Keeping up with the Murdochs

Quite a lot has happened since we last turned to the antics of the Murdoch clan, so time for an update. First, let’s do a little score-keeping—last August we gave Rupert and James Murdoch six months in their current jobs. Well, I’ll take 50%, thank you very much, if you grant I was a bit off on the timing for James. Rupert, though, well, he’s still holding on, and in fact is giving signs that he wants to make a fight of this, depending on what this is, since there are about 84 things going on at once here. Rupert seems to be keeping potentially restless shareholders quiet by paying ridiculously high dividends. Whether this will prove to be a successful strategy over the longer term is questionable, but it has certainly worked up to now. The great thing about Murdochgate or whatever we want to call it is that it keeps on giving. Every time you think you’ve got a handle on it, something new emerges from the slime.

So the most recent thing—as I said, it’s hard to keep track at this point—was a report by the BBC on its Panorama show this past week, which does investigative journalism to varying degrees, that a subsidiary of News International called NDS engaged hackers to hack into its main UK competitor at the time, ITV Digital. This company was owned by Sky competitors Carleton and Granda, who eventually merged and became ITV plc in 2004. Panorama claimed that NDS got the proprietary codes and then leaked them through the internet, which basically sank ITV Digital, Sky’s biggest UK competitor at the time, which went out of business in 2002. Jeez, why, that’s ten years ago. I have to say, this seems like a convincing report that the BBC did here. Adding to the ironies of the situation is the fact that James Murdoch was at the time a non-executive director of NDS at the time this was alleged to have occurred, although pretty much everyone agrees it’s likely he knew nothing about any of this. Or at least these sorts of comments are phrased along the lines of “there is no evidence James Murdoch knew anything about…,” that sort of thing. The Panorama report is still available on the BBC iPlayer for those who can access it.

And then, just to prove that there is no such thing as coincidence, came a report from Australia that Australian Financial Review, an Australian competitor to Murdoch’s Australian operations, made exactly the same claim. Who would have possibly predicted that? This brought some grumbling from a variety of Australian politicians, but so far no police investigation.

Rupert, having apparently decided that his previous general strategy of laying low was no longer effective, has announced that he will “hit back hard” over these claims. Obviously savvy as he still is at 81, Murdoch’s riposte came in the form of a tweet, which read, in full, “Seems every competitor and enemy piling on with lies and libels. So bad, easy to hit back hard, which preparing,” Which was then followed by this gem: “enemies many different agendas, but worst old toffs and right wingers who still want last century’s status quo with their monopolies.” Heh. News Corp’s CEO, Chase Carey, called the claims “baseless accusations.” This all sounds vaguely familiar, actually—it’s the same response that these guys gave to the news hacking stories. Anyway, Ofcom, the UK media regulator, is apparently taking the UK claims seriously enough to initiate an investigation.

And that’s not all. This is just sort of the icing on an increasingly large cake that enemies of Murdoch are staring at in gleeful anticipation. Because over the past several months, there have been all sorts of further developments, none of them positive. Some of the more predictable ones concern James—who has resigned from practically every job he had last summer, along with practically every board of directors he was sitting on. News International (where he also resigned as Chairman) was the big one, but there have been a bunch of directorships—GlaxoSmithKline, Sotheby’s. Moreover, there’s increasing shareholder pressure to remove James from the boards of both News Corp and from News International. James is still heading off to New York to become the number three at News Corp. But, it has to be said, whether he will ever run it, for all of Rupert’s dynastic instincts, appears to be a pretty low-probability event at this point. Plus it’s still not clear that James was, as he has maintained, in the dark on the phone hacking—there’s that interesting email trail, for one thing. James is, for all intents and purposes at his point, toast.

Then there’s the Leveson inquiry, which Parliament set up to investigate the whole mess. The specific remit is to examine ethics in the media, but it’s much broader than that, including looking at the relation between the press and the police. And it’s fairly clear that the institutional corruption of both reached an epic scale, bases on months of testimony. In fact, some of this testimony has been horrifying, particularly Charlotte Church’s. This inquiry is ongoing, and there’s sure to be more to come, but already there seems to be enough to warrant several criminal prosecutions—assuming that there aren’t complications from the testimony already delivered that may complicate future prosecutions

And then there have been the pretty interestingly large number of arrests over the past several months. Rebekah Brooks was arrested again—and this time she was hauled off at six in the morning, with her husband. Not just Rebekah, who is currently unemployed, as it turns out—a whole slew of other News International executives and NOTW and Sun reporters. This flummoxed Murdoch so much he flew into London immediately, and promptly launched The Sun on Sunday. There have been all sorts of deals with various celebrities and sports figures settling phone hacking cases, with thousands more to go, theoretically. Perhaps most interesting, several police have also been arrested, and there will likely be more to come. The institutional corruption that Murdoch created and fostered is both wide and deep, and will take some time to winnow out. As I commented earlier, the British police and political establishment (under both Conservative and Labour governments) were thoroughly compromised here by Murdoch and his troops—but it was hardly at gunpoint. And now there are lots of agencies all over the place taking a close look at the Murdoch empire.

