The investigation by the British government into phone hacking by News Corp. prompted an appearance by Rupert Murdoch today at a parliamentary hearing into the matter.
Despite the widespread phone hacking from the Murdoch-owned News of the World, he testified that "I don't believe in using hacking, in using private detectives or whatever, that's a lazy way of reporters not doing their job. But I think it is fair when people have themselves held up as iconic figures or great actors that they be looked at."
Bloomberg recently reported that there were likely over 1,000 victims of the News of the World's phone hacking.
In additional testimony Murdoch sought to downplay his involvement in British politics. From The New York Times:
The government's lead attorney for the inquiry, Robert Jay, pursued a chronological line of questioning beginning with Mr. Murdoch's entry into the British newspaper market in the late 1970s and early 1980s. Much of the questioning centered on meetings with British political leaders and the pledges Mr. Murdoch had made not to influence his newspapers' editorial policies.
He acknowledged meetings, dinners and shared quips with a series of prime ministers, but sought to dismiss suggestions that he wielded any influence.
"I don't know many politicians," he said, on one of many occasions when he denied accusations from Mr. Jay that his newspapers supported politicians whose policies might offer him some commercial benefit. As to suggestions that his power might be more subtle than such obvious exchanges, he responded, "I'm afraid I don't have much subtlety about me."
The emails showed that News Corp. and representatives of the British government were discussing government approval of the media company's purchase of satellite TV network BSkyB.
As part of the ongoing fallout from the News Corp. phone-hacking scandal, James Murdoch, who earlier this year resigned as head of Murdoch's UK newspaper empire, today appeared at a judicial inquiry about press culture in the UK.
In keeping with his (and his father's) pattern of denying knowledge of the extent of the hacking at the News of the World tabloid, Murdoch reportedly told the inquiry that News of the World executives kept him in the dark about the scale of the hacking problem.
He has consistently maintained that the paper's management failed to alert him to the scale of the problem.
"Knowing what we know now about the culture at the News of the World in 2006, and from what we know about the alleged widespread nature of these poor practices, then it must have been cavalier about risk and that is a matter of huge regret," James Murdoch told a packed courtroom.
Asked if he read the weekly News of the World, he said "I wouldn't say I read all of it," and asked about its daily sister paper, the Sun, he said he had "tried to familiarize myself with what was in it".
Murdoch was also pressed on a 2008 email chain that mentioned a "nightmare scenario" involving potential legal consequences of phone hacking at News of the World. When these emails first surfaced in December, Murdoch released a statement admitting to both receiving and replying to the email, but also denying having read "the full e-mail chain." According to the BBC, Murdoch repeated this defense today:
In December, another email from 2008 was released indicating Mr Murdoch had been copied into messages referring to the "rife" practice of phone hacking at the News of the World and also citing the "For Neville" email.
Mr Murdoch has said although he was copied into the email, he did not read it fully.
He told the inquiry: "I didn't read the email chain. It was a Saturday, I had just come back from Hong Kong, I was with my children. I responded in minutes."
He said he now accepts that the "For Neville" email was "a thread" that raised the suspicion of wider phone hacking at the News of the World.
"The fact it suggested other people might have been involved in phone hacking - that part of its importance was not imparted to me that day," he said.
News Corp. CEO Rupert Murdoch is scheduled to appear before inquiry on Wednesday and Thursday.
CNN's Howard Kurtz admonished officials at Sky News, a News Corp.-owned British news channel, for "saying they reserve the right to break the law" after it emerged that officials there acknowledged hacking into private emails.
Officials at the News Corp. channel confirmed this week that on at least two occasions, reporters illegally hacked into private email accounts.
Sky News head John Ryley made clear that the hacking was authorized and said that they "stand behind these actions as editorially justified and in the public interest." Kurtz on Sunday called that justification "bloody rubbish."
In an April 6 Huffington Post column, Media Matters executive vice president Ari Rabin-Havt explained how the latest development in the News Corp. hacking scandal further validates concerns that the company suffers from a culture of corruption:
The Sky case is particularly interesting because for the first time, the company has admitted that hacking was not only approved of, but in fact officially sanctioned by the management of the channel. John John Ryley, the head of Sky News, told reporters, "We stand by these actions as editorially justified and in the public interest." Ryley continued: "Material provided by Sky News was used in the successful prosecution, and the police made clear after the trial that this information was pivotal to the case."
