David McKnight - Rupert Murdoch: An Investigation of Political Power

First published in Australia in 2012

Copyright David McKnight 2012

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Contents

To my mother, Ruth McKnight

Introduction

In 1995 the journalist Ken Auletta spent many hours talking to Rupert Murdoch for a profile in the New Yorker magazine. Murdoch emerged as a ruthless man, feared by politicians and envied by his business rivals. Aulettas conclusion was that Murdoch was a pirate, a man who will cunningly circumvent rules, and sometimes principles, to get his way. Aulettas description was later embraced by the editor of Murdochs New York Post , Col Allan, who said that the culture of the company meant we like being pirates... we dont like conforming. The image of pirates can be that of romantic rebels, but in reality most pirates are brutal bullies. In 2011 in Britain, Murdoch and his editors were caught circumventing the rules once too often. His newspaper, News of the World , was shown to have systematically broken the law by hacking phones on an industrial scale as well as bribing police. The resulting scandal led to a crisis within Murdochs company, News Corporation, which is not yet over.

This book is an investigation of one of the worlds richest and most powerful men and the media corporation on which his power rests. Rupert Murdoch has been the subject of many books; their authors mostly mesmerised by his charm, his buccaneering and by his dazzling business deals. But he has been underestimated in areas about which he truly cares: politics, power and ideas. This book sets out to rectify this absence of scrutiny. Along the way it intimately explores Murdochs personal political ideology and traces the financial subsidies he dispenses to advance it.

Murdochs personal wealth stands at $6 billion, but he values political influence and ideas just as much as profit. His lifes work, News Corporation, is worth more than $30 billion, and as well as being a money spinner, it is a crusading corporation, a media institution with a mission. Its news outlets articulate a set of political values and beliefs that have evolved over 30 years. This book will examine these values and the corporate culture which spawns them: the secretive political seminars for editors and executives; the recurring editorial themes around the world; the private political donations; the sponsorship of think tanks and the patronage of conservative intellectuals. Today News Corporation is a powerful political presence in Australia, the United Kingdom and the United States. And while the power of Rupert Murdoch and News Corporation is expressed most clearly in its campaigning on major issues such as the invasion of Iraq and the denial of global warming, it extends far wider as this book will show.

In 2011, for the first time, a serious obstacle emerged to Rupert Murdochs smooth exercise of power. It began in Britain in 200506 when a police investigation led to the jailing of a private investigator, Glenn Mulcaire, and a News of the World journalist, Clive Goodman. The case involved the two men illegally hacking the voicemail of members of the royal family with resultant exclusive stories. Police attempts to deepen the investigation were met with a stone wall from Murdochs British operation, News International. A parliamentary inquiry later concluded that News International was deliberately trying to thwart a criminal investigation.

Over the next few years evidence accumulated that phone hacking was far more widespread at News of the World than previously thought, although News International insisted it was the work of the single rogue reporter who had been jailed. In 2009 a growing number of people began taking successful legal action against News International including Gordon Taylor, the head of the Professional Footballers Association. This fuelled the suspicions of many observers that hacking was widespread. The jailed journalist was the Royal Correspondent of News of the World . If he was truly the sole rogue reporter, how come Taylors phone had been hacked?

Throughout this period one Labour member of parliament, Tom Watson, doggedly pursued the case only to become a target himself. When he called on Prime Minister Tony Blair to resign, he angered top Murdoch executive Rebekah Brooks so much that he was told she would never forgive him for doing what he did to her Tony. Watson later found out that News of the World had hired a private investigator to follow him. Another Labour MP on a committee examining the phone hacking was threatened by News International with exposures about his private life.

In early 2011 a new police investigation into phone hacking by News of the World began and a series of arrests of senior editors and executives followed. News International had no choice but to admit the hacking was widespread. The political implications deepened with the resignation of Andy Coulson as spokesman for the British prime minister, David Cameron. Coulson had been the editor of News of the World , resigning from that position after the first hacking arrest. Then, at the beginning of July 2011, the dam burst when family of a murdered school girl, Milly Dowler, revealed that her phone voicemail had been hacked by News of the World . The newspaper had deleted messages to make room for more messages, giving her parents hope that the school girl was still alive. The police investigation was similarly thrown off the track. News Corporation soon admitted that bribes had also been paid to police for information. Two days later News International announced that it was closing News of the World , its highly profitable newspaper and, symbolically, the first major purchase by the young Rupert Murdoch in 1969. As the scandal deepened Murdoch withdrew his bid to take full control of the British satellite TV company BSkyB which, a few months before, looked certain to be approved by the Cameron government.

On 19 July 2011 Rupert Murdoch and his son James, his designated successor, were subjected to the indignity of close questioning about the hacking by a British parliamentary committee. It was a masterpiece of steely self-control by father and son, with Rupert Murdoch only momentarily losing his grip, dismissing the scandal as hysteria. Both denied personal knowledge of widespread hacking but with the establishment of a determined police investigation and a judicial inquiry, the reverberations of this scandal will continue to shake the Murdoch empire for some time.