The trial of several News Corp. employees accused of being involved in the widespread phone hacking scandal has now entered its third month. British royalty, actors, politicians and crime victims all had their privacy compromised. In February, the prosecution -- which rested its case during the month -- alleged that former Prime Minister Tony Blair offered to "secretly advise" News Corp. chairman Rupert Murdoch as the scandal unfolded. Testimony from former News Corp. executive Rebekah Brooks supplied the bulk of information for the month, as the defense began its presentation. Among other revelations, Brooks admitted to authorizing "half a dozen" payments to public officials during her time working as an editor at The Sun.
The trial of several former News Corp. officials for their alleged involvement in hacking the voicemails of several prominent people, including British royalty, politicians, crime victims, and actors is in its second month. Among the developments: Actress Sienna Miller testified about her voicemail being hacked, a former News of the World reporter claimed officials knew about the phone hacking, jurors were told about executive cellphones going missing during the time of the hacking, and shown footage of one executive's spouse hiding a laptop in a parking garage.
The trial of former News Corp. employees for their role in the massive phone hacking scandal has already produced several noteworthy revelations, including the hacking of voicemails from the British royal family, a six figure contract between News Corp. and its phone-hacking private investigator, and more alleged phone hacking victims, including actor Jude Law.
Newly released transcripts of secretly recorded comments by a News Corp. executive reveal that the phone hacking scandal that has engulfed the company over the past few years could cost the firm $1.6 billion, much more than has previously been disclosed.
The reputation of News Corp. and its founder and head, Rupert Murdoch, have taken a hit from the now-acknowledged illegal practices of the company's News of the World and The Sun newspapers, which include generating stories by paying off law enforcement officials and hacking into the cellphones of celebrities, crime victims, politicians and others. Numerous News Corp. employees are currently on trial on charges relating to those crimes.
In his forthcoming book on News Corp chairman Rupert Murdoch, veteran NPR media reporter David Folkenflik reports several fascinating stories about the mogul's expansive media empire.
Among the stories highlighted in Murdoch's World: that Fox News' public relations shop used an elaborate series of fake accounts to post pro-Fox comments on websites critical of the network; that the same PR department has resorted to ruthless tactics to take revenge on critical reporters; that News Corp's CEO tried to suppress damaging reporting about the phone hacking scandal from running in the Wall Street Journal; and that a New York Post columnist was merely "chastised" for directing a racial slur at a colleague.
Fox's ruthless PR department: Taking revenge on reporters and using sock puppet accounts on critical websites
Folkenflik highlights numerous anecdotes about the aggressive tactics of Fox News' PR department, which punished reporters that upset the network.
For example, when New York Times media reporter Timothy Arango was working on a story about CNN's solid ratings in 2008, he was reportedly first asked by Fox to run in full a "vitriolic" statement about CNN that the conservative network had provided him. After he bristled at the suggestion, Arango -- a former News Corp employee that had worked for the New York Post from 2002 to 2006 -- claims he received an ominous threat from Fox suggesting he would be attacked personally for his story.
The morning Arango's story ran on the front page of the Times' business section, he was contacted by a writer for the now-defunct gossip website Jossip. That site later anonymously published a hit piece on him, including revealing that a recent medical leave he had taken "may have been a stint in rehab":
This time, he said, [Fox News' Irena] Briganti warned him: They're going to go after you personally. On March 5, 2008, Arango's story, headlined "Back in the Game," ran on the front page of the Times business section, and it was featured prominently on the paper's website. That morning, he received a call from a blogger with Jossip, a now-defunct gossip site. Arango knew what lay in store but did not return the call.
The unbylined story on Jossip said Arango had just returned from a two-month medical leave that "many allege may have been a stint in rehab." The Jossip posting utilized every element of Arango's past coverage at the Post and Fortune magazine to draw a portrait of a craven reporter in unsuccessful pursuit of on-air reporting jobs at cable channels. It referred to "blowjob pieces about CNBC execs" written, the blog claimed, when Arango was hustling for a job at the network.
