Murdoch's World (41 page)

Huntsman said he wasn't criticizing the network—in part because he viewed it as “entertainment.”

Huntsman's categorization of Fox—as entertainment—was being adopted by its corporate owners too.

21

GOODCO VERSUS SHITCO

BY FEBRUARY 2012 NEWS INTERNATIONAL'S containment strategy had crumbled. The effort to contain scrutiny to a single reporter and investigator had failed. So had attempts to limit attention to a single newspaper and to protect Rebekah Brooks. Anyone without the last name Murdoch was expendable.

In the UK,
the plan was to allow the
Sun
to thrive, standing apart from its tarnished sister tabloid. By mid-February 2012, however, police had arrested nine
Sun
reporters and editors on suspicion of having bribed a breathtaking array of government and law enforcement officials. Even worse, from the standpoint of many of Murdoch's British journalists, fellow News Corp employees working under Joel Klein and Will Lewis had volunteered the evidence allegedly implicating them. Over the next year, the company sought to blunt the search for more damaging information. In late January 2012, Dinah Rose, a British lawyer for News International, conceded the company's responsibilty but
said there was nothing more to find. “We accept we are the villains,” she told the judge as the company settled the cases of three dozen hacking victims.
“We have the horns and the tails.” But, she attested, the company's compliance was complete. There was no need to chase phantoms.

The High Court judge, Geoffrey Vos, expressed little confidence in that profession of good faith by News International and its executives. The company had deleted millions of emails, removed key evidence from servers, even dismantled its own reporters' computers. “They are to be treated as deliberate destroyers of evidence,” Vos said in court. “I have been shown a number of emails which are confidential. Suffice it to say they show a rather startling approach.” In court, News International admitted that senior executives and directors of its tabloid unit “knew about the wrongdoing and sought to conceal it by deliberately deceiving investigators and destroying evidence.”

The collaboration with authorities came at a cost. Inside News International's newsrooms, Will
Lewis was quickly losing whatever respect he had built up in his years as an editor at various British papers. His was a grim task, to be sure, but one he embraced. Boyish and canny, Lewis had been a respected journalist and a brilliant corporate player at the
Financial Times
and, until a falling out, inside the
Telegraph
newspapers as well while editor in chief. Widespread suspicions emerged that he had orchestrated the leak of the
Telegraph
's damning tape of cabinet minister Vince Cable trashing Murdoch. The tapes were first publicly released by Lewis's friend, Robert Peston of the BBC, rather than by the
Telegraph
itself, a blot on the paper's reporting. When directly asked at the Leveson Inquiry,
Lewis declined to answer whether had played a role in the release of Cable's remarks.

Lewis was also playing to a New York audience rather than one in London. He had been the one pouring tea for the Dowlers in that July 2011 meeting at which Rupert Murdoch so assiduously apologized. Lewis hitched himself to Klein, and
they labored to forestall punitive federal action against the company under the Foreign Corrupt Practices
Act. Full disclosure to Scotland Yard in the UK and the feds in the US promised the best path. As an anonymous but conveniently knowledgeable source told Lewis's old paper, the
Telegraph
, the arrests at the
Sun
are “a mark of the absolute determination of News Corporation to
drain the swamp.”

Staffers at the
Sun
, however, were on the brink of revolt as Klein's team directed police to key emails, notebooks, and phone records. Some of those arrested held the paper's most-senior positions, including a deputy editor, the chief reporter, the chief foreign correspondent, and the news editor.
Trevor Kavanagh, the
Sun
's associate editor, who was a columnist and occasional Murdoch dining companion, spoke out twice on BBC radio. “The newsroom is full of people who feel deeply unhappy about the way that their colleagues, who they've worked alongside for sometimes decades, and who they respect and admire as supremely professional operators, have ended up being arrested, searched, put on police bail and suspended from their duties,” Kavanagh said. He
called the investigation a witch-hunt but saved special contempt for News Corp's role. “Certain parts of the company are actually boasting that they're sending information to the police, which has put these people I've just described into police cells.”

Rupert Murdoch flew to London to quell the Wapping Rebellion. He promised to keep the arrested
Sun
employees on staff until any conviction. In a private meeting with several
Sun
journalists who had been arrested,
Murdoch signaled they retained his affinity. “I don't know of anybody that did anything that wasn't being done across Fleet Street and wasn't the culture. We're being picked on, I think,” Murdoch said, his remarks captured by digital recorders hidden by more than one of the
Sun
journalists present and later leaked to
Private Eye
and
Exaro News
. “We're talking about payments for news tips from cops. That's been going on for a hundred years, absolutely. . . . It was the culture of Fleet Street.” He said that he may have panicked: “We might have gone too far in protecting ourselves.” Murdoch then
announced the creation of the
Sun on Sunday
, promising to reclaim the most profitable day of the week and holding out the prospect of more jobs to boot. His pledges reduced internal pressures but did little to stave off further revelations.

