The Fall of the House of Murdoch
Chapter One 4th July: Before the Fall
To say that Rupert Murdoch ruined my life, and probably ruined yours, is only partly hyperbole.
In a career spanning more than half a century, Rupert Murdoch has carved out an almost mythic place for himself as the modern media mogul, a species distinct from the purely print-based newspaper tycoons of the past. From the early days in Australia, when he added TV stations to the newspaper legacy of his father, his was a cross-platform project that spanned different formats and quickly developed international ambitions. The acquisition of the News of the World in 1969 (including a brief attempt to run London Weekend Television) was followed four years later by Murdoch’s relocation to New York, and purchase of magazine and newspaper franchises in the US. By the mid-1980s, incorporated in the US, with Australia as an accounting base and the United Kingdom as political bridgehead, he had begun to launch a fifth television network in the biggest media market in the world. By then News Corp was a global conglomerate, characteristic of the late twentieth century, active in multiple parts of the mass media, and able to navigate national taxes and regulations, by shifting operations and earnings across international boundaries.
Along the way, Murdoch’s media strategies have broken social as well as geographic borders. His trademark papers, from the downmarket New York Post and the Sun to upmarket titles like the Australian, The Times and the Wall Street Journal, prove that he can address the nuanced interests of the governing elites as well as appeal to the popular concerns of their constituents. Almost invariably, he has managed to change the terms of the game in the markets he has entered, destroying or supplanting previous practices and gentlemen’s agreements and bypassing national laws on competition, monopoly and cross ownership regulations. In the process, Murdoch has defeated or superseded rival owners and dynasties – the Halifaxes, the Packers, the Carrs, the Bancrofts - even the Windsors. Three generations of politicians in Australia and the UK have regarded him as a ‘King maker’, someone who has to be courted for political support, assuaged and consulted on policy. By 1996 he was named by Time magazine as the fourth most powerful person in the US. And with ever broader in interests in sports, book publishing, film making, marketing and even education software spreading across Europe, Asia and South America, there can be no doubt that Murdoch’s impact has been more than just political, or commercial, but cultural and historic too.
In his iconoclastic biography of Picasso, the art critic and novelist John Berger describes the Andalusian artist as a ‘vertical invader’, an outsider from the poor south whose energy so shook the Parisian art world that he rose rapidly to a position of great wealth, eminence and isolation. One can see a similar drive towards confrontation and disruption in Murdoch although – from a background of relative wealth and prestige in Australia – the invasion is more lateral than vertical. One of Murdoch’s few constant refrains over the years has been his hatred of the ‘establishment’, and a desire to challenge ‘snobs’ and ‘elites’. Like a wired-up, globalised Citizen Kane, he’s a horizontal invader who courts and then challenges every hierarchy he meets (except his own) with a radical restlessness.
This paradoxical quest for both the power of the insider and the dissenting energy of the outsider would inevitably lead Murdoch to the cultural, economic and political powerhouse of the late twentieth century: the United States. In 1985, unable to establish a TV network as an alien, he was fast-tracked to US citizenship and News Ltd, reinvented as News Corp, was incorporated in the state of Delaware. A year later he founded the Fox Network. Five of his six children are now American citizens. Famous in the UK for deploying his press monopoly in support of Margaret Thatcher, Ronald Reagan remains Murdoch’s political hero, and his Cold War American style of conservatism the best ideological fit.
By 2010, as Chairman and Chief Executive of News Corp, Rupert Murdoch presided over the third biggest media conglomerate in global terms, but with two distinct advantages over his rivals: an unprecedented concentration of power in the English speaking world, and a unique level of personal control over his company ran as almost a ‘one man show’. By then Murdoch owned 70 per cent of the Australian Press and many TV stations, nearly 40 per cent of the UK press and a controlling interest in its biggest pay-tv broadcaster. In both these countries his domination of the media – and by extension politics and political coverage - has been described as a ‘Murdocracy’. Meanwhile, in the US, Carl Bernstein has said: “it’s hard to think of any other individual who has had a greater impact on American political and media culture in the past half century.” His waspish official biographer Michael Wolff makes even more sweeping claim, contending that Murdoch’s TV station Fox News has “helped transform American culture into a two-nation state. The Tea Party is its child.”
Last year, the legacy was almost complete, with one remaining challenge: how to retain the Murdoch brand in a publicly-listed company while also solving the troubled issue of the family’s role in the corporation. The problem of who among his children would inherit control had been creating frictions for over a decade, with his oldest son Lachlan bounced from the News Corp board by internal rivalries, and his oldest daughter setting up her own company Shine (though it was subsequently bought back into the News Corp fold for $663 million). But a strategy had finally been worked out. Rupert’s second son James, having initially shown no taste for corporate life, had proved himself as head of News International in the UK and sat on the board as head of News Corp’s European and Asian interests. It was James’ well-choreographed plan to takeover of the remaining 61 per cent of BSkyB that would not only have secured the parent company a large cash stream, but also his role as the heir apparent.
Then, in a few days in July 2011, moments before the British government were preparing to allow the £6.7 billion News Corp takeover to go ahead, a long-rumbling phone hacking scandal erupted into the public consciousness. Inevitably the scandal that followed was called Hackgate (only on this occasion the nod toward the Watergate scandal had the support of the original Washington Post investigator who investigated it, Carl Bernstein, as well as Nixon’s legal counsel John Dean). Revelations followed of further hacking victims, police pay-offs and email intrusion, and three new official investigations were established to investigate allegations of phone hacking, police corruption and computer hacking (Operations Weeting, Elveden and Tuleta). In an attempt to stem the contagion, the News of the World was closed after 168 years because, in the words of its former editor and CEO of News International, Rebekah Brooks, the brand had become ‘toxic’. The biggest selling English language newspaper in the world, which had thrived on a diet of scandal about other institutions and dynasties, suddenly became the scandal itself.