Regardless of intentions or the criminal behavior of a target, it is not in the realm of a private entity to determine which laws to follow and which to ignore. It's because of this hubris, which runs up and down the News Corp. ladder, that the company has landed in this place.
Due to the ongoing investigation of the News Corp. phone-hacking scandal, James Murdoch has stepped down as chairman of UK satellite broadcaster BSkyB. BBC reported:
James Murdoch has resigned his role as chairman of UK satellite broadcaster BSkyB, but will remain on the board.
His father Rupert founded its parent company News Corporation, which had to drop its bid for BSkyB amid a phone-hacking scandal at a UK newspaper.
James Murdoch said in a statement that he did want want BSkyB to be undermined by "matters outside this company".
Sources told Robert Peston, the BBC's business editor, that it was Mr Murdoch's own decision to leave.
Mr Murdoch said on Tuesday: "As attention continues to be paid to past events at News International, I am determined that the interests of BSkyB should not be undermined by matters outside the scope of this company.
"I am aware that my role as chairman could become a lightning rod for BSkyB and I believe that my resignation will help to ensure that there is no false conflation with events at a separate organisation."
In February, James Murdoch resigned as chairman of News International.
This week's sudden unraveling of Rush Limbaugh's radio standing as the untouchable king of conservative media strangely mirrors deep difficulties recently faced by Rupert Murdoch and Glenn Beck, two other far-right press titans.
Limbaugh supposedly boast 20 millions listeners (in truth, he likely doesn't come close), and is routinely singled out by Republicans themselves as a GOP kingmaker and someone who must not be crossed. As the proprietor of Fox News, and the vanity publisher of the money-losing New York Post, Murdoch is the Godfather of right-wing media in America, stamping his trademark mendacity onto the conservative press. And not that long ago Beck was drawing three million viewers to his Fox News show, which made him the cable channel's most-watched personality and a rising media superstar.
Together, the far-right triumvirate helped define the movement's message on a daily, even hourly, basis. They were also seen as invincible forces.
And now look at them.
In the last year the trio has suffered extraordinary setbacks; setbacks that were entirely their own doing and setbacks that highlight the dangers of not operating under simple guidelines of fairness of common sense. Instead, led by the likes of Limbaugh, Murdoch and Beck, the conservative press has adopted a strange brand of radicalism that embraces falsehoods, smears and even law breaking, all of which places their practice well outside the mainstream culture.
In the last year, that brand of recklessness, built upon a foundation of spite, has produced three very public crises for Limbaugh, Murdoch and Beck. All three players have been badly damaged professionally and all three were led astray by their exaggerated belief that the rules don't apply to them.
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More than eight months after News Corp.'s long-simmering phone-hacking scandal erupted in Britain last July, and eight months after Rupert Murdoch and his top lieutenants insisted the law-breaking inside his London tabloids had been limited to a rogue element, the scandal yet again this week has accelerated with surprising force.
Two days after Scotland Yard revealed that Murdoch's tabloid The Sun had engaged in a sweeping pattern of illegal activity, and one week after it was alleged that News Corp. had implemented a policy of deleting sensitive emails regarding hacking at News of the World, today Murdoch's son James resigned as chairman of News International, a coveted post that oversees Murdoch's U.K. newspaper empire.
Prior to the hacking humiliation, the 39-year-old Murdoch was seen as the likely heir to his father's global media throne. In making the announcement today, News Corp. made no mention of the hacking investigation, instead noting that Murdoch had resigned his position as part of a previously announced relocation from London to News Corp.'s world headquarters in New York. But it's impossible to view the resignation outside of the scandal that continues to eat away at the Murdoch family reputation.
The pressing problem the Murdochs now face is that the blockbuster story has truly morphed into a hacking and bribery scandal, and James Murdoch is implicated in both.
