Murdoch Again?

The Murdoch slime machine slithered into the news cycle again. Their people in China reportedly laid some hefty “gifts” (entertainment and travel) on sources over there. If true, that would seem to be a big no-no under US law. Wall Street Journal staffers in China were tagged with the bribery charges. They deny everything and say outsiders hired to investigate gave them a clean bill. They could have saved their money; hopefully our authorities will do the investigation and if it turns out that the Journal is clean, it will not cost Murdoch a penny. But if our investigation goes the other way, it will cost him big time. The FBI and the Justice Department are not commenting on these bribery charges.

However, this is not the only instance of the Murdoch empire being looked at for possible violations of our Foreign Corrupt Practices Act (FCPA). That’s the law that makes it illegal for American entities to bribe folks outside our borders as Murdoch has in Great Britain. His minions were nailed for unconscionable telephone hacking schemes and laying thousands of British pounds on police and other public servants for scoops. Murdoch is a US citizen and his organization is based in the United States; that would seem to put his London crew under FCPA.

That could be the least of Murdoch’s worries. The FCPA violations would go away after some healthy fines; just a cost of doing business for the ethically challenged like Rupert Murdoch. More serious is the finding of a committee of the British Parliament that Murdoch is "not a fit person" to run a major international entity like News Corp. Where that spills over into News Corp’s home in America is when Murdoch’s broadcast licenses come into play. He owns a couple dozen broadcast stations in America.  

Citizens for Responsibility and Ethics in Washington (CREW), a nonpartisan watchdog group, has been bugging the Federal Communications Commission (FCC) to revoke his licenses as the Communications Act would seem to dictate. Should that happen Murdoch’s American broadcast properties would be reduced to some used office furniture, used electronics gear and real estate. The tens of millions these facilities are worth would be gone, poof, just like that. We’ll see what the FCC does. They have had this issue before them for a couple years; it is past time for them to act.

Meanwhile the DOJ is juggling the FCPA implications raised by Murdoch’s bribery activities in Great Britain. The Brits have arrested Murdoch minions by the dozen including Rupert’s darling, Rebecca Brooks, who formerly headed all his smarmy Fleet Street newspaper operations. The DOJ ought to be arresting Murdoch executives here in the United States, perhaps even Murdoch himself, certainly his son James, who headed News Corp at least in theory. Don’t hold your breath, however. In the end the FCC and the DOJ will probably chicken out and do nothing; a pity.

Collapse of an Empire

The ethical cesspool at the center of the media colossus Rupert Murdoch created over the years since he arrived on London’s Fleet Street, is beginning to suck him into its vortex. Last week (05.01.12) a Parliamentary Committee released a 121 page report detailing some of the smarmy activities and behaviors the Murdoch culture has spawned. As widely trumpeted in the media, it branded Murdoch “not a fit person” to run an enterprise like his.

Apologists for the Murdoch clan are quick to point out that the “not-a-fit-person” phrase was opposed by four of the nine members of the Committee, all members of Prime Minister David Cameron’s Conservative Party. While the Conservative members of the Committee dissented on the fit-person wordage, they agreed with most of the report. Cameron is connected to Murdoch’s organization in a number of aspects. Foremost is his former Communications Director, Andy Coulson, who moved directly to 21 Downing Street from one of Murdoch’s London newspapers. Coulson has been arrested but not charged. Prime Minister Cameron described his own ties to the Murdoch organization as “too cozy.”

Phone hacking, police bribery, and who knows what else were unearthed by the inquiry. “Who knows,” because many areas in the report are left untouched. The Committee did not venture into the domain of Scotland Yard and the prosecutors who are still building the criminal cases. As a result they did not explore the role of more than forty Murdoch editors, private investigators, and reporters, along with police officers who have been arrested so far. That group includes Murdoch darling Rebecca Brooks and ten others whose connections to the hacking scandal were reportedly referred to prosecutors last month by Scotland Yard.

All of this and the disclosures unfolding before a separate British judicial inquiry, raises the question, why are there no similar queries into the Murdoch Oligarchy in the United States? Rupert Murdoch and his clan are all US citizens; News Corp is a US corporation. While his trashy newspapers in the UK are often seen as the face of his holdings, they’re but a tiny segment. In America he has a couple dozen television licenses, so where is the FCC? Combined, these stations, Fox News, The New York Post, The Wall Street Journal and his entertainment entities dwarf any similar organization.

Where are the Congressional investigations? Given the detailed bribery charges in the UK, where are the FCPA (Foreign Corrupt Practices Act) concerns? If the SEC is hot on Walmart’s tail (properly) for spreading the wealth among Mexican officials, how about Murdoch’s minions greatly enriching Scotland Yard types? If a parliamentary investigation in the UK finds Murdoch “not a fit person” to run a handful of newspapers, what does that say about the television properties our FCC has awarded him? Are the bureaucrats and the political types in Washington afraid of his attack dogs at The New York Post and Fox News?