Closure didn’t contain the problem: more arrests followed, including Prime Minster David Cameron’s former communications chief Andy Coulson. Soon Rupert’s favoured ‘impostor daughter’ – Rebekah Brooks – whom he’d flown to London to protect, had resigned from News International, and was arrested by appointment a couple of days later. Allegations of phone hacking and other illegal intrusive methods spread to other News International titles, and ranged from accounts of politicians and lawyers being followed and intimidated, to regular bribes to corrupt officials, and suggestions of a corporate cover-up. After an emergency Parliamentary debate, sub-committee hearings and the launching of a public enquiry, News Corp’s bid for BSkyB was withdrawn. Rupert’s succession strategy for James was in tatters. Rupert and his son were forced, by the command of the serjeant-at-arms, to appear in Parliament before MPs. The man who – in the title of one biography - ‘owned the news’ suffered – in his own words ‘the humblest day of my life’ becoming one of the most prominent victims of his own bad press.
This book seeks to explain how that happened through following the twists and turns of those two weeks in July 2011 as events unravelled, drawing together important threads from the four previous decades, for just as phone hacking itself was a symptom of an organisation which behaved as if beyond the law, the tragic flaws in News International can be traced back many years. The book also follows the repercussions of the Hackgate scandal forward to the inevitable denouement, as the Murdoch name fell from grace, and accusations of criminality, monopoly and abuse of power ended all possibility of a dynastic succession.
Looking back on those tumultuous fifteen days last July, from the initial revelation of the hacking of teenage murder victim Millie Dowler’s phone to the Murdochs questioning by British MPs, it’s hard not to feel shock at the industrial extent of hacking, blagging, surveillance and intimidation; and disgust at the extent of collusion of senior politicians and the subornment of police officers. There is also the forensic thrill of the chase as multiple investigations, both legal and journalistic, put together the many broken pieces of corporate malpractice and apparent cover-up which began to look, in the words of former prime minister Gordon Brown, like a ‘criminal-media nexus’.
By the time Rupert and James Murdoch were summoned to appear (after an initial refusal) before the DCMS Parliamentary sub-committee, this feeling became, for many, both vindication and a sense of justice finally being done. At last, the most powerful unelected person to have energed in our lifetime was being forced to face the people’s elected representatives in Parliament. British commentators compared it to the fall of Mubarak in Egypt or the Death of God, and even in the US – where Department of Justice investigations were still pending – liberal opinion was enjoying something akin to a schadenfreude-fest. Indeed, it was the reaction to a series of dairies on the major progressive Democrat site Daily Kos which inspired this book, and was the source of much original research and collaboration.
However, buried under the various emotions which escaped from the Pandora’s Box of ‘Hackgate’, there is one last unexpected feeling that emerges – a feeling of guilt.
Why guilt? I personally hadn’t hacked anyone’s phone. I’d never bought the News of the World or the Sun, and can’t remember when I last read The Times or the Sunday Times – though I may have scanned articles online before the pay-wall was erected. True, I worked briefly in a News International subsidiary in the 90s, but as a freelancer and in a multimedia project that never happened. I have several friends and colleagues in journalism, some who work for News International, but they weren’t at the tabloid end: they didn’t routinely invade privacy or engage in the politics of personal destruction. But – like the Eric Lewis cartoon above - I still feel somehow complicit in the near remorseless hegemony News Corp has asserted over my country and culture.
This sense of complicity comes from being a passive bystander. When a colleague revealed to me, several years ago, that his phone had probably been hacked, I sympathised, but took it to be in the natural order of things. I remember complaints by actors I had worked with that they had their wedding rings erased in photoshopped pictures when out on the town, them or their partners set up in compromising romantic stings. Again, I thought it something that was always the same and could never change. Clearly that fatalism was widespread. Indeed, I knew journalists who had told me that phone hacking was rife: but I didn’t do anything about it. What could I do? The access to publicity and outrage was controlled by the press and media: it was exactly those means to seek redress which were most compromised. It was like looking for a bandage in a gutter.
There were plenty of warnings about the hubris at the centre of News International, but they only become clear in hindsight. In his 2009 McTaggart lecture at the Edinburgh Festival James Murdoch outlined the plan for Sky to replace the BBC as the nation’s major broadcaster. This was all part of his strategy which – whether by coincidence or design you can decide– was aligned to News International’s switch of support from Labour to David Cameron. Much of the behind the scenes lobbying escaped public scrutiny: James’ demand for the broadcasting regulator Ofcom to be disbanded; Cameron’s speech calling for the same thing. Only an insider would have realised the implicit deal being done.
Then I had a brief glimpse inside that magic circle. At a conference in 2010 about the future of news in the digital age, a senior NI journalist and a Tory special adviser suggested that there was too much news ‘for free’ and public service provision needed to be reduced. (Rules, 2010) Though there were several BBC executives present, they made little protest, but the prospect of a News Corp dominated ‘market in news’ appalled me. When I spoke out about this, I was chastised for being alarmist.
However, three months later, in its Comprehensive Spending Review the Coalition Government cut the BBC’s budget by 16 per cent. This was done in the backrooms of Whitehall, as the public service broadcaster was threatened with either having to fund the cost of the license fee rebate for pensioners, or taking on the cost the World Service – previously paid for by a Foreign Office grant. This sudden change was never put to the people who are supposed to own the BBC, i.e. the public who pay the license fee. Indeed, both the government and senior BBC management kept quiet about the deal, perhaps because it would have undermined the already creaky notion that the BBC was a public body at arm’s length from the government, and not liable to any state interference.
Finally, a month or so before the Hackgate scandal erupted, I was invited to a dinner with a Junior Minister at the Media and Culture department, and the issue of the BSkyB takeover came up. I tried to argue for the merits of a mixed economy in broadcasting and the dangers of News International having a cross platform monopoly, but though the minister nodded through the principle, it was clear the hard pragmatic decision was a juggernaut roaring somewhere high above his pay grade. Given the level at which News International operated, with News International’s Chief Executive a friend of the Prime Minister, and his Head of Communications a former Editor of the News of the World, keeping your head down and accepting the inevitable was probably the best thing to do for any junior minister who wanted to keep his job. The fix was in.