Arango braced for the slam about rehab because he had indeed returned a few days earlier from an extended medical leave to address his substance abuse. Arango kept silent, expecting a wave of disgust from his own newsroom. It never materialized. Bill Keller, then the executive editor at the Times, emailed Arango a note of encouragement: We don't take that kind of bullshit seriously. Keep your head up. [Murdoch's World, pp 72-73]
Folkenflik also writes about an incident involving fellow Murdoch biographer Michael Wolff. Wolff reportedly told Folkenflik that he was approached by Murdoch's staff with a request to "change the date when Murdoch met his third wife, Wendi Deng," whom Murdoch married "just weeks" after he finalized his divorce from his previous wife. After Wolff refused, his book received "scant coverage in any News Corp properties," though the New York Post eventually published seven pieces in the span of a month invoking an affair Wolff had been having with a colleague:
As Wolff tells the story, Murdoch wanted the timing of his involvement with Deng out of the book, but it stayed in. The Man Who Owns the News, received scant coverage in any News Corp properties. And Wolff also criticized [New York Post editor Col] Allan by name on cable television for the racially charged cartoon. Soon an article appeared on the gossip website City-File, and then another surfaced on the better-known Gawker, alleging that Wolff was having an affair with a younger colleague - a woman just a year older than his daughter. The Post pounced, citing, of course, the reporting of others. Over the course of the month, the Post published seven pieces invoking the affair and publishing another cartoon by Delonas, unfairly depicting the couple, in the words of Wolff's girlfriend Victoria Floethe, as "a thirteen-year-old girl in bed with an eighty-year-old." By the end of the coverage, Wolff had moved out of the apartment he shared with his wife and the tabloid was running pieces about a legal fight the soon-to-be divorced couple were having with Wolff's mother-in-law. [Murdoch's World, pp 49-50]
Folkenflik explains that after some negative attention in 2008, "Fox pulled back on some of its most aggressive tactics."
As Media Matters has previously highlighted, lashing out at critical reporters isn't the only way Fox's PR shop seeks to shape public opinion. Folkenflik reports in the book that the network's staffers set up a series of fake accounts to post comments to articles that were critical of Fox:
On the blogs, the fight was particularly fierce. Fox PR staffers were expected to counter not just negative and even neutral blog postings but the anti-Fox comments beneath them. One former staffer recalled using twenty different aliases to post pro-Fox rants. Another had one hundred. Several employees had to acquire a cell phone thumb drive to provide a wireless broadband connection that could not be traced back to a Fox News or News Corp account. Another used an AOL dial-up connection, even in the age of widespread broadband access, on the rationale it would be harder to pinpoint its origins. Old laptops were distributed for these cyber operations. Even blogs with minor followings were reviewed to ensure no claim went unchecked. [Murdoch's World, pg. 67]
Before he was promoted to his current role as chief executive officer of News Corp., Robert Thomson used his position at The Wall Street Journal to hobble the paper's reporting of the parent company's phone hacking scandal, according to a new book.
Australians will head to the polls tomorrow to decide whether or not to reelect Labor Party Prime Minister Kevin Rudd. Rudd was not only forced to run against Tony Abbott of the Liberal Party, but also faced an avalanche of attacks from Rupert Murdoch, who used his newspapers to manipulate the election in such a heavy-handed way that even Roger Ailes and the Fox News editorial staff would blush.
The Hollywood Reporter noted:
Murdoch-owned papers, which control about 70 percent of the local market, have run covers featuring Rudd as a Nazi, as Col. Klink from Hogan's Heroes and as Mr. Rude from the Mr. Men kids books. News Corp's Daily Telegraph in Sydney has dropped all pretense of impartiality, publishing a picture of Rudd under the headline, "Let's Kick This Mob Out!"
The election was so important to Murdoch that, according to Australian media, he decamped Col Allan from the New York Post halfway around the world to inject some of the metropolitan tabloid's hard edge into his Oz publications.
