Murdoch's World (42 page)

Lawyers for News Corp wrote letters cautioning other British and Australian publications not to rely on the BBC and
Australian Financial Review
reports for their coverage. In New York,
a News Corp official privately denigrated the investigative pieces to me as wildly overheated: Technology companies often relied on computer hackers to monitor and even test their own shortcomings and those of their competitors without engaging in harmful or criminal activity. I thought the BBC and
AFR
made a fairly persuasive case from the documents they had obtained and presented, though I was open to its refutation. Absent firm proof contradicting the arguments, and given the unreliability of the company's past denials involving operations in the UK, I asked the official, how can you and News Corp reasonably expect the benefit of the doubt? The News Corp official had no answer.

Meanwhile, leaks had confirmed that
OfCom had stepped up its review of whether News Corp was a “fit and proper” controlling owner of BSkyB. In early April, James Murdoch stepped down as nonexecutive chairman of BSkyB too.
His retreat from the UK was nearly complete. Two days later, on April 5,
Sky News admitted that it had hacked into the emails of a man who had faked his own death. It had also illegally obtained access to the emails of a suspected pedophile. The managing editor of the cable news channel had approved both seemingly illegal acts.

It was a straight flush. The five most important Murdoch news outlets in the UK either conceded breaking the law or faced credible accusations of criminal activity.

ON APRIL 25, 2012, Rupert Murdoch took his turn at the Leveson Inquiry. He had prepared in arduous rehearsals with Joel Klein and the company's new general counsel, Gerson Zweifach, who, like Brendan Sullivan, was also from Williams & Connolly. Murdoch would not be the out-of-touch octogenarian badgered by MPs the previous July. Murdoch calmly apologized for not keeping a more careful eye on
News of the World
. “I have to admit that some newspapers are closer to my heart than others. But I also have to say that I failed,” Murdoch said.

Despite that admission, the media mogul denied any personal culpability and defended both James Murdoch and Rebekah Brooks, saying other British company officials had executed a cover-up. That admission did not seem scripted; it caused Zweifach to shoot up from his chair to catch Murdoch's eye. Judge Leveson immediately rebuked the lawyer, ordering him to sit down. At another moment, Murdoch took a shot at
Daily Mail
editor Paul Dacre, while explaining that his lawyers had expressly told him not to do so.

At key moments, Murdoch interrupted, challenged, even jabbed his questioner, lawyer Robert Jay, if only to yield respectfully when Judge Leveson intervened. At times, Murdoch
seemed to relish the testimony. But he looked alone sitting at the table, without even James to intercede, as he flipped through thick binders of evidence while parrying Jay's attacks. No one had been able to tie Murdoch directly to hacking or even to corruption. For Leveson, the key question remained the undue influence, or even occasional control, Murdoch exercised over British cabinets and hence public policy. As Jay kept circling the riddle of whether Murdoch pursued his ideological beliefs or his business interests, Murdoch professed humility. He explained why he rebuked
Sun
editor Kelvin MacKenzie for the jubilant April 1992 front-page headline (“It's the Sun Wot Won It!”) after Conservative prime minister John Major beat Labour's Neil Kinnock. “We don't have that kind of power,” Murdoch demurred.

The extraordinary lengths to which politicians went to court him—Blair flying to an island off Australia, Gordon Brown to Idaho, Aussie prime ministers to New York, David Cameron to a Greek isle—were unnecessary, Murdoch said: “If any politician wanted my opinions on major matters, they only had to read the editorials in the
Sun
.” Murdoch portrayed these encounters as completely mundane, as though he had bumped into a neighbor at the supermarket.

Murdoch's papers may have helped elect or at least anoint a string of winners in the UK—Thatcher, Major, Blair, Cameron—and helped topple an Australian prime minister in the 1970s (and would be poised to do so again). But Murdoch claimed his influence on politics and policy was vastly overstated. As Jay drilled down more deeply, the media mogul declared it was illogical to think financial imperatives drove his editorial stances. If they did, he said, he would have stuck by the Conservatives at every election, like the
Telegraph
. The Tories were better for business.

Under Blair, Jay pointed out, Labour softened its stance on media ownership, labor unions, the euro, and other policies dear to Murdoch's heart. Lance Price, a former press aide to Blair,
called Murdoch effectively a cabinet member—indeed, one of only three people other than Blair whose opinion counted in making government policy. Murdoch insisted that he was “oblivious” to the commercial advantages of one politician holding office over another and had neither requested nor received any business favors from politicians, including Thatcher and Blair. “I've never asked a Prime Minister for anything.” But Murdoch did not need to do anything so “cack-handed,” Jay said, sending American reporters scurrying to online dictionaries. When Murdoch wanted to know more about the Italian government's sentiment toward News Corp's efforts to acquire a television network in that country from Silvio Berlusconi, Blair called Premier Romano Prodi to learn more.