If senior politicians, journalists and BBC executives treated Newscorp with reverence, what could a lowly freelance writer do? In retrospect, all the information was there – and must have been seen and understood by many professionals in the media business – and yet few protests were raised, and the story never gained much public exposure. The key role of the press – to provide accountability about political and business decisions – was compromised because it couldn’t cover itself.
This is where the guilt comes from – or perhaps it is better described as a form of shame - the kind of shame when one is confronted with an unpleasant spectacle you have to witness but can do nothing about. Time and again I’ve seen this mixture of helplessness and inevitability in the faces of competitors, employees, policy wonks, and even radical opponents when it comes to the activities of Murdoch and News Corp.
In theological terms, we were guilty of succumbing to the mortal sin of despair.
We were wrong, en masse. That’s one of the key lessons of this story. By falling for the Murdoch myth of invincibility, we gave it power. That’s one of the reasons why the Murdoch brand collapsed so rapidly: it was so reliant on the optical illusion of inevitability. A mere month before the scandal broke, News International parties were the ones any politician or public figure would be loath to ignore; almost overnight, senior executives like Rebekah Brooks and James Murdoch went from living within a magic circle of privilege and access to standing behind a deadly third rail which few wanted to touch.
We were wrong, en masse, and it was only the persistence of a few brave individuals who, despite years of threats and obstruction, managed to bring an all-powerful corporation to account: a lawyer from Manchester who refused to be intimidated by corporate legal power; two Parliamentarians who risked reputation and preferment by pursuing an organisation that still had the power to make or break their political careers: and above all, by the Guardian and its lead investigator on the issue, Nick Davies.
Partly supported by the New York Times, Davies proved that the era of investigative journalism isn’t quite dead in the UK – despite the thousand cuts and compromises created by the automation of news which Murdoch did so much to promulgate. the Guardian was not alone in trying to resist the BSkyB takeover, and both the Independent and the Daily Telegraph campaigned against the cross platform monopoly power it would give to a foreign corporation. But the Telegraph’s campaign spectacularly backfired when – in a sting interview with the Business Minister– two young female journalists got Vince Cable to boast he was ‘at war’ with Murdoch over the bid. Though this section of the interview was excised from the Telegraph scoop, it was soon leaked to News International, and publication of it meant that oversight of the bid was passed from the reluctant and combative Liberal Democrat to the younger and perhaps more malleable Conservative Culture secretary Jeremy Hunt.
By early July 2011, the BSkyB bid was only days away from approval. Had the hacking story broken any later, the judicial process would have taken its course and probably have been impossible to undo. Whatever the furore, in practical terms News Corp’s dominance of the UK media would have been unassailable. Murdoch would have been more powerful than Berlusconi in Italy, but with the added firewalls of accounting practices in Australia and his US base and citizenship. No British subject – though very much subject to his whims and opinion forming – would have ever been able to hold him to account. Murdoch’s hegemony was only confronted and confounded at the eleventh minute of the eleventh hour through a tiny number of people who refused to bow to inevitable.
When I say that Murdoch ruined my life and probably did yours, this is not just a tongue-in-cheek tribute to his commercial success, but also a wink towards the way his tabloid model has changed our discourse. Instead of the bland brain-numbing government controlled Newspeak envisaged by George Orwell in the 1940s, which would elide categories and deprogram dissent, we have a livelier, brash commercial equivalent: the mockery and mayhem of the Murdoch-led tabloids, which could perhaps be described as Sunspeak.
Like a red top headline, my hyperbole is personalised, provocative, turning a complex issue into a news-worthy drama, lurking with animus, betrayal, passion and anger. If Murdoch physically loves the printed press and tabloid ink flows in his veins, then this how his rebarbative DNA has been dispersed into our culture. It’s not all for the bad – few things ever are – and compared with the mandarin tones of US or British publishing before his arrival, Murdoch’s graphic language had much to commend it. But framing a protest in the language of your opposition is tantamount to offering a false flag of tribute. So let me try a less tabloid explanation of what Murdoch’s influence over my culture has really meant to me.
Though my early childhood was fairly comfortable and middle class, my teens were pretty desperate. My father, discharged from the army as a manic depressive, was bankrupted twice in the early seventies, leaving my mother and the four remaining children she had at home, penniless and about to be evicted from a repossessed house. To be declared homeless – bad enough in itself – also meant that my nine-year-old foster brother would have to be returned to a children’s home despite five years of living with us. Fortunately, my mother had just trained as a social worker, and she managed to get a job on a vast psychiatric hospital in the Buckinghamshire countryside. With that job came cheap subsidised accommodation.
For years I lived in a pebble-dashed semi on a grim windblown sixties estate over the road from the even grimmer Victorian mental institution. My mother, now separated from my father, was working all hours. Our diet seemed to consist of frozen hamburgers and peas, and for various reasons I didn’t understand, I began to act up. By the time I was fourteen I was regularly smoking and drinking. I came twenty-fourth in my class, and having received five detentions one term, I was threatened with suspension. My closest friend at the time, and the only schoolmate who lived within walking distance, was also troubled (he ended up in prison). My mother would complain about my deteriorating accent, and those of the girls who would ring for me, and we inevitably rowed. But apart from my mother’s stoicism, there were a few other rays of quality and hope: the odd book she left around, the out-of-tune upright piano, the family heirloom silverware I’d polish for Christmas, and the weekly sound of the Sunday Times plopping onto the doormat.
It’s hard to explain to anyone younger than me just what a breath of intelligence, and insight the Sunday Times was under the inspired editorship of Harold Evans. I still have vivid memories of its photomontages in the sixties, from the colour pictures of the first moon landings to the black and white shots of a naked John Lennon and Yoko Ono. In those tough teenage years I read little, but would use the weekly newspaper – especially the Review Section – as visual source material for pencil drawing, the one activity beyond television, school and going out, that filled my time. The black and white photos were particularly easy to sketch: I remember copying an ancient woman painting and smiling (I have no idea who she was), a man fishing in river (his name was Jonathan Raban) and a rotund bald Frenchman, with an amazing moustache and huge bags under his eyes. His name was Gustav Flaubert.
