News Corp., the New York-based multinational media conglomerate whose majority shareholder is the controversial billionaire Rupert Murdoch, is now facing an FBI investigation for illegal activity in news gathering. Long maligned by press advocacy groups as a leading source of biased and abusive media activity, and even of attacks on genuine news sources, News Corp. is now being accused of having authorized bribery and/or hacking activity to gain illegal access to the private files of victims of the terrorist attacks of September 11, 2001.
The Murdoch hacking scandal has been rapidly spreading across the Atlantic, since it was revealed last week in Britain that the News of the World tabloid had not only hacked into the private voicemail of a 13-year-old murder victim, but had deleted messages, interfering with criminal evidence and a police investigation. Some raised concerns that the illegal hacking was not only obstruction of justice, but that it may have made it more difficult to identify and mount an effective legal case against the murderer.
Since then, the scandal has widened, as news has come to light of investigations into illegal hacking at numerous News Corp. publications, going back to 2002. Prime Minister Cameron’s hand-picked (and now former) media director Andy Coulson, who had Murdoch’s UK operations, has been taken into custody. Several other employees of the media company have been arrested, and now Mr. Murdoch and his son will be required to give sworn testimony to the British Parliament, this coming week.
Rebekah Brooks, whom Murdoch had said he would protect, come what may, has now resigned, under significant pressure from inside the Murdoch family, from among her former staff and from Britain’s political elite. According to the Washington Post:
Although it’s hard to believe any editor worth the ink on their hands didn’t ask how their reporters got such big scoops, it’s certainly possible her defense of ignorance will hold up. Brooks says in her resignation letter that she feels “a deep sense of responsibility for the people we have hurt” and she “believed that the right and responsible action has been to lead us through the heat of the crisis.” While those intentions may be one reason she’s stayed on as critiques mounted, the biggest reason she was still around was the support she’s had from her friend and boss, Rupert Murdoch.
The media mogul has professed his steadfast support for Brooks, whom he’s said in the past is like a favorite daughter to him. When asked by the news media on Sunday what his priority was, Murdoch said “this one,” gesturing to Brooks. There have been smiling photos taken of the two of them together in recent days. Apparently she evenalready offered her resignation before Friday, but was refused by Murdoch (or his son, News Corp. deputy chief operating officer James Murdoch). In her resignation letter, she says, “While it has been a subject of discussion, this time my resignation has been accepted.”
The spreading scandal has become so grave that Murdoch was forced to abandon his bid to take over BSkyB, the British satellite broadcaster he founded, when the Prime Minister signalled his intention to side with the opposition Labour Party to oppose the takeover. The unraveling of that business deal, specifically owing to Murdoch’s own apparently degraded reputation, has renewed allegations in the US, among shareholders, that Murdoch’s leadership is not suitable or responsible, for the furthering of shareholder value.
The phone hacking scandal has breathed new life into a shareholder lawsuit alleging improper management activity in a deal where Murdoch reportedly steered $675 million dollars (£415 million) to the purchase of a network owned by his daughter. The purchase itself and the allocation of company revenues for the purchase, are being questioned, and now Murdoch’s potential complicity in an international criminal conspiracy may be added to the allegations.
Murdoch has been accused of using his media influence to threaten and intimidate political leaders, to control political debate and to sway elections. In 2000, in the United States, it was direct communications between a Fox News executive and the Bush campaign that led Fox News to report (contrary to official exit polling and the extant Florida vote count) that George W. Bush had won the state of Florida, and so the presidency, sparking a month-long constitutional crisis, contested to this day as illegitimate.
In the 1992 general election in the UK, Murdoch’s Sun newspaper was relentless in its biased promotion of the Conservative party cause, and was often accused of misreporting facts about other parties and candidates, and making false claims to bolster the Conservative party’s chances. It ran a front page headline giving itself credit for winning the election for John Major, the Conservative party candidate. There were consistently questions about whether Murdoch’s media properties were being used as an illegal campaign platform for the Conservative party.
