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Murdoch Heads for a Fall

Politics / Mainstream Media Jul 09, 2011 - 02:04 AM GMT

By: Mike_Whitney

Politics

Best Financial Markets Analysis ArticleBoy, this is about as sleazy as it gets....

Imagine that your 13-year old daughter has been kidnapped and you have no idea where she is. So you frantically call her cell phone over and over clinging to the faint hope that she might still be alive. And, then, a miracle happens; you notice that messages on her phone have been deleted signalling that she's still alive but unable to call back.


What a relief! Suddenly, you are overcome with feelings of joy and gratitude knowing that your child is still alive.

But then something terrible happens. You find out that your daughter's been dead all along. You only thought she was alive because some sleazeball working for a Murdoch tabloid had been fiddling around with her phone messages so he could get the inside story.

Here's the story from The Guardian:

"....the journalists at The News of the World then encountered a problem. Milly’s voicemail box filled up and would accept no more messages. Apparently thirsty for more information from more voicemails, the paper intervened — and deleted the messages that had been left in the first few days after her disappearance. According to one source, this had a devastating effect: when her friends and family called again and discovered that her voicemail had been cleared, they concluded that this must have been done by Milly herself and, therefore, that she must still be alive. But she was not. The interference created false hope and extra agony for those who were misled by it." (The Guradian)

Is that the most heartless thing you've ever heard or what?

And the Milly Dowler incident is just the tip of the iceberg. Investigators are now trying to figure out whether the News of the World tabloid (NoW) hacked the phones of relatives of dead soldiers, terrorist victims and other murder victims.

Get the picture? Murdoch is in the bereavement business; and business is good! Personal suffering doesn't matter. What matters is eyeballs on the screen and papers sold. That's what really counts; the bottom line.

Here's a little background on the phone hacking charges from the UK Guardian:

"The Metropolitan police holds evidence that could prove hundreds of people had their phones hacked by News of the World, Scotland Yard told the high court, a far greater number than had previously been believed.

Barristers for the Metropolitan police said notes seized from Glenn Mulcaire, the private investigator on the paper's books, showed he made a note of 149 mobile phone pin numbers and around 400 unique voicemail numbers. Both are used to access messages left on mobile phones.

Jason Beer QC, for the Metropolitan police, told a high court hearing the figures were: "a snap shot in time as of last week". Until Friday, the police had maintained Mulcaire kept a record of just 91 pin numbers.

The true extent of the investigator's activities is only now becoming apparent as Operation Wheeting, the new police investigation into phone-hacking at the News of the World which began in January, continues. Mulcaire's targets included the actor Jude Law, who is suing the paper for breach of privacy." ("Police uncover evidence of hundreds more hacked phones" Guardian)

And who is this Glenn Mulcaire character who was on the company payroll? Here's a clip from the Associated Press that helps to fill in the blanks:

"Glenn Mulcaire, a private detective employed by News of the World, and former News of the World reporter Clive Goodman have already served prison sentences for hacking into the phones of royal officials. Mulcaire issued an apology Tuesday to anyone who had been hurt by his actions, but said there was no intention of interfering with a police investigation.

"Working for the News of the World was never easy. There was relentless pressure. There was a constant demand for results," Mulcaire said." ("UK phone hacking targets more slain schoolgirls", Gregory Katz, AP)

Nice, eh? And this guy was getting paid by Murdoch's NoW?

So the phone hacking goes way-back to 2002 (at the very least) and involves some very unsavory people like Mulcaire, right? Doesn't that suggest that it was company policy?

For those who believe that Murdoch "didn't know" what was going on at News of the World, take a look at this blurb from Bloomberg:

"Another Labour lawmaker, Tom Watson, demanded action against James Murdoch, Rupert’s 38-year-old son, who runs News Corp.’s European operations....

‘Cover-Up’

Watson referred to the News of the World’s statement to a parliamentary committee in 2009 that James Murdoch had approved a 700,000-pound payment to a phone-hacking victim that was accompanied by a non-disclosure agreement. The company had been trying to organize a “cover-up,” the lawmaker said.

“It is clear now that he personally, and without board approval, authorized money to be paid by his company to silence people who’d been hacked,” Watson said. “This is nothing short of an attempt to pervert the course of justice.” ( "Murdoch Gets Dangerous for Cameron", Bloomberg)

"So, Rupert's son James knew what was going on", but Rupert did not? How believable is that?

What the public needs to know, is how far up the chain of command this goes, because that's the only way to determine accountability. Is phone hacking and (possible) obstruction of justice company policy or not? That's the question. If it is, there needs to be a thorough investigation and criminal penalties. That means jail-time.

The editors at News of the World should be required to sign depositions stating whether they knew that private investigators were being used to hack phone-lines or not. If they knew, then one can assume that it wasn't merely overzealous reporting, but company policy. And if it was company policy, then whoever set the policy is guilty. Was it Murdoch?

