views and opinions are cheap to produce; that is the main thing about them. Some of the views and opinions may be quite critical of property booms and other aspects of neoliberal rule. It is not necessarily the case that it is all cheerleading.
Susan O'Keeffe (Labour)
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I have two questions. The first relates to Mr. Browne's reference to some research, stating that a reputable transnational "scorecard" of journalism's coverage of the financial crisis found that in Ireland, most stories were episodic and short of analysis. Does he have anything further to add to that?
Mr. Harry Browne:
Yes, "episodic" essentially means that it talks about what happens on the day instead of giving an analytical or thematic framework of understanding for them. To be honest, it characterises most coverage of most stories, partly because of the constraints and pressures we talked about earlier. It is one of the richest areas of study of journalism. It is one of the areas where we find that there is actually a difference in how people read and receive stories depending on whether they are given real analysis and thematic understanding or whether they are merely told what happened today.
This analysis was an article by a series of scholars who looked at the coverage of the crisis in many different countries and found that in Ireland and most other countries as well, the coverage was largely bitty. It was not to say it was all positive. Obviously - we have not really talked about this - the crisis really did bring about a huge swing to the negative pole in how journalism talked about the economy, talked about the banks and talked about the property market. However, it was without rich analysis. It was largely the latest emanation of crisis.
Susan O'Keeffe (Labour)
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We talked a lot about property. Was there any influence by senior politicians exercised over newspapers, over journalists, during the time Mr. Browne has been working and observing?
Mr. Harry Browne:
I was just a foot soldier in the world of journalism. I would not necessarily have been in on discussions with senior politicians. One would know that certain politicians had a good relationship with the political editor, the editor or whatever, but mostly I would consider that to be normal institutional relationships - exactly what one would expect from institutions that are important parts of the functioning of an information system in a society. Yes, senior politicians care what is in the newspaper; that is good.
Ciarán Lynch (Cork South Central, Labour)
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I thank Mr. Browne. I will not be pushing him to give "Yes" or "No" answers, but I want to bring proceedings to a conclusion. I ask him to answer the following questions succinctly. Was Ireland unique in the 2002 to 2007 period with regard to how the media covered growth in the property sector?
Ciarán Lynch (Cork South Central, Labour)
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When that period was over, from 2007-08 onwards, were the media coming out of that period ultimately beneficiaries or had they suffered losses as a result of that experience or their engagement with property?
Ciarán Lynch (Cork South Central, Labour)
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Is that damage financial or reputational?
Mr. Harry Browne:
Both, but I think that to some extent the lesson of the reputational damage was to say, "Well, we should beat up on ourselves for what we did during that period", but, as I think Dr. Mercille's research indicates, to essentially move into a new orthodoxy. The period since then has not necessarily been characterised by a really pluralistic critical journalism; it has just been characterised by a different orthodoxy.
Ciarán Lynch (Cork South Central, Labour)
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That leads me to the next area. Were particular spheres of media affected more than others, either commercially or reputationally in the aftermath?
Ciarán Lynch (Cork South Central, Labour)
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So Mr. Browne is not grading one over the other.
Ultimately, what lessons need to be learned? Deputy Eoghan Murphy referred to this in his closing question. Could this happen all over again in the financial sector? While that is a question for people who deal with regulation of bankers, given Mr. Browne's expertise in media I ask this. Are the media structured in a way that this whole thing could happen again and we would see these massive supplements, albeit maybe in a different technological format - online or whatever?
Mr. Harry Browne:
Yes, of course it can happen. I think that fundamentally if it did happen again, probably for better or worse the institutions we are talking about would be less important than they were in the period the committee is studying, but they could certainly continue to fall into many of the same traps because they continue to have many of the same structural relations to the industries and the sectors, and the interests that represent them.
Ciarán Lynch (Cork South Central, Labour)
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One of the jobs of this inquiry is not just to look at the past in terms of what we can learn from it but also to draw lessons from that going into the future. Is there any particular learning from this period that Mr. Browne thinks has not been acted upon or needs to be acted upon going into the future?
Mr. Harry Browne:
It depends on who can do this acting. That is what I would say. Certainly, as I said in answer to Deputy Murphy, I do not feel comfortable with suggesting that there is a new regulatory framework needed - in terms of a restrictive one.
Nor do I think the commercial media are currently in a position to reshape themselves somehow to avoid the pitfalls they came into before. It is all very well to ask what would be done in that respect but we are in our current situation. It is not a terribly good one for journalism.
Ciarán Lynch (Cork South Central, Labour)
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Is there anything Mr. Browne would like to add before we wrap up matters?
Ciarán Lynch (Cork South Central, Labour)
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Thank you very much for your participation in the inquiry today. The commentary has been very informative. It has been a valuable meeting that has added to our understanding of factors leading to the banking crisis in Ireland. With the permission of members, I propose to suspend the meeting until 2.45 p.m., at which time we will resume to speak with a delegation from the Irish Examiner. Is that agreed? Agreed.
Ciarán Lynch (Cork South Central, Labour)
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We are in public session. We will proceed with session three of today's hearings, which is a discussion with two representatives from the Irish Examiner- Mr. Tom Murphy, CEO, and Mr. Tim Vaughan, editor - about the role of the media during the property boom in the lead up to the banking crisis in the period 2002-07 and any changes of approach after the crisis. Mr. Murphy and Mr. Vaughan have specifically been invited to discuss the Irish Examiner's editorial policy on the economy and the property boom, and, separately, their newspaper's business model and sources of revenue, including that from the retail sector, in the period 2002-07.
Mr. Tim Vaughan is a European studies graduate of NIHE Limerick, now the University of Limerick, and has been a journalist for 28 years. He began his career with The Corkman and The Kerrymanbefore being invited to join the Cork Examinerin 1991. Four years later he was promoted to associate editor and in 2001 he was appointed editor of the newspaper. Mr. Tom Murphy is group chief executive of Landmark Media Investments Limited and chief executive of the Irish Examiner, a position he has held since March 2013. From June 2010 to March 2013 he was group chief executive of Thomas Crosbie Holdings Limited, and from October 2002 to June 2010 he was chief executive of the Irish Examiner. Mr. Vaughan and Mr. Murphy are very welcome before the inquiry.
Ciarán Lynch (Cork South Central, Labour)
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Before I begin, I wish to advise that, by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the Chairman to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and, as they have been informed previously, the committee is asking witnesses to refrain from discussing named individuals in this phase of the inquiry. Members are reminded of the long-standing ruling of the Chair to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable.
I invite Mr. Murphy and Mr. Vaughan to make their opening comments.
Mr. Tim Vaughan:
I thank the Chairman for the opportunity to address him and his colleagues today. I will deal with the issues I have been asked to address, with specific reference to the Irish Examiner and our editorial policy on the economy and the property boom from 2002 to 2007, as referred to in the invitation from the committee.
I would first like to give a brief introduction to the Irish Examiner. It is a broad-based mid-market newspaper, publishing six days a week, with an increasingly active online presence across many platforms. I have been editor since 2001. While we have a respected national profile, our circulation is significant in Cork and Munster, where we have the largest readership of any daily newspaper. My role as editor is to lead a great team who make it happen every day.
A trusted newspaper must inform honestly and accurately. It must ask questions and challenge where questions need to be asked and answers found. It must present a broad range of diverse opinion and it must know and engage with its readers. If it does all of these things successfully, it generates enough income to pay the wages of its employees, contributors, contractors, suppliers and shareholders. That income is derived almost exclusively from two revenue streams: the cover price of the newspaper, and advertising.
I turn now to the specific area the committee asked me to consider, our editorial policy on the economy and the property boom and the approach to reporting on the property market and the Irish economy. As far as the Irish Examineris concerned, during the period in question we approached reporting on the economy and the property market in the same way that we approach reporting across the broad spectrum of the newspaper. We endeavoured to ensure our reporting was accurate and reflected the facts. The newspaper reflected all shades of opinion during these years, including prominent warnings going back to 1999 and throughout the Celtic tiger era that the property boom could not last forever.
What our coverage did at the time was reflect the preoccupation with property in a country experiencing an unprecedented boom. We reported what was happening and what authoritative institutions such as the Central Bank, the Economic and Social Research Institute, the International Monetary Fund, the European Central Bank and the Organisation for Economic Co-operation and Development stated about what was happening.
No newspaper lives apart from its readers, and their preoccupation with and enjoyment of the financial benefits of that era were reflected in our columns. Nobody who lived through that period, proclaimed throughout the world by our political leaders as an economic miracle, was immune from the spirit of the time. It was the prevailing narrative of the political, banking and property establishment. At the time, we had little or no reason to believe that key figures in our financial regulatory infrastructure were not functioning as they should have been in the best interest of the State and its citizens, and nor was there a level of transparency around the regulatory process for the banking system that would have allowed us to access information that subsequently emerged after the crash, too late, when the damage was done. Believe me when I say that had I or any of my colleagues in the Irish Examinerbeen able to access that critical information about the real state of our financial institutions and their methods of operation in those years and months leading up to the bank guarantee, I would have published it. It would not have been enough to have been privy to that inside information; I would have had to be able to prove it in a court of a law. Publishing what one knows to be true does not mean one cannot be successfully sued for libel. That is a point worth remembering when people question why the media does not publish what the dogs in the street might know.