A Jolly Good Time

A British High Court Room saw the Murdoch media empire humbled as never before last week. It was the first of what’s likely to be many “Pay-Up Days” for Rupert and his minions. After years of denials and reported cover-ups, the Murdochs were passing out cash like Halloween candy. In carefully worded and vetted statements one potential lawsuit after another was settled, tens of thousands, even hundreds of thousands of pounds in many instances, plus legal and court costs of course. Lots of big entertainment names, political types and the occasional ordinary person who got caught up in their mess.

Two very significant factors stood out for us. One was new: News Group News, the umbrella entity for the Murdoch London based newspapers caught up in the hacking scandal, as much as admitted that their senior executives were involved. In a statement the lawyers for the victims said, “News Group News has agreed to compensation being assessed on the basis that senior employees and directors of NGN knew about the wrongdoing and sought to conceal it by deliberately deceiving investigators and destroying evidence.” 

While that falls under the usual legal cover, “doesn’t admit nor deny,” it’s pretty clear that “documents relating to the nature and scale of the conspiracy, a cover-up and the destruction of evidence by News Group” in the hands of the victim’s legal counsel, has Murdoch painted into a corner. It’s pretty clear that a culture of deceit is at the core of the Murdoch organization and that it seeps down from the very top staining every corner of his vast domain. 

The second thing that popped out for us is not new, but it may be the first time it has emerged in a formal legal setting. Apparently two of Murdoch’s gossip sheets, The News of the World and The Sun, had a field day with details of the back and forth that went on between Jude Law and his ex-wife Sadie Frost. Of special interest to those of us on this side of the pond is that Law had his phone hacked while he was at JFK Airport on Long Island. We had heard that before, but never in a legal setting. It’s important because the laws regarding hacking are very different in America. 

The Murdoch Empire is headquartered in the United States. The parent company, News Corp, is a Delaware corporation and fully subject to the laws of the United States. Rupert Murdoch is a United States citizen. The Murdoch Empire is largely in America. Murdoch moved into the US in the early 70s with one newspaper and soon followed up by founding the Star a trashy supermarket tabloid; adding the New York Post, not much above that. Then came television, motion pictures and The Wall Street Journal, most devoted to spewing his sensationalist trademark views of the world.

By hacking Jude Law in the United States, Murdoch has put it all at risk. There will be no carefully vetted settlement in this case. Like the ethically challenged at Enron, Adelphia and others in our recent past, the Murdochs may very well be facing jail time.

Murdoch Woes

It just keeps getting worse for the Murdoch Empire. An empire so vast that it’s hard to grasp the wide flung tentacles that encompass a host of newspaper, television and entertainment entities spread across the planet. Rupert Murdoch’s shadow darkens almost every English speaking nation in the world, from his birthplace in Australia, to Great Britain and of course the United States. They are all rife with Murdoch properties. 

Things first began to get out of hand in Great Britain. London’s rough and tumble Fleet Street newspaper world, the world that formed the Murdoch culture has ironically exposed behaviors that may end it all for the clan. A rival newspaper, the Guardian, has unearthed one misdeed after another. Most of the media coverage has focused on the telephone hacking the Murdoch London newspapers seemingly used at every opportunity. That, however, is the least of it.

Murdoch scion, James –who heads (in title if not in fact) much of the family enterprise– testified before Parliament that he knew nothing of any hacking beyond one rogue reporter. When the then editor of the now shuttered News of the World and their legal manager came forth with detailed testimony to the contrary, it left James flopping about like a fish out of water. 

Rupert started with a tabloid stable his daddy left him in Australia. He moved on to London while still in his early twenties and much later came to America where he owns a wide array of media from newspapers to motion pictures to television entities. Actually it isn’t “his;” while Murdoch effectively controls News Corp, it is a public company. In fact it is an American company headquartered in New York City.

While fibbing to a parliamentary committee is serious stuff, it is not the worst of the specters looming over the Murdoch Empire. The courts present the most serious threat. News Corp stockholders are lining up to sue. These law suits are serious but not nearly as serious as the gathering storm in Washington. Rupert Murdoch is an American citizen, and News Corp is an American company; both are subject to American laws.

The U.S. Justice Department is looking at bribes paid to London police by News Corp newspapers. Under our Foreign Corrupt Practices Act (FCPA) American companies are not permitted to practice bribery abroad. News Corp is taking this threat very seriously, as well they should. They have hired a flock of lawyers to deal with it, many of them former Department of Justice FCPA experts.

As the noose tightens it’s hard to see any outcome short of the collapse of the Murdoch Empire. An outcome that would seem foreordained in a company run by a man described by one of his executives as, “a man who wants it all, and doesn't understand anybody telling him he can't have it all." That sounds more like a spoiled child than the kind of person we want running the largest media company in the world. While it fits the trashy tabloid culture that spawned Murdoch, a person of character would have grown into a more ethical mode. It seems a waste to have the resources Rupert Murdoch has amassed devoted to the smarmy ends he put them to.

How Low Can You Go?

Just when you begin to think that the Murdoch Empire’s Limbo demonstration could not lower the bar any further, another disclosure adds to their record setting performances. We’ve known about their hacking into the mobile phone of murdered teen Milly Dowler in 2002. Rupert Murdoch himself made a very public apology for that one.

