CONFLICT OF INTEREST: Fox Doesn't Disclose Murdoch Ties To Oil Shale Venture
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Fox Business Network repeatedly promoted a controversial oil shale venture in Israel without disclosing that Rupert Murdoch -- the head of Fox's parent company -- is one of the project's most prominent investors.
Last year, News Corp. chairman Rupert Murdoch joined the "Strategic Advisory Board" of Genie Energy, and purchased an equity stake in Genie Oil and Gas, which consists of Genie Energy's interests in oil shale initiatives on federal land in Western Colorado and in Israel's Elah Valley. Genie Energy -- which is a division of IDT Corporation, a global telecommunications company -- has attracted several other high-profile advisers and investors, including former Vice President Dick Cheney, Lord Jacob Rothschild, and Michael Steinhardt, a prominent hedge fund investor and philanthropist.
Extracting oil from shale has long enticed investors and those seeking a route to energy independence, but no company has yet proved a way to make the process both commercially viable and environmentally sound. Genie Energy's experimental drilling methods -- which seek to reduce the high levels of water use and greenhouse gas emissions typically associated with shale development -- are still in the pilot phase.
On three consecutive days last month, Fox Business promoted Genie Energy's project in Israel -- known as Israel Energy Initiatives (IEI) -- yet never disclosed Murdoch's financial stake in it.
The coverage began with a teaser during Lou Dobb's April 11 show. In it, Fox Business host Stuart Varney declared, "The next big oil power in the middle east, Israel? Can you believe that? Well, it may be the case because of shale oil. Israel's got a lot of it, and we're covering it."
The following day, Varney & Co. featured Wall Street Journal columnist Bret Stephens to discuss the IEI oil shale venture. Guest host Charles Payne, filling in for Varney, introduced Stephens as the man who "broke this story" on the oil shale reserves in Israel.
A week earlier, Stephens had written a column in the News Corp.-owned Wall Street Journal touting the IEI project in Israel. That column, as well as a similar piece published in March in the News Corp.-owned Times of London, disclosed Murdoch's financial stake in the project.
But when he appeared on Fox, Stephens never mentioned the conflict of interest -- and neither did Payne or the other guests who appeared during the segment.
Payne concluded the discussion by teeing up more coverage of the project. "This potential oil find is so big that we have to go to the source," Payne said. "Tomorrow, the man in charge of this oil project joins us live from Jerusalem, Harold Vinegar is his name. We'll ask him if it's really worth getting so excited about."
Indeed, the next day, April 13, Varney was back with another report on IEI -- this time with an interview of Harold Vinegar, the scientist charged with heading the oil shale drilling project in Israel. Varney asked a series of questions about the timing and funding for the project, but neither man mentioned Murdoch is a key investor.
"When can you get this shale oil out of the ground, and will you have any regulatory delays in getting it out of the ground -- the same as we have in America?" Varney asked at one point.
Vinegar said that IEI hoped to conduct its first pilot project within 18 months, before adding that he hoped the Israeli government would provide minimal regulatory interference. "We're moving as fast as we can," Vinegar said, "and with respect to regulatory delay, well, that's a fact of life probably everywhere in the world. And Israel is no different that way. But it's such a compelling case for the state of Israel, to produce its shale oil, that we're hopeful it won't be that long."
Watch the Fox Business reports:
IDT Corporation and Charles Payne declined to comment for this article. Bret Stephens and Stuart Varney did not respond to requests for comment.