At some point, the accompanying text of the newspaper must have percolated into my brain, for I have some recollection of mastheads billing an important but to me dull series called 'The Crossman Diaries' (a major scoop in the face of Government opposition). More engaging were the well-illustrated Insight articles about the Raid on Entebbe, terrorist attacks, or army shootings in Northern Ireland. At the back of the Review Section there was also a funny, intelligent take of the week’s television, written by someone called Dennis Potter. I began to wander from my weekly diet of soaps and pop programmes and follow up these tips to dramas and documentaries.
The Sunday Times was a cultural lifeline for me as a teenager. Something of the inquiring, open spirit of that newspaper must have got through my thick seventies haircut. Within a couple of years, books by Ernest Hemingway had joined science fiction on my bookshelf and I dreamt of being a journalist or an explorer – or maybe both – when I grew up. A few years late on and I was studying literature at Cambridge University, with a particular interest in politics and current affairs. Before I graduated, I actually appeared in the Sunday Times Review Section, when James Fenton, the theatre critic, generously reviewed one of my student plays.
What happened to the Sunday Times when it was acquired by Rupert Murdoch in 1981 is the subject of another chapter – but the short version is that I doubt many teenagers were inspired by the bloated whale of a paper it became, with multiple shrink-wrapped supplements, as if column inches alone accorded insight (though it clearly added more advertising revenue). The reputation for meticulous fact-checking was blown apart by the fiasco of the Hitler Diaries. The famed Insight Team, which had exposed the spy ring around Kim Philby and the truth of Bloody Sunday in Northern Ireland, was diminished by episodes such as the misreporting of the killing of three IRA members in Gibraltar by the SAS. Instead of exposés of the corporate negligence around the Thalidomide drug, it spread misinformation about the spread of AIDS. Editorial independence was slowly eroded until, under Andrew Neil’s editorship, it became a relatively uncritical cheerleader for the Thatcherite revolution.
I still believe it’s rare for a cultural legacy to be all good or all bad, and not all the formative influences of Murdoch’s audience can have been as negative as mine. For my kids at least, they have Murdoch partially to thank for the parodic multi-layered wit of The Simpsons appearing on his Fox Network, which include two episodes in which Rupert turns up to play himself, accompanied by the Darth Vader theme from Star Wars. No doubt there are many football fans who praise Murdoch for Sky’s acquisition of football rights and the creation of the Premier League – though there are many supporters of lower league football who claim this has ruined the game, and I doubt it would compensate many Liverpool supporters after the Sun’s coverage of the Hillsborough football stadium disaster while under the editorship of Kelvin McKenzie. Ask young women who were brought up with the constant topless pictures of girls on Page Three what they think of Murdoch’s legacy. Or a Trades’ Unionist about News International’s move to Wapping. Or a New Yorker about the New York Post’s edifying coverage of metropolitan life since the Son of Sam summer. Or an Australian climate scientist about News Ltd’s coverage of climate change...
A moral cost/benefit analysis of Rupert Murdoch’s influence on the English speaking world is a vast task, given his reach and the hundreds of papers and TV channels he owns. However, when it comes to the self-declared core function of News Corp – the provision of information about the modern world – the jury’s verdict is pretty clear.
Sensationalised Fleet Street reporting wasn’t invented by the Sun or the News of the World: the so-called 'Gutter' or 'Yellow' press has been successfully tormenting celebrities, politicians and opponents in public life for 200 years. But it’s no coincidence that the Hackgate scandal coincided with an unprecedented concentration of press ownership. As a market leader in Fleet Street, News International could be said to exercise a modal monopoly in an increasingly cut-throat business, developing the practices that other media owners were forced to copy to survive. By creating a market in which scoops and scandals gathered huge economic rewards, they also paved the way for phone and computer hacking, the bribing of police officers, and illegal information gathering on an unprecedented scale.
As with many scandals, it’s the ensuing corporate cover-up which exposes the real abuse of power. There are understandable commercial imperatives at work – the need to prevent ‘reputational damage’, and ensuring senior executives remained ‘fit and proper’ to regulators. But the News International reaction went way beyond the usual spin. The police – though they hardly pursued it vigorously – were blocked in their investigations. Emails were deleted, computers destroyed in what Lord Justice Voss would claim raised “compelling questions about whether [NGN – a subsidiary of NI] concealed, told lies, actively tried to get off scot free”. Soon, problematic lawyers, witnesses and even members of parliament would become targets.
However the cover-up only revealed a culture which already though itself beyond the law, and too big to jail – and this is where the Watergate analogy ceases to help. The need for constant surveillance and inside information are indeed reminiscent of Nixon’s paranoia and the dirty tricks he used during his campaign for re-election while also running a secret war in Cambodia. But Watergate showed the ruthless power of the state exposed by fearless journalists. Hackgate, Bribegate, Horsegate – the whole paraphernalia of collusion and corruption exposed in News International – show a state cowed by the ruthless powers of journalism. It also proves that current reality is always more bizarre and troubling than any of the comforting nightmares of history. Who would ever have imagined that a news corporation could bribe, intimidate, blackmail and eavesdrop on police, army officials, civil servants, politicians and the family of the Head of State, putting them on a par with a private sector version of East Germany’s infamous Stasi?
If there’s one certain legacy of Rupert Murdoch’s decades long dominance of the British press, than it would be this deterioration of the image of investigative journalist from truth teller to sleazy extortionist. You’ll see this sad transmogrification in the depiction of British journalists in Hollywood. To add to the stock-in-trade English stereotypes of effete villains, dashing spies, zany comedians and mop haired pop stars, a new archetype was born: the ruthless, venal, privacy-invading tabloid journalist, epitomised by Peter Fallow in Tom Wolfe’s The Bonfire of the Vanities. As Murdoch became the leading force in the British press, the cultural reputation of British journalism sank to a new low.