The hacking scandal has sent shares in News Corporation tumbling and is now threatening to derail Murdoch's bid to takeover BSkyB. Public revulsion has also forced the government to get involved. Prime Minister David Cameron, has called the hacking claims ''truly dreadful'' but has been restrained in his criticism due to his connections to Murdoch. (He is now calling for an investigation) Others, like Tim Farron, the president of the Liberal Democrats, have been less diplomatic. According to the he Sydney Morning Herald, Farron, "said News executives had shown they were not ''fit and proper persons'' to take over BSkyB and joined calls for a public inquiry into the hacking scandal...."This goes far deeper than one individual. It appears to have been about a culture and a complete lack of ethics,'' he said." (The Sydney Morning Herald)

"Labour MP Chris Bryant was even more strident in his criticism. Bryant said, "These were the "immoral and criminal deeds of organisation that was appallingly led," he said. "Journalists and investigators should be ashamed of what happened, so too should the people who ran the paper. Editorial negligence is tantamount to complicity," said Mr Bryant. (The Telegraph)

The News of the World phone hacking flap is a fast-breaking story that could go any number of ways. But one thing is certain, we're going to find out a lot more about the intrusive (and, possibly, illegal) means the media uses to generate headlines. That may be good for the public, but very bad for Rupert Murdoch.

Part 2---Murdoch Update (Friday) Blood in the Water

It's all beginning to unravel for Rupert Murdoch, the serpentine media tycoon, whose empire has been rocked by a phone hacking scandal that's ballooned into a full-blown crisis. On Thursday, Murdoch shuddered the 168 year-old "News of the World" laying off 200 workers while retaining beleaguered NoW editor Rebekah Brooks. Brooks is at the center of the controversy, although she still maintains she knew nothing of the phone hacking. The facts are likely to prove otherwise. She will undoubtedly be questioned by the police in the near-future. If she is implicated, she could go to jail.

On Friday, the former editor of News of the World, Andy Coulson, and former royal editor, Clive Goodman, were arrested by the Metropolitan Police in connection to phone hacking allegations. The investigation is widening and more arrests are expected in the coming weeks.

The scandal has sent shares of News Corp. tumbling and taken a toll on Murdoch's business interests. According to The Guardian, the prospects for the big BSkyB deal appear to be fading. Here's an excerpt from the article:

"Rupert Murdoch's plan to take full control of BSkyB have been scuppered by the political fallout from the News of the World phone-hacking scandal, the City believes.

Sam Hart, media analyst at broker Charles Stanley said: "Murdoch's plan to bid for the satellite operator has been kicked into touch.

"Shareholders are discounting the possibility that this bid won't happen for the foreseeable future. Some people wonder if it will happen at all. It could take years before the various inquiries have wound up, so the deal has been pushed much further back than anyone would have guessed a week ago." ("BSkyB deal could collapse, City experts warn", Guardian)

And here's more on the selloff of Murdoch stocks:

"Investors in companies controlled by Rupert Murdoch have been dumping the shares amid fears on both sides of the Atlantic over the fallout from the phone-hacking scandal at the News of the World. Shares in broadcaster BSkyB are down 5% in the last week, wiping some £666m off the value of the business, while News Corp had lost 2.6% – slicing some $400m off the value of the News of the World's ultimate parent company." (The Guardian)

The phone hacking incident has helped to crystallize the public's growing contempt for the media and its methods. In a matter of days, Rupert Murdoch has gone from a king-maker to pariah, a transformation that he has brought about for many of his victims. Murdoch knows how fickle people can be and how much they enjoy seeing the rich and powerful get skewered in the press. He probably wonders if he is next on the list. Here's a clip from and interview with Nick Davies on Wallace's blog:

"To me it isn't a story about journalists behaving badly. It's about the power elite. It's about the most powerful news organisation in the world. It's about the most powerful police force in the country. It's about the most powerful political party in the country, and for good measure it's about the press complaints commission and how they all spontaneously colluded together to make everybody's life easier. It's about how they casually assumed that the law didn't apply to them, and how they equally casually assumed that it's perfectly all right to lie to the rest of us..the little people." (Wallace's blog: Rupert Murdoch - destroying standards)

The phone hacking scandal has its tentacles everywhere, from NoW front offices to Scotland Yard to 10 Downing Street. How is Prime Minister David Cameron involved? Were the police taking payoffs for information? How high up the chain of command did they know about the hacking? Did Murdoch know what was going on?

This wasn't some trifling, part-time hacking operation. Oh no. As former employee at the News of the World Paul McMullan told actor Hugh Grant:

(It was a) "High, extensive, industrial-scale phone-hacking went on at News of the World, particularly under Andy Coulson, (and) it wasn't just the News of the World, it was all the tabloids, how money regularly passed hands between News International and offices of Metropolitan Police," he said." ("How Hugh Grant Helped Expose News Corp.'s Phone-hacking scandal", Hollywood Reporter)

So, phone hacking is de rigeur in the sleaze business, mainly because it saves time and money on investigations. It's also a good way to nab the big headline, which is the real goal. News of the World never would have uncovered the facts about 13-year old murder victim Milly Dowler if they hadn't hacked her messages. That gave them a leg-up on the competition allowing them to break the Big Story and sell more papers. They probably never gave a second thought to the fact that their actions would cause more suffering for Dowler's grieving parents. Why would they care anyway?

It's going to be a bumpy few months for Murdoch. There are bound to be more arrests, more surprises, and more employees who leak their stories to the press. And, then, there's always the possibility that another shoe will drop causing even more trouble; no one knows for sure.

This could all end very badly for Rupert Murdoch.

By Mike Whitney

Email: fergiewhitney@msn.com

Mike is a well respected freelance writer living in Washington state, interested in politics and economics from a libertarian perspective.

© 2011 Copyright Mike Whitney - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis.
Individuals should consult with their personal financial advisors.

Mike Whitney Archive

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