And Jay challenged Murdoch's memory and his word, with documentation of a luncheon he attended with Thatcher in early 1981 as
he sought to take over the
Times
newspapers. Although he had maintained he had never ever spoken to Thatcher about the matter,
a senior aide to Thatcher had taken notes, filing a memo titled, “Commercial—in Confidence.” At the lunch, requested by Murdoch, he explained his plans to cut costs paid to the unionized labor force. (The
Times
had been losing money but the
Sunday Times
was projected to be profitable the following year, a point Murdoch did not make at the lunch.) Murdoch did not ask Thatcher to avoid tying up his bid in endless regulatory reviews. He did not do anything so “cack-handed.” One of Thatcher's aides, Woodrow Wyatt, wrote a note saying that he had told Murdoch that government supported the bill needed for his acquisition of the
Times
newspapers. “Margaret is very keen on preserving your position. She knows how much she depends on your support. Likewise you depend on hers in this matter.”

Thatcher's trade minister, John Biffen, approved the bid, and the government did not refer the decision to a commission that reviewed mergers and corporate consolidation. Murdoch's bid, on the merits, may well have been the best the previous owners could have secured. But none of the other suitors received a private audience with the prime minister to set out his case.

Former prime minister
John Major later alleged, under oath, that Murdoch had not asked but demanded at a private dinner in early 1997 that he retreat from the integration of the country's political and economic destiny with Europe. Murdoch set the shift as a condition of his newspapers' support. Major refused and Murdoch's papers switched to Labour.

Murdoch also had expansive discourses with Tony Blair over the euro, which the prime minister was eager to join and Murdoch opposed. Blair needed only to have read the editorials of the
Sun
, as Murdoch said, to learn the news executive's stance. But Murdoch expressed his opposition in person, also at Chequers. Blair did not change his government's position. But he did agree to schedule a
referendum so British voters could weigh in on whether to adopt the common European currency, just as the
Sun
had demanded. It served as a break on momentum toward the euro—and a sign Blair was willing to bend to acknowledge Murdoch's wishes.

At the Leveson Inquiry, Murdoch said he never asked David Cameron to reduce the amount of money the BBC received from mandatory fees on all television owners. But in denying that he made any request to Cameron, Rupert Murdoch seemed to concede he had raised the other topic with his predecessors.

“I'd been through that with previous prime ministers and it didn't matter what they said, they all hated the BBC and they all gave it whatever it wanted,” Murdoch said. Cameron's cabinet froze the BBC license fee for six years amid the recession;
the broadcaster's budget was to be cut 16 percent.

Around and around Robert Jay and Rupert Murdoch went, in front of Justice Leveson. Thinking he was out of hearing of others in the room, Murdoch turned to his lawyers during a break and spat out, “Let's
get this fucking thing over with today.” The questioning continued into the next day. Murdoch became more contrary.

Murdoch savored settling scores. He suggested that a pecuniary motive drove the former
Sunday Times
editor and ex-Sky chairman Andrew Neil: “Mr. Neil seems to have found it very profitable to get up and spread lies about me, but that's his business,” Murdoch said. Former
Sun
editor David Yelland's contention that most News Corp editors wake up in the morning wondering what Murdoch would think of the day's news inspired a curt rebuttal: “I think you should take it in the context of Mr. Yelland's very strange autobiography, when he said he was drunk all the time he was at the
Sun
.”

While Murdoch said he bore corporate responsibility for any criminal actions in his newsrooms, he assumed no personal culpability for creating a culture that allowed it, even cultivated it. He, too, was a victim, he testified.

LESS THAN a week later, Murdoch's antagonists in Parliament had their revenge. Led by John Whittingdale, the Parliamentary Committee on Culture, Media, and Sport unanimously found that it had been misled in previous testimony by Les Hinton, by Tom Crone, and by Colin Myler. On a partisan split—the Labour and Liberal Democrat members against the Conservatives—the committee declared itself to be “astonished” by James Murdoch's incuriosity as an executive. MP
Tom Watson read aloud the majority's further conclusions. “We found News Corp carried out an extensive cover-up of its rampant lawbreaking,” Watson said. “Its most senior executives repeatedly misled Parliament. . . . In the view of the majority of committee members, Rupert Murdoch is not fit to run an international company like BSkyB.”

Watson chose his phrasing carefully. The law required the TV regulator OfCom to determine whether the owner of a broadcaster was a “fit and proper” proprietor. The Murdochs did not really believe that OfCom would yank their authority to control BSkyB. But Watson and his allies on the committee had just handed the agency cover to do so if it wanted. On the other hand, the split vote allowed the corporation's executives in the UK and the US to portray the MPs denunciation as
driven by partisan politics.

Yet
the ghost of the
News of the World
caught a break the following week. Testifying before the Leveson Inquiry, a lawyer for the Metropolitan Police said forensic engineers could not establish that reporters for the tabloid had intentionally erased Milly Dowler's voice mail messages or whether a software program for the cell phone provider had automatically erased them. Old editors and reporters for the
News of the World
defiantly emerged on Twitter and in print to throw that misstep back in the paper's face. The scandal never would have gained steam without that part of the story, they said.

They were wrong, of course. The dead girl sufficed. The
Guardian
's Nick Davies and others believed they had reported even that element of the story accurately. But the
Guardian
and its fellow crusaders had to retreat on that point, and it put them temporarily on the defensive.