Murdoch's behavior was so over the top that the head of the Australian Press Council felt the need to step in. "Newspapers that profess to inform the community about its political and social affairs are under an obligation to present to the public a reasonably comprehensive and accurate account of public issues," said the group's chair Julian Disney. "As a result, the Council believes that it is essential that a clear distinction be drawn between reporting the facts and stating opinion. A paper's editorial viewpoints and its advocacy of them must be kept separate from its news columns."
Murdoch's power was so vast that when Getup.org, one of Australia's largest progressive grassroots organizations, decided to run an ad criticizing the mogul, it was banned from all major television networks in the country.
GetUp was told directly by some of the networks that "they're not running the ad because they don't want to criticize Rupert Murdoch."
The events happening halfway around the world should be at the forefront of our thoughts. With rumors swirling of Rupert Murdoch's desire to buy more large media properties in the United States, News Corp's interference in the Australian election serves as a reminder of the damage Murdoch could wreck in the U.S. as well. Fox News' abhorrent behavior in 2010 and 2012 is benign when compared to the pressure exerted in this year's Australian election.
Like a boomerang from his Australian youth, the phone hacking and bribery scandal that Rupert Murdoch's been trying to outrun for two years keeps coming back to him.
The recent revelation that Murdoch was caught on tape privately acknowledging he was unsurprised to find his reporters were illegally paying off public officials for news tips and that he had no qualms with the practice, simply stands as the latest proof that Murdoch's career, and certainly his career in Britain, will be forever defined by the wayward lawbreaking that occurred under the Murdoch name at his London tabloids.
The criminal transgressions have never really been in doubt. What the embarrassing tape recording provides however is more evidence that Murdoch is not a man whose word can be trusted, and that he operates in an almost impenetrable sphere of hypocrisy.
It's that duplicity and lack of honor that creates such a strong stench of scandal; an odor that continues to follow Murdoch nearly two years to the week after the hacking story finally exploded worldwide in 2011.
Standing in stark contrast to his contrite admission of wrongdoing while testifying before Parliament in 2011 ("This is the most humble day of my life"), the secret recording captured Murdoch in a far more blustery mood, rallying his beleaguered Sun employees -- several key editors and reporters are currently facing charges -- by haranguing "incompetent" law enforcement for wasting its time with the News Corp. investigation.
"It's the biggest inquiry ever, over next to nothing," Murdoch told the assembled journalists in March, one of whom hit the record button when the boss started talked. (Murdoch's News Corp. has not questioned the authenticitiy of the tape.) The CEO also bragged that his company had stopped cooperating with law enforcement's investigation of News Corp.; an inquiry he labeled a "disgrace."
The bluster was alternately wrapped in the wallowing sense of victimization and persecution that has come to define Murdoch, as well as doubled as the hallmark for so many of his media proprieties. "I don't know of anybody, or anything, that did anything that wasn't being done across Fleet Street and wasn't the culture," said Murdoch, referring to London's ethically-challenged tabloid industry.
News Corp. subsidiary News America Inc. has pumped a quarter million dollars into today's Board of Education elections in Los Angeles. Rupert Murdoch's corporation is not merely an interested onlooker in the elections; fellow News. Corp subsidiary Wireless Generation has a contract with the school district.
According to the Los Angeles Times, "a relatively small group of major donors" has given big last-minute financial support to a political action committee called the "Coalition for School Reform." The PAC reportedly aims to help current Los Angeles schools superintendent John Deasy survive the elections by supporting board candidates that favor keeping him in the position.
Among the major donations listed by the Times are $250,000 from News Corp. subsidiary News America Inc. and an additional $25,000 from News Corp VP Joel Klein, who heads up Amplify, the corporation's education division.
As Anthony Cody has explained at Education Week, Wireless Generation, an education technology company owned by News Corp. "already has a big contract" with the Los Angeles Unified School District (LAUSD). According to Wireless Generation's website, starting in July 2011, the group partnered with the LAUSD to provide "DIBELS," a reading assessment tool.
News Corp. has previously inserted itself into local education politics with close financial ties to its education division. In September 2012, Joel Klein penned a column for the Wall Street Journal attacking striking Chicago teachers without disclosing News Corp.'s role in the multi-million dollar testing contracts that were central to the teachers' dispute.
