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Select Committee on the Future of Public Interest Journalism
22/08/2017
Impact of search engines, social media and disinformation on journalism in Australia

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RYLE, Mr Gerard, Director, International Consortium of Investigative Journalists

[15:16]

CHAIR: I now welcome Mr Gerard Ryle from the International Consortium of Investigative Journalists, and I want to congratulate Mr Ryle for the work that was done on the Panama Papers. In a room next door, we are talking about corporate tax minimisation and avoidance, and the two things are obviously quite related to one another. I've got here your bio. Rather than read it into the Hansard, I may ask before I ask you for an opening statement on your views—and we'll get into that—if just generally you want to explain for the Hansard record what the International Consortium of Investigative Journalists is, how it came together and what it represents.

Mr Ryle : Sure. We are a non-profit, based in Washington DC. We basically rely on philanthropy to pay for journalism. I guess the reason that's significant here is that you don't have tax deductions for journalism in Australia, whereas you do in America. There are dozens of organisations like ours that are basically doing work on a domestic level in America: the Center for Public Integrity, ProPublica and organisations like that. Then there are a few organisations like ours that do work out of America internationally. But we're probably, at this point, the best known. It has basically allowed public interest journalism to flourish, because people can get a tax deduction for what we do. We work by bringing media organisations around the world together, to work on stories that cross borders. Here in Australia, we work with Four Corners on a regular basis, with The Guardian Australia and also with the Financial Review. We are open to working with pretty much anyone. We also work with the BBC, Le Monde in France and The New York Times. We find stories that can possibly have a global impact and bring them all together to work together. That's what we do.

CHAIR: I'm fascinated by this. The bit that I think makes your organisation stand out as opposed to others is that you do active journalism. You're not just a vehicle for releasing information. What makes your role so different from, say, a WikiLeaks» is that you, as I understand it, apply journalistic standards to the work you release, where it's not just a vehicle to get things out. Is that fair?

Mr Ryle : Yes. We basically bring the story to the media organisations, but we rely on each media organisation to do their own work. They can decide what's important for their constituents and what isn't important. We don't tell them what to do. We have no editorial control, but we also do our own journalism. Where we differ from «WikiLeaks is that, when we get big datasets like the Panama Papers, we don’t just publish every single detail on the web. We do publish extracted details, but we do make all of the documents available to the journalists, and we allow the journalists to do journalism. We basically are a service industry for the media around the world.

CHAIR: The observation you made, and one of the things that we're actively looking at for our recommendations in this inquiry, is this idea around tax deductibility for journalism and for philanthropic investment in journalism.

There are two different areas around that, two different tax components to it. Again, you can use the American example. You take five minutes of listening to PBS or whatever radio and it starts with—there's a huge cultural difference between here and there, obviously, but the MacArthur Foundation and the FRONTLINE Fund are all tax deductible organisations; correct?

Mr Ryle : Yes, they can get it from individuals or foundations. Most of our funding comes from big philanthropic foundations, but we also take $2 donations from the public and other things. But, yes, that's what funds the journalism in America.

CHAIR: I don't quite understand how it came about but we have a situation here. Take the Minerals Council of Australia. They're entitled to it, within the rules. They have tax exempt status. And The Guardian, for instance, doesn't. And a lot of charity organisations that would be focused towards journalism, were they to be created, wouldn't, which is just an incentive not to—obviously, it becomes a disincentive for people investing in that. You talk about the American example. Do you know anything about the tax status around the world apart from America? I'm aware of the American example, but what about European examples?

Mr Ryle : Not quite a lot, because we take money from organisations in different countries. It's different in every country: it's not tax deductible in England or in most countries around the world. In fact, I think America's probably the only place where it is.

CHAIR: Really?

Mr Ryle : Yes. But there are ways around the rules, and we still get money, for instance, from—

Senator XENOPHON: Tax lawyers—

Mr Ryle : We're not, no, and they're not either.

CHAIR: Putting money through Panama, I thought! I thought that's the way you do it.

Mr Ryle : You can get around it by—you can talk about public education, for instance.

Senator XENOPHON: And it does have a public education role.

Mr Ryle : I think here, too, you can get a tax deduction if you're a cultural organisation, I believe; it's very similar.

