The Sun is Setting on Media Tycoon’s British Enterprises

Anyone who as a child sat enraptured and rather scared through the wonderful movie The Wizard of Oz, will never forget the final five minutes of the film, in which the all-powerful and hitherto hidden wizard, is suddenly exposed as a rather pitiful, bumbling old man, whose magical powers, having evaporated, is left fumbling for words. There were occasions when, watching Rupert Murdoch’s performance as he was questioned at the Leveson inquiry, the less than wonderful wizard came to mind. Watching the former king-maker in the flesh, we saw an old man who was clearly unaccustomed to being questioned by anyone about anything, let alone about matters that he considered were properly the concern of the various underlings to whom they had been delegated. If he had been carefully briefed, it didn’t show. Perhaps he mistakenly believed that he needed no advice. Faced with the forensic probing of Robert Jay, QC for Lord Justice Leveson’s inquiry, Murdoch stumbled from one evasive or inadequate response to the next. Deeply uncomfortable with the situation he found himself in, he was sometimes flippant, sometimes arrogant, frequently irritable, and always self-exculpatory. His performance bore no relationship to the image of the all powerful global mogul whose blessing was so recently sought by the political elites in return for great favours happily granted to further aggrandize his already overblown media empire. One might have been forgiven for thinking that this spelled the beginning of the end for Murdoch and News Corporation. That is almost certainly the case for News International in Britain, but it is too early to write the obituary for News Corp’s far more extensive international media enterprises.

All hope he may have had of extending his control of the print and broadcasting media in Britain must now be abandoned. Taking the remaining 61% of BSkyB, which only last year was almost a done deal for him, is now beyond his reach. He has already closed the best-selling tabloid, News of the World, many of whose former journalists and management face criminal charges for phone-hacking and perverting the course of justice. His son James has resigned as executive chairman of News Group newspapers, but remains deputy chief operating officer of News Corp.

The toxicity staining the Murdoch brand in Britain has now spread to the government. Evidence has emerged in emails released by News Corp, that culture secretary, Jeremy Hunt (who last year was in charge of oversight of the BSkyB bid) was in secret contact with James Murdoch. In emails written to Murdoch by his lobbyist, it seems clear that Hunt was, contrary to his parliamentary obligation to act in a quasi-judicial and impartial way, adopting a blatantly partial stance in favour of the £8 billion bid. In one explosive revelation the lobbyist, apropos his contacts with Hunt, notes: “Confidential: Managed to get some infos on the plans for tomorrow (although absolutely illegal!)…Lots  of legal issues around the statement so he [Hunt] has tried to get a version which helps us.” None of this comes as much of a surprise to close observers of the dealings between the government and News Corp. Jeremy Hunt had already described himself on his own website as a “cheerleader for News International”. In December 2010 business secretary Vince Cable, then responsible for overseeing the BSkyB bid, had unwittingly revealed in a sting operation against him by the Daily Telegraph, that he had “declared war on Murdoch”. For this indiscretion he was removed from his responsibility and replaced by Hunt. Everyone expected Hunt to approve the bid, enabling Murdoch to take the 61% of the shares, giving News Corp total control of BSkyB. All that stopped this happening was the revelation by the Guardian newspaper on July 13 2011 that the News of the World had hacked into the voicemail of murdered teenager Milly Dowler in 2002. Had this not happened, Hunt would have waived the bid through. To avoid what, in the light of the revelation, would have been a unanimous House of Commons vote against it, the bid was withdrawn by Murdoch.  It was in the midst of all this that prime minister Cameron announced the establishment of the Leveson judicial inquiry, with a wide-ranging brief to investigate the culture, practices and ethics of the press. In view of what has been revealed so far, he and much of the political establishment, to say nothing of those engaged in the practices that Leveson is investigating, must devoutly wish that the inquiry had never been set up. This is clearly the view of most of the tabloid papers who are judiciously avoiding any mention of the proceedings. But, such was the pressure on the government – the Tories in particular – to do something to create the impression that they were no longer in hock to Murdoch, that Cameron had little room for maneuver.