Murdoch also reportedly has designs to further influence Los Angeles-area politics; he has expressed serious interest in purchasing the LA Times and bringing it under the News Corp. umbrella.
The Wall Street Journal and Fox News are suggesting that President Barack Obama's nomination of Gina McCarthy as head of the Environmental Protection Agency is a sign that he is acting like a "dictator," using an "end-around" to regulate carbon emissions that drive climate change. But they failed to mention that efforts to curb this greenhouse gas through the EPA are not an invention of the Obama administration -- they were given the go-ahead by a George W. Bush-era Supreme Court decision.
Earlier this week, the president nominated McCarthy, a former official for then-Massachusetts Governor Mitt Romney, to succeed Lisa Jackson as EPA administrator. McCarthy is likely to play a major role in the administration's presumptive plans to regulate carbon emissions from existing power plants.
But News Corporation's Fox News and Wall Street Journal are launching a preemptive attack on these efforts, claiming they are "antidemocratic" by once again ignoring a Supreme Court decision that all but required action. Monday, Fox News anchor Megyn Kelly incorrectly suggested that action through the EPA is unprecedented, saying "It used to be that if you wanted to make a major change or have a major impact on climate change or green energy regulations in this country, you went through Congress" but the president "has found an end-around, and as a result this EPA is extremely powerful right now." The next day, a Wall Street Journal editorial smeared McCarthy as "antidemocratic," adding, "Mr. Obama has been going around saying that the problem is that he's a President, not an 'emperor' or 'dictator,' but on carbon regulation this is a distinction without much difference."
Both failed to note that a 2007 Supreme Court ruling found that greenhouse gases fit the definition of an "air pollutant" and could be regulated under the Clean Air Act if they were determined to be harmful. A subsequent "Endangerment Finding," privately authored during the Bush administration but suppressed until 2009, stated that this was the case due to their contribution to climate change. Stephen Johnson, then the EPA Administrator, told President Bush in early 2008 that the Supreme Court decision "combined with the latest science of climate change requires the Agency to propose a positive endangerment finding," adding "the state of the latest climate change science does not permit a negative finding, nor does it permit a credible finding that we need to wait for more research." The Bush administration reportedly refused to open the email containing the Endangerment Finding, leaving it to the next president to take action. As noted by Legal Planet, the environmental law and policy blog of the University of California Berkeley and UCLA law schools, regulation of carbon emissions under the Clean Air Act is not undemocratic. In fact, "[T]here's nothing here that's an end-run around Congress. EPA is (as bureaucracies should do) implementing the orders of the legislature through duly enacted laws." If the president has "given up getting Congress to agree" to regulate emissions by other means, as the Journal argued, it is only because Congress has repeatedly failed to pass legislation doing so, thus compelling the executive branch to act.
On the heels of its latest quarterly report showing a doubling profits, News Corp. is still reeling from the fallout from the phone hacking scandal as six former News of the World journalists were arrested on February 13 for allegedly intercepting voice mails. Two of those arrested are still employed at News Corp.
According to a February 13 Bloomberg article:
News Corp.'s phone-hacking scandal is widening after London police arrested six more former journalists at its now-defunct News of the World tabloid and uncovered a new conspiracy to intercept voice mail.
Three men and three women suspected of hacking phone messages in 2005 and 2006 were arrested today and some homes are being searched, the Metropolitan Police Service said in a statement. Two of the people arrested currently work at News Corp.'s other U.K. tabloid, the Sun, Britain's best-selling daily title.
News Corp. has settled about 200 civil phone-hacking lawsuits. It faces as many as 100 more as police continue to notify victims, lawyers said at a London court hearing last week.
At least 55 journalists have been arrested in the last two years in connection with the phone hacking investigation.
These arrests, the latest in a long string of arrests and charges for News Corp. employees, are a reminder that the media conglomerate is far from free of its ethical challenges. According to Bloomberg, lawyer Mark Lewis said, "It comes as no surprise that the lines of investigation are widening ... There is a lot further to go, and ultimately this is a problem that will continue to have reverberations at the top of News Corp."