What's telling is that when Rupert Murdoch's legal troubles mounted last year, he specifically devised a defense that he thought would help inoculate James, according to a recent report in BusinessWeek. That strategy, and the larger News Corp. cover-up, has failed.
Cultivating a culture of corruption can be expensive. Just ask Rupert Murdoch.
His media behemoth News Corp. has spent nearly $900 million dollars in recent years cleaning up legal messes created by the unethical behavior of his employees. And the legal bills, including out of court settlements, show no signs of abating as trans-Atlantic investigations grind on.
By year's end, News Corp. had already spent $200 million on legal costs trying to deal with and contain the phone-hacking scandal that continues to envelop his British newspaper empire. That sum comes in the wake of News Corp. shelling out nearly $700 million to recently settle three different anti-business lawsuits filed against a Murdoch marketing company in the United States.
Speculation mounts that the phone-hacking scandal could prompt the Department of Justice to prosecute News Corp. for bribing foreign officials in order to gain a competitive advantage and the legal costs surrounding that type of probe could also be enormous. One expert tells Media Matters that Murdoch's company could have to spend another $100 million navigating that investigation; more if the inquiry drags on longer than one year.
What's telling is that the massive legal bills all stem from the fact that Murdoch seems to cultivate a corporate culture where executives don't believe that the rule of law applies to them. The News Corp. culture is one where hacking computers, emails and phones, not to mention bribing politicians with favorable news coverage in exchange for votes in parliament, have been seen as a way of doing business.
In other words, Rupert Murdoch has created a ethical cesspool and now his company has had to spend what's approaching ten figures trying to clean it up. The legal tab though, is still open.
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Faced with a corporate decision last May on how to handle the still-troubling, but not yet disastrous, phone-hacking allegations that had been dogging his British newspapers, Rupert Murdoch assembled key lieutenants in London and weighed his options.
According to a new, detailed account of the meeting published by Bloomberg BusinessWeek, Murdoch was presented with two options: let his London office continue to deal with the police and Parliamentary inquires, neither of which up to that point had done grave damage to News Corp., or Murdoch could shift responsibility to New York, to News Corp.'s corporate headquarters and allow key executives there to give the pressing problem a fresh, independent look.
According to BusinessWeek, Murdoch chose to keep the phone hacking focus in London (i.e. the "containment strategy"), in part to inoculate his son James Murdoch, a key News Corp. executive who had been positioned to become his father's successor.
Two months later though, the hacking scandal exploded when it was revealed Murdoch's News of the World had hacked into the phone messages of Milly Dowler, a 13-year-old girl who disappeared in April 2002 and was later found murdered. Since July, more than a dozen hacking arrests have been made, News of the World was shuttered, and executives were summoned before Parliament for a series of hearings, including James whose reputation has been badly damaged.
By August, it was evident that Murdoch had made exactly the wrong decision in opting for the London containment strategy.
Writes Greg Farrell in BusinessWeek:
If Rupert Murdoch had chosen a different path at that dinner in London, the company might have dodged theworst consequences of the Milly Dowler revelations.
James would still have suffered in the short term for heading News International at a time when it was obscuring the extent of phone hacking, but he could have avoided the embarrassment of making firm claims before a parliamentary committee that were eventually contradicted by e-mail evidence.
In making his fateful choice, Murdoch overruled his longtime general counsel, Lon Jacobs, who urged his boss last spring to move aggressively on the pressing problem and transfer the focus from London to New York.
In the latest sign that News Corp.'s hacking scandal shows no signs of fading, Scotland Yard is reportedly investigating Times of London with regards to allegations that a Times reporter "gained unauthorized access to an e-mail account."
As today's New York Times notes:
The development was significant in two regards: it focused attention on e-mail hacking rather than the illicit voice mail interception at the center of inquiries so far, and it suggested that the most august of the Murdoch publications in Britain was not immune from scrutiny.
But the development is also significant because it means Murdoch's media companies are now being investigated, on two separate continents, for three different kinds of hacking: phone, email, and computer.
As Media Matters has been documenting for months, it's increasingly clear that there's a larger culture of corruption inside Murdoch's media empire, and that too many of his employees feel unrestrained by ethics or the law.
