Listen to Angelo Carusone and Molly Jong-Fast discuss the seismic consequences of Dominion's lawsuit against Fox

Angelo Carusone on Fast Politics with Molly Jong-Fast, 3/3/23

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Citation From the March 3, 2023, edition of Fast Politics with Molly Jong-Fast

MOLLY JONG-FAST (HOST): Angelo Carusone is the president and CEO of Media Matters. Welcome to Fast Politics, Angelo.


JONG-FAST: So I wanted to talk to you about our favorite topic, what's happening at Fox News? What's happening at Fox News?

CARUSONE: I think that we are watching it sort of a beginning of a cascade effect. And it was just something we talked about in the past, like last summer when this ruling came through that Dominion was going to have access to the Murdochs in discovery and depositions. And the significance of that, because at the time I compared it to what happened with the phone hacking scandal, which is that, you know, a little bit of a crack emerged. And then the second people were able to pierce the veil and get a slight look inside, it just unraveled.

And I think this is a similar moment where what's going to happen is they're going to go to trial. And it's you know, more information is going to come out. There's still a lot of redactions in the documents that we've already seen. And I think you're going to see additional follow-up. You're going to see shareholders sue them. You're going to see pushback from cable companies. There's going to be some tensions within their audience. This is going to be a real tumultuous time for Fox and the Murdochs.

JONG-FAST: That's such bad news. Just kidding, I'm delighted. So far in the filing, what have been the things where you were like, Holy shit.

CARUSONE: Yeah. Because, I mean, obviously the fact that Fox News functions like a political operation is not a surprise or that Fox News lies like that. None of that's surprising, right? I mean, there are some people that are like, I can't believe this. For the most part, that's not surprising.

But there really were a few of these. I can't believe that; one of them was in October of 2020. The Joe Biden campaign made a national ad buy on Fox, and Rupert Murdoch himself took the ad before it went public and shared the ad and other sort of accompanying information that he got access to as a part of that ad buy with Jared Kushner, who was with the Trump campaign. So essentially gave them confidential information about a competitor that was like in order to help them politically. I was surprised about that. Even for Fox, that's that's a pretty big breach of confidentiality.

JONG-FAST: Journalistic integrity, ha ha ha.

CARUSONE:It sure is. Right. And also the law, possibly. It actually really could amount to an in-kind campaign contribution, which is going to create additional legal problems for them. So that – I was kind of I was shocked and I was also shocked that it was Rupert Murdoch himself. I mean, just think about how both sort of pathetic and also monumental that is, is that like it wasn't like it was a staffer or, you know, Hannity's producer or somebody, right? Rupert Murdoch took the ad and gave it to Kushner. It just that that was surprising to me was like, I can't believe that.

JONG-FAST: Yeah, I can't believe rich Republicans are corrupt. What this is my shocked everyone seemed shocked.

CARUSONE: And so that was the big one that I couldn't believe. And then the other thing that I couldn't believe was the scale. So like we've always sort of known and that that this kind of these kinds of like political positions were happening. But there is a lot of direct instructions from Rupert Murdoch to Suzanne Scott, who's the president of Fox News, directing her to reorient Fox News' coverage for very explicit political reasons.

So there was this moment where Lindsey Graham was getting a little pushback during his election run. And he says, you know, he says to Suzanne, we're trying to get Hannity to say some nice things about him. And Hannity, of course, went above and beyond and hosted him like six times in rapid succession over the next week and a half, sort of just flattering him on in each segment or telling him – telling her to redirect resources to help Republicans in tight Senate races in October and in the days leading up to the 2022 election, or really getting into the substance of some of the programming, because it was to ensure that they were trying to win Georgia.

Like, I mean, there's just so many individual and explicit instructions and it all seemed so normal that it should give you a sense of this is happening basically on a daily basis over there. And that part I was a little surprised by, I sort of knew it, but I thought mostly it was a somewhat autopilot and muscle memory. I didn't really expect there to be that much day to day explicit instructions, at least written down that they were doing their politics, that was a surprise.

JONG-FAST: I'm surprised they were stupid enough to write all of this stuff down.

CARUSONE: I know – they wrote it down like a lot. They wrote it down a lot. But this is Rupert Murdoch's overreliance on email and written communication. They're going to do bad things, don't write them down. And they did.

And I think also that is a reflection of their hubris. There is this sense that they are just untouchable. They've managed to avoid any scrutiny or accountability whatsoever. And I think at this point they just felt like eh, you know, nothing can happen to us, we're untouchable. And I do think that that created a climate where they were so brazen about what they wrote down and not only that they had so much disregard for their responsibilities, but that they just didn't think that there was any chance that anything could ever come back around to bite them.