And the lies are all dribbling out now as well. Murdoch has maintained through the decades that he had no meetings with Margaret Thatcher prior to her approval (which was necessary) for his acquisition of The Sun following his acquisition of the Times. We now know that that was a lie. There will be more.

All of which, inexorably, leads to Rupert’s operations in the US. And whether the various regulatory bodies in the US that could take an interest in any of these various behaviors actually do take an interest. So far, there have been some encouraging signs, but there are also lots of distractions. Does one, if one is the FCC or the FBI, go after Rupert Murdoch during a presidential election year, as satisfying as that might be? So we’ll see how this plays out. Much is contingent on what criminal charges ultimately are brought here—and that’s still a wide open field.

All of this is great spectator sport, of course, and has the potentially satisfactory conclusion of seeing the Murdoch empire weakened, perhaps fatally. I for one would not be at all sorry to have him out of British politics, to say nothing of the swill that comprises Fox News. But I’m not going to hold my breath, either. If Murdoch’s shareholders haven’t gotten sick of him yet, you have to wonder what it will take. I suspect it will be the threat of having the US television station network broken up. We may get there, but it will be a process, not an event. People who do fluid mechanics know that there’s a concept called self-organized criticality, which applies to, say, piles of sand, and it’s the state of maximal instability that the pile of sand achieves right before the next avalanche. Not only that, it’s the state that the pile of sand keeps reorganizing itself to after each avalanche. You get the sense that News Corp, which still generates prodigious amounts of cash for its owners, has become this sort of system, and that it won’t take much to cause an avalanche considerably larger than the little ones we’ve seen so far.

Here’s what I really want to know, though—what’s with the complete radio silence on Rebekah Brooks’s laptop? This has gotten almost no press in the US, so far as I can tell. Last summer, when all of this was really starting to heat up, a very odd thing happened. “Odd” may not be the right word, but I’m not sure what other word will do. It’s probably better just to quote The Guardian at length here:

Detectives are checking the contents of the two computers found in a carpark near the riverside home of Rebekah Brooks, the News International chief executive who resigned over phone hacking.

Police have asked for passwords to the laptop and iPad, claimed by Brooks’s husband, Charlie, to belong to him. They are understood to be examining the computers’s contents to establish whether they contain any evidence relevant to the criminal investigation of phone hacking at News International.

The bag, also containing personal papers, was found by a cleaner in an underground car park at the riverside Chelsea Harbour development on Monday afternoon.

Shortly after its discovery Brooks’s husband, a former racehorse trainer and close friend of David Cameron, arrived on the scene and tried to reclaim it.

The police were instead called and less than half an hour after the bag was found two marked police cars and an unmarked forensics car are said to have arrived at the scene.

That same day David Wilson, Charlie Brooks’s official spokesman, told the Guardian that Charlie Brooks expected the bag to be returned “forthwith”.

Wilson has said Charlie Brooks is “disappointed” that three days later police are still refusing to return the bag – but added that Brooks remains confident police will return it once they have established it is his.

“Police have been in touch and have asked for the passwords,” Wilson said. “Charlie was hoping it would be returned before now but he is adamant that … it is his computer and that there is nothing on it that is Rebekah’s and nothing that has anything to do with the [phone-hacking] case.

“He hopes it will all be returned without much more delay. It is in their [the police’s] hands now but Charlie is confident they will return it in the fullness of time.”

Police are understood to be checking CCTV footage at the garage to establish who left the bag, found in a bin in the car park. Brooks has said the bag was dropped by a friend who was trying to return it to him but accidently left it in the wrong part of the garage.

“The suggestion is that a cleaner thought it was rubbish and put it in the bin,” Wilson said.

Perfect, just perfect. The cleaner thought it was rubbish, after it was dropped off in the wrong part of the garage, and then it ended up in the bin somehow. If this were fiction, it would never get past the editor. And here’s the thing—the police still have that laptop. And every now and then there’s some mention in the press that the police still have that laptop, and isn’t that sort of interesting? You bet. I can’t wait to see what happens next.

And if nothing else, at least there’s been a pretty funny lingerie ad campaign in Germany prompted by all this.

3 replies »

  1. Didnt I hear that the Aussies just started the equivalent of a RICO investigation of this nasty old thug? It sounds as if these guys were running a criminal enterprise. Hacking to get stories is one thing, hacking to sink competitors is a whole new level (even though it’s morally no worse.)