The sun had long set and the temperature had dropped below freezing in Aspen on Monday evening as James Packer breathed a quiet sign of relief.
Bunkered down in the 18th century-inspired West Buttermilk Estate he jointly owns with his second wife, Erica, in the heart of Colorado snow country, Packer was bracing for the worst all day as the hours counted down to the release of the Bergin report into his embattled Crown Resorts group.
When the report was released just before 9.30pm Aspen time, it confirmed the billionaire’s worst fears – that Crown would be found unsuitable to hold its Sydney licence because of a range of critical risk management and governance failures which at worst, enabled money laundering to take place through its flagship Melbourne casino.
It also confirmed that one of Packer’s most trusted lieutenants, his finance guru Michael Johnston, would have to go from the Crown board. And it made the positions of his director friend Andrew Demetriou and current Crown chief executive Ken Barton untenable.
Most importantly for Packer, Bergin also recommended that no single person or operator in the future be allowed to own 10 per cent of Crown, as has been the case for years for its arch rival, Star Entertainment.
But then she gave Packer an out – he could apply to a proposed new casino regulator to retain his interest.
Importantly she also stressed transitional provisions would be required in order to provide Packer’s Consolidated Press Holdings – which holds 37 per cent of Crown – “with a reasonable period of time to obtain approval from the Authority to either sell down some or all of its existing interest in Crown or to obtain fresh prospective approval to retain that interest”.
Unexpected positives
Then there were other unexpected positives for Packer.
His other closest confidant Guy Jalland was given a clean bill of health to remain a Crown director.
Jalland, CPH’s chief executive, was described as “clearly an honest witness”.
Bergin said Crown’s decision last year to scrap special arrangements giving Packer and CPH access to confidential information and allowing it to charge Crown fees for providing services would give Jalland a different role on the board in a “far healthier” operating environment.
Packer, Jalland and Johnston – and Crown itself – were also found not to have breached the terms of Crown Sydney’s operating agreement with the NSW government by allowing Lawrence Ho’s Melco Group to obtain an interest in Crown in 2019.
Certainly Bergin was critical about the power of Packer’s domineering personality within Crown, even after he left the board to deal with his mental health crisis in March 2017.
She found he was being “deeply involved in managerial manoeuvring and significant decisions of the Company”.
She cited an exchange with former executive chairman John Alexander in November 2018 about cost-cutting plans as highlighting “a rather surprising element of subservience to Mr Packer”, notwithstanding Alexander had built “commercial resilience over years of exposure to hard-nosed business operators”.
She claimed Alexander’s perception of his relationship with Packer was “either blind to the reality or lacking in candour”.
She also highlighted Packer’s communications with Ken Barton in 2019, noting the language employed by Packer in emails reflecting “aggressive expectation and entitlement”.
“The communications demonstrate that Mr Packer perceived Crown as “his” company. His powerful personality, his time-critical requests, his venting of frustration when his requests were not met including the domineering language, for example, ‘for your own sake’, all fed into a regime of Crown’s corporate operatives kowtowing to him.,” she wrote.
While she noted that Packer had nothing but good intentions for Crown, its structure and operations were compromised by his remote management and manoeuvring of the corporate empire which had to end “for the health of the corporation.”
She said the NSW Authority could consider imposing a condition on Crown requiring any future commercial arrangements with CPH and/or Packer to be notified to and approved by the Authority.
But perhaps the most important part for Packer personally in the two voluminous reports produced by Bergin was her consideration of the threat he made in 2015 towards businessman Ben Gray.
Describing the conduct as both serious and disgraceful and inconsistent with that expected of a director of a public company and certainly a close associate of a licensee of the Sydney casino, she said there was no doubt Packer had “suffered ill health” since the event.
She stressed that all the confidential exhibits and medical evidence provided during the course of the inquiry would be available to the casino authority to assist it in any review of his future suitability.
“It is reasonable to conclude that Mr Packer’s expressions of shame and disgrace were genuine,” she wrote.
“These expressions and the ignominy of the exposure of both the conduct and the expressions of shame and disgrace in Public Hearings of this Inquiry and the media reporting thereon may be regarded as mitigating factors by the Authority in any considerations of Mr Packer’s suitability as a close associate upon which the Authority may embark.”
Packer had never sought to hide from the fact that the emails to Ben Gray were shameful but had stressed he was diagnosed both in Israel and Los Angeles with bipolar syndrome and has been on powerful medication ever since.
Some solace for Packer
Bergin has now opened the door for that reality to be considered should he choose to remain associated with Crown.
It is still an even-money bet that the billionaire will look to sell down his stake in part or completely, but with her recommendations Bergin has given him time and space to do that if he so chooses.
And for all the pain the Bergin inquiry has caused him, her commentary on his mental health should provide him with some solace that one of the most reputable judges in the nation has recognised the seriousness of his condition and the potential for his rehabilitation from the dark days of 2015-16.
All while she’s left open the door for Crown to put the wrongs of its past right to retain its Sydney licence.
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