CHAIR: Here, a lot of them do it in very odd ways. They partner with a university and then the university can take the money—those kinds of workarounds.

Mr Ryle : That happens in the US as well. For instance, a lot of the fellowship programs for journalism are done through universities, where you can get tax deductible endowments and things like that. A lot of the same organisations that fund us, for instance, fund those journalism fellowships as well.

CHAIR: I wouldn't mind getting your take on this. The type of investigative journalism that you support is, frankly, quite expensive.

Mr Ryle : It's not necessarily, no. We like to pride ourselves on the fact that we're a very small organisation. My budget this year is about $3 million, which is not a lot of money for what we do. The Panama Papers itself would have cost about $1.8 million all up and, given that we had nearly 400 journalists working in 50 countries on that story, it's a pretty good return. If you wanted to get an actual return on the story itself, you're talking about 150 inquiries caused by that story, two governments falling, one in Iceland, one in Pakistan.

Senator XENOPHON: So only $15,000 per inquiry.

Mr Ryle : I'll give you an example: there were 400 public companies that we named in the Panama Papers, which lost a combined total of $135 billion, which is bigger than the Enron and Volkswagen scandals combined. In terms of a public good that came out of that investment of $1.8 million, I would argue that it was a pretty good investment. How it works for us, though, is that we basically aid and help the existing media organisations by providing them with the documents, in the first place, but also the technology that allows them to look at the documents. We're like a service industry. We're not trying to take away the jobs of the journalists at The Guardian, or the BBC or Le Monde.

CHAIR: No, you're assisting them.

Mr Ryle : We're helping them, basically. They're using existing resources in a better way by having us as a service industry coming to them with a story, coming to them with technology, coming to them with documents, and then they get their own journalists to work on the story. We had, I think, 380 journalists working on the Panama Papers. I at ICIJ paid for 22 of them, so you can see how our little organisation can have a huge impact and help—

Senator XENOPHON: Without embarrassing Marian Wilkinson—who's in the room and who led the charge in terms of the Four Corners investigation, which caused waves here—of the 22 journalists that you paid for, did you get that back from the news organisation? Did you get reimbursed for it in some way or is there some formula to get your money back so you can fund the next big investigative journalism project?

Mr Ryle : No money changes hands at all. We go to our funders, which are the philanthropic foundations. We get money from them. They don't tell us what to do. We certainly only take general-support funding, which is very unusual, again.

Senator XENOPHON: So it's not tied in any way?

Mr Ryle : No, it's not tied in any way. Most non-profit journalism outfits in the US are tied to specific funding, for instant, someone will come to them and say, 'We will give you $1 million to investigate the environment,' which basically limits you to doing environmental stories or medical stories or political stories. At ICIJ we only take general-support funding, and we do that for a reason: it doesn't interfere with our right to choose the story that we want to investigate.

Senator XENOPHON: Choosing the story is, itself, an editorial function, isn't it? It's a function of editorial choice.

Mr Ryle : It is entirely, yes. We only survive because we find good stories that the journalists want to investigate, then they go to their editors and get the resources. I would go to Marian with a story, but then Marian would talk to her bosses at Four Corners and try to get the resources to do the story for Four Corners. It's the same at the Fin Review. It's the same at The Guardian.

CHAIR: To put this in a global perspective: we've had a fair bit of evidence from people talking about American examples in the media, particularly around the death of papers and regional papers. There are all these figures that show that The New York Times and The Washington Post are having a good year, but every kind of local paper under the sun is probably struggling in this kind of modern environment. Are you able to draw for us the global trends in terms of investigative journalism? We've seen these figures in Australia. We've lost 3,000 journalists in the past five or six years—they were the figures that were presented to us.

Senator XENOPHON: About a quarter of the journalists in this country.

CHAIR: That only seems to be heading in one direction. Are you able to help us place that in some kind of, from your anecdotal evidence, international context?

Mr Ryle : I think you'll find that most countries are suffering the same thing, except some countries, bizarrely, are the opposite—India for instance.

CHAIR: Indian local newspapers are through the roof. They are going up. There are more papers every week.

Mr Ryle : Journalism is flourishing there, and they're making it, but in most countries, like the US, England and Australia, journalists are losing their jobs. It's no longer profitable. The business models that have sustained journalism are now broken. In many ways the reason I see ICIJ has flourished is because of that: people in the media organisations are now willing to listen to new methods of doing things. I think if I tried to do this 10 years ago I couldn't have done it.

CHAIR: Would they have said, 'No, it's your story, we do our own stories.'

Mr Ryle : They were too big. They didn't want to listen to you. They felt they could do everything in-house. They don't have the resources to do what we do. Half of my team are computer engineers. They are journalists, but they have skills that the media companies have not invested in. We're able to go to them with ready-made data journalists that can basically get huge datasets and make them searchable and readable for the journalists. No media organisations really have the resources to do that anymore. Because we get everyone to share information, they also share photographs and graphics. It actually becomes very cost-effective to work with us, for instance, you don't need to send someone to France to get a photograph when you've got someone on the team that you're working with who can go and take the photograph for you. In terms of graphics and other visuals, we tend to do that for the media organisations or they share with each other.

CHAIR: That's really fascinating. You're effectively saying, if I'm understand this correctly, that the creation of an organisation like yours is a response to this new environment of rationalisation within the media and 10 or 15 years ago that kind of collaboration wouldn't have been as successful. You're seeing the collaboration as a product of necessity as much as it is a product of globalisation.

Mr Ryle : ICIJ has been around for 20 years, but the way we're working has changed dramatically. In the last five years we have taken this new way of working. We've gone from doing the traditional American non-profit journalism to really doing what you are seeing today, which is Panama Papers, before that, in a way, it was Swiss Leaks. We've done a number of these stories over the last five years, each of them bigger than the last. But, yes, there is a huge change in the attitude of the media now. They're willing to listen to new ways of doing things, and when we come to them with a story they listen now. I had real trouble at the beginning, when I went over there six years ago, trying to get people to listen to me to actually convince them that this was a good way of working. Now they're all convinced.

Senator XENOPHON: We are faced with legislation here in Australia that relates to media ownership rules—the so-called two-out-of-three rule—and you worked at Fairfax previously, so you are familiar with that. One argument from some media companies, the small media companies, is that it's inevitable but, if you're going to go down that path, you need to have some countervailing measures. One measure that I have been pushing for is giving accelerated tax write-offs, in the form of R&D type tax write-offs, which work in that way, so that small and medium publications or mastheads that turn over up to $25 million a year can get that tax write-off, or, for up to $2½ million in expenditure on content providers—journalists, subeditors and editors—you could claim a 40 per cent write-off of $1 million. Is that the sort of thing that you think might help in terms of that investigative journalism? It is not just on a global level, like the Panama papers. I have young journalists who work for country newspapers who say, 'We've got so many good stories on malfeasance, misfeasance, problems with local government and the local council, but we just don't have the resources to cover it.' What is the solution, short of being fortunate enough to have philanthropic donations to underpin quality investigative journalism or direct public funding, such as the ABC has?

Mr Ryle : I just want to make a general comment on that, because I believe there is an easy way to help journalists, and that is to make it easier to do journalism. It's really difficult to do journalism in Australia. I've now worked in many different countries and I've worked with many different journalists around the world. This is one of the most difficult environments in the world to be a journalist.

Senator XENOPHON: In what way?

Mr Ryle : It's so easy to be sued here. The defamation laws here are antiquated. Even in the UK—and we base our laws on the UK's—there is now a thing called the Reynolds defence, which came from, I believe, an action taken by the Irish Prime Minister against an organisation in Britain. Eventually he did win the case, but he won one pound, and basically that has changed the rules.

Senator XENOPHON: I think it would have cost him more than one pound, wouldn't it?

Mr Ryle : It would have cost him a fortune to run the case, and winning one pound is basically a pyrrhic victory. But it has led to a situation, which is a little bit similar to the US, where if you've taken every step to get the story right and you've gone to the person for comment and given them adequate time to respond to your story—even if you get your story wrong—you've still got a defence in court called the Reynolds defence. In the US it's the same. For instance, we fact-check everything we do, and it's not because we like to get out story right. But we basically have a defence in the US afterwards if we get the story wrong, if we've taken every possible step to get the story right.

CHAIR: So it's a good-faith kind of provision?

Mr Ryle : It is. For instance, with the Panama papers, you probably remember the famous incident of the Icelandic Prime Minister getting up from the interview and walking out. That was done three weeks before we published. We went to Vladimir Putin and all his associates a week in advance. Usually it is three weeks, simply because the US requires us to do that. I think here in Australia—and I worked here for 20 years—often you would go to somebody really late because either you were worried about getting an injunction or you were worried that they would lie to you, and, basically, you didn't really give them a right of reply. The laws here are basically encouraging journalism that isn't necessarily good. I think that, if you change the laws, you'll actually end up getting better journalism. It would require journalists to do things they're not used to doing now, which is again, as I say, to go to someone a lot sooner to make sure their facts are checked by a professional fact-checker. I do think that will raise the quality of journalism here, but at the moment you can't afford to do that. You've got a very concentrated media in Australia because you need to have extremely deep pockets to be a media company because you've got to defend all of the court cases that you're going to face.

Senator XENOPHON: As someone who still has a practising certificate as a lawyer I know it's the costs involved, or the preliminary steps, the interlocutory steps, that cost a fortune.

Mr Ryle : I remember the last case that I had when I was working for The Sydney Morning Herald. We wrote a story about this Firepower company, which was a pretty big fraud.

CHAIR: Yes, I remember.

Senator XENOPHON: Which one was that?

CHAIR: It was a Western Australian company where they put this little tablet—it was a money scam.

Mr Ryle : Basically, they sold shares in this company but they did not have a product. They took about $100 million—

CHAIR: It was a thing to give you better fuel efficiency. And they spent it all on sports cars and sponsoring the—

Mr Ryle : And on the Western Force, which has basically just gone under. It was one of the big sponsors.

CHAIR: And the Sydney Kings.

Mr Ryle : And on the Rabbitohs.

Senator XENOPHON: What happened to that?

Mr Ryle : It was quite clear that the whole thing was completely fraudulent, but it still did not stop them from taking The Sydney Morning Herald to court. In fact, we faced about four court cases over that story. It would have cost the company—the figure I had is about $260,000. We were right; the stories were right.

Senator XENOPHON: For something that had no merit all.

Mr Ryle : No. And it turned out that the guy was a fraudster and, of course, you could not collect the money.

CHAIR: That is four cadets for a year.

Mr Ryle : That is a lot of money. I understand that the annual bill of The Sydney Morning Herald is millions of dollars. That is just one newspaper. It is jut ridiculous.

Senator XENOPHON: Some journalist will take the view that, if you have to give one, two or three weeks notice, the person you approach might then go to a friendlier medium and try and kill the story by putting it—

Mr Ryle : Absolutely.

Senator XENOPHON: But that is the quid pro quo really.

Mr Ryle : We faced the same situation in Iceland, where the wife of the Prime Minister immediately went on Facebook and started leaking details of the story. We had to wait three weeks; we had to sweat on that story; but it still worked. You are asking for my opinion. I feel that you could help at the front end of journalism rather than looking at little side issues like a grant here or a grant there. I think you could introduce tax deductibility for non-profit journalism, which would help a lot. And I believe you should look at the libel laws; they are antiquated, they are out of date.

CHAIR: The other tax question we are looking at is the same as with research and development write-offs: allowing write-offs for investments in journalism that would perhaps be paid for by a levy on the aggregators, the Googles of the world. There is no point in making recommendations to government about paying for R&D style write-offs if you are not going to also present how you are going to pay for it. You know, there is an ecosystem. I do not know what your take on something like that would be or whether you know of an example from around the world.

Mr Ryle : I do not have an example for you on that. Again, I would be worried that what you are doing there is really propping up existing players. If you are here to help journalism, then you have to make it easier for journalists to be journalists.

Senator XENOPHON: The evidence we heard yesterday from country publications and entities such as Schwarz Media is that it would actually get more people working and employ more journalists.

Mr Ryle : To my mind, they are still working under the existing very difficult regime to be a journalist.

Senator XENOPHON: But they would take on more journalists; that is what they said.

Mr Ryle : If it was easier to be a journalist here, you would have more journalists doing journalism.

Senator XENOPHON: I hear what you are saying.