According to recent reporting from the Guardian:
“If Murdoch cannot be beaten – and there are many who believe that his media holdings need to be cut down to size – we should encourage more British media companies to grow, compete and give Mr Murdoch a harder run for his megabucks,” Peter Mandelson wrote in the Daily Mail in January 1994.
The FBI probe in the US is said to be the result of numerous lawmakers from both parties urging the Justice Department to investigate News Corp., after allegations of bribery and phone hacking targeting the private information of 9/11 victims came to light. Murdoch’s hold on news properties in the US may also be called into question, should he be found to have known of and condoned, participated in or ordered the illegal activity that brought down his News of the World tabloid and which is now staining his other newspapers in the UK.
There are also allegations executives under Murdoch’s leadership, in the UK, threatened to members of Parliament investigating alleged illegal phone hacking years ago, saying they would be made to “regret it” if they pressed for testimony from Ms. Brooks. Such allegations have been made about Fox News and other Murdoch properties in the US, but Sen. Frank Lautenberg (D-NJ) says he will not be intimidated, and will press for a thorough airing of all the facts related to bribery, hacking and other allegations of illegal activity at News Corp.
Pushing the envelope still further, News Corp. donated $1 million to the US Chamber of Commerce (a anti-regulatory big-business lobbying organization, not a government agency), in apparent support both for efforts to elect Republicans and to reform the Foreign Corrupt Practices Act. The Chamber has since pressed to do away with penalties for the kind of bribery of which News Corp. personnel are now accused in the UK, and possibly at home in the US.
Were News Corp. to be found guilty of having engaged in bribery and violated the Foreign Corrupt Practices Act, the Federal Communications Commission could revoke its license, potentially shutting down, or causing the sale of dozens of media properties across the United States. An official told CNN this was possible, but said there were no known cases of that precise series of events taking place, regarding a major media conglomerate.
UPDATE, 6:31 pm EDT: Les Hinton, the publisher of the Wall Street Journal, has resigned, in connection with the News Corp. hacking scandal.
Hinton —who headed News International, the UK subsidiary of News Corp., during much of the time the News of the World is alleged to have been illegally spying on politicians, murder victims, and the families of victims of terrorist attack and soldiers who died in combat— was thrust into the stratosphere of American news media in 2007, when Rupert Murdoch made him publisher of the Wall Street Journal.
Murdoch allegedly urged him to “make it the Financial Times of America”. (Some would argue it was already that and more, and that Murdoch’s initiative was aimed at making the publication less news oriented and more slanted toward his political agenda.) Hinton has now worked for Rupert Murdoch for 52 years, and his resignation is a serious blow to the top ranks of the News Corp. organization, and to Murdoch’s inner circle of personally loyal executives.
Hinton says he had no knowledge of the hacking activities or the police bribery and that the alleged crimes were, to his view, the rogue activities of one employee, Clive Goodman. Critics have argued this could not be possible, because British police had already found evidence of related activities at other News Corp. publications, including the phone hacking of the 13-year-old murder victim and of PM Brown’s personal and family accounts, and the suggestion this was not brought to the attention of top News Corp. executives lacks credibility.
Hinton said in a letter that he recognizes “The pain caused to innocent people is unimaginable. That I was ignorant of what apparently happened is irrelevant and in the circumstances I feel it is proper for me to resign from News Corp and apologise to those hurt by the actions of News of the World.”
It is not yet clear whether Mr. Hinton may be a target of the FBI investigation, regarding alleged spying on the families of 9/11 victims, or alleged police bribery in the United States, but there is a strong likelihood his testimony will be sought in connection with investigations into whether News Corp. violated the Foreign Corrupt Practices Act, by engaging in systematic illegal activity, including the bribery of public officials, over what now appears to be a period of at least 9 years.