Turning to the property market specifically, aside from reporting property news and commentary in the main newspaper, we introduced a weekend section with a property element in the mid-1980s. This was a period of deep recession in Ireland and a world away from the property boom, but property editorial was of interest and was important to our readers, just as it is today. That weekend section also included the usual mix of features, including television highlights and generally softer-focus content suitable for relaxed reading at the weekend. In the mid-1990s, due to the increasing popularity of the sector and as the economy improved, the property element became a standalone publication, focusing on residential homes, which continues to this day. In 2001 we introduced a commercial property section for Thursdays.
The purpose of the weekend property magazine is to provide readers with factual information on property for sale throughout the country, but primarily in the Munster region. In essence, it is a mix of properties for sale, with a brief factual description, in addition to larger spreads for more distinctive and striking properties for sale that we think may be of interest to readers. It also has sections on interior design, home improvements, gardening, antiques, etc. It has been an important forum for informing readers of the types and costs of properties available for sale, along with additional advertising from furniture and home interior companies, DIY and gardening businesses, etc.
Advertising in the property section was an important and valued source of revenue during the Celtic tiger years - as it was before and still is - but it is important to stress that advertisers did not seek to influence the editorial policy of the newspaper, and the fact that such advertising was an important source of revenue certainly did not hinder our warnings over several years about the dangers of a financial crash. In my entire time as editor of this family-owned company, the owners never once sought to interfere editorially. The family has been publishing newspapers since the 1800s and I am in the privileged position of being the beneficiary of its strong belief in editorial independence. That is important in the context of what the committee is seeking to establish with regard to the media during the period in question.
During that time, our property-related coverage reported factual information such as rising property prices, ESRI and Central Bank reports, pronouncements of leaders in their fields and Government-related interventions in the property market. Although many of the articles published during this period mirrored the widely held view of the majority of commentators at the time - in particular, a prediction of a soft landing - it was not all one-way traffic. Many articles containing opinion contrary to the prevailing view of the property market were also published in our newspaper. As far back as 1999, we reported on spiralling house prices and warnings from the then Governor of the Central Bank, Maurice O’Connell, that banks were "lending too much money too easily". A year before Morgan Kelly warned in 2006 of an imminent crash, the historian Ryle Dwyer wrote a column for the Irish Examinerheadlined "Why the housing boom could collapse like a ton of bricks." In his article, he wrote "The threat posed ... is patently obvious, yet it is being largely ignored, even though it threatens the social, financial and political fabric of society." Warning consistently over many years, he drew parallels with the speculative property boom that caused the economic collapse of Japan. He further stated "Is anyone so foolish as to think that what happened in Japan couldn't happen here?". That was in February 2005, over three and a half years before the State’s guarantee of the banks and almost six years before the bailout by the troika. Between Maurice O’Connell’s warning in 1999 and Ryle Dwyer’s in 2005, we published many articles, including editorial commentary, which questioned the viability of the boom, and particularly the danger to the economy posed by the property bubble. In 2004, we asked whether the glowing economic predictions of the time were based on sound financial principles, on the speculation bubble or on overly optimistic aspirations. I have supplied the committee with some sample editorial coverage of these warnings over the years.
With regard to the contribution of the media to public understanding and debate around fiscal budgetary policies and their applications, in addressing this section I wish to restrict my response to the newspaper for which I have responsibility and knowledge rather than presenting a critique of the media generally. During the period covered here, the investigative eye of the newspaper was trained on those ultimately responsible for the fiscal and budgetary policies of the State, namely the Government. Critical analyses of the policies of the Government formed part of the opinion editorials of the Irish Examinerduring the property boom. As referred to earlier, the threats of rapidly increasing house prices and a failure to put on the brakes were published in the newspaper as early as 1999 and continued throughout the boom years. There was no change of editorial policy during those years. Our approach as a newspaper has been to accurately report the news and comment objectively on the facts as far as they were available to us. Alongside that, I continued our long-standing tradition of providing a platform to all shades of opinion, including those with which I might have strongly disagreed.
Much of the information on the causes of the crash that have subsequently come to light as a result of various reports and the work of this inquiry to date was not only not in the public domain in the lead up to the banking crisis but was inaccessible to us. Our reporting was influenced by the information available to us. We had articles, editorials, columnists and commentators who, as the Celtic tiger roared, argued, in effect, that it was out of control and would end in tears. They argued that there was something fundamentally wrong with the fact that somebody on a €40,000 salary was eligible for a €400,000 loan to buy a house. Nevertheless, the predominant public sentiment in political, financial and property circles was that at worst the boom was going to end with that oft-quoted soft landing. That predominant sentiment found its reflection in media coverage of the time in our newspaper and everywhere else.
A daily national newspaper such as ours is necessarily general in nature, with a mix of news, sport, business and features between its covers. We are not a Financial Timesor a Wall Street Journalstaffed by a big team of financial forensic experts. We are reliant on agents of the State to be competent, professional, open, honest and reliable in what they do and say, and then we report on that. Our reporting on the economy during the period in question was as balanced, diverse and well informed as was possible given the information available to us, which was not all of the information available to various agents of the State. If we were guilty of anything - and I believe we were - it is that we believed and accepted that institutions such as the financial regulatory authorities were doing their jobs and doing them competently, with due diligence, appropriate compliance policies and proper political and departmental oversight, all of which we believed were designed to ensure the stability of our economy. From what we know as a result of the Honohan, Regling-Watson and Nyberg reports and the contributions of others to this inquiry, it appears to be obvious that our trust in these various arms and agents of the State was, to say the least, misplaced.
I acknowledge that there was insufficient critique of the frequent claims that there would be no crash and our so-called economic miracle would continue to be an example to the world. We should have more rigorously challenged the predictions of analysts and economists, including those who contributed to our newspaper and those who had direct or indirect associations with financial institutions.
While this is an accusation that could be levelled at many editors and publishers throughout the world, much better resourced than my own organisation, it remains a matter of personal regret. That said, it is with the benefit of hindsight which has been conveniently available to an earlier witness, Dr. Julien Mercille, but not to those of us living and working here at the time. Even if we had been more questioning of the positive analysis and predictions for the economy and if we had even more contrarian voices to highlight, I doubt very much that it would have gone any meaningful way towards preventing the property bubble or the crash. We still would have been unable to find out the true state of banks and their own regulation and we would still have been faced with an alignment of authority in the form of the IMF, the ECB, the European Commission, the international credit agencies, the Taoiseach, the Minister for Finance, the Central Bank and the ESRI who were all of the view that our economic fundamentals were sound with the IMF giving Ireland a clean bill of health as late as 2006-2007. It is difficult to envisage how any media organisation could effectively challenge such a formidable consensus.
Ciarán Lynch (Cork South Central, Labour)
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I thank Mr. Vaughan. I now invite Mr. Murphy to make his opening statement.
Mr. Tom Murphy:
On foot of a request from the Joint Committee of Inquiry into the Banking Crisis in Ireland the Irish Examinerhas nominated me to appear before the committee to discuss item 2, business model and sources of revenue, including from the real estate sector 2002-07. I was the CEO of the Irish Examinerfrom October 2002 to June 2010 when I was appointed group chief executive of the then holding company of the Irish Examiner, Thomas Crosbie Holdings Limited. I was not the CEO of the Irish Examinerfor the period from July 2010 until October 2011 at which stage I resumed that role in addition to my other responsibilities.
As the committee will be aware, the Irish Examineris a daily morning, mid-market newspaper, produced six days per week which circulates in broadsheet format in the Republic of Ireland generally but its core area of circulation is in the Cork and Munster region particularly. In addition, the Irish Examinerhas an established increasing online presence now but in the period 2002 to 2007 all of this was in its infancy and, as such, was being established. The Irish Examinerhad no online property business in that period but had associated companies under the then parent company Thomas Crosbie Holdings Limited, called Recruit Ireland Limited, a recruitment support company, and breakingnews.ie, an online news publisher and contents indicator to third parties. Thomas Crosbie Holdings Limited also had an online motoring site, called motornet.
I wish to address the areas on which the committee has asked me to comment, namely, business model and sources of revenue. As CEO of the Irish ExaminerI have the task and pleasure of leading a great team of people who are responsible for producing, publishing and administering the best possible newspaper we can six days per week, 52 weeks per year. I had eight direct senior management reportees at the time for the following role-functions: advertising sales, circulation sales, distribution and administration, editorial, finance, human resources, marketing, and production and IT.
Mr. Tim Vaughan has been the editor of the Irish Examinersince 2001 and is a highly regarded and experienced journalist and editor. Mr. Vaughan has responsibility for all editorial matters pertaining to the Irish Examinerand his brief is to continue, as his predecessors did, to produce the best possible newspaper he can for our readers. The brief of the editor and the board continues to be to publish as he views appropriate without fear or favour. While he must be aware of influencers, given the nature of his role he has to remain steadfastly independent of such influences for purposes of editing the newspaper. This has been the philosophy of the Crosbie family as handed down from generation to generation and remains the ethos of the newspaper today.
The second item is the importance of property related revenues within the overall revenue mix. In common with most, if not all, quality newspapers, the Irish Examinerhas two main income streams, the first from circulation sales in the form of cover price and the second from advertising sales. Circulation revenue is the mainstay of the revenue base but increasingly advertising revenue has become and remains vital, more particularly since 2007 when newspaper circulation volumes declined. The ratio of advertising to circulation revenue in the period averaged 60:40.