JONG-FAST: It's funny because it is true. This is not Rupert's first scandal. And in some ways there really is a sort of if there's a phone hacking on the wall in the first act. Right. This has shades of the last scandal.

CARUSONE: Yeah, it does, because it unravels in a way when you obviously we've always known how politically corrupt it was, how how much they were sort of treating Fox and the Fox Corporation like their own personal piggy bank, when in fact it's not – it's a publicly traded company. They have shareholders and they don't own a majority in the company.

That's the part about this that's so shocking is that, you know, because they don't own the majority of the company, they have obligations to shareholders to return investments and to have their fiduciary duties. But they also have to, you know, a delicate balancing act because they need to basically ensure that there's at least another 10%, 12% of the voting stock that will always vote with them in lockstep so that they maintain control of the company. They're the largest shareholder, but they're not the majority shareholders.

And so to me, that's the part where it's a little bit precarious is that, you know, they have overly relied on in the past a few proxies. One of the ways they navigated the phone hacking scandal is that, you know, Prince Alwaleed was the number two shareholder and he basically gobbled up a big part of the company to give them that functional proxy. That's how they were able to basically get through that period of time is that Prince Alwaleed voted with the Murdochs in lockstep so that they always had the majority vote. It was sort of an arrangement that they sorted out. That arrangement no longer exists. They don't have a replacement for what Prince Alwaleed was, obviously, he had to divest his shares a while back because of stuff that was happening in Saudi Arabia.

Right now, it's basically owned by institutional investors that just want their money. They don't really care about the Murdochs machinations, and so they're in a much more vulnerable position now, even just from a control perspective, than they were back during the phone hacking scandal. And there's this – the thing that isn't surprising at all, but it just goes to show you what a weasel Paul Ryan is. And I really don't think that we should discount how much of a weasel Paul Ryan really was in some of his communications is that when he's a board member and Fox has a very small board like five people on it, and when he was reaching out about this, he was telling them that they needed to stop doing some of these things in terms of their coverage. And he explicitly said, I am contacting you as a fiduciary. This is a breach of fiduciary duties. Like he was literally writing a document for the record, it seems, so that if and when inevitably it came back around and the Murdochs and Fox was in trouble and possibly the board for not doing their due diligence in their fiduciary duties, that he would get off the hook, he literally wrote himself a get out of jail free card.

And I thought that for sure. But given that one, I think that's a little bit surprising. Maybe it's not that he's such a weasel, but that he was so explicit about it. And to me that Murdoch both acknowledged that it was his email and his notes but didn't do anything about it, even when Fox's legal counsel followed it up and basically echoed the same thing. So this is why I think that they're in a little bit of trouble with their shareholders is that it is going to affect their bottom line and they don't have a proxy anymore. And what this basically shows is that the Murdochs are, in a weird way not only interested in money, which they are, that's their primary, but they are really interested in power, too. And those two things, they are willing to sacrifice money sometimes in the short term for power in the long term.

JONG-FAST: A heartwarming story, sacrificing money for power is very, very heartwarming. And some of the things I was surprised by and I didn't read the entire filing, so you can correct me if I'm wrong, but some of the things I was surprised by were the text messages. Will you talk a little bit because you know about this much more than I do the hosts text messaging to each other and to leadership at Fox.

CARUSONE: Yeah. The thing is and you're right, that is a little bit surprising. I mean, I guess they always pretend that they're like that. They're just like their audience, even though they're obviously not. They're very, very rich and elite themselves, but the hosts kind of hate their audience, which kind of came out in these text messages because basically, they were pushing what they called they were calling people who are promoting these conspiracies and being lunatics, you know, batshit all kinds of stuff. I mean, they were just insulting the conspiracies itself about the election. They didn't believe them, but they were sort of lamenting that they had to push them because this is what their audience wanted. So that was the first thing. It's like they didn't believe much of the stuff that – they don't believe really anything that Sidney Powell and Rudy Giuliani were pushing. They didn't believe the claims of the Trump campaign.

JONG-FAST: So you're saying that Tucker Carlson didn't believe that there were ballots made in China through a satellite to Italy? He didn't believe that?

CARUSONE: No. He said, believe it or not, he did not. He did not. Now, he was happy to say it and promote it. And I think this is one thing where Rupert Murdoch and this is the part that was shocking and it ties into the hosts – is that Rupert Murdoch during his deposition explicitly acknowledged that the hosts were not just giving a platform for these conspiracies and for these false claims that they were endorsing them. And he kind of threw them under the bus there, because that is a significant admission on their part.