The ongoing investigation hasn't stopped CEO Rupert Murdoch from exploring new business ventures or racking up billions in profits. News Corp. reported net profits of $2.4 billion in the last three months of 2012, mostly related to gains from cable TV and new channel acquisitions, effectively doubling its profits from the same period in 2011.
News Corp. has paid more than $340 million in costs related to the phone hacking scandal.
Last year, News Corp. announced plans to split the company into separate publishing and entertainment divisions. On a quarterly earnings call February 6, News Corp. executives said the planned separation was on track "to be completed in approximately one year from the date of announcement."
The Wall Street Journal published an editorial defending the latest report by StudentsFirst, an education reform group run by former Washington, D.C., schools superintendent Michelle Rhee, and failed to disclose the education interests of its parent company, News Corp., and its reported financial link to the advocacy organization.
In an editorial titled, "Where Failure Is a Virtue," the Journal is critical of Richard Zeiger, California's chief deputy superintendent, for making light of his state's "F" grade on the StudentsFirst report and calling it a "badge of honor." StudentsFirst ranked and graded each state's education policy on categories such as "value effective teachers" and "empower parents with information." California was one of 11 states to receive an "F." From the editorial:
Mr. Zeiger claimed to be elated by the failure. He called StudentsFirst "an organization that frankly makes its living by asserting that schools are failing," adding to the New York Times that "I would have been surprised if we had got anything else."
Mr. Zeiger is a factotum of the teachers unions that dominate California politics, so he naturally dislikes StudentsFirst because it advocates evaluating teachers based in part on student performance on standardized tests. Ms. Rhee and her reform group also want teacher evaluations to be made available to parents, among other policies to improve accountability. Unions don't like accountability.
In coming to Rhee's defense, the Journal failed to disclose links between News Corp. and the education reform industry. CEO Rupert Murdoch, who has expanded his media empire to include a digital education company, has reportedly donated to StudentsFirst. According to journalist Steve Brill's book Class Warfare: Inside the Fight to Fix America's Schools, Rhee "had gathered more than $100 million in donations or pledges from heavy hitters such as ... Rupert Murdoch." Fox News' Neil Cavuto has similarly reported that Murdoch is a StudentsFirst donor. Murdoch has also publicly supported Rhee in her advocacy efforts, reportedly calling her "a bona fide reformer."
In a New York magazine post, Gabriel Sherman pointed out that while Fox News resisted calls to discuss gun policy in the wake of the shooting at Newtown, Connecticut, Rupert Murdoch, the head of Fox's parent company, News Corp., was expressing support for more restrictive gun laws. Sherman noted that the difference between Fox's pro-gun history and Murdoch's call for action on gun control "highlights the growing chasm between Rupert Murdoch and [Fox News CEO Roger] Ailes":
Certainly Fox's decision to avoid widespread policy talk could be seen as an editorial impulse to keep the focus trained on the tragedy's human dimension. But Fox's coverage also highlights the growing chasm between Rupert Murdoch and Ailes. Gun culture is alive and well at Fox News. Roger Ailes and Sean Hannity are reportedly licensed to carry concealed handguns in New York City. Fox personality Eric Bolling is a vocal Second Amendment proponent on air. "Not only do they carry guns, they don't allow an honest debate on TV," a Fox News insider said. In the past, when Ailes has clashed with Murdoch on politics, Fox News's outsize profits have helped Ailes prevail. Earlier this fall, Ailes signed a new four-year contract, and he retains complete editorial control over the network.
A Fox News spokesperson declined to comment on Ailes's Second Amendment views.
While Ailes's network said it wasn't the right time to talk about legislation, Murdoch had no hesitation. Within hours of the attack, he took to Twitter to call for an automatic-weapons ban. "Terrible news today. When will politicians find courage to ban automatic weapons? As in Oz after similar tragedy," he wrote, referring to Australia's move to ban assault weapons in 1996 after a man used two semiautomatic rifles to kill 35 people and wound 21. That massacre came six weeks after the horrific mass school shooting in Dunblane, Scotland, in which sixteen children and one adult were murdered. (Despite Murdoch's plea, automatic weapons are already illegal in the United States; Adam Lanza used semiautomatics.)