In any newspaper the key advertising sectors are to a greater or lesser extent property, recruitment, classifieds and run of paper. Run of paper advertising typically is the larger display type advertisements often used by retailers, telecommunications companies and motor dealers et al.Increasingly today digital advertising revenues are becoming more important but in the reference period they were insignificant. The Irish Examiner published a commercial section every Thursday within the newspaper for many years, including the period 2002 to 2007. It also published a residential property section from the mid-1980s, which moved to a stand-alone publication on a Saturday from the mid-1990s, given the high level of home ownership in Ireland, relative to the rest of Europe, and the ever-increasing interest in property, furniture and interiors that the Irish population displays. Advertising revenue is of vital importance to fund the current 300 jobs in the Irish Examiner and the continuing role of the Irish Examinerand the wider industry, so sales from all sectors is a critical success factor for newspapers.
Property advertising in the Irish Examineris in relative terms as important today as it was at the height of the Celtic tiger but so are recruitment revenues, retail sector revenues and all advertising sector sales. However, in the period 2002 to 2007 property advertising was consistent and strong. Having said that, it reflected only a small but important percentage of our overall revenues in the period. While it represented a greater percentage of our advertising revenues, internally we accorded it no greater importance over any of our other advertising sales sectors or over our circulation revenues. To illustrate the point, we tend to allocate the same headcount and editorial space to property in our publications today in 2015, as we did at the height of the market in 2007.
The third point is the engagement in property related commercial activity. In 2006 the Irish Examinermoved from Academy Street in Cork to new rented headquarters in Lapp's Quay, Cork. The Academy Street building housed a 35-year old printing press that was no longer fit for purpose. This printing press had no commercial utility or value. It was therefore decided to sell this building, leaving the old printing press in situ for economic reasons and to move to a more modern office block in the city. Printing was then outsourced. It is also worth remembering that work practices were changing in the industry and, in particular, that it had become increasingly difficult to operate the type of scaled printing and distribution business we had from the premises in the centre of Cork city. The Academy Street building which was owned by the company for more than 150 years was sold for approximately €40 million. This transaction was not unique and it followed a similar pattern of other newspapers, both here and abroad, who moved from city centre locations to new locations and-or who outsourced their printing.
In a separate property transaction around this time another city centre premises owned by the company, the Irish Examiner, which was used in the business as a parking garage and store for newsprint was sold for approximately €2 million. These are the only property related transactions of any significance that I am aware of that the Irish Examinerparticipated in during this period. I was not involved in any way in these decisions which I understand were based on commercial considerations rather than on speculation in the property market. These matters were negotiated at a holding company level at Thomas Crosbie Holdings Limited at the time.
The fourth point is the relationship between the editorial and sales functions. There is a clear distinction between editorial and the sales functions of the Irish Examineras referred to in section 1 and as fostered at management level by the management team and myself. The concept of editorial independence is fostered by everybody in the company and is well understood in our marketplace. However, editors today must have a commercial sharpness and awareness to ensure the best opportunity for their newspapers which is why they can prosper. By way of example, this is practised in the Irish Examinerby: the editor ensuring that there is timely and adequate communication, where relevant, to the circulation and advertising managers of his planned editorial activities to ensure there is the best possible opportunity to maximise the sale of newspapers and, where relevant and appropriate, the sale of advertising; and similar communications with the marketing managers so that appropriate in-paper signposting and, where appropriate, advertising slots can be purchased on radio and television. While the commercial side of the house will never dictate editorial policy we, like most newspapers worldwide, produce commercial supplements and features which are advertising led and are clearly labelled as such to ensure that no confusion arises in relation to their origins.
We have also published specifically themed editorial booklets covering topics as divergent as suicide, infertility and eating disorders. While these are open to sponsorship and advertising, editorial content is sacrosanct and cannot be influenced. The suicide booklet was produced without advertising or sponsorship at a financial loss but we published it in order to provide a public service as neither the HSE nor any other State agency had published anything like it despite the huge numbers dying by suicide.
Ciarán Lynch (Cork South Central, Labour)
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I thank Mr. Murphy. Before I invite the lead questioners perhaps I can put a question to Mr. Vaughan and to Mr. Murphy on which both of you may wish to comment.
In his opening statement, Mr. Vaughan refers to the preoccupation with property in a country experiencing an unprecedented boom and that we were proclaimed throughout the world by our political leaders as an economic miracle. He states that it was the prevailing narrative of the political, banking and property establishment. Could he elaborate on that for the committee as to what he is indicating there?
Mr. Tim Vaughan:
The three points are three separate statements from my opening statement. The first part discusses the point that the coverage in the Irish Examinerreflected the preoccupation of most Irish people at that time. It is as simple as that; I do not mean to say any more than that. Regarding the second part, I think it is widely accepted that our economic miracle, so called at the time, was widely described as such by our own Government and by journals and publications from New York to Shanghai to Beijing. The final part of my statement relates to the widely held belief that everything was rosy at the time - that was the predominant view as the committee has heard before today and again this morning. The numbers of dissenters from that view were few. I do not mean to say anything more than that.
Ciarán Lynch (Cork South Central, Labour)
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Could Mr. Murphy outline to the committee the extent of the property related advertising function within the Irish Examiner during the peak period from 2002 to 2007, for example, the proportion of staff working in theIrish Examinersay in the print room in comparison to the journalism floor and the general size of the property supplement of that time?
Mr. Tom Murphy:
Certainly, yes. I will deal with the second part of the question first. At the peak, the number of staff working in the property advertising sales area would have been three sales executives. They dealt with property advertising in the Irish Examiner. That is now down to maybe two people, with holiday and sickness cover coming from a pool of other staff. I believe there were two people working on the editorial side of the property supplement and property matters generally. That is now probably down to one and a half at his stage. Regarding pagination, at the height of the market the Saturday property supplement would have run from 48 to 64 pages and occasionally 72 pages. It is currently approximately half that.
Ciarán Lynch (Cork South Central, Labour)
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What was the revenue coming in from that on a weekly basis vis-à-visthe overall revenue intake for the paper in terms of sales circulation and advertising?
Mr. Tom Murphy:
I will say something about the nature of theIrish Examiner'sbusiness. TheIrish Examineris a privately owned company. Up to March 2013, it was owned by what I will describe an investment holding company called Thomas Crosbie Holdings Limited which went into an insolvency process. TheIrish Examineris now owned by another investment holding company called Landmark Media and in neither of those scenarios did the Irish Examinerfile its own accounts. It always prepared consolidated accounts. The information pertaining to the Irish Examineras a single entity has not been available for many, many years. The information the Chair seeks is not in the public domain anywhere and it is important I state that. I am very mindful of the purpose of the inquiry and in an effort to assist the inquiry I am prepared to say that the relationship between property advertising in the 2002 to 2007 period was, on average, approximately 7% of our total revenues in that period.
Ciarán Lynch (Cork South Central, Labour)
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Revenues to advertising or overall?
Ciarán Lynch (Cork South Central, Labour)
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Mr. Murphy referred to the movement of the Irish Examinergroup into Landmark Media holdings. He also explained the move from Academy Street over to Lapp's Quay. We will move to the end of the crisis period, or the expansionary period. How would he view the situation for the Irish Examiner? When the dust settled after the property collapse, was the Irish Examineras an entity a net beneficiary or was it at a net loss? What were the consequences for the newspaper?
Ciarán Lynch (Cork South Central, Labour)
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The corporate entity of which the Irish Examineris part.
Mr. Tom Murphy:
I am not entirely sure how to answer that question. The Irish Examineras a newspaper brand has been in existence for over 170 years. It is a very strong, well recognised brand with strong affiliations in its target and core areas. I believe newspapers generally are going through a difficult time now with a transition in place in terms of moving from the traditional business models into the new business areas of digital-type operations. I have no doubt that the brand will go from strength to strength. I do not know if that answers the Chairman's question or not.
Ciarán Lynch (Cork South Central, Labour)
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Did the company need to be restructured?
Kieran O'Donnell (Limerick City, Fine Gael)
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I welcome Mr. Vaughan and Mr. Murphy. Can I ask Mr. Murphy about March 2013 when the Thomas Crosbie group went into receivership? How much of that was related to being a victim of the property crash?
Mr. Tom Murphy:
Property was an important source of revenue for theIrish Examinerat that time, but so was recruitment revenue and so was classified revenue - all revenue. I would say it had little effect on it aside from the fact that obviously profits were suppressed in the industry generally and for the Irish Examiner. I think the issues that it had to contend with were quite different and were holding company level issues rather than trading company level issues.
Kieran O'Donnell (Limerick City, Fine Gael)
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What was the financial reason Thomas Crosbie Holdings went into receivership?
Kieran O'Donnell (Limerick City, Fine Gael)
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Was it insolvent? It had nothing to do with property?
Kieran O'Donnell (Limerick City, Fine Gael)
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Did it have anything to do with property advertising falling from a peak in 2007?
Kieran O'Donnell (Limerick City, Fine Gael)
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Mr. Murphy was group commercial manager for Thomas Crosbie Holdings from 1990 to 2002. Would The Sunday Business Posthave fallen under his remit at that time?
Kieran O'Donnell (Limerick City, Fine Gael)
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Was it not part of the Thomas Crosbie Holdings?
Mr. Tom Murphy:
It was indeed but probably not from 1999. I do not remember the year in which it was purchased. I was involved in the acquisition of The Sunday Business Postbut I had no day to day involvement in it post acquisition. I had no involvement at all until I was appointed group chief executive in June 2010.
Kieran O'Donnell (Limerick City, Fine Gael)
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Mr. Murphy was the CEO of the Irish Examinerfrom October 2002 up to March 2013, and I presume he is now CEO of the overall group, including the Irish Examiner. Is that correct?
Kieran O'Donnell (Limerick City, Fine Gael)
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What view would he have taken of the commercial operation of the Irish Examinernewspaper in terms of articles being written within the paper itself?
Mr. Tom Murphy:
I consider the Irish Examinerto be a very high quality broadsheet newspaper that is expertly edited by my colleague, Mr. Vaughan. It retains excellent staff and columnists who write truthfully within the parameters of the knowledge and information available to them. I believe they do an excellent job.
Kieran O'Donnell (Limerick City, Fine Gael)
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Would there have been occasions when Mr. Murphy might have seen a certain trend arising in the newspaper, say on a particular aspect which may have affected the commercial operation or advertising, that he would consult with Mr. Vaughan?
Mr. Tom Murphy:
I do not believe I have ever had that type of experience.
From our standpoint, the editorial integrity and independence of our newspaper, and all newspapers, is sacrosanct. Should there be a clash between commercial and editorial integrity and independence, editorial independence and integrity would win out every time.
Kieran O'Donnell (Limerick City, Fine Gael)
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Mr. Vaughan referred to a general consensus about how Ireland was viewed at the time in terms of the Celtic tiger. I reviewed the various articles Mr. Vaughan gave us copies of from 1999 to 2012. Many of the articles and editorials from 1999 up to mid 2007 are very cautionary in tone and refer to concern for property investors. In June 2004, it was stated that a property bubble was a danger to all. In May 2007, there was an editorial with the headline, "Construction worries - Housing fear may be well founded". On 8 July the title of the editorial was "Property dilemma - House prices prediction is a real worry". One editorial, on 7 August 2007, seems to be out of context. The headline is "Property market - Soft landing to cushion fall in prices" and the editorial finishes by stating:
The demographic trend, with the great influx of people from abroad, has underpinned the need for extra housing, and the Government has taken realistic steps to assist affordability with the increase in mortgage interest relief. These factors would suggest the desired soft landing in relation to property prices.
As editor, this is Mr. Vaughan's domain. Where did this editorial come from? It appears to be out of step with what came previously.
Mr. Tim Vaughan:
I cannot recall the specific editorial, although I did provide it to the committee. There were other articles which I did not supply. I was giving a snapshot of the time. The overriding attitude of the newspaper in editorials and commentary was cautionary. That editorial was an exception.
Kieran O'Donnell (Limerick City, Fine Gael)
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Why did the exception occur? It was at the height of the time when the market was crashing. The previous editorials I cited were different.
Mr. Tim Vaughan:
There was much flux among all commentators throughout the 2000s. The committee has heard from Professor Alan Ahearne. Although he was raising flags in 2005, in July 2007, after there had been many high-profile warnings, he wrote:
Of course, Ireland's housing market at the moment is not crashing - it is correcting gradually downward. That is good news. The second piece of good news is that in the experiences of other rich countries, housing busts rarely lead to serious problems for banks.
There has been much diversity and many changes of opinion over time.
Kieran O'Donnell (Limerick City, Fine Gael)
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Dr. Mercille, who was here this morning, said, "my overarching point is that news organisations largely conveyed the views of political and economic elites". What is Mr. Vaughan's formal response to this? Mr. Vaughan is the longest-serving editor of a national Irish newspaper. Is that correct?
Kieran O'Donnell (Limerick City, Fine Gael)
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The editorial of 7 August 2007 specifically referred to the Government of the time putting in realistic steps to assist affordability when clearly we now know, and based on the editorials the Irish Examinerhad previously printed, that everything was crashing around us at a rate of knots.
Kieran O'Donnell (Limerick City, Fine Gael)
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Who does Mr. Vaughan represent? What is his remit as editor of the Irish Examineraround property at that time?
Kieran O'Donnell (Limerick City, Fine Gael)
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Does Mr. Vaughan follow the readers or does he comment independently of them? Was there a herd mentality during the period whereby the newspaper media followed the fashion of the moment?
Mr. Tim Vaughan:
In hindsight, there may have been some element of thinking along the same lines, without any conspiracy element. There is a perception of the media that it might be no harm to debunk or explain. There is much talk of the media as one homogenous entity acting in unison and in self-interest, and there was much of this from Dr. Mercille this morning. However, categorically, this is absolutely not the case. Geographically, the Irish Examineris based in Cork, and is the only newspaper based outside Dublin.
Kieran O'Donnell (Limerick City, Fine Gael)
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Does Mr. Vaughan see the Irish Examineras being different from the Dublin media?
Kieran O'Donnell (Limerick City, Fine Gael)
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In what sense, regarding property?
Mr. Tim Vaughan:
The main concentration of property development was in Dublin. At one stage, we had a section in our weekly property supplement called The Two Irelands, namely, Dublin and the rest of the country. Every Saturday, it showed a selection of houses for sale in Dublin and in the other Ireland, and showed how skewed the market was.
Kieran O'Donnell (Limerick City, Fine Gael)
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Were there occasions on which Mr. Vaughan was running with an editorial line or allowing features to be printed that could have been perceived to be detrimental to the commercial and advertising operations of the Irish Examiner, he was contacted by the CEO, Mr. Murphy, and he pulled back?
Kieran O'Donnell (Limerick City, Fine Gael)
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Of any description?
Kieran O'Donnell (Limerick City, Fine Gael)
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Although Mr. Murphy said the group went into receivership due to other issues, was the property crash the tipping point that pushed Thomas Crosbie Holdings into receivership?
Kieran O'Donnell (Limerick City, Fine Gael)
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In terms of the advertising base.
Kieran O'Donnell (Limerick City, Fine Gael)
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Yes.
Ciarán Lynch (Cork South Central, Labour)
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What Mr. Murphy is trying to clarify is whether the Deputy refers to overall advertising revenue or property-specific revenue.
Kieran O'Donnell (Limerick City, Fine Gael)
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I refer to property-specific revenue.
Kieran O'Donnell (Limerick City, Fine Gael)
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When Mr. Murphy referred to 7%, was it 7% of the income of the Irish Examiner or 7% of the overall income of Thomas Crosbie Holdings?
Kieran O'Donnell (Limerick City, Fine Gael)
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The figure is for the Irish Examinerrevenue specifically. Is that the case?
Kieran O'Donnell (Limerick City, Fine Gael)
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Did Mr. Murphy ever have a situation where he would have been contacted by, say, an auctioneer or developer about critical comments in the Irish Examinerunder Mr. Vaughan's jurisdiction?
Ciarán Lynch (Cork South Central, Labour)
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That is your last question, Deputy.
Mr. Tom Murphy:
I met many estate agents and property developers. Did I ever have an issue of editorial significance that would have been of concern to me or such that I would be of the view that it should be of concern to the committee? No, I do not believe so. Anything that would have occurred would have been in the normal cut and thrust of normal commercial activity. There would have been nothing that I would have been concerned about. It was normal cut and thrust.
Michael McGrath (Cork South Central, Fianna Fail)
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I welcome Mr. Murphy and Mr. Vaughan and I thank them for their time. I will start on the issue of the reliance of the Irish Examineron income from property related advertising. Mr. Murphy indicated 7% of the total revenues of the Irish Examinerwere accounted for by property related advertisements. I appreciate Mr. Murphy is not required to give us commercial data in that sense. However, he put on the record in his opening statement that the ratio of income was 60% from advertising revenue and 40% from circulation. Therefore, if 7% of the total revenues were from property related advertising, then in the region of 11% or 12% of advertising revenue came from property related advertising.
Michael McGrath (Cork South Central, Fianna Fail)
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Would it have varied much from the early 2000s up to the peak of 2006 or 2007?
Mr. Tom Murphy:
I set the scene in terms of my ability to be helpful to the inquiry in this regard. To be helpful, I have given the committee certain types of information. I have now given the committee two types of information in respect of our advertising base. As I have said, that information is not in the public domain. I am genuinely trying to be helpful to and co-operative with the inquiry. Behind me are representatives of the press from every newspaper in the country. I would prefer not to put the matter further than that. I do not think that I should allow myself to be sucked into giving more detailed information.
There are two or three other entities to follow us, tomorrow, I believe. To the best of my knowledge, what differentiates Mr. Vaughan and myself from the individuals who will follow us is that, from a newspaper standpoint, three of the four individuals are retired. Furthermore, as I understand it, the fourth person is now in a different position to the one he occupied in the 2002 to 2007 reference period. We have access to the information. I do not know what access these people have. They follow us. We are giving the committee a great deal of pertinent information which, we believe, is helpful in setting the context of the situation. Genuinely, I would prefer not to put the matter further.
Michael McGrath (Cork South Central, Fianna Fail)
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The witnesses that are to come from Independent News and Media, for example, have put on the record that of their total advertising revenue in 2002, approximately 11% was property related and that the figure increased up to approximately 17% in 2006. However, Mr. Murphy does not wish to go any further in respect of the Irish Examiner. Is that the case?
Michael McGrath (Cork South Central, Fianna Fail)
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That is fine. I am keen to discuss the issue of the Chinese wall between the editorial side and the commercial side. Mr. Vaughan gave a rather direct answer to Deputy O'Donnell to the effect that at no stage was there any interference from the commercial side on any editorial decision made on his side of the house. Is that the case?