And it obviously isn't it didn't get explosive in terms of the out, you know, the immediate coverage of these filings. But from a legal perspective, it's a really big deal because part of their defense was that they were just giving a platform for these ideas and that they were not themselves active, disseminators of it. And during his deposition, Rupert Murdoch actually said, no, they were endorsing it, and I should have done more to stop them from doing it.

And to get back to what the hosts were saying as they were pushing more and more of these of these conspiracies, these false attacks about Dominion, the same day or days after they were texting each other about how incredulous and ridiculous and unfounded and not true they were. And yet and then simultaneously attacking the network for some of the decisions it had made in the immediate aftermath of the election, simply by calling the election for Joe Biden. And Tucker was texting people about how they didn't appreciate how much damage they were doing to their relationship with Fox News' audience.

And so those exchanges were they were revealing, I would say, because they were pretty explicit in how much contempt they have for their audience or frustration for what their audience wants sometimes, but a recognition that they, you know, that their service, their audience. And that's it.

JONG-FAST: The central tension, which you kind of could see as an outside observer, which I think is pretty interesting, was this idea that if Fox did not give the MAGA crowd what it wanted, someone else might. Is that your sense?

CARUSONE: Yes – so two things that are significant on that track. One and we talked about on the pod a couple of times is that you know, that is that Fox News accepted the election results for a short period of time. And then all of a sudden because One America News was out there and Newsmax and One America News was on the ascent, you know, they're gone now because of these cable fights that happened against them. But at that time, they seemed like a real threat.

Fox's audience was leaving Fox for these other two networks because they were essentially pushing these election conspiracies. And so Fox went from accepting the results to all of a sudden on a dime in the last two weeks of November, doing more than 700 segments, explicitly attacking the election results. I mean, they literally flipped and went all-in on these election denials and did it much more intensely than One American News and Newsmax, in part because they really were afraid of losing their audience and it was happening in real-time. So that's one tension.

And then the other tension is and I thought this was revealing, too, is that in the filings, one exchange comes out that where Rupert Murdoch was talking and some other Fox executives about how Fox was unique amongst anyone in the media landscape because they were basically, as far as they were concerned, the only entity out there that could tell people that the election was not stolen and that Joe Biden was actually the president or the president-elect at the time. And Murdoch himself acknowledged this in these discussions about how they had a very unique role and that they should do something. They should go out there and finally say, okay, the election is over and Joe Biden actually won, even though they fully acknowledge they were the only entity that could actually do that, to take the wind out of the sails of this election denial sort of movement, because their audience, a very large chunk of their audience would believe them when they said that and they fully accepted this. They ultimately decided not to do it.

And that discussion that took place on January 5th, so they could have on January 5th, if they had followed through with what they all said they were going to do, made a big push to say the election was not stolen and January 6 might have looked a lot different because a lot of people would have been like, okay, we're mad, we're mad at Fox, were mad at the world, we're mad at everything, but at least we know it wasn't stolen now.

But they decided they ultimately didn't do it. And I do feel like that was a significant exchange. And it ties back to your question because part of the reason they didn't do it was that they were afraid that their audience would backlash against them. And so you couldn't find a host. And that's ultimately where they concluded that their hosts would get mad if they tried to force them to do this. And so you can see that tension playing out at various moments. And when they felt they could serve them, they did things like when they flipped on a dime in November and when they were trying to sort of grapple with their unique role, they ultimately didn't exercise the power that they had, even though they knew for a while they were pushing lies.

JONG-FAST: This decision and seeing this happen in real-time with texts. Is that proof that there was actual malice and that Dominion can actually win this case?

CARUSONE: I think so. There's a lot of evidence here because actual malice standard is that you either knew that it was not true, the things you were saying and you pushed them anyway or you acted with reckless disregard for the truth.

And one of the important things that came out during these filings was that along the way, as Fox hosts and Fox News was pushing specific claims about Dominion that were not true. Dominion itself was sending memos and messages to Fox News, basically debunking these claims in real-time and begging them to let them book somebody on-air – offering up guests to basically offer a counter perspective on these claims about Dominion.

So Fox, very intentionally along the way, said we're not going to – well, one, we're going to ignore the things that Dominion is literally saying to us, and two, we're not going to let anybody on air that is going to challenge these claims. And in fact, Fox personalities, a very small few, had started to soft fact-check some of the Dominion claims in reporting, and they got punished by network executives for doing it – it came out during these filings.