News Corp. chairman Rupert Murdoch has a Twitter account. A for-real, honest-to-goodness Twitter feed. He composes the tweets and hits the "send" button. It is a direct link to the mind of one of the wealthiest, most powerful, and controversial men in the world. Which is why it's so surprising and disappointing that, to date, it's been rather banal.
As the New York Times described it, Murdoch impulsively decided to join the microblogging service while tooling around the Caribbean on his yacht over the holidays. Since then it's been a steady stream of pro-vacation missives ("Vacations great time for thinking. St Barth's too many people. Thoughts best kept private around here. Like London!"); promotions of News Corp. ventures ("I LOVE the film 'we bought a zoo', a great family movie. Very proud of fox team who made this great film."); and cryptic warnings ("Jack. Tokyo sounds great but be careful of that full moon").
But this is Murdoch's big debut on the internet! And we're privileged enough to see him stumble his way through the basics of Internet 101. Lesson 1: the internet is a conspiratorial and sexual place: "Why is every tweet thought to conspiratorial or sexual. I was talking blackjack. Give me a break." Lesson 2: the heartbreak of auto-correct: "Yes, thanks, of course I meant POTUS. Somehow iPad changed my spelling. I should have checked. Sorry."
Murdoch is obviously not of the internet generation (he'll be 81 in March), so tweets like these aren't surprising. And while his ignorance of internet basics is, in these instances, charming and somewhat comic, it starts to have more sinister implications when you consider Murdoch's influence over tech policy.
News Corp. is one of the many large media conglomerates that support the PROTECT IP Act (PIPA) and its beleaguered cousin, the Stop Online Piracy Act (SOPA). The controversial pieces of anti-digital piracy legislation -- once considered all-but-certain to become law -- ran headlong into a buzz saw of internet activism and are now facing an uncertain future. Big-name tech companies (Google, Yahoo!, Facebook) opposed the bills out of concern over censorship and their potentially stifling effect on innovation, and popular online communities (Reddit, Wikipedia) organized successful boycotts of pro-SOPA companies and are scheduled to go dark for most of tomorrow as an act of protest.
As one would expect, Murdoch, as the head of News Corp., enthusiastically supports SOPA and PIPA, and he has taken to Twitter to boost the bills and take swipes at the opposition. The problem is that he doesn't seem to have any idea what he's talking about, and actually ended up making an anti-SOPA argument by accident.
The United States Attorney for the Southern District of New York, Preet Bharara, has recused himself from the office's ongoing investigation into News Corp. because of a longstanding friendship with a News Corp. board member.
The U.S. Attorney's office does not publicly announce when recusals are made, but spokeswoman Ellen Davis confirmed to Media Matters that Bharara took himself off the investigation several months ago. Bharara consulted with the Department of Justice's ethicist who concluded he did not have to recuse himself, but that "in order to avoid even the appearance of impropriety" he opted to do so, says Davis.
In the wake of this summer's sweeping phone-hacking scandal in Britain, the U.S. Attorney's office launched an investigation into Rupert Murdoch's News Corp. to determine if the company has been engaged in a pattern of corrupt business practices in America.
Allegations include a Murdoch-owned marketing firm hacking into a competitor's password-protecting website in order to steal proprietary information. As part of a civil lawsuit, which was abruptly settled for $30 million, News Corp. admitted its computers were used for the hacking attacks. A News Corp. whistle blower has also gone on the record alleging the same U.S. marketing firm routinely engaged in predatory pricing and other anti-competitive practices. Media Matters reported in September that in the wake of the hacking scandal, U.S. investigators for the first time had reached out to the News Corp. whistleblower.
In recent months, Murdoch and his top lieutenants have focused most of their crisis management on the U.K. scandal. However, any charges brought against News Corp. by the U.S. Attorney Office would likely present enormous political, as well as legal, problems and complicate the company's efforts to control the ongoing scandal damage to Britain.
As Time's Massimo Calabresi previously reported, Bharara's conflict revolves around his longstanding friendship with Viet Dinh. A controversial Republican insider, Dinh served as assistant attorney general early in the Bush administration and co-authored the Patriot Act. After leaving government, Dinh joined News Corp. as a member of its board and has been deeply involved overseeing the company's internal investigation into the hacking scandal; the same topic the U.S. Attorney's office is digging into.
Dinh and Bharara have been close friends for two decades, with Bharara serving as the best man at Dinh's wedding. Bharara was appointed as a U.S. Attorney by President Obama in 2009.
This isn't the only Dinh-related conflict with regards to News Corp.'s hacking scandal and the independent inquiry Dinh is supposed to be overseeing.
As Bloomberg reported this summer:
News Corp. (NWSA's independent directors, obligated to assess Rupert Murdoch and other top executives' handling of the company's phone-hacking scandal, are relying for guidance on Viet Dinh, a board member with personal ties to the Murdoch family.
A Washington attorney and Georgetown University Law Center professor, Dinh has been a friend of Chief Executive Officer Rupert Murdoch's oldest son Lachlan since 2003 and is godfather to Lachlan's second child. In 1992, a decade before they met, the South China Morning Post, then owned by Murdoch, helped Dinh free his sister from a Hong Kong refugee camp.
As for the current News Corp. inquiry, Ellen Davis says the U.S. Attorney's Office does not comment on ongoing investigations.
UPDATED: Here's the full statement from Davis at the U.S. Attorney's Office:
"Many months ago, the United States Attorney, Preet Bharara, solicited opinions from all the appropriate ethics officers within the Department of Justice regarding the potential for a conflict. Each ethics officer formally opined that he need not step aside, but in an abundance of caution and in order to avoid even the slightest appearance of an ethical issue, he voluntarily removed himself from the investigation many months ago. As a result, it is being supervised by the Deputy United States Attorney."
"This is the most humble day of my life."
That's how Rupert Murdoch began his July 20 testimony to Parliament about the phone hacking and bribery scandal that had already resulted in the resignations and arrests of key News Corp. officials.
Murdoch's son, James, was equally contrite. "I would like to say as well just how sorry I am and how sorry we are, to particularly the victims of illegal voicemail interceptions and to their families," he told the committee. "It is a matter of great regret to me, my father and everyone at News Corporation. These actions do not live up to the standards that our company aspires to everywhere around the world."
The story had begun spiraling out of Rupert Murdoch's control two weeks earlier, when the Guardian reported allegations that employees of Murdoch's London tabloid News of the World had hacked into the mobile phone voicemails of a British schoolgirl who had gone missing, and who was later found dead.
"I cannot think what was going through the minds of the people who did this. That they could hack into anyone's phone is disgraceful," lamented Prime Minister David Cameron as the scandal quickly engulfed the U.K., and spread throughout Murdoch's global media reach. "But to hack into the phone of Milly Dowler, a young girl missing from her parents, who was later found to be murdered, is truly despicable."
Allegations of phone hacking within Murdoch's newspapers had been simmering for years in the U.K., and News Corp. had been forced to make public apologies for the systematic invasions of privacy, often sponsored by News of the World and targeting celebrities, athletes and members of the royal family.
And while parts of the Dowler story have since been called into question, News Corp. agreed to pay her family 2 million pounds, and Murdoch himself delivered an apology in person. Moreover, the story set off a cascade of damning revelations that have continued to this day.
Evidence quickly tumbled out indicating the hacking been widespread, and that multiple, high-ranking executives had known about the intrusions. That meant previous explanations to Parliament, when Murdoch managers claimed the crimes had been limited, had been misleading at best. At worst, Murdoch chiefs lied to lawmakers in an effort to cover-up massive wrongdoing.
For years, Media Matters has documented the stream of purposeful misinformation that flows from Murdoch's American properties, most notably Fox News, where the misinformation has taken an epic turn for the worse under President Obama. Yet the corporate spectacle on display this year is even more troubling. This has been Murdoch overseeing a corrupt enterprise and one whose transgressions extend well beyond tapping into phone messages.
And for that dubious distinction, as well as for starring in a media unraveling that has attracted multiple police and government investigations on several continents, Rupert Murdoch and his international media behemoth are the recipients of this year's Misinformer of the Year award.