Murdoch’s reaction to this kind of cultural and moral criticism has been to shrug it off as old fashioned snobbery. As his circulation figures prove, he is only giving the people what they want, and if you object to that, you’re old school and patronising. Time and time again he – and his useful stooges – use the language of democratic accountability: if people vote every morning by buying my papers, then I have a public mandate to do what I do. Populism and the market place become the ultimate guides to social truth, the final arbiters of value. Everything else is elitism, socialism, snobbery.
There are questionable assumptions here, many of which have become widely accepted over the last few decades. Of course, people don’t ‘vote’ by buying a newspaper: if votes could be bought like that then a billionaire would buy more ‘democracy’ than other people. Also, underlying the political claim is an economic claim, a punchier populist version of laissez faire: you can’t buck the market, and the market is always right. Any examination of the regulations, barriers to entry and concentrated ownership of the media would suggest that this is far from an open and free market. Theories of rational consumer choice fall down when the supply is both limited and highly diverse, and the supply chains of information deeply opaque. And although news is certainly a market, it’s not only a market; news is also a public good, vital for the functioning of a democracy. In most democracies, access to impartial information about elections and the manifestoes of political parties is written into law.
Murdoch has described himself as a libertarian, and the cliché that all regulation is a form of government control has become almost an unconscious norm over the decades he has dominated the media. The counter-argument that efficient markets have always needed regulation, weights and measures, currency, fair trading, laws of contract is rarely considered. Just as the Leveson Inquiry has been accused of ‘chilling free speech’ by a Government Minister with close ties to Murdoch, raising questions about the diversity, openness and accessibility of the media, is deemed an attack on the freedom of the press. Any mention of its public good is an impingement on private gain. Forty years after Rupert Murdoch first entered the UK market by buying the News of the World, James Murdoch reiterated his father’s libertarian fallacy in his landmark McTaggart Lecture. He may have tried to dress it up with new media radicalism and MBA smartness, but the message was just the same: “The only reliable, durable, and perpetual guarantor of independence is profit.”
The title of James’ speech - 'The Absence of Trust' – has thickened with irony since 2009, especially as it was made only a year after he had authorised a million-dollar pay-out to one of first phone hacking victims to launch a civil claim, complete with stringent confidentiality clauses. Throughout this whole saga, News Corp has used every weapon in its armoury to suppress the phone hacking story: a news organisation vigorously trying to conceal news about itself. It’s entirely consistent with his message though: if news is to be entirely market driven, then money can buy the news.
Days after the Hackgate scandal erupted, an anonymous a senior News Corp executive told Carl Bernstein, according to a feature in the Daily Beast.
“This scandal and all its implications could not have happened anywhere else. Only in Murdoch’s orbit. The hacking at News of the World was done on an industrial scale. More than anyone, Murdoch invented and established this culture in the newsroom, where you do whatever it takes to get the story, take no prisoners, destroy the competition, and the end will justify the means… Now Murdoch is a victim of the culture that he created. It is a logical conclusion, and it is his people at the top who encouraged lawbreaking and hacking phones and condoned it.”
There is no doubt there is a lucrative and important ‘market in news’, but if news is only a market, the Hackgate scandal shows us the consequences. The logical extension of cheque book journalism is that it can buy private details of unlisted phone numbers, social security numbers, computer passwords and voicemail pin codes. It can buy blagging into bank accounts and medical records. It can suborn police officers for tip offs on celebrities and crime stories. It can pay off informants for kiss and tell stories. It can hire the best lawyers, and threaten litigants. It can authorise massive hush fees with non-disclosure orders. More insidiously, it can buy more media space to trash and harass political opponents. It can pay its favoured defenders big fees for ghost-written columns. It can become a kind of protection racket until a newspaper owner becomes a political legislator in his own right, like the twenty-fourth member of the cabinet. It can enter the back door of Number Ten the day after a contentious election.
Murdoch’s media empire institutionalised those values, and proved beyond doubt that the dominance of the market in news ends up perverting the news.
The Hackgate scandal erupted in a year of many crises: the collapse of regimes in Tunisia, Egypt and Libya, as well as the continued global financial meltdown which, from the liquidity crisis and credit crunch three years earlier, had extended to a wider sovereign debt crisis in the Eurozone in 2011. One can make trite comparisons between Murdoch’s slow motion demise and the toppling of tyrants in the Arab Spring, but the connection with the economic crisis is more pertinent.
Murdoch has always enjoyed a close relationship with bankers and shown a fondness for leveraged buyouts since his earliest Australian acquisitions. A personal friend of the junk bond trader Michael Milken, Murdoch has both deployed the aggressive techniques of post Big Bang globalised finance, and stoutly defended its principles editorially. The rise and fall of the House of Murdoch in the English-speaking media world is therefore inseparable, both in business form and ideological content, from the successes and failures of the Anglo-Saxon model of capitalism.
This should not be just a partisan political argument. For two hundred years, the liberal market economy has also been underpinned by the concept of a free press, and that pluralism, accountability, transparency, an access to accurate information is vital to an open society as well as a functioning market. A diverse press and media is one of the cornerstones of modern capitalist countries, and should be vital to all shades of opinion. Beyond party politics, there has been a vocal consensus that accumulation of too much unaccountable power leads, almost by definition, to abuses of that power. This should have been a common principle to those on the liberal left, the conservative right, and especially the civil libertarians on either side.
The foreign friends I talk to, especially in former communist countries where democracy is still seen as precious and precarious, the recurrent question I hear about the Hackgate scandal is simple: “How did you let one man get so much power?” That’s where the complicity is more than just an emotional reaction: it’s a matter of vital public policy and social concern. How did this happen? How can we stop this happening again?