CHAIR: They are not mutually exclusive; it does not have to be one or the other. Part of what I am saying is that is difficult to be a journalist. The problems we are seeing with the lay-offs and what is happening is really interesting evidence. The evidence we have not been getting to date is that the problem is the journalism and what is produced or how it is produced; there is not a way of monetising it. You are saying no, if you are able to address some of this stuff, you lower the barrier to entry and it makes the threshold of what you have to monetise easier because you do not have all these other overhead pressures. It is fascinating.

Mr Ryle : Basically, crisis creates innovation. If you want to change things, you have to allow people to innovate. And they will innovate. The technology is racing ahead of journalism at the moment. There will be new players. But if you still have the old system, it is still being controlled—

Senator XENOPHON: I do not disagree with you, but isn't the difficultly here that Google and Facebook between them, they say, take $1½ billion of advertising revenue out of the market? The true figure they take away from the Australian media in advertising revenue is closer to $4 billion a year. That has caused an existential crisis in the sense that all that advertising revenue that helped pay for investigative journalism is now going to Facebook and Google, who, in relative terms, pay very little tax. It is a big issue.

Mr Ryle : I am not contradicting that at all. I would be looking at it in a different way. I would make the journalism easier—

Senator XENOPHON: But your clear message—others have referred to it, but you have homed in on it and amplified it in, I think, a very important way—is that we need to reform our defamation laws in this country. As someone who has been on both the giving and receiving ends of defamation matters, I agree with your thinking: there needs to be a much clearer way. Even if something egregious has been said about the plaintiff, they are told they might lose their house. If something is wrong, I would rather get an apology—and get it widely published in the same way that the initial material was published—and then you can get on with your life.

Mr Ryle : There are laws in the US called SLAPP, of which you are probably aware if you are a lawyer, whereby you can get rid of the lot of nuisance claims. A lot of the claims that come into newspapers are nuisance claims; they are not designed to get an apology or retribution; it is to stop you from doing anything against the person in the future. So you might be on the right track with a story—

CHAIR: Do they work?

Mr Ryle : Of course they do, financially; if you are getting sued, you do tend to back off. But I am not saying it should just be one way; I am not saying you should make defamation laws better and easier for journalists and that there is no obligation on the part of the journalists to improve what they are doing. I do think it will lead to better journalism. If they are forced to, for instance, take every possible step to get the story right and give the person the right of reply, it is going to make for better journalism. There are shades of grey in every story, as I have learnt over the years; I have been doing this for 30 years, and I may not have realised that when I first started out. Every story has a shade of grey, and it is very important to go to both sides.

Senator XENOPHON: Chair, this is not a reflection on the committee—this has been raised tangentially but not to the same extent as Mr Ryle—but I think this is quite important. If we are concerned about investigative journalism breaking big stories and uncovering corruption and malfeasance, bad behaviour by politicians and governments—

CHAIR: And banks.

Senator XENOPHON: banks and large corporations, then reforming our defamation laws along the lines you have suggested will make a very material difference. And it means that small publishers I speak to who say they do not touch some of the big stories because they cannot afford to spend $1 million in court because it will kill them—

Mr Ryle : And I can assure you that is what happening. I was a senior executive at Fairfax, albeit briefly, before I left to go to the US. I can tell you that, when you got the phone calls, you did back off; you had to. It was a question of whether it was really worth the grief you were going to get.

CHAIR: Mr Ryle, I understand how valuable your time is, but are you able to write us a letter of a couple of pages? We will treat it as a submission.

Mr Ryle : Sorry, I only got your call on Friday, so I thought it was better if I came to talk to first and then made a submission.

CHAIR: Thank you. That is completely understandable. If you are able to do that as a submission—we are past the point of the theoretical here; we would like to get some practical ideas for recommendations.

Senator XENOPHON: Best practice in terms of defamation and what needs to be done. I think that is relevant also in the context of media laws: if we value our democracy, we need to value our journalists; and we cannot value our journalism if it is going to be hindered by antiquated defamation laws.

CHAIR: And note that your submission will have parliamentary privilege—so just let it rip!

Senator XENOPHON: You can't get sued for anything you write; that is the great advantage of being covered by parliamentary privilege. We would like to hear about best practice models from around the world.

CHAIR: Mr Ryle, thank you so much. That was incredibly worthwhile. Thank you for making yourself available at short notice, and sorry we had to play around with time a bit.