Michael McGrath (Cork South Central, Fianna Fail)
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Mr. Vaughan has provided details of various articles and editorials that appeared in the Irish Examinerduring the years in question. These articles were to varying degrees critical of, questioned or contrary to the views that were popular at the time. Were Mr. Vaughan or Mr. Murphy ever contacted by anyone in government, for example, or any politician who made it known to them that such articles were unwelcome or amounted to not donning the green jersey? Did Mr. Vaughan ever get that vibe? Was there ever direct contact along those lines?
Michael McGrath (Cork South Central, Fianna Fail)
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They might raise issues about the balance of coverage. Is that it?
Michael McGrath (Cork South Central, Fianna Fail)
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We will not go down that road today. We know that The Irish Timesbought myhome.ie, the property website, in 2006 for approximately €50 million. It was reported that a number of media organisations were involved in potentially buying it or negotiating for it. Was the Irish Examinerinvolved at the time? Was it interested in expanding into property related websites?
Mr. Tom Murphy:
I will answer that. I was contacted by a person inquiring whether we were interested in acquiring a property portal at or around that time. I would have shared that information with the then managing director of Thomas Crosbie Holdings under whose control those matters were being dealt with. I can only say that I was not involved in the process thereafter. No transaction was completed in respect of a property portal at the time or subsequently by the Irish Examiner, Thomas Crosbie Holdings or any entity in the group.
Michael McGrath (Cork South Central, Fianna Fail)
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A pitch was made on behalf of the vendor and some discussions may have been entered into. Is that correct?
Michael McGrath (Cork South Central, Fianna Fail)
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Mr. Murphy stated in his opening remarks that the editor's brief from the board is to publish views without fear or favour and that he must be aware of influencers given the nature of his role. What did Mr. Murphy mean by this? Who is he referring to as influencers? He referred to influences as well.
Mr. Tom Murphy:
Deputy McGrath has probably already asked Mr. Vaughan about what is an influencer in a newspaper. I imagine if Mr. Vaughan walks down St. Patrick's Street in Cork tomorrow and he is leisurely, he could meet four people, for example, a reader of the newspaper, a purchaser of the newspaper, an advertiser of the newspaper or, dare I say it, a politician. If he stopped and spoke to the four of them, I have no doubt that the conversation would inevitably go to something that was in the newspaper that day, that week, that month or whatever.
Our view is that we engage. Cork is rather different place to live and work in than Dublin, for example, in terms of population size and the size of the city. We interact with people on an ongoing basis. It is rather difficult to avoid. I suspect Deputy McGrath knows that himself. Any one of those people could be an influencer, if that is the correct terminology.
For example, I might meet an estate agent. That person may say to me that he would love to get an iconic property featured in the weekend supplement but cannot. That is not a complaint or editorial influence in any way. It is a matter of a person trying to advantage his client in some way. However, the editor might be of the view that the newspaper covered the next-door property two months previously. He may have no interest because he may be of the view that there is nothing particularly iconic about the property. A motor dealer could be in the same situation. He may say to the editor that he wants to get his new marque reviewed by the newspaper motoring correspondent but that he has be unable to do so. The editorial view may well be that either the newspaper has done the brand previously or it will do it next week or it will do it with a different dealer. There are 100 possibilities. All of these things are influencers. Do I believe any of these influencers function in a way that has a detrimental effect on the brand or the editor's ability to edit the newspaper? Not at all.
Michael McGrath (Cork South Central, Fianna Fail)
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Let us consider the weekend property supplement, for example. There are certain features or articles written about properties which are advertised for sale in the supplement. How do they get chosen? I presume they are advertisement-led. Will Mr. Vaughan set out from an editorial point of view what influences the selection of the individual properties that feature?
Mr. Tim Vaughan:
That particular property supplement is edited by the property editor, Tommy Barker. He is in constant communication with people in the market about what is coming up and what is interesting. His prime focus is to get properties that are interesting to readers. These may or may not be advertising and they may or may not be houses for sale, yet they may feature. There is not a situation whereby if someone advertises, he must get editorial coverage. That does not happen.
Michael McGrath (Cork South Central, Fianna Fail)
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Yes.
Mr. Tim Vaughan:
There is complete editorial oversight.
Quite frequently over the years, people who had advertised properties that were subsequently reviewed would have been very unhappy with what they read the following day. Mr. Barker would frequently have had phone calls on a Saturday, when the supplement came out, or on a Monday from people who were unhappy with aspects of what was reported. It is not PR.
Michael McGrath (Cork South Central, Fianna Fail)
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So Mr. Vaughan is saying is it is not always advertisement-led - it is not always geared to the advertisement of the property in the supplement.
Michael McGrath (Cork South Central, Fianna Fail)
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Does Mr. Vaughan believe that the Irish Examinerwas sufficiently welcoming of contrarian views during the years leading up to the crisis - that he was quite open to publishing the views of people who may not have been mainstream but whose views would have been pilloried by those in the establishment?
Mr. Tim Vaughan:
As I said in my opening statement, hindsight is great. Looking back, if I could do it again I would seek out more contrarian views - more dissenters - but the fact of the matter at the time is that they were not there. It never once happened that somebody had a valid viewpoint which was contrary to the prevailing mood and I refused them access to the newspaper. In fact, I would have welcomed it. There is plenty evidence down through the years of us presenting that contrarian view, but such voices were not there. There was David McWilliams, as is frequently quoted, and there was Morgan Kelly at the later end of 2007.
Michael McGrath (Cork South Central, Fianna Fail)
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There was no one knocking on Mr. Vaughan's door saying "This is going badly wrong."
Mr. Tim Vaughan:
Absolutely not. One of the things one has learned since then is to get more of those voices and to seek them out. They are there now. We did not have the Constantin Gurdgievs or the Brian Luceys who are there now. That is one change since the crash. They are available now, but they were not then. They did not feel the need to speak out - or maybe they did not.
Ciarán Lynch (Cork South Central, Labour)
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One minute remains for the Deputy.
Michael McGrath (Cork South Central, Fianna Fail)
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Mr. Vaughan made the point on more than one occasion in his opening statement to the effect that he had faith as such in the institutions in place to monitor and regulate the financial institutions on behalf of the State. Can Mr. Vaughan elaborate on that? Is it his view that too deferential an approach was taken within the media - that it was not challenging enough?
Mr. Tim Vaughan:
It is not so much that it was deferential. As I said at the end of my opening statement, there is an alignment of what would have been perceived as authority from all of those institutions, including the IMF. If the IMF, which has vast experience of looking at economic booms and busts over the years, gave us a clean bill of health in 2006 and 2007, I find it difficult to see how the Deputy could validly or effectively challenge that. If, in addition to the IMF, one includes the ESRI, the Central Bank, the ECB and the European Commission, it is difficult to see how any newspaper, especially a general newspaper such as ours, in which we give more coverage to sport than to business, can effectively challenge that.
Ciarán Lynch (Cork South Central, Labour)
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I will take a final question from the Deputy.
Michael McGrath (Cork South Central, Fianna Fail)
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Again, it is directed to Mr. Vaughan. Is there a policy, from an editorial perspective, on the acceptance of hospitality and gifts by journalists from people who may be the subject of their writing, whether it be those in financial institutions or those in the property industry? Is there a company-wide policy for people who are involved in journalistic output to maintain their absolute independence and integrity?
Mr. Tim Vaughan:
The vast majority of our journalists are members of the NUJ and they are signed up to operate under the code of conduct of the NUJ. The Irish Examineris a member of the Press Council. Principle 8 of the NUJ's Code of Conduct states that a journalist "[r]esists threats or any other inducements to influence, distort or suppress information and takes no unfair personal advantage of information gained in the course of her/his duties...". We do not have a written policy, but it is there. There is the ethos of the newspaper, which goes back as long as I have been with it. A journalist might get a bottle of wine or something like that at Christmas, or perhaps it might include lunch. I was once taken to lunch by the Irish Bankers' Federation to persuade me to stop me eating at the banks, but I do not think the lunch was very successful from that point of view. There is no such thing as taking gifts apart from what I would say is normal corporate-type Christmas stuff.
Ciarán Lynch (Cork South Central, Labour)
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I thank Mr. Vaughan. Before we move on, I wish to put a question to both witnesses. During the expansionary period, or bubble period, between 2000 and 2007, did either of the witnesses ever sit down with their counterparts in any of the other major media, such as newspapers and radio and television broadcasters, to discuss the property market explicitly either in terms of advantages to be made commercially or concerns they may have had?
Mr. Tim Vaughan:
As I said earlier, there is no homogenous media. It might come as a surprise to some people that editors rarely, if ever, talk to each other. Newspapers do not co-operate. There is very little co-operation. In fact, I think the only time in my 14 years as editor of the Irish Examinerthat all the newspaper editors were in one room was when the Press Council was being established and launched, and even then there were some editors who wished they were not in the same room as some other editors. It does not happen.
Ciarán Lynch (Cork South Central, Labour)
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That happens in politics as well.
Marc MacSharry (Fianna Fail)
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I welcome the witnesses. Am I allowed to speak about the The Sunday Business Post?
Ciarán Lynch (Cork South Central, Labour)
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Once you are within the terms of reference you may. If the witness is unsure he can just look to me. If the witness is prepared for the question and feels comfortable in that area, we can go ahead.
Ciarán Lynch (Cork South Central, Labour)
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I understand that. So if you feel uncomfortable, just come back to the Chair and I will give direction.
Marc MacSharry (Fianna Fail)
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On the same theme of gifts, when I asked the previous witness, Mr. Harry Browne, about the codes of ethics, he mentioned the NUJ code of conduct and so on. The implication of what he was saying was that they were insufficient. Would the witnesses share that view?
