Archive for the ‘Media industry’ Category

Will Discredited Murdoch Get His U.S. Comeuppance?

Thursday, May 3rd, 2012

The recently released UK parliamentary report on the phone hacking scandal involving News Corporation is destined to become a classic exposition of corporate misconduct.

Its authors appear to have exhausted their thesaurus in coming up with various ways of accusing the company and its top executives, including CEO Rupert Murdoch, of deceit. The company’s long-time claim that the hacking was the work of a single “rogue reporter” is described as “false” (p.7) and “no longer [having] any shred of credibility” (p.67). Various assertions made by the company are said to have been “proven to be untrue” (p.9). Company officials are portrayed as having acted “to perpetuate a falsehood” (p.84), “failing to release to the Committee documents that would have helped to expose the truth” (p.14) and as having “repeatedly stonewalled, obfuscated and misled” (p.68).

The report does not come out and directly call Rupert Murdoch a dirty rotten liar, but it makes the same point in a more biting way when it says of the media mogul’s official testimony: “Rupert Murdoch has demonstrated excellent powers of recall and grasp of detail, when it has suited him” (p.68).

In language rare for a government document to use about a powerful corporation and its top executive, the report declares:

On the basis of the facts and evidence before the Committee, we conclude that, if at all relevant times Rupert Murdoch did not take steps to become fully informed about phone-hacking, he turned a blind eye and exhibited wilful blindness to what was going on in his companies and publications. This culture, we consider, permeated from the top throughout the organisation and speaks volumes about the lack of effective corporate governance at News Corporation and News International. We conclude, therefore, that Rupert Murdoch is not a fit person to exercise the stewardship of a major international company (p.70).

As satisfying as this statement is to read, my primary reaction is: what took so long? Murdoch has been the CEO of News Corp. for more than 30 years, and during that time he has done untold damage to the integrity and quality of the media industry worldwide. The phone hacking scandal was not an aberration in the history of the company or the career of its leader.

Murdoch has been unfit to lead at least since the 1970s, when he began acquiring major publications in the United Kingdom and the United States and infusing them with an insidious combination of sensationalism and Neanderthal politics. In the UK he also declared war on the newspaper unions.

Once he was firmly established as a print baron, Murdoch moved into broadcasting and film through the acquisition of Metromedia’s U.S. TV stations and the Twentieth Century-Fox movie studio. In the process he ran roughshod over federal newspaper/broadcasting cross-ownership regulations and played a major role in the decision by the feds to undermine those rules. Murdoch used his U.S. broadcasting empire not just to make money but to exercise a toxic influence on political discourse, especially through the Fox News Channel launched in 1996.

For Murdoch there has never been a clear dividing line between business and politics. He’s used his properties to promote his political views, and he’s used his political connections—even in a place such as China—to advance his business interests.

This practice has extended into the realm of book publishing, in which Murdoch has played a major role since the acquisition of HarperCollins (previously Harper & Row) in 1987. Murdoch has been accused of using Harper to curry favor with key political figures via lavish book deals. The most notorious of these cases involved none other than Newt Gingrich, who was revealed in 1994 to have received a $4.5 million advance on a two-book deal at a time when he was Speaker of the House and thus in a position to influence legislation to the benefit of News Corp.

It came out that Gingrich met with Murdoch personally shortly before signing the deal was struck. Although Gingrich called the criticism “grotesque and disgusting,” the controversy forced him to forgo the advance. HarperCollins also offered generous advances to other public figures such as Supreme Court Justice Clarence Thomas.

While the legal troubles of Murdoch and News Corp. continue in the UK, the question is whether there will be consequences on this side of the Atlantic, where the company is headquartered. The bribery aspects of the phone hacking call out for prosecution under the Foreign Corrupt Practices Act, and there has been speculation about such as investigation since last summer.

For too long, Murdoch has sidestepped U.S. law to build his empire, even going so far as to become an American citizen to get around restrictions on foreign media ownership. There would a delicious irony if what finally brought his comeuppance is misbehavior outside the country.