Now the London Coppers have told Sara Payne -who’s eight-year-old was murdered two years earlier in 2000- that her mobile was hacked by a private detective in the employ of Murdoch’s News Corp. And guess where Sara got that telephone? It was a gift from the sympathetic and ever-so-friendly then editor of The News of the World, Rebekah Brooks. The same woman who went on to head all of Murdoch’s British newspaper operations. The same woman who resigned a hair's-breadth before she was arrested. So we are left to ask, where did the private eye get Sara’s number? Is it possible that Ms. Rebekah knew nothing of all of this? Right!

Nasty business, smarmy, but maybe no laws were broken. Maybe. Leave the law breaking bit to new disclosures of a four-year News Corp cover-up. It turns out that an investigation in 2007 by a committee of the British Parliament triggered by a phone hacking guilty plea from a News Corp reporter did not get the whole story. News Corp saw to it that important disclosures were left out.

Murdoch’s minions had their law firm, Harbottle & Lewis, review a couple thousand emails looking “only” for any involvement by the reporter’s editors in his efforts to hack the mobile phones of the Royal Family. After much back and forth about its content, the prestigious law firm dispatched a one-paragraph letter saying they had found no evidence of any higher-up’s involvement in the hacking and the Committee was satisfied.

Now it turns out that while there may have been nothing in the emails to show that the phone hacking went above this one reporter, there were instances –lots of instances– indicating that the reporter was routinely paying police officers to provide inside information. In one instance he asked for a thousand pounds (about two grand US) to buy a stolen copy of the Royal Family’s private phone directory from a police officer.

A review of funds used by News Corp reporters shows receipts covering payments to police officers that round out to about a half billion in US funds over several years. Jon Chapman, a News Corp lawyer at the time, says that he did not realize that slipping payoffs to police officers was illegal. How could he? After all he is not a criminal lawyer and he must have missed that bit about bribing police when he was in law school. Apparently News Corp wouldn’t allow Harbottle & Lewis to go there. Since they were unwilling to flat out say they had found nothing incriminating, they kept their response narrowly parsed to cover only the level of knowledge related to the phone hacking. And the friendly Investigative Committee bought it.  

In the meantime, Rupert Murdock stands steadfast that he knew nothing of any of this; reminiscent of Sergeant Schultz in the CBS Sitcom, “Hogan’s Heroes”. While Murdoch may yet escape any personal responsibility, the culture and views he holds dear are indelibly stamped on every aspect of his worldwide organization. It is hard to imagine that these unsavory and perhaps illegal, ongoing tactics do not reflect News Corp’s founder.

It’s the Culture, Stupid!

The Murdock media feeding frenzy continues unabated. And it may be just beginning. One defining aspect helps explain much. The nature of the media across the pond is different from that in the United States. Great Britain –and most of what’s referred to as the British Commonwealth– are subject to some form of the “Official Secrets Act.”

For all intents and purposes, these laws put all government activity and government folks (those elected, the bureaucracy, etc.) –so far as what they are doing on the job– pretty much out of bounds, safe from pesky reporters. There could have been no Watergate, no Pentagon papers had we suffered under these laws in the United States.

Media subject to these restrictions are reduced to a frantic effort to be the first to reveal any trace of scandal or other bit on the personal level that they can dig up –by hook or by crook as it now turns out. The kind of stuff we largely leave to the supermarket tabloids such as the National Star, one of Murdock’s first purchases in the United States.

The scion of an Australian publisher, Rupert Murdock was still in his early twenties when he landed in the dog-eat-dog culture of Fleet Street where London’s newspapers reside. The young Murdock inhaled it, savored it, embraced it, and made it his own; embarking on a lifetime culture of journalism as a competitive calling.

As he expanded his Empire across the globe Murdock acquired a wide range of US media: motion pictures, television, newspapers and news services. He was forced to become a US citizen –a prerequisite to the ownership of broadcast entities here– but his heart, his soul, the culture of his News Corp remains on Fleet Street.

No one has suggested that Murdock personally hacked into (among thousands of others) the mobile telephone of a missing youngster, or bribed police and other public officials. However, the culture he has projected since founding his organization may have driven dozens of his employees to engage in these repulsive practices over many years. “Get it first” morphed into “Get it anyway you can”. There are now suggestions that News Corp hacking efforts extended to the mobile phones of families of 9/11 victims in America.

These disclosures couldn’t have come at a worse time for Murdock. First his crown jewel, The News of the World, the leading tabloid in Great Britain, went under the bus in an attempt to save his bid for the 61% of British Sky Broadcasting (BSkyB) that his company does not already own. The enormously popular and profitable satellite service dominates television in Great Britain and Ireland. Until the scandals surfaced, it looked like British government approval of the deal was a slam-dunk. Now Murdock has been forced to drop that effort and his current 39% ownership may be in jeopardy.

Faced with government investigations and legislative hearings in Great Britain and the United States, Murdock’s Media Empire –the second largest on the planet– may suffer more losses. None could be more welcome than an end to a culture that has soured and revealed an evil side.