Marc MacSharry (Fianna Fail)
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Good. He also alluded to a situation, without mentioning names, in which a journalist had accepted and had been given real estate for the purpose of positive commentary. Did Mr. Vaughan ever come across anything like that in his career?
Marc MacSharry (Fianna Fail)
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Does Mr. Vaughan have a view on whether, in the media generally over the years, the raw reportage of the facts has given way to views and opinion as put forward by writers?
Mr. Tim Vaughan:
I would not agree with that. The function of the newspaper, as I see it, is to report the facts on events. We give them context and provide analysis of the same events or different events, and we open our columns to diverse opinion, opinion that I might or might not disagree with. Sometimes I disagree strongly with it. We must have opinion, but it should be informed opinion.
Marc MacSharry (Fianna Fail)
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I thank Mr. Murphy for his presentation. In his experience with the Irish Examineror in his position as group head, has he experience of any large commercial entity withdrawing or cancelling pre-scheduled advertising because of an editorial dispute?
Marc MacSharry (Fianna Fail)
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Specifically on property.
Marc MacSharry (Fianna Fail)
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I know that, but to Mr. Murphy's knowledge, was there ever an instance, either in The Sunday Business Postor the Irish Examiner, of a major commercial entity, and we are here to talk about property, cancelling pre-scheduled advertising for two, three, four, five or six months because of a dispute?
Marc MacSharry (Fianna Fail)
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That is fine. During the relevant period and up to the present day, did the Irish Examineror The Sunday Business Postever engage in promotional raffles where property was the prize?
Mr. Tom Murphy:
I believe they did, but I am not sure if it occurred in the period referenced. Again, I would have to stand open to correction on that. I have a recollection it may have been The Sunday Business Post. If there was, it would have been done in partnership with a financial institution, but I cannot give a definitive answer on that.
Marc MacSharry (Fianna Fail)
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If it were true, and in the event that it perhaps did happen in The Sunday Business Post, did the winners ever get the property?
Marc MacSharry (Fianna Fail)
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It is a line of questioning that I would love to get into in the next phase.
Ciarán Lynch (Cork South Central, Labour)
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Okay, so the Senator is just putting down a marker. I appreciate that. Are you concluded, Senator?
Susan O'Keeffe (Labour)
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Chairman, in the interests of clarification, I believe that Senator MacSharry raised a point in relation to Mr. Browne. I believe he inadvertently suggested that Mr. Browne had said that property was offered and accepted by a journalist. I am not entirely sure that Mr. Browne said that it had been accepted. I do not believe Senator MacSharry meant it, but in the interests of that piece, I believe there may need to be clarity for the record.
Ciarán Lynch (Cork South Central, Labour)
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That is noted.
Marc MacSharry (Fianna Fail)
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I did mean that it was offered.
Eoghan Murphy (Dublin South East, Fine Gael)
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I thank both witnesses for attending. I wish to ask Mr. Vaughan about the written opening statement he gave to the committee. He mentions that in specific cases editorial positions remained consistent, even when significant advertising clients objected to articles concerning them and threatened to withdraw their business. How would that have come about? Would an advertiser have made contact directly?
Eoghan Murphy (Dublin South East, Fine Gael)
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Mr. Vaughan mentions specific cases, and few and far between. In his recollection it would have been through a reporter saying they had written a story and an advertiser had complained to the reporter about the story.
Eoghan Murphy (Dublin South East, Fine Gael)
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So that could come from either a reporter or the commercial manager?
Mr. Tom Murphy:
It would not be unusual for an advertiser to be unhappy. They may be unhappy with the position of the advertisement in the newspaper, they may be unhappy with wording of it, they may be unhappy with some editorial coverage relating to it, they may be unhappy that they did not get an adequate or appropriate response to the advert or they did not get the price they sought. It may be the case that they would threaten to withdraw their advertising. I come back to my earlier point that people typically do not advertise for the newspaper's benefit. They advertise for their own benefit, a mutually beneficial transaction.
Eoghan Murphy (Dublin South East, Fine Gael)
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I am not talking about whether a company might not be happy with the position, left or right of the page, or they did not get enough hits or sales, but where an advertiser has an actual problem with an editorial in the newspaper, and that view would have been conveyed to the witnesses on a couple of occasions at least.
Eoghan Murphy (Dublin South East, Fine Gael)
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As an editor, was it ever conveyed to Mr. Vaughan by someone more senior in the newspaper?
Eoghan Murphy (Dublin South East, Fine Gael)
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Would the witness have thought it would have had a chilling effect?
Eoghan Murphy (Dublin South East, Fine Gael)
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Has the witness ever felt, in terms of his own practice, that it had any chilling effect on how he might proceed on a subject on any subsequent occasion?
Mr. Tim Vaughan:
I believe that when a newspaper has owners who strongly respect editorial independence, everything else flows from that. The importance of this might not be appreciated. There is a commercial imperative. One has to stay in business and make a profit, but I enjoy that privilege. The same pressures which might apply elsewhere do not apply. I do not come under that pressure. Advertisers might be unhappy or other people might be unhappy. Every day there is somebody unhappy with something that appears in the newspaper. That is part of the business, but you do what you do and hold the editorial line.
Eoghan Murphy (Dublin South East, Fine Gael)
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When it comes to publishing the newspaper each day and deciding the page layout, does Mr. Vaughan decide the position of adverts?
Eoghan Murphy (Dublin South East, Fine Gael)
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I am just looking at an example from Sunday, 4 April 2004, supplied by the witness. There is a front page and the headline is "Mortgage holders at risk as debt soars". Directly below there is an advert for an interior design company offering a 15% discount.
Mr. Tim Vaughan:
There can sometimes be unfortunate juxtapositions of editorial and advertising. That would have been under our old computer system. An advert is booked in and shape is defined at a half page or quarter page advert. One does not see what the advert is until maybe 6 p.m. that day. The page is designed earlier. One would not replace the advert because of the editorial going there. That would not happen.
Eoghan Murphy (Dublin South East, Fine Gael)
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So it is an unfortunate coincidence.
Eoghan Murphy (Dublin South East, Fine Gael)
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The Irish Examinerbrand is respected and trusted. It cannot carry just any advertising but must be conscious of what any message a total page might convey to someone. Is that considered when the witness goes to print? Does he look at a headline and an advert and worry about giving a mixed message to the public?
Mr. Tim Vaughan:
It would be pretty routine, depending on the stage in the production process. It is a very intense, deadline-driven process as the day progresses. If it becomes apparent to somebody that there is a bad juxtaposition, then either the advert will change or the editorial will move to a different page or position. I do not know if that is answering the question.
Eoghan Murphy (Dublin South East, Fine Gael)
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It is a bit because I am talking about the overall impression the newspaper might give.
At the end of the day, it is still a newspaper. It is a vehicle for presenting news, not for selling things. I am interested to know that the editorial takes primary position if such a conflict arises.
Eoghan Murphy (Dublin South East, Fine Gael)
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It would not be a question of moving a story to suit an advertisement. If someone had booked a space on the bottom right hand corner of the front page, a great position that costs a lot of money-----
Eoghan Murphy (Dublin South East, Fine Gael)
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Was that because the advertising did not fit with the editorial?
Susan O'Keeffe (Labour)
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Would the sales staff have been on incentives for selling more advertising? That would be pretty normal in the wider industry but may not have been the case with the Irish Examiner.
Mr. Tom Murphy:
There would have been a commission structure in place at that time, yes. It would have been reasonably nominal and would not have been multiples of salaries, for example. It might have been double-digit percentages of salaries but would not have represented a significant sum to any individual.
Susan O'Keeffe (Labour)
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Were the sales staff encouraged to seek out deals with particular organisations? Would they, for example, have done deals with particular estate agents over a period of time? Would there have been arrangements whereby if the agents took out a full page advertisement every week for 52 weeks, they would have been given a discount? Was that kind of thing going on?
Mr. Tom Murphy:
Without getting into areas of commercial sensitivity, the sales staff, under the control of an advertising sales manager, would negotiate contract deals with entities such as estate agents where they were in a position to give a high volume of advertising. It would be normal practice to differentiate the rate charged for advertisements between nomadic and regular advertisers. So the answer is "Yes".
Susan O'Keeffe (Labour)
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Obviously at that time there were some estate agents that had more to advertise than others. There were bigger and smaller agents, and deals would have been done accordingly. Is that correct?
Susan O'Keeffe (Labour)
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Yes; I said "accordingly". At the end of the day, what was the main reason for the company becoming insolvent? What was the driving force for that?
Susan O'Keeffe (Labour)
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That is fine. In his statement, Mr. Vaughan spoke about the daily national newspaper, saying, "We are reliant on agents of the State to be competent, professional, open, honest and reliable in what they do and say, and then we report on that." Is it fair to say that is Mr. Vaughan's ethos and central point?
Susan O'Keeffe (Labour)
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Yes. I am seeking clarification because Mr. Vaughan said "We are" and not "We were".
Susan O'Keeffe (Labour)
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Mr. Vaughan was speaking in the context of the time in question. Would he say that the newspaper is not like that any more?
Susan O'Keeffe (Labour)
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What made the newspaper take them on faith, given that there had been other stories in the past, going back decades, to indicate that such organisations were not always professional, open, honest and reliable? It is the role of a journalist to always question everything that is handed down and never to take anything as being set in stone.
