Friday, July 22, 2011

the murdochs: power without responsibility

Video - Rupert and James kinda/sorta testify...,

The Nation | What did we learn from the Murdochs’ testimony [1]? That, at 80, Rupert Murdoch is losing his grip—or wants to appear that way. The billionaire tyrant’s saurian response to his tormentors on the parliamentary select committee showed a man who struggled with names, dates and details, and who needed to be rescued by his son James (who seemed almost pathetically eager to do so). But the picture that emerged of a father far too busy struggling (and by yesterday’s evidence, failing) to keep track of a global media empire to have any knowledge of what his underlings’ underlings were up to on one lowly British tabloid was profoundly at odds not only with Murdoch’s track record as a manager in total command of every detail of his empire, but even with portions of his own testimony yesterday. When MP Tom Keen tossed him a softball: “You’ve been kept in the dark, Rupert Murdoch,” he blasted it right back: “Nobody kept me in the dark. Anything that’s seen as a crisis comes to me.”

James Murdoch’s portrayal of the dutiful son who arrived on the scene too late to have been involved in any wrongdoing—but just in time to sign off on the multimillion-pound payoffs to a handful of hacking victims—was more convincing. Though here too it is worth noting that the legal opinion from Harbottle & Co., the high-priced London firm that News International used to handle the invasion of privacy claims, which James waved around like a doctor’s note getting out of a particularly unpleasant school trip, has been undercut by the firm’s statement yesterday [2] that its advice had been wrongly summarized, but that the firm’s request to be released from confidentiality to explain exactly how had been turned down by News International.

On the whole, the Murdoch strategy of running out the clock was successful—even before the doubtless unpleasant distraction of wiping a shaving cream pie off Murdoch senior’s face, which cost Murdoch a small portion of his majesty but also kept Tom Watson, by far the most dangerous member of the panel, from being allowed to ask a concluding set of questions. There were two small but genuine revelations: that News International continued paying the legal fees for Glenn Mulcaire, the private investigator jailed in 2007 for hacking into mobile phones belonging to members of the British royal family (and who also hacked into the voice messages of the murdered school girl Milly Dowler) long after his conviction, and that Rupert Murdoch himself never even considered resigning or in any way accepting responsibility for the illegal actions of his employees.

What happens next? There are currently at least ten separate British investigations, including an independent inquiry headed by a judge, police investigations into both phone hacking (“Operation Weeting”) and the issue of police corruption and illegal payments to police officers by Murdoch’s newspapers and other British press organizations (“Operation Elveden”), as well as an examination by the media regulator Ofcom about whether the actions of Murdoch employees on the News of the World throws into question the family’s fitness to retain control of its British broadcast operations.

An optimist might think that with so much smoke surely a barbecue is in the offing. But the adage about too many cooks is probably just as relevant. One problem facing any regulator or national legislature genuinely trying to come to grips with Murdoch is that News Corporation is a truly global company. The most recent GAO report shows the company operating 782 foreign subsidiaries—of which 182 are in such notorious tax havens as the British Virgin Islands (sixty-two), the Cayman Islands (thirty-three) and Luxembourg (four). The career of Les Hinton—or indeed James Murdoch—demonstrates the ease with which Murdoch shuffles managers from continent to continent. Tracking the flow of News Corporation assets around the world is far more difficult.

And as I’ve said before [3], News Corporation is no ordinary business enterprise. The thousands of journalists on the company’s books—and the untold number of private investigators, “blaggers” and other practitioners of journalism’s black arts paid off the books—mean that in addition to men and money, News Corp. also has global reach in amassing information, particularly the kind of titillating personal information that can put a troublesome regulator or meddlesome legislator on Page Six of the New York Post or the front page of the Sun. That’s why the most significant comment on the scandal before Nick Davies managed to get the British public to pay attention was from the anonymous MP who, when asked why Parliament kept allowing Rebekah Brooks to refuse repeated invitations to testify, replied that they felt too intimidated [4] by the threat of what might be done to them by News International journalists if they insisted. Combine that threat with a corporation whose unabashed largesse to its friends—from the £ 5 million Harper Collins paid for Margaret Thatcher’s memoirs to the $4.5 million the company offered to pay Newt Gingrich to the $1.25 million paid to Sarah Palin for Going Rogue [5]—seems to transcend business logic and you have assembled a powerful set of incentives for accommodation.

Really getting to the bottom of News Corporation would require a global effort, with global focus—and far more determination than anything shown either by Attorney General Eric Holder’s tepid assurance that the Justice Department would look at any evidence of phone hacking in the United States or David Cameron’s government, whose links with News Corporation go far beyond sharing the occasional egg nog at Christmas.


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