Best little whorehouse in Sydney

When it comes to invective, no one beats the French. The Italians and Germans are fine in their way, but when a Parisian philosophe reaches his stride -- especially when denouncing American sexual mores -- there is none better.

Pascal Bruckner -- essayist, novelist and French man of letters -- let fly in a recent news column in Le Monde:

“America obviously has a problem with sex that stems from its protestant heritage. ... It's not enough though to describe the country as puritanical because what governs here is a twisted puritanism which, after the sexual revolution, talks the language of free love and coexists with a flourishing porn industry. What we have here is lubricious Puritanism.”

The last bit sounds even better in French “C'est très exactement un puritanisme lubrique.”

While Bruckner was writing about the Dominique Strauss-Kuhn affair in New York, his words gave me pause as I prepared this note on a report in the BusinessDay section of the Sydney Morning Herald which ran under the headline, "Westpac pulls out of brothel project."

Was my discomfort with this story a function of un puritanisme lubrique? A lack of continental sophistication, or is there a God-shaped hole in this story?

According to the SMH, one of Australia’s leading ‘high street banks’, Westpac:

... walked away from financing the ‘world's biggest brothel’, the proposed 42-room megaplex on Parramatta Road opposite Sydney University.

The bank had come under pressure to abandon its role financing the brothel project when BusinessDay revealed an investor presentation two weeks ago showing Westpac as the senior financier on the deal. National Australia Bank was also a financier.

In a release to the Australian Stock Exchange today, Delecta, the company behind the development controlled by adult sex toy and porn kingpin Malcolm Day, said it was in the process of seeking alternative funding arrangements.

The deal had called for Westpac to provide $12.1 million in funding to build “spas, lounges, restaurant, underground car park and a number of multi-bed rooms.” The business plan appeared sound as the “existing brothel” took in “$7 million in revenue last year and earnings before interest, tax, depreciation and amortisation (EBITDA) of $3.6 million -- a profit margin of more than 50 per cent.”

From a business point of view this appears to have been an attractive investment. The company has a sound cash flow, is expected to generate $11m in profits on $17.3m in sales in 2013. Oh, and prostitution is legal in that part of Oz.

However, the SMH noted that “Westpac declined to specify why it had withdrawn its offer but it had come under substantial pressure for its involvement with the deal since it was made public on August 1.”

At this point, it appears that there might be a religion ghost in this business report.

Who exerted pressure and why? The article doesn’t say, and a follow up story by the SMH is equally vague, adding only that CEO Gail Kelly and the bank’s senior officers were “mortified at being hauled into the public spotlight as brothel financiers.”

Why were they mortified?  The SMH leaves me guessing.  Perhaps le puritanisme américain has spread to the board rooms of Sydney? Or, could it be, as the Ethical Investor reported on the third day of this newscycle, that Westpac pulled out after a “prominent Anglican questioned the morality of the bank’s board of directors over the deal”?

The Ethical Investor stated that Dr. Phillip Jensen, dean of St Andrew’s Anglican Cathedral in Sydney, had denounced Westpac “for its role in financing the project,” and had “railed against the fact that he had become an unwitting supporter of the brothel by owning shares in Westpac.”

Writing in Anglican Media Sydney Jensen attacked the bank’s ethical investment policies:

“Does this mean to invest ethically I must have nothing to do with banking? Does it mean I should sell my shares or protest at the Westpac AGM? Is it illegal for the bank to refuse, for purely ethical reasons, to invest in a legal, commercially viable, and very profitable business? Would such morally discriminating board members be accused of discrimination? It would certainly be discriminating, indeed ethical – but are boards allowed to discriminate or be ethical? And if they are, why is the Westpac board so unethical as to enter into the wickedness of promoting prostitution?”

It may well be the business pages of the SMH don’t do God -- believing the moral implications of the deal and the subsequent outrage were extraneous to the financial issues at play.

And now back again to our French friends. Is the question I am asking a culturally specific one? Is Bruckner right to suppose that les Anglo-Saxons like Jensen are mere prudes? Or, did the SMH simply miss a crucial element in the story?  It is not as if ethical investing were a new concept after all.

The bottom line: Should business reporting touch upon the ethical or religious issues pertinent to the story? What think ye, readers?

While kudos should go to the SMH for breaking the story and presenting the financial details of the deal, it could have been more than a  louche account of a failed business deal and would have been improved if the basic questions of ethical investing, as raised by Jensen, had been addressed. It's also possible that religious objections may have, literally, helped shut down the deal.

Is that a fact? It would have been good to ask that question.

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