Susan O'Keeffe (Labour)
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Is Mr. Vaughan saying that the newspaper did not challenge because it did not have any evidence?
Susan O'Keeffe (Labour)
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What was stopping Mr. Vaughan, as the editor, from asking his journalists to go out and seek such evidence, to try to challenge these views? What allowed him to be in a position in which he would accept what they were saying without challenging it? Mr. Vaughan cited the paper's own contrarians, Maurice O'Connell and Ryle Dwyer, whose views were published. Why did Mr. Vaughan not say to himself, "Mr. Dwyer said X, Y or Z; perhaps we should pursue that line, get some more information, and put that to the ESRI, the IMF or whomever?" What stopped him from doing that?
Ciarán Lynch (Cork South Central, Labour)
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I ask the Senator to be brief. She needs to allow Mr. Vaughan to respond or she will run out of time before he can do so.
Susan O'Keeffe (Labour)
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As it was happening - say, in 2003 - I am curious to know why Mr. Vaughan, as the editor, would have been reliant on agents of the State in that way, rather than questioning them by seeking out the evidence. The paper had already published some contrarian views. What stopped it from pushing further?
Susan O'Keeffe (Labour)
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Yes, but Mr. Vaughan was accepting the version presented by these bodies. Why were they any more valuable than the paper's capacity to challenge? I still do not understand what stopped the paper from challenging.
Ciarán Lynch (Cork South Central, Labour)
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I wish to deal with one matter related to the property or housing ladder at that time. Based on the testimony of other witnesses and evidence laid before the inquiry, there seems to be a general acceptance that Ireland is a house-purchasing nation. Before, during and after the crisis, we continued to be a nation in which the most desirable type of accommodation for the majority of people was a purchased home. During the 2002 to 2007 period we saw massive increases in the cost of homes, with properties that once cost two to three times the average industrial wage going up to eight or nine times that wage. Property affordability was such that mortgage terms grew from an average of 20 to 35 years and so forth. Newspapers such as the Irish Examinerwere reporting this dynamic because, as Deputy Murphy said, that was the type of thing that people walking down Patrick Street were discussing. What is Mr. Vaughan's view of the impact, if any, of the reporting of increasing house prices during the pre-crisis period from 2002 to 2007, as carried in the Irish Examinerand other mainstream news titles, and the concept of the housing ladder? Was the presentation of what was happening in the housing market adding to the frenzy and encouraging people to purchase now, because if they did not do so they would not be able to afford to later on?
Mr. Tim Vaughan:
I do not think so. Speaking on behalf of the Irish Examiner, I would say that buying a house is a very personal choice and we would never have encouraged people to buy. Obviously we carried property advertising, but I do not think we contributed to the frenzy to which the Chairman referred.
Ciarán Lynch (Cork South Central, Labour)
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Does Mr. Vaughan think it is a valid point that there was concern between 2002 and 2007 among the young population of potential purchasers that they were getting dangerously close to not being able to afford to buy a home?
Ciarán Lynch (Cork South Central, Labour)
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Where were they getting that concern from? Were they reading about it?
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I thank Mr. Vaughan and Mr. Murphy for their attendance and statements. With the exception of the meeting mentioned earlier with the Irish Bankers' Federation, were there other meetings of a formal or informal nature in the reference period, 2002 to 2007, between property or banking interests and journalistic or editorial staff of the business, where the editorial line of the publication was discussed?
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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In relation to the lunch itself that Mr. Vaughan referred to, can he recall roughly when that happened?
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I want to put a couple of quotes to Mr. Vaughan from both of our witnesses from earlier today. Dr. Mercille expressed the view, which he had on the first page of his presentation, that "both private and State-owned media organisations largely convey corporate and political establishment views". With an eye to Mr. Vaughan's own publication, does he accept that particular opinion or what is his view on that particular statement?
Mr. Tim Vaughan:
As I said, as far as the Irish Examineris concerned, it is alien territory to me. I do not agree with that. The owners of the company have divested editorial responsibility to me and I answer only to the chief executive and the board. We are not beholden to anybody. We do not write for any corporate entities, any political entities, or any economic entities. We write for our readers, for our customers. That is the only agenda.
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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Dr. Mercille further went on, in answer, I think, to questions from Senator D'Arcy, to refer to the fact that newspapers do not produce supplements on homelessness or poverty. How does Mr. Vaughan ensure the Irish Examiner, as a publication, reflects wider societal views in terms of his publication? The Irish Examinerdoes not produce those publications either. Could Mr. Vaughan outline why it does not?
Mr. Tim Vaughan:
I did not catch all of what he said but I got pieces. He also said that it is cheaper and easier for a news organisation to send somebody down to the Dáil to talk to a politician than to investigate what is happening in rural Ireland because it is more expensive. He obviously does not know what we do because I had my special correspondent doing exactly that for a week or ten days, looking at the state of rural Ireland. We do it all the time. I think we seem to have missed his radar.
John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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On page 5 of Mr. Browne's presentation he spoke about the relationship between the PR industry or sector and journalism and he referenced research that had been done in the United States in the 1980s that the PR industry had expanded rapidly in contrast to the journalistic sector. Mr. Vaughan has expressed his view that it is not a homogenous sector but that employment levels are greatly lower than in the PR sector. Does he agree with Mr. Browne's assertion that PR officers in general control the agenda of the media? He asserted that because of the ability to deny access for interviews and a number of other factors in effect mean they have a great deal of control, at least, of the media agenda.
Mr. Tim Vaughan:
I do not agree that they have control. I would agree that it is an industry that has mushroomed. It is highly paid, highly lucrative, and presents a greater challenge to journalism than heretofore. There is a protective layer around much of the corporate world by PR companies. Journalists have to go through them to get information but a good journalist will always find ways around that and they will not accept the PR line, at least in the Irish Examiner.
Joe Higgins (Dublin West, Socialist Party)
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Mr. Vaughan has discussed why his newspaper or maybe other newspapers were not more aware of the dangers in the blowing up of the bubble. He says on page 4, "Advertising in the property section was an important and valued source of revenue during the Celtic tiger years ... but it is important to stress that [it] did not seek to influence the editorial policy of the newspaper". That is Mr. Vaughan's quote. Before political parties had strict limits put on the amounts of money they could receive, developers, beef barons, banks, and corporate donors gave substantial sums of money to political parties and sometimes to leading members of those parties who always loudly protested that this had no influence whatsoever on the policies they promulgated or whose interests they advanced. It is true to say that very few people in Ireland believed them. Should they believe the media when they make a similar claim? When millions of euro are coming in from developers, for example, for property supplements, is it likely that one of those major developers would be challenged seriously on an issue?
Mr. Tim Vaughan:
I can only speak on behalf of my own newspaper that I edit. As my colleague, Mr. Murphy, outlined, the proportionality of property advertising in the Irish Examinerwas not of the magnitude that some people might have thought. It was not at 50% or 60% where people might think there might be more pressure. I have never come under pressure from a property developer. There were some issues in relation to an editorial but I do not agree with the view that money can influence the editorial in our newspaper.
Joe Higgins (Dublin West, Socialist Party)
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In one of the studies, which has been relied on for contributions here, entitled From boom to bust, which was produced by respected academics in Dublin City University, Fahy, O'Brien and Poti, the authors did quite a study with financial journalists and one financial journalist noted that:
Much of the mainstream media seems to me to be very conflicted because of their reliance on real-estate and recruitment advertising. That doesn't mean reporters consciously avoid writing bad news stories, but it's hard to run against the tide when everyone is getting rich.
Does Mr. Vaughan recognise that as an influence?
Joe Higgins (Dublin West, Socialist Party)
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On page 2 of his presentation, Mr. Vaughan says, "We had little or no reason to believe that key figures in our financial regulatory infrastructure were not [doing the work they were required to do and not] functioning as they should" What was manifest during the inflation of the bubble was rampant speculation in building land and the fact that the price of an ordinary home increased every year for ten years by the equivalent of the average industrial wage, from 1996 to 2006, and, as we know, the young people trying to buy houses had huge mortgages placed upon them, and the length of mortgage went from 20 years to 40 years. Did Mr. Vaughan ever consider launching a major project of investigative journalism to expose the level of profiteering that was going on behind that to investigate, for example, who was buying the land and then selling it a few years later for massive gains, how that affected the prices of the homes that were built on it and the detrimental social effect that would have on the people who were buying? Did the Irish Examinerever conduct such an investigative project of journalism?
Joe Higgins (Dublin West, Socialist Party)
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Does Mr. Vaughan think it would have been useful to take the then average price of an average new home in Dublin of €375,000, which perhaps would have been a little bit cheaper in Cork and areas outside Dublin, and break it down to the component costs of bricks and mortar, labour and pure profit and speculation? Would that have been a good project for the media to undertake in respect of its readers and those who were afflicted by the price of housing?
Mr. Tom Murphy:
What Deputy Higgins has described is the normal bread and butter-type editorial coverage that one would expect to see in any quality newspaper. All these issues were covered, but not as an investigative piece but in a series of articles over time. I have no doubt that much of what Deputy Higgins has said has been covered but not in the format that he proposed.
Joe Higgins (Dublin West, Socialist Party)
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Does Mr. Murphy agree that there should have been that type of investigation? Perhaps, Mr. Murphy could not have known about the credit manoeuvring going on inside the banks, but the rampant level of speculation was known to all. Does he think it would have been appropriate for the media to go on a much more offensive investigation?