It isn’t as if we weren’t warned in advance about Murdoch’s predilections for combining monopoly commercial power with political clout. Over the decades there have been thousands of articles, hundreds of books (see the bibliography) and a raft of TV documentaries spelling out the dangers that lay in wait if Murdoch’s media power was allowed to grow unfettered. In response there have been white papers, inquiries, Parliamentary bills and guarantees of pluralism and independence for the press and media. But both the legislation and the outcry have been stunningly ineffective.
The legislative failures require a chapter to themselves, but when it comes to the unattended warnings about the rise of the house of Murdoch, some trends are fairly clear. Back in the sixties, when Rupert was aiming to take over the News of the World, part of the resistance to his bid was old school snobbery about a colonial outsider and, in a bit of deft jujitsu, Murdoch played the cultural cringe against the ‘old boy network. A BBC interview at the time show him animatedly regaling the TV audience how he’d been called a ‘moth eaten kangaroo’ by his rival, Robert Maxwell. This allowed Murdoch to portray himself, in stark defiance of the facts (he was the son of a millionaire and educated at Oxford), as the man in the street, the ordinary bloke willing to take on the snooty Oxbridge establishment.
Though it has survived much longer as a sobriquet, Private Eye’s ‘dirty digger’ barb also falls partly into this class warfare trap. As Murdoch proceeded to take over the Times group in the 1980, establish Sky satellite offshore before taking over BSB, the chorus of disapproval got louder but no more effective. In 1994, in an otherwise powerful last television interview with Melvyn Bragg, the famous TV dramatist and polemicist, Dennis Potter, explained how he’d named the pancreatic cancer that would soon kill him ‘Rupert’. Potter then went on to say, “There is no one person more responsible for the pollution of what was already a fairly polluted press, and the pollution of the British press is an important part of the pollution of British political life.” Though seventeen years later the warning may seem prescient, personalising and pathologising the Murdoch phenomenon has done little to combat its rise.
Around the same time, having suffered a third successive election defeat, and with the Sun claiming that it had “It was the Sun Wot Won it” for the Tories in 1992, the new leadership of the Labour Party came to the same conclusions. The architects of New Labour – Tony Blair, Gordon Brown and Peter Mandelson – made a strategic decision that a policy of dialogue and containment might better neutralise the negative press from News Corp.
A year after becoming leader of the Labour Party, Tony Blair attended a conference on Hayman Island, Australia, hosted by Newscorp. In terms of election endorsements, the rapprochement was pretty successful (the 1997 election campaign saw the leading Murdoch tabloid declaring: “The Sun Backs Blair”) but New Labour’s courtship of Murdoch required them to trim their step both in terms of media legislation and other policies until – some would argue – they were dancing to his music. If reports are to be believed, Rupert Murdoch was a key confidante over probably the most fateful and controversial decision in Blair’s leadership of the country, calling him several times on the eve of the Iraq Invasion in 2003
As we will see, the whole story of New Labour and its relationship with News Corp is slightly more interactive than this. Murdoch had briefly been a Labour supporter at Oxford, and agitated for the election of the Australian leader Gough Whitlam in the seventies, before conniving a few years later in his dismissal. He also had fairly good relationships with the Australian Labour leaders Bob Hawke and Paul Keating, the latter particularly advising Tony Blair and Alistair Campbell how to deal with the media mogul. This has led many journalists and analysts to conclude the Murdoch’s ideology is actually fairly unimportant to News Corp: he pursues his business interests aggressively, and will court politicians of whatever persuasion as long as they don’t threaten through regulation his commercial activities. But this overlooks the fact that, for a global media company covering news, a business interest is also a political interest.
So, though his former editor at the Sunday Times claims that Murdoch’s views on most things were ‘very right wing’ in the eighties, support for New Labour wasn’t necessarily all opportunism and commercial calculation. (Neil, 1996) Murdoch is like his newspapers – fascinated by politics and political personalities, but also easily bored and seeking novelty and sensation. He was already disenchanted with the Tories under John Major, and the arrival of Tony Blair at Number Ten coincided with a major makeover in Rupert’s life with the marriage to Wendi Deng. The fact that it has recently been revealed that Blair is godfather to Murdoch’s two children with Wendi Deng, and those same children regularly played with Gordon Brown’s young boys, suggests that what started out as a political rapprochement by the last two Labour prime ministers, soon became a lot more entwined.
If the left’s critique of Murdoch has failed, either by being personally charmed by him, or by launching into ad hominem attacks, the right has – if anything – been even more supine and useless. Of course Murdoch supported the radical Thatcherite agenda for ten years, led by one of Thatcher’s key confidantes, Woodrow Wyatt. But Murdoch abandoned them for another three elections and Wyatt confided to his diary “Rupert has behaved like a swine and a pig”. Apparently Murdoch’s initial attitude to David Cameron after his election as Conservative Leader in 2005 was dismissive and suspicious. But all these betrayals by Murdoch seemed to be easily forgotten two years later when the former News of the World editor Andy Coulson was appointed as the Head of Communications at Conservative HQ.
Some of this moral fluidity is just political pragmatism, from the notoriously hyper-pragmatic wing of the Conservative Party. Some of it is no doubt due to the particularly telegenic and media savvy background of David Cameron himself, who spent most of his career prior to becoming the Conservative Party leader as Director of Corporate Affairs or senior consultant for Carlton Communications, an Independent TV company. As for the die-hard ideological wing of the Conservative Party: for all its support of New Labour, the Murdoch press has consistently maintained an editorial antipathy to the European Union, thus satisfying the core post-Thatcher test of ideological soundness for the core Eurosceptics. Yet, on virtually every other level of social conservatism or economic liberalism, Murdoch’s commercial activities should have drawn ire from the right as much as the left.
For a one-nation Tory or a right-wing nationalist, Murdoch – an American citizen who indulged in a long albeit unproductive dance with the Chinese Communist Party – had little to offer. To the true followers of Hayek or Adam Smith, the oversight is even more egregious: did they not notice this avatar of free market philosophy was rapidly establishing monopolies across the world through cosying up to politicians? Did they not get the cognitive dissonance between a so-called meritocrat and man of the people wanting to turn his company in a family dynasty?