On February 27, 2012, the Leveson judicial inquiry released
emails from 2006 suggesting Rebekah Brooks knew that Glenn Mulcaire had been paid more than one million pounds to hack into cell phones for
News of the World
. Two days later, James Murdoch resigned from News International.

The company presented the resignation as a long-planned move to allow him to take up a more global portfolio at the company. But in Britain his credibility was spent. It did not help that Prime Minister David Cameron found himself on foreign soil again fielding questions from reporters about News Corp. He had addressed the Milly Dowler revelations from Kabul back in July 2011; more than six months later, at a press conference in Brussels about the flagging economy of the European Union, Cameron
once again attempted damage control.

Rebekah Brooks had been given a retired police horse, Raisa, by the top brass of the Metropolitan Police in 2008, a gift that appeared to violate Scotland Yard's policies on handling former workhorses.
Reporters for the
Telegraph
who had learned about Raisa had badgered 10 Downing Street's press shop for days asking whether Cameron had ever ridden the horse. The questions were swatted aside for days as absurd.

From Belgium came Cameron's tortured admission that yes, in fact, he had ridden the retired horse given to Brooks by the Metropolitan Police. He started by apologizing for any confusion that had emerged and emphasizing his ties with Charlie Brooks rather than Rebekah:
“He's a good friend, and he's a neighbor in the constituency,” Cameron said.

“Before the election, yes, I did go riding with him,” Cameron admitted. “He has a number of different horses and, yes, one of them
was this former police horse, Raisa, which I did ride.” The closely knit Murdoch press, senior police executives, and the nation's leading politicians were captured in a single canter. Such untimely reminders of coziness gave heartburn to executives in Wapping and in Manhattan. The Murdochs vastly preferred being the target of a punch than of a punch line. They knew how to fight back.

DURING THIS time, Rupert Murdoch's British papers were creating mischief for Cameron, whom Murdoch considered weak; undercover reporters for the
Sunday Times
captured a
Tory fund-raiser as he seemed to be promising “premier league” access to the prime minister for donors who gave more than £200,000. The fund-raiser had to resign, and Cameron was forced into a series of embarrassing admissions about his meetings with donors. Meanwhile, the
Sun
kicked off what would become
a two-month campaign against a consumption tax on pasties, a sort of Cornish calzone. It was a minor element of a much broader bill, but Chancellor George Osborne ultimately folded in the face of the tabloid's relentless coverage.

In New York, News Corp executives
quietly girded for more bad headlines as they sold a division called NDS,
a satellite TV encryption company vital to Sky TV's enterprises in the UK and elsewhere. News Corp acquired the Israeli start-up in 1992, later taking the company public and making nearly $2 billion in 2008 when selling its stake down from 67 percent to just under half. News Corp retained, as was its frequent practice, effective control. James Murdoch served on its board, as well he might: NDS served as BSkyB's chief smartcard vendor. Instead of repeatedly replacing the pricey boxes that sat above or below television sets, News Corp invested in NDS smartcard technology. The cards themselves were cheap and their technological protections could be continually updated.

In March the technology giant Cisco reached an agreement to buy the company for $5 billion from News Corp and its investment partner. NDS was about to receive some very unwelcome attention. The BBC-TV investigative show
Panorama
had teamed up with a senior correspondent at the
Australian Financial Review
, Neil Chenoweth, who had previously written a critical biography of Murdoch. (The
AFR
is owned by Fairfax Media, Murdoch's largest newspaper rival in Australia.)
Chenoweth had obtained 14,000 emails involving NDS contractors and computer pirates and used them to piece together what he concluded was a multiyear and multifaceted plot to sabotage the company's competitors. News Corp had
derailed a related lawsuit filed by the French media conglomerate Vivendi, which had accused News Corp of intercepting its smartcard phones. Another lawsuit was decided in News Corp's favor. But in late March 2012,
AFR
and BBC's
Panorama
each presented a hard-hitting report within eighteen hours, in which they mined familiar veins. Computer hackers accused former police officers working for NDS of encouraging criminal behavior. The two news organizations posted the emails for the public to sort through. That was intended both as an experiment in “crowd-sourcing” further reporting and as a way to strengthen their case to British authorities that the full emails should be made public.

News Corp officials took the stories as intentionally hostile acts. Rupert Murdoch angrily posted tweets against
“old toffs and right-wingers.” “Seems every competitor and enemy piling on with lies and libels,” he tweeted. “So bad, easy to hit back hard[,] which preparing.” He had given fair warning. The company's various divisions struck back in unison against Chenoweth, the
Australian Financial Review
, and the BBC. In Australia, News Ltd CEO Kim Williams
accused Chenoweth of relying on stolen emails and said the journalist had “manipulated and often misunderstood” the facts. Williams challenged the
Australian Financial Review
to “put up or shut up”—to hand over evidence of wrongdoing to the Australian federal police
proving its allegations, as though publishing were not itself an act of revelation. News Corp chief operating officer Chase Carey charged that
“
Panorama
presented manipulated and mischaracterized emails to produce unfair and baseless accusations.”