Mr. Tom Murphy:
I can see that it could have been useful, but let me say that we would have reported land and property transactions, where land was being rezoned. We would have spoken about the cost of properties and we would have done much of what the Deputy is saying, but not in the format he proposes. It was part of our editorial content.
Michael D'Arcy (Fine Gael)
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As Mr. Vaughan is now the longest serving editor nationally, to what extent does a personal view influence his editorial?
Ciarán Lynch (Cork South Central, Labour)
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This is a leading question. I think the Senator is asking how Mr. Vaughan arrives at an editorial position.
Michael D'Arcy (Fine Gael)
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I was not misleading-----
Ciarán Lynch (Cork South Central, Labour)
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I said "leading".
Michael D'Arcy (Fine Gael)
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-----or leading.
Michael D'Arcy (Fine Gael)
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May I ask about the extent of the influence of those with whom Mr. Vaughan engages? Is the ratio 50:50, 60:40, 70:30 or is there a formula?
Michael D'Arcy (Fine Gael)
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Would it be Mr. Vaughan's personal view?
Michael D'Arcy (Fine Gael)
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The first occasion that I have sourced the term "soft landing" was in the book Anglo Republic: Inside the Bank that Broke Irelandwhen Simon Carswell refers to the then Deputy Noel Ahern using the term in 2003. What is Mr. Vaughan's personal view of soft landings?
Michael D'Arcy (Fine Gael)
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In terms of Mr. Vaughan consulting people from eight different sectors, including finance, did he discuss the concept of a soft landing with the financial journalists for his group?
Michael D'Arcy (Fine Gael)
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Were there many editorials about soft landings?
Michael D'Arcy (Fine Gael)
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Earlier today in evidence Dr. Julien Mercille said that the primary purpose for a media outlet is to tell the truth. As an experienced practitioner in the sector, Mr. Vaughan, what is the primary purpose of a media outlet?
Mr. Tim Vaughan:
As I have said already, it is to report the news and events truthfully and accurately. It is to provide context and analysis for the news and events as they happen and to open its columns to contrary and diverse opinion. It has to be accurate. It is important to state that there is a difference between informed speculation and fact. Many of the commentators over the years were giving informed opinions of the state of play at various stages. Mr. David McWilliams was giving very informed opinion on his views of the way the economy would go from 2001. That did not become a fact until after the crash. Dr. Mercille spoke about the need for the truth and the need for facts. I think he was long on opinion and short on facts. He spoke of his regard for The Guardian. He might well have remembered its great editor, C.P. Scott, who said opinion is free and facts are sacred. We have to deal with the facts.
Michael D'Arcy (Fine Gael)
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What is Mr. Vaughan's view on commentators who espoused a particular view but subsequently changed it and gave an inconsistent view on the banking sector? How did people, whose views altered and changed, influence his interaction with them? Did he hold the views of those whose viewpoints changed in the same high regard as those with a consistent view?
Michael D'Arcy (Fine Gael)
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I may not be asking it particularly clearly. Some commentators changed their views. They espoused a particular view and all of a sudden that view changed. I am thinking of Mr. David McWilliams's view on the bank guarantee. He took a position and a month later he took a contrary position. Mr. Vaughan has said that the editorial is his personal view in conjunction-----
Ciarán Lynch (Cork South Central, Labour)
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I do not think that Mr. McWilliams would agree with Senator D'Arcy. I think his position evolved. I think Mr. McWilliams's opinion might be different from Senator D'Arcy's reading of his opinion. I will accept the general point.
Michael D'Arcy (Fine Gael)
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Mr. Vaughan stated the editorial is his personal view in conjunction with the opinion of people whom he trusts. If their position evolves, changes or alters, how does this influence the editorial he would write subsequent to their views altering?
Ciarán Lynch (Cork South Central, Labour)
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That is a nice short answer to a long question. After Senator Sean Barrett's questions, we will move towards wrapping up.
Sean Barrett (Independent)
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I welcome our friends from Cork and thank them for making the journey. In Mr. Murphy's presentation, he referred to the splendid Cork Savings Bank building. Was it part of the group for a while? Was it to be the corporate headquarters?
Sean Barrett (Independent)
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Is it still in the group?
Sean Barrett (Independent)
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Mr. Vaughan referred to Mr. Maurice O'Connell as a contrarian. Mr. O'Connell wrote in the Irish Examinerin 1999 that banks were lending too much money too easily. How did Mr. Vaughan present the story?
Sean Barrett (Independent)
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It struck me as strange that the Governor of the Central Bank of Ireland was saying that. I would be analogous to a hospital consultant saying that too many of his or her patients were seriously ill or dying. It was a story not just because of what he said but because of who he was. Did Mr. Vaughan question him on it?
Ciarán Lynch (Cork South Central, Labour)
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There is a reasonable level of recollection or recall.
Sean Barrett (Independent)
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I thank the editor.
Sean Barrett (Independent)
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Did the article by the redoubtable Mr. Ryle Dwyer appear on its normal page, or did Mr. Vaughan put it on the business page so that the economics and business people would see the contrarian view?
Sean Barrett (Independent)
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Did people in Cork communicate to the Irish Examinera feeling we have got from around the country - that too many banking functions had been relocated to Dublin, that managers in important towns and cities throughout Ireland were replaced by a speaking clock in the Dublin headquarters and that this was part of the problem in the property sector?
Sean Barrett (Independent)
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Did Mr. Vaughan ever have any indication from the bankers, or in talks with his journalists, particularly when the Irish Examinerwas on Academy Street and they were on the South Mall, that things were happening in banking in Cork that could not continue? Did any bankers communicate to him that a crash was likely to be on the way?
Sean Barrett (Independent)
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Ditto with the property sector. Did anybody in the property sector communicating with Mr. Vaughan or his journalists say there was going to be a crash?
Sean Barrett (Independent)
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I was hoping the rebel county would have lived up to its reputation. The Central Statistics Office is located in Mahon in Cork. It is a major advantage for the Irish Examinerin terms of getting data on issues such as the way property lending took over Irish banking. Does the Irish Examinerhave first use of all that data and good contacts with the CSO?
Sean Barrett (Independent)
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Mr. Vaughan noted the rapid movement in Irish bank lending towards property to the exclusion of virtually everything else, so he had a warning signal.
Kieran O'Donnell (Limerick City, Fine Gael)
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On a point of information, Senator Michael D'Arcy asked Mr. Vaughan whether he had written an editorial about a soft landing. There was one on 7 August 2007 entitled "Soft landing to cushion fall in prices." Did the fact that there was so much competition between the various newspapers influence the coverage of the property market generally? This is as much a question for Mr. Murphy.
Kieran O'Donnell (Limerick City, Fine Gael)
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Would there ever be a situation in which the Irish Examiner would refuse advertising?
Kieran O'Donnell (Limerick City, Fine Gael)
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Not in property?
Kieran O'Donnell (Limerick City, Fine Gael)
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Did the editor of the property supplement, Mr. Tommy Barker, report to Mr. Vaughan? Was Mr. Vaughan the senior editor?
Kieran O'Donnell (Limerick City, Fine Gael)
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Would Mr. Vaughan have an input into the content of the property supplement?
Kieran O'Donnell (Limerick City, Fine Gael)
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Would Mr. Vaughan ever have asked for something to be changed in the property supplement that he felt might have conflicted in some way with the main body of the newspaper?
Michael McGrath (Cork South Central, Fianna Fail)
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As a journalist, a citizen and someone who has, in his professional work, observed the years leading up to the crisis and what has emerged since, what is Mr. Vaughan's view of this inquiry, if he cares to express one, from a public service point of view? Where does he believe it could usefully focus its work in terms of where the gaps in the knowledge are? Would he like to make any comments on it?
Ciarán Lynch (Cork South Central, Labour)
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I did not think I would be looking at you, either.
Marc MacSharry (Fianna Fail)
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It is almost over, Mr. Vaughan will be glad to know.
Ciarán Lynch (Cork South Central, Labour)
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In relation to Deputy McGrath's question, the inquiry's task is not just to examine the past and see where errors were made or things were not picked up or spotted. Going into the future, lessons must be learned to ensure we do not repeat these errors.
Mr. Vaughan talked about better scrutiny of major opinion shapers and agencies whose reputations are renowned, such as the IMF, and agencies which appeared before the committee and said they got it wrong, such as the ESRI and others. Is there a lesson for his industry going forward in terms of how it can scrutinise what is happening daily, in particular in the property sector, so we do not see the type of bubble we saw in the past?
Mr. Tim Vaughan:
One of the lessons is to be even more sceptical and more inquisitorial. It has underlined, if ever it needed to be, the importance of investigative journalism. There are some changes that will be beneficial going forward. For example, the Central Bank of Ireland was not under the Freedom of Information Act at the time and that is an important development. We focused on property largely for purchase during those years and perhaps we should have looked more robustly at, and campaigned for improvements to, legislation governing rental accommodation. The whole issue of social housing policy went a bit under the radar as well and it should be addressed.
Ciarán Lynch (Cork South Central, Labour)
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Is there anything Mr. Murphy or Mr. Vaughan would like to add before I bring the meeting to a conclusion?
Ciarán Lynch (Cork South Central, Labour)
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As we move into the media module, I thank Mr. Murphy and Mr. Vaughan for their participation today. It was a very informative and valuable meeting which will assist our understanding of the factors leading to the banking crisis in Ireland. We need to go into private session but we will suspend for ten minutes and then resume. Is that agreed? Agreed.