The failure to counter Murdoch’s media concentration is, with some notable exceptions (especially among Liberal Democrats), a failure of the whole UK political establishment. In this light the Hackgate scandal is like a decades-long slow motion car-crash during which everyone could see what was happening and were powerless to stop it. This failure cannot be laid at the door of just a handful of politicians or commentators. Like the Dreyfus case in France at the turn of the last century, when an innocent Jewish cavalry officer was incarcerated on Devil’s Island on trumped up charges of espionage, the Hackgate scandal reveals deep fissures not only in politics, but the whole of civil society. Our political culture failed because we didn’t seem to have the language to describe what was happening.
A large part of our problem is that our tools for analysing the role of media ownership and freedom of expression are firmly rooted in eighteenth century notions of government censorship and a free press: they take little account of the globalised media conglomerates of the twenty-first century. The two year Leveson Enquiry into the Culture, Practices and Ethics of the Press, has been framed under these assumptions, with a remit which mainly looks at the competing balances between no regulation, self-regulation, and state regulation of free speech. So far, cross-ownership and media monopoly have played no part in their considerations. But the issue of free speech – a legal guarantee to protect civil society from interference or censorship by the state – is very different to the concept of free speech in a highly competitive and commercialised world where the media are the key sector in the information economy.
Nearly all our concepts of censorship and freedom of expression are variants on those principles first outlined by John Milton in Aeropagitica, developed by J.S. Mill in his essay 'On Liberty', and enshrined in the first amendment of the US constitution. This Enlightenment emphasis on freedom of thought and empirical enquiry holds that no one person is in full possession of the truth, and that discovery requires competition of ideas, a sceptical citizenry exposed to argument and counter-argument, rather than having issues centrally decided by State or Church. Of course, this understanding has been vital to the growth of modern democratic societies, and the alternative – centralised control of the press – is a key characteristic of totalitarian and authoritarian regimes, whose first move in a period of social repression is usually to smash printing presses or park their tanks outside TV stations.
George Orwell extrapolated this to an imaginary England in the narrative of Winston Smith in his novel 1984, and – based on personal experience in the wartime BBC – outlined the way that the apparent disclosure of truth could be turned into its obverse in his brilliant appended essay on 'Newspeak'. This – the ultimate expression of political spin and obfuscation – has rightly been the focus of discussions of free speech for most the second half of the twentieth century, given that for half of Europe and most of the world, excessive government control was the main threat to a free press.
However, Orwell himself, when discussing the realities of Britain in the 40s rather than projections of socialist takeover, acknowledged that centralised ideological control over our discourse was not the only issue. As he writes in his classic essay ‘The Prevention of Literature’:
“In our age, the idea of intellectual liberty is under attack from two directions. On the one side are its theoretical enemies, the apologists of totalitarianism, and on the other its immediate, practical enemies, monopoly and bureaucracy. Any writer or journalist who wants to retain his integrity finds himself thwarted by the general drift of society rather than by active persecution. The sort of things that are working against him are the concentration of the press in the hands of a few rich men, the grip of monopoly on radio and the films, the unwillingness of the public to spend money on books, making it necessary for nearly every writer to earn part of his living by hackwork...”
And in case it should be overlooked, Orwell repeats the premise at the end of the essay:
“To keep the matter in perspective, let me repeat what I said at the beginning of this essay: that in England the immediate enemies of truthfulness, and hence of freedom of thought, are the press lords, the film magnates, and the bureaucrats”
We’ll never know what Orwell would have made of Rupert Murdoch, a press lord and film magnate, with the bureaucracy of News Corp virtually under his sole control. But over sixty years later, with the collapse of communism, and the near hegemony of market economics, new private bureaucracies have arisen: corporations which, in an age of transglobal capital and borderless exchange, could be argued to have become as powerful as many nation states. The debate about free speech, as evidenced so far by the Leveson Inquiry, has not updated itself to reflect this.
I would argue that throughout the Hackgate scandal we’ve seen vivid evidence of corporate censorship. From the mass deletion of emails, legal pay-outs with attendant non-disclosure orders, redundancies with confidentiality clauses, to professional harassment of lawyers and politicians, there have been clear examples forceful non-disclosure, even if it is in the guise of ‘reputational management’ rather than provable cover-up.
Lowell Bergman experienced this new kind of corporate threat when he tried to air his 60 Minutes CBS documentary about the tobacco industry whistle-blower Jeffrey Wigand in 1995. While the secrets of the CIA or FBI had been exposed by journalists under the public interest defence, the concept of a private ‘confidentiality agreement’ had no such get-out clause. The concept of a broadcaster – a commercial corporation – interfering with the private contracts of another company is called ‘tortious interference’ and could lead to litigation so punitive CBS would have been bankrupted. So in this instance, corporate confidentiality ended up being more powerful than state security. As Bergman said in a PBS interview: “So there's no question that it was fair game to use confidential information from the government. But the new rule was: Don't use confidential information if it comes from the inner-workings of a Fortune 500 company, where the source has signed a confidentiality agreement.” (Lowell Bergman’s exposé documentary about Murdoch should be aired on the PBS network by the time this book is published)
Hard censorship and self-censorship are only the most egregious examples of the chilling of free speech. As Orwell points out, the suppression of dissenting voices doesn’t have to be negative: it can be achieved through the soft censorship of promoting of the favourable point of view, the acquiescent op-ed, the politically correct line. Though it’s not bribery, the blandishment of large fees on favoured politicians or public figures for their Opinion pieces both co-opts them and the readership. Suppressio veri: suggestio falsi. All it takes to promote falsehood is to prevent the truth.