Sherman further reported that the lack of gun policy coverage on Fox stemmed from an order from David Clark, executive vice president of Fox's weekend coverage, who reportedly instructed producers to avoid the subject. According to Sherman's sources within Fox, the decision not to address gun policy "created a rift inside the network."
Fox has a history of top-down orders to affect how news is reported on the network. Fox News Washington managing editor Bill Sammon has attempted to slant Fox's coverage on everything from climate change to health care reform and influenced Fox's coverage of President Obama's 2009 Cairo speech on America's relationship to the Muslim world.
News Corp. CEO Rupert Murdoch's call for politicians to find the "courage" to ban automatic weapons in the aftermath of the tragic mass shooting at a Connecticut elementary school is sharply at odds with the extreme rhetoric often heard on Fox News. Indeed, Fox voices routinely demonize any calls to strengthen gun laws.
Fox News is deep in an ethics quagmire following a Washington Post report that the network's CEO Roger Ailes used Fox News analyst K.T. McFarland to try to recruit Gen. David Petraeus to run for the president as a Republican. While Ailes and McFarland made their secret overtures, McFarland appeared on Fox's airwaves to praise Petraeus as "one of the greatest generals in American history."
According to The Washington Post's Bob Woodward, Ailes had McFarland advise Petraeus that he "should turn down an expected offer from President Obama to become CIA director" and instead hold out for the chairmanship of the Joint Chiefs of Staff, and to resign and run for president if he was not offered that post. In audio of the meeting obtained by Woodward, Petraeus also said to McFarland that he had been advised that Ailes might resign as Fox News chief and act as a Petraeus aide should the general run for president. He also said that Ailes might bankroll the campaign, although he added that maybe it was News Corp. CEO Rupert Murdoch who had made that offer.
Woodward also reported that Ailes has acknowledged that he did ask McFarland to make the pitch: "It was more of a joke, a wiseass way I have." Ailes also called McFarland "way out of line" in some of her comments.
This would be an ethical problem by itself: Ailes -- the chief of a supposedly objective news network -- was advising an active general who was commanding U.S. troops in the middle of a war to make demands of the president, and if those demands were not met, to run for president with Ailes acting as his aide.
But the ethics problem is much worse than that. McFarland appeared on Fox's airwaves soon after meeting with Petraeus to praise him as "one of the greatest generals in American history" who will save us from defeat in Afghanistan. While McFarland was putting Petraeus on at least the same level as Ulysses S. Grant, George Washington, Andrew Jackson, and Dwight Eisenhower, she provided no disclosure of her and Ailes' advice that Petraeus should consider running for president.
From the April 21, 2011, edition of Fox News' Happening Now:
McFARLAND: When I was there two years ago, Jenna, I looked around and I concluded this is hopeless. Now with General Petraeus, who is one of the greatest generals in American history, he has gone in and he has devised a plan that will work. And the question is not, will it work, but the question is, should we be doing this? Is this an objective, is this a mission that we want? And as you have pointed out, it's expensive. And are we at this point -- you know, where is America's priorities?
JENNA LEE (co-host): Are we in this kind of stalemate [in Afghanistan] like it seems some are describing in Libya -- of course we're not there with combat troops -- but where no side is really gaining any ground and nothing really changes?
McFARLAND: Well the plan that -- the Petraeus plan is to really spend this summer -- they've diminished and decimated the middle ranks of Al Qaeda at the same time they've built up the middle ranks, the mid-level management of the Afghans. So the plan is to continue to make inroads into the Al Qaeda -- not the Al Qaeda so much as the Taliban, and then have slowly but surely the Afghans take over. And it will take a number of years to do that.
McFARLAND: We're doing the military part right, but it's a three-legged stool. And the other parts of the stool, the other legs, are the Afghan government and the Pakistani government, which has safe havens for the Taliban.
During the Happening Now segment, Fox even aired a photo of McFarland's meeting with Petraeus without disclosing what they discussed about Petraeus' future: