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More Trouble in Murdoch-world

Politics / Mainstream Media Jul 19, 2011 - 02:20 AM GMT

By: Mike_Whitney


Best Financial Markets Analysis ArticleRupert Murdoch's troubles keep piling up.

On Friday, Labor leader Ed Miliband called for a break-up of the Murdoch empire saying, "I think he has too much power over British public life.....We’ve got to look at the situation whereby one person can own more than 20 percent of the newspaper market....I think it’s unhealthy.”

Miliband has a good grasp of public sentiment, which is why his personal approval ratings have soared in the last few weeks. His comments reflect a fundamental change in attitudes about media ownership following revelations about Millie Dowler, the 13-year old murder victim whose phone messages were hacked by investigators employed by Murdoch. The public now understands that the concentration of media has led to terrible abuses that need to be corrected. As the phone hacking investigation widens, the effort to revise media ownership rules is bound to gain pace.

But Murdoch can't be bothered about things like that now. He's got more important matters to attend to, like putting out the fire that's threatening to consume more of his properties. What he's focused on is crisis management and "getting ahead of the curve" so he's not dragged around by events like he has been up-to now. That's why he's launched an impressive Mea Culpa campaign wherein two of his chief lieutenants have resigned (on Friday), Murdoch has personally (and publicly) apologized to the family of Millie Dowler, and News Corp. has published two full-page ads in many their Saturday and Sunday newspapers stating in bold print: "WE ARE SORRY". .... "We are sorry for the serious wrongdoing that occurred.....We are deeply sorry for the hurt suffered by the individuals affected." (etc) signed Rupert Murdoch.

"Mea culpa, mea culpa, mea maxima culpa."

So, Murdoch is taking a more proactive approach to stop the bleeding. But will it work? His first big test will be on July 19, when he and his son James appear before the Select Committee in Parliament to answer questions related to the phone hacking controversy. We expect the usually-abrasive Murdoch to be on his best behavior doing whatever is required to put the flap behind him.

But the crisis won't end with these preliminary hearings. In fact, there's little Murdoch can do to stop the drip, drip, drip of new revelations. Already there's talk of "break ins" and "phone tapping", although, so far, the claims have not been substantiated. What is certain, though, is that Murdoch Inc. is going to be under a microscope for a long time to come. And, that's going to be very bad for advertising revenues and stock prices.

So what will the investigation uncover?

Well, first of all, there's the question of criminal wrongdoing. Is there proof? This is from Reuters:

"News International chief executive Rebekah Brooks was warned by police in 2002 about serious malpractice and possible illegal activities by reporters at a newspaper she edited, former British Prime Minister Gordon Brown said on Wednesday....

"As early as 2002 senior police officers at Scotland Yard met the now chief executive of News International and informed her of serious malpractice on the part of her newspaper staff and criminals undertaking surveillance on their behalf," Brown told parliament on Wednesday." ("Police told News Corps Brooks of malpractice: Brown, Reuters)

Okay, so who knew the phone hacking was going on and how high up the chain of command does it go? All the way to Murdoch?

If so, then was phone hacking company policy? These questions have to be answered.

Here's a tidbit from the Hindustan Times:

"....a steady stream of revelations over the last few years suggest that reporters at the News of the World illegally hacked into the phones of upto 4,000 people, checking on their voice-mails and perhaps, listening to their conversations. The list of those whose phones were hacked (often by private detectives working on behalf of the paper) included politicians, sports stars, actors, other journalists and anybody else who happened to be in the news at the time.....

If it is wrong to hack or tap phones or carry transcripts of the private conversations (as the current mood of outrage suggests) then let’s also accept that this is a fairly common and widespread practice. Reporters often tap phones or secretly tape conversations. Newspapers hack into computers and obtain access to bank data and personal financial information. They carry taped conversations without verifying their accuracy or testing the tapes for evidence of tampering....

In Britain, there is also a little discussed kind of journalism called the ‘dark arts’ in which journos hire actors to impersonate people on the phone to obtain information or pretend to be somebody else to con people into talking to them...." ("When the whip comes down on tabloids", Hindustan Times)

So, Murdoch is just the tip of the iceberg?

Apparently so. But if that's the case, then isn't time the public found out how widespread these intrusions into their privacy really are? And don't people have the right to know whether the media is gathering information legally or not? That seems pretty basic.

There's an interesting article in The Nation titled "Has Roger Ailes Hacked American Phones for Fox News?" by Leslie Savan that brings these questions more into focus. Here's an excerpt:

Dan Cooper was one of the people who helped create the Fox News channel with Roger Ailes, and was fired in 1996. In 2008, Cooper wrote on his website that David Brock (now head of Media Matters) had used him as an anonymous, on-background-only source for an Ailes profile he was writing forNew York magazine. Before the piece was published, on November 17, 1997, Cooper claims that his talent agent, Richard Leibner, told him he had received a call from Ailes, who identified Cooper as a source, and insisted that Leibner drop him as a client--or any client reels Leibner sent Fox would pile up in a corner and gather dust. Cooper continued:

“I made the connections. Ailes knew I had given Brock the interview. Certainly Brock didn’t tell him. Of course. Fox News had gotten Brock’s telephone records from the phone company, and my phone number was on the list. Deep in the bowels of 1211 Avenue of the Americas, News Corporation’s New York headquarters, was what Roger called the Brain Room. Most people thought it was simply the research department of Fox News. But unlike virtually everybody else, because I had to design and build the Brain Room, I knew it also housed a counterintelligence and black ops office. So accessing phone records was easy pie.” ("Has Roger Ailes Hacked American Phones for Fox News?" Leslie Savan, The Nation)

If Savan is right, then the other major media are probably involved in similar activities. But doesn't that suggest that media is not really a "watchdog of power" at all, but rather a threat to the public interest? After all, no one knows how this information is being used. It could be that ownership is using the information to blackmail politicians or to eliminate political enemies. Is that why so many congressmen have decided not to run for another term in the 2012 elections, because someone in the media has dirt on them that would turn them into the next Anthony Wiener or John Edwards?

Lastly, here's a blurb from another article in The Nation titled "Sky Falls on Rupert Murdoch":

"...widening revelations of the phone-hacking scandal show, News Corporation is not an ordinary commercial enterprise. Through his journalists and gossip columnists and the network of former and current police officers and law enforcement officials on his payroll, Rupert Murdoch has been operating what amounts to a private intelligence service. And the threat of personal exposure—on the front page of the Sun or Page Six in the Post—gives News Corporation a kind of leverage over inquisitive regulators or troublesome politicians wielded by no other company on earth.

English already has the expression “para-state” to describe the kind of shadowy forces that operate beneath and behind legitimate authority. Is it really unreasonable to suggest that in News Corporation, Fox, News International, Sky and the rest of Murdoch’s empire, we are witnessing the exposure of the para-corporation?" ("Sky Falls on Rupert Murdoch", D.D. Guttenplan, The Nation)

Repeat: "Rupert Murdoch has been operating what amounts to a private intelligence service."


The firestorm in the UK is not really about phone hacking at all. It's about Corporate fiefdoms and unelected oligarchs who control the flow of information and use that power to their own advantage. The longer the investigation goes on, the better for everyone. Transparency is the best disinfectant.

By Mike Whitney


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.

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