Lest it seem a parochial concern for media experts, regulators and journalists, it’s worth point out how misinformation can have much more serious and devastating casualties than just the truth. In his Flat Earth News, written years before he broke the Hackgate scandal, the Guardian journalist Nick Davies explores how the decline of independent investigative journalism played a large part in allowing the falsehoods about Iraqi Weapons of Mass Destruction to become prevalent before the 2003 invasion. That botched intelligence about WMDs, combined with the disinformation about Saddam’s regime and Iraqi reactions to the US military, led directly to the debacle that followed: an insurrection that cost around 100,000 Iraqi lives and that of more than 4,000 American service personnel.
It would be wrong to accuse News Corp for all the partiality of the press: they certainly are not alone in promoting what Nick Davies calls ‘churnalism’. But – for all the reasons outlined above – Murdoch plays a central and exemplary role in the modern media. Many, like Davies himself in that book, have argued that this is a structural economic and social problem, and that no one proprietor can be blamed. Back then, Davies claimed that Murdoch’s ideology and political influence is over-rated, that he was following profit and audiences rather than ideology. If that was true, you’d expect his multiple outlets to at least reflect the diversity of opinion in his international audiences. But when it comes to the crucial political decisions of the moment, such as the Iraq Invasion, how diverse was that opinion?
There’s a simple statistical answer to this. Despite international disagreement in the Security Council, major dissent from allies, and the largest ever protest demonstration in the UK, of Murdoch’s 175 newspapers scattered across the globe, ALL came out in favour of the Iraq invasion in spring 2003. (Page, 2011)
Such a level of conformity is almost Orwellian. It proves that private bureaucracies are as capable of stifling dissent as the state bureaucracies. It proves that global competition between corporations doesn’t necessarily lead to diversity, but rather a monoculture hidden under the market mechanics of pluralism.
Before he died tragically young of Lou Gehrig’s disease, the British born historian Tony Judt wrote an article in praise of the Polish poet Czeslaw Milosz’s seminal account of the hold of Stalinism on young intellectuals, The Captive Mind. Having used the book as a teaching aide since the seventies, he noticed how thirty years later, students seemed to have no comprehension of how any thinking person could be seduced by such a totalitarian delusion. But then goes on to explain how this is a sign of malaise rather than liberation:
“(T)he true mental captivity of our time lies elsewhere. Our contemporary faith in 'the market' rigorously tracks its radical nineteenth-century doppelganger—the unquestioning belief in necessity, progress, and History…. But 'the market'—like 'dialectical materialism'—is just an abstraction: at once ultra-rational (its argument trumps all) and the acme of unreason (it is not open to question). It has its true believers—mediocre thinkers by contrast with the founding fathers, but influential withal; its fellow travellers—who may privately doubt the claims of the dogma but see no alternative to preaching it; and its victims, many of whom in the US especially have dutifully swallowed their pill and proudly proclaim the virtues of a doctrine whose benefits they will never see. Above all, the thrall in which an ideology holds a people is best measured by their collective inability to imagine alternatives.”
Our complicity with Rupert Murdoch’s media project – our inability to think of any alternative – has several ominous parallels. The News Corp story raises similar questions about the apparent ‘freedom’ of free markets, and how that connects with the similarly slippery kind of ‘freedom’ displayed by the current model of the free press. Born during the expansion of mass media and the mechanical reproduction of news, and now trying to survive in the digital era of the new media, News Corp’s crisis is also inseparable from the other ‘problem of free’: how the public good of truthful and accurate news can be promoted, beyond both government control and commercial manipulation, in an era where there is a digital abundance of information combined with a crisis in reliability and authority.
In the Information Age, the provision of news moves from being a precondition of the functioning of society to one its most profitable activities. Just as the shadow banking system, originally devised to provide liquidity to financial markets, actually became bigger than the banking system itself, the medium of news has become the message in a way that Marshall McLuhan could not have foreseen. The US and the UK are now primarily knowledge economies, devoted to the processing and packaging of information. We accept Bloomberg, Reuters and the Financial Times provide important signalling mechanisms to help financial markets function, but news is more than just the raw material of data mining about facts and figures. Whole sectors of our economy are now in secondary data industries, devoted to turning information into workable and predictive knowledge. As for the tertiary industries, you could class many activities, from politics to sport to entertainment, as exactly that, manufacturing meaning from information about the world and creating motivating narratives for its inhabitants.
With vast interests from marketing to Hollywood movies to new educational software, News Corp clearly sits at various points on this supply chain of information. But, though newspapers are becoming an ever smaller fraction of its source of profits, the company still brands itself as a news company, providing information about the world. And it’s on that level it should be judged.
One of the key revelations of the Hackgate scandal is a massive malfunction in the company’s core activity. The pages ahead will describe an ethos – right from Murdoch’s early days in Australia – in which crucial bits of information were withheld from the public for commercial or political leverage. In effect, Murdoch turned news into a currency that could be traded, sometimes with the public, sometimes with other players under the counter. Rather like Enron, the notorious US company which went from provision of energy to trading in energy futures, one can look at News Corps’ various gambles over the years – from the cross promoting of Sky in the Sun to the promotion of favoured politicians – as a trading in news futures: i.e. betting on outcomes rather than current events. And just as this kind of derivative trading is liable to consume the original activity (as Enron did by deliberately provoking power cuts in California to manipulate energy prices) I would argue that News Corp has gone from being a news organisation to an anti-news organisation and has thus failed its primary purpose. It’s hard to imagine any other industry surviving such a scandal: a pharmaceutical company creating a drug that makes people ill, a construction company building skyscrapers that fall down, or an airline company making planes that regularly fall out of the sky. In the past, such corporate malpractice has been eventually brought down by media exposure. If the media itself it faulty, the safety valve has gone.
Half a century in the making, and fifteen days in the unravelling, the Hackgate saga exposed the contradictions and flaws not only of one man, or one multinational corporation, or indeed one society or nation, but an international culture which, by connecting free expression with the free market, had somehow ended up violating key freedoms in the process. And that’s why – beyond the scandal and the personalities, beyond the party politics, boardroom battles and dynastic squabbles – the story of the Fall of the House of Murdoch holds many lessons for us yet.