Murdoch’s ambitions have taken a severe battering. His appearances at the inquiry have revealed a man seemingly much diminished – although his public appearances have anyway been so few that it is difficult to judge. One thing is clear; he seems determined to wreak some sort of revenge on those he blames for upsetting his plans. Thus the release to the inquiry of a steady flow of information of a very comprising nature for so many of those with whom he has had dealings. As the centre-left political weekly, the New Statesman opined on 30 April “If Murdoch’s going down, he’s taking everyone with him”. Those with inside knowledge claim that the release of email records of confidential exchanges with Jeremy Hunt was deliberately intended to finish the minister’s career. It is also reliably reported that before the present government came to office the Tories did a deal with Murdoch to the effect that News International’s tabloids would support the Tories in the 2010 election (meaning that the Sun and News of the World would withdraw their backing for Labour) in return for a Tory government supporting Murdoch’s interests in the UK. That meant assisting the BSkyB bid, reducing the powers of the media regulator Ofcom and cutting back the BBC. All this came naturally to the Tories anyway, much as it had to Tony Blair and New Labour whose desire to please Murdoch was no less than Cameron’s. Anyway, all the indications are that Cameron acted exactly as had been arranged. His first visitor at No.10 after the election was – Rupert Murdoch.

The most recent development in this saga is the report of the parliamentary culture, media and sport select committee. It is damning. As the record of criminal behaviour at the News of the World is so well established and incontestable, the Murdochs and their minions are unable to challenge the main finding of the committee’s report. What they are anxious to do is to reject any suggestion that those at the top of News Corp – particularly Rupert and James Murdoch, are personally culpable. Some of the underlings who can be allowed to go to the wall are: yesterday’s favourite, former Sun and NofW editor and ex-News International CEO, Rebekah Brooks; former NofW editor and director of communications for Cameron, Andy Coulson; former executive chairman of News International and Murdoch favourite, Les Hinton; ex-NoW editor (now editor of the New York Daily News) and former legal manager of News Group Newspapers, Tom Crone. Brooks and Coulson are at present on police bail. Hinton, Myler and Crone have been found guilty of misleading a select committee. They will be summoned to present themselves before the bar of the House of Commons to formally apologize – the first time this has happened since 1957. The committee drew no conclusion about the behaviour of Brooks and Coulson as they are both under police investigation and on bail. Brooks was arrested on suspicion of conspiracy to pervert the course of justice.   

The most damning conclusion in the committee’s report concerns Rupert Murdoch himself. In a key passage the committee concluded that “Rupert Murdoch is not a fit person to exercise the stewardship of a major international company.” No sooner had the report been released than Tory members of the select committee, led by aspiring celebrity Louise Mensch, rushed to disassociate themselves from this conclusion. They hastened to point out that all the Tories on a committee numbering ten (5 Labour, 4 Tory, 1 Liberal Democrat) were opposed to it. Mensch stated forcefully that the “not a fit person” passage gave the report a partisan character that completely devalued its conclusions. In the ensuing argument it became clear that there had been other disagreements over which the committee had divided. It turns out that they voted on 16 amendments making the report more, or less critical (or neither), of the Murdochs. The voting pattern shows that the Labour members and the Lib Dem supported most of the amendments making the report more critical and that the Tories supported many of those making it less critical and few of those making it more critical.  For example, Louise Mensch only voted for one making it more, but for six making it less critical. Her fellow Tory, Dr Therese Coffey supported none of the amendments making the report more critical and voted for 6 of those making it less critical. Philip Davis probably reflected the Tory attitude to the Murdochs in his less than trenchant judgment that “They have admitted mistakes. I make hundreds of mistakes every day. Hands up anyone here who has not made any mistakes!”  But committee member Tom Watson, the Labour MP who has done more than anyone in parliament to expose the criminality at the heart of News Corp, went straight to the point: “We found that News Corporation carried out an extensive cover-up of its rampant lawbreaking. Its most senior executives repeatedly misled Parliament and the two men at the top, Rupert and James Murdoch – who were in charge of the company – must now answer for that.”

No-one who has followed the affair can be in any doubt about the cover-up, or that responsibility goes right to the top. The attempts by Mensch and her fellow Tories to wriggle out of the report’s conclusion are completely disingenuous. They cannot deny the overwhelming body of evidence implicating the Murdochs, but they shy clear of holding them responsible, preferring instead to let their underlings take the rap. This shows how deeply reluctant Tories are to challenge corporate power. Britain’s political elites have been subservient to the Murdoch empire for so long that the habit of subservience is hard to break. But it will do them little good. As ever more incriminating evidence emerges – as it surely will as the Leveson inquiry exposes more criminality and those implicated start to blame one another  - it will not help anyone’s political career to be seen as a defender of Rupert Murdoch.

The only argument left to his dwindling band of defenders in Britain, is that he is “a fit person to exercise stewardship of an international company”, by virtue of the fact that he must be to have got where he is today. And, ultimately of course, that is the defense upon which the News Corp executives and shareholders in the United States will have to rely. Corporate power needs no justification other than its continued success, and that is measured in terms of the share price. Who cares how se got where we are. Whether Murdoch will be able to stage a retreat to his New York bunker and  successfully pursue his operations from there, remains to be seen.