JONG-FAST: Right. I saw that tweet.

CARUSONE: And so that is a part of the actual malice standard is that it's very clear that they were knowingly pushing things that were not true and that they acted pretty recklessly when they were making very specific claims about Dominion.

And so that is a standard here, that that definitely seems to have been met. And I – it is extraordinary and I really want to emphasize this because I know this is like really in the weeds. But Dominion filed for a motion for summary judgment. That just doesn't really happen at all in a defamation case. It's nearly impossible to have ever even seriously put together a summary judgment motion.

JONG-FAST: Can you explain to our listeners what a summary judgment is?

CARUSONE: So basically, it basically says, hey, we're suing this entity, and I know we're supposed to go to trial, but the evidence is so overwhelming already that Judge, I think we could skip the trial and you could just rule in our favor.

Why that matters is that they thought and I think that has borne itself out so far in the file in the pleadings, is that their case was so strong that they could credibly go to the court and say, we don't need a trial because it is plain. Now, I don't think they're going to win their motion for summary judgment, not necessarily because they don't have the goods. It's because it is such a monumental thing when it involves free speech and a purported news channel, which obviously they're not. But that's the argument that they're going to make. And I think a judge is going to not try to sort of really go too far ahead. But the trial is set for April. But what it does give us is a chance now to look at a very large part of the record and say, wow, look how bad this is.

JONG-FAST: Yeah, I think that's totally right. So what is the timetable here then?

CARUSONE: It goes to trial in mid-ish April, so they will probably get a decision about the summary judgment motion in the next couple of weeks. And then it's full steam ahead for the trial, assuming that Dominion is not successful in their summary judgment motion. And it's worth noting that more things come out in trial.

JONG-FAST: And you're going to have people testify.

CARUSONE: People are going to testify. There's a lot of stuff that was in the filings that was redacted that we still don't know or didn't see. So and I would say that some of that stuff is going to be even more damaging.

JONG-FAST: This will cost Fox millions of dollars.

CARUSONE: The trial alone will cost them a fortune. And one of the things that happened after Rupert Murdoch's deposition is Fox said we're not going to – we're no longer going to re-merge our companies. So even if nothing happens as a result of this, and I think that's highly unlikely, something really big has already taken place because up until the beginning of January of this year, News Corp and Fox were on a glide path to re-merging, to becoming one company again.

And so something else we talked about, this was part of a strategy for Rupert Murdoch to re-consolidate his two companies and then buy CNN.

JONG-FAST: Wait, he was going to buy CNN?

CARUSONE: He was going to make another run at CNN because it is his white whale. Rupert Murdoch has never attempted to buy something that he has not been able to successfully buy, even if he's lost a bunch of times. That's how we got The Wall Street Journal. It took him a couple runs before he got it.

He has tried repeatedly to buy CNN. He's failed every time. In fact, he tried to get Donald Trump to lean on AT&T back in 2017 and force AT&T through the regulatory process to sell CNN. And I think it was pretty clear all the indicators were there that he was gearing up to make another buy for CNN.

In fact, he was so sort of excited about the prospect that he started teasing the first couple of days of January that he had one big deal left in him. And everybody in the inside sort of knows what that means.

But right after his deposition ended, they decided that they could no longer merge the companies because the independent commission that they're legally obligated to hire to sort of assess the deal would not have been able to endorse it because it would have created too much liability for News Corp. shareholders, which is now technically a separate company, even though they're both run by the Murdochs.

So if nothing else has happened, one, it thwarted that effort and it weakened the ability for Lachlan, who's much worse than his dad, believe it or not –

JONG-FAST: Right. I believe it.

CARUSONE: – a jointly confirmed, you know, a joint – a combined company. And that's a big deal in and of itself. So there's already been repercussions from this litigation well beyond, you know, what will happen with with all this.

And the last thing I'll say on that is that where this is taking place is also significant because Dominion is suing for $1.6 billion, but that's only in damages that they can say, look, this is. How much damage we've experienced as a result of these lies. But they're suing in Delaware, which does not have a cap on punitive damages. Yeah. So unlike Alex Jones, where the states where he was getting punished had caps on damages. Delaware doesn't have that. So depending on the scale of how egregious this behavior is, and it certainly seems pretty egregious, a jury can award a pretty hefty set of punitive damages on top of the compensatory damages.

JONG-FAST: Angelo, I hope you will come back as this trial goes on. Really, really great.

CARUSONE: You bet.