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Rupert Murdoch’s American Media Immunity

Alex Constantine - April 4, 2012

The paradox is how little interest, until now, the US press has taken in the scandals engulfing the tycoon's News Corp empire

By Michael Wolff

The Guardian, 4 April 2012

Rupert Murdoch 007 300x180 - Rupert Murdoch's American Media ImmunityEven as his British media empire seems close to collapse, Rupert Murdoch has seemed 'untouchable' in his adopted home of the United States. Photograph: Stefan Wermuth/Reuters

Last week, PBS aired a Frontline documentary, more then six months in the making, about Rupert Murdoch's phone-hacking scandal. The big budget film, hosted and reported by Lowell Bergman, one of the pre-eminent US investigative journalists, broke no news nor offered new perspectives about the affair. Rather, the show – the first US documentary to delve into the Murdoch scandals – gave a diligent, if somewhat flat-footed account of events that came to a head last summer, for an audience that, the producers seemed to assume, had missed most of the story.

In the same week, the BBC and the Australian Financial Review, opened up an entirely new chapter in the ever-expanding chronicles of News Corporation's scandals: NDS, a News Corp subsidiary company that developed encryption technology for pay TV outlets, had allegedly mounted a long-term effort of piracy and hacking in an effort to undermine its competitors. News Corp's Australian arm has denied the allegations.

Here's the thing: Murdoch's empire may be under siege in one of the most riveting business tales of our time – featuring wounded celebrities, a dynastic family drama, and toadying at the highest levels of government – but American journalism has been mostly absent from the story. At best, it has been a sidelined presence, late to the game, and generally confused about how to get ahead of events happening in another country. This is, arguably, the best thing Murdoch has going for him: in the US, the seat of his company and the main motor of his fortunes, he has been able to hide in plain sight.

So, why the disconnect? In a universe of equal-access global information, how can such parallel worlds comfortably exist? In the world abroad, almost everything is coming apart for Murdoch: his top executives, including his son, face possible imprisonment, his businesses face dismemberment, his reputation is in ruins. In the world at home, he remains the largely untouchable chief executive of one of the most influential companies in the nation. Within the US business and journalistic community, there is no real sense that he is even vulnerable – precisely, or circularly, because it would require a US outcry to bring him down. And the business and journalistic communities, which would have to lead that outcry, haven't begun to stir.

Many journalists, including Bergman, make the technical point that without an instance of phone-hacking on US soil, there is no smoking gun. Last summer, a spurious report in a second-tier British tabloid suggested that Murdoch reporters might have hacked the phones of 9/11 families, which would have provided an emotional gotcha. But without that, well … shrug.

Still, while this lack of jurisdiction might change the legal direction of the story, it ought not to change the journalistic view. The UK evidence trail reaches ever-more perilously close to Murdoch, the big kahuna. And such pursuit of such a personality is the sport of journalists, isn't it?

What's more, the constant revelations in the UK, and now Australia, reflect on the ethos of the whole company, most of which operates in the U.S.: News Corp. has built itself by an aggressiveness that defines its character and actions. The smoking guns seem limited only by one's imagination.

And yet, nothing: not a single US news outlet has meaningful advanced the investigation of Murdoch and his company.

The one significant contribution from the US media came more than 18 months ago when the New York Times ran a Sunday magazine piece about the scandal. The Times' attention furthered the story in Britain, and demonstrated the power of US media interest. But in fact, the Times mostly regurgitated what the Guardian had already reported.

At one level, the conundrum for journalists is Murdoch himself. He lives here; he makes most of his money here; he is a business superstar here. But he has never cut the kind of figure – nor been the object of such obsession – that he has in Australian and the UK. In the US, he owns largely anodyne entertainment and sports assets, rather than newspapers (the obstreperous New York Post is a local extravagance, and the Wall Street Journal is his reach for respectability); the exception is Fox News, but Roger Ailes is correctly perceived as its mastermind, and Murdoch as its more remote proprietor. While Murdoch is a figure of respect and even awe in the media community, he has never much captured the interest of people outside it.

Still, that ought to be a journalistic opportunity: to take the shadow figure and bring him into the light. But unless you are singularly committed, it is hard to take on power until its hold begins to loosen – and it hasn't, quite. At least not in the US.

This may have been Murdoch's annus horribilis, but News Corp's share price has advanced by 30% over the year – the ultimate sign of public faith and corporate solidity. (For a business story of this complexity and magnitude, the logical outlet to cover it would have been the Wall Street Journal. Alas.)

From a journalistic standpoint, it is hard, or ought to be hard, to ignore the sense of drip-drip inevitability. In London, there are three fronts: the original hacking charges at the News of the World; investigation of police bribery at the Sun; and possible charges of obstruction of justice (that is, the alleged cover-up). The latter most directly threatens Murdoch's son, James. Many of Murdoch's senior-most managers have been arrested – and not yet charged. While the lack of charges seems to be interpreted in the US as a signal of weakness in the allegations, it more likely reflects the process of British law: plea bargains occur before indictment.

In other words, some of the arrested subjects are likely bargaining and getting ready to testify against each other and those above. If the dominoes begin to fall, that will increase pressure on the US Justice Department to act under the Foreign Corrupt Practices Act. And now, with the NDS story, allegations of scandal reach by another vector into the uppermost levels of the company: anything to do with pay TV strikes close to Chase Carey, the chief operating officer, and presumed "Mr Clean" alternative to people named Murdoch.

Of course, to truly report this story, you need sources inside the company at a high corporate level. It is a testament to the kind of aggressive loyalty that Murdoch has cultivated at News Corp (which has, arguably, been at the root of so much of the companies' feral behavior), that few American reporters have such sources. Omerta rules.

And so the story has unfolded from the far ends of the empire, with the New York journalists working in close proximity to the company's center of power woefully out of the loop – though it is they who, if they wanted to, could buttonhole Murdoch on the pavement.

Still. Hollywood seems suddenly roused. Judging from the shocked and outraged calls I've gotten in the days since Frontline acquainted PBS viewers with the basic details of this long-in-progress, slow-motion downfall of the most powerful man of our time, maybe, finally, the story has reached us. And is ripe.


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