By Thursday, July 14, 2011, the House of Commons Culture, Media, and Sport Committee summoned Rupert and James Murdoch back to London to testify. Reporters at his Journal were also calling to pose inconvenient questions about James Murdoch’s leadership of the company’s British operations. The patriarch telephoned the paper’s London bureau chief, Bruce Orwall, to urge reporters to refute “some of the things that have been said in Parliament, some of which are total lies.”
News International, Murdoch said, had handled the crisis “extremely well in every way possible,” save for some “minor mistakes.” James, its executive chairman, had acted “as fast as he could, the moment he could.” The Journal published the piece, which folded in other developments—including the opening of a federal investigation into whether any phones were hacked on US soil.
The New York Times’s Joe Nocera took that article as inspiration to devote a column to what he called the “Fox-ification” of the Journal. “The Journal was turned into a propaganda vehicle for its owner’s conservative views. That’s half the definition of Fox-ification,” Nocera wrote. “The other half is that Murdoch’s media outlets must shill for his business interests. With the News of the World scandal, the Journal has now shown itself willing to do that, too.”
He pointed to Orwall’s Murdoch interview as particularly damning. “There was no pushback against any of these statements, even though several of them bordered on the delusional,” Nocera wrote. “The Journal reporter had either been told not to ask those questions, or instinctively knew that he shouldn’t. It is hard to know which is worse.” Mea culpa, Nocera wrote. Back in 2007, Nocera had been one of the commentators to declare Rupert Murdoch would be a savior of the Journal.
Many news staffers at the Journal privately considered Nocera’s column terribly unfair. Murdoch hadn’t volunteered himself for an interview. He had telephoned to harangue an employee. Orwall leveraged the call into remarks he could put in print, at a time when Murdoch proved an elusive quarry. If anything, Murdoch’s own paper allowed him to damage himself by making comments that galled many people following the story.
True, Murdoch could not control how he sounded: when asked what truth there could be found in rumors he would split his newspapers from the rest of the company, or sell them altogether, Murdoch replied, “Pure and total rubbish . . . give it the strongest possible denial you can give.” (Not such rubbish, as it turned out.) His journalists saw the paper’s publication of those comments as forcing him on the record and, as it happened, allowing him to land blows against himself.
The allegation of “Fox-ified” coverage was particularly nettlesome. The Journal’s partnership with NBC’s financial cable channel, CNBC, predated Murdoch. Reporters dreaded the looming expiration of that deal in 2012. They feared they would be forced to collaborate with coverage on the Roger Ailes–led Fox Business Network.
Some Journal reporters and editors had found Nocera’s fears overblown. “Oh, I think all of us, at the time the deal was announced, were anxious what it might mean,” said Alan Murray, who was executive editor of the paper’s online operations and deputy managing editor under Thomson through late 2012. “What [would] News Corp’s control of The Wall Street Journal mean? Would it in any way affect the independence of the news department? Would we somehow be forced to carry some other corporate agenda news that News Corp has?”
“But none of that’s happened,” Murray said.
Yet the taint was edging closer to home, and questions about corporate agendas arose, at least internally, with Les Hinton serving as the connective tissue between Murdoch’s holdings on the two sides of the Atlantic. Hinton, the publisher of the Journal and CEO of Dow Jones, had been CEO of News International when hacking occurred. Further, Hinton had reassured MPs in testimony that he personally believed the violation of cell phone messages by News of the World to be limited to a single case. His words soothed roiling waters at the time. He carried gravitas in the UK; he had even served as the chairman of the enforcement panel of the Press Complaints Commission, an industry-led, self-regulatory body that was intended to field the public’s concerns like a state bar or medical association.
In hindsight, Hinton’s testimony reads as though it had been carefully couched to help the company smother bad headlines while avoiding legal liability down the line. By 2011 Hinton could duck the heat no longer, despite five decades of service to Murdoch. The chairman delivered the news personally: Hinton had to leave the Journal, Dow Jones, and News Corp.
The editorial page of the Wall Street Journal shifted into high gear. In a blistering editorial, the Journal blamed the tabloid scandal almost exclusively on the failure of police to investigate. And it turned its wrath onto another target: the paper’s journalistic rivals. “We also trust that readers can see through the commercial and ideological motives of our competitor-critics,” the paper wrote. “The Schadenfreude is so thick you can’t cut it with a chainsaw. Especially redolent are lectures about journalistic standards from publications that give Julian Assange and WikiLeaks their moral imprimatur. They want their readers to believe, based on no evidence, that the tabloid excesses of one publication somehow tarnish thousands of other News Corp journalists across the world.”
Those remarks were directed squarely at the Guardian and the New York Times. The liberal British paper had been episodically reporting on the culture of tabloid corruption for eleven years by that point, while in 2010 the Times had published its own exposé based in large part on leads provided by the Guardian. Murdoch’s aides at News Corp called the story a setup: the two papers were colluding to try to damage him.
The New York Times piece was particularly damning because it included sources that were on the record. One of them, Sean Hoare, a former News of the World reporter who admitted his own actions, was discovered dead at his home the day of the Journal’s editorial. Authorities ruled out foul play: His death was later attributed to a drug overdose. But former colleagues said he had been traumatized by the scandal.
Many Journal critics refused to believe it, but the paper’s news staff and its editorial staff had little or no influence over each other. And no one took the Journal’s editorial page editor, Paul Gigot, as a stooge for Murdoch. He had adopted a firm conservative line for the paper well before its takeover by News Corp and, if anything, outflanked Murdoch on his ideological right. Gigot had also pledged to colleagues that he would quit if Murdoch meaningfully interfered to further his business or political interests. Still, the editorial was a remarkable piece of corporate patriotism. It sounded as though it could have sprung from Thomson’s mind to the printed page.
The defensiveness in that editorial also was given full voice by the company’s supporters and treated seriously by other reputable news organizations. Washington Post media reporter Paul Farhi wrote an article that raised the specter of media bias both by Murdoch’s publications and by those covering the accusations against News Corp’s British journalists, citing “corporate loyalties and entanglements [that] have raised suspicions about news organizations’ independence and objectivity.”
The Journal’s schadenfreude editorial stood out for its incredibly poor sense of timing and judgment and badly misread the mood of the public. Its sister paper, the Times of London, struck a tone of remorse, which alienated the editor in chief, James Harding, from his bosses at the paper’s corporate headquarters in New York. But the Journal’s editorial stance stoked fears of journalists inside the paper that in moments of crisis somehow they would be pressured to serve Murdoch’s needs.
The extraordinary circumstances stirred the Wall Street Journal special oversight panel to action. On July 25 the committee published a statement in light of the hacking scandal, entitled, “What About the Journal?” The Special Committee wrote, “We have found nothing to even hint that the sort of misdeeds alleged in London have somehow crept into Dow Jones.” The panel acknowledged that some journalists (presumably inside the paper, but not specified) thought Journ
al reporters should test the honesty of former Journal publisher Les Hinton’s testimony to British lawmakers. The panel’s members said they had repeatedly asked staffers, “Is anybody putting political, ideological, or commercial pressure on you to influence your news judgment?” It concluded, “The broad and consistent answer we get is no.”
By and large, that rang true. But that did not reflect life as it was experienced by a dozen Journal reporters and editors assigned to cover allegations of criminal activities by various News Corp employees and contractors in the UK. Several reporters and editors had told colleagues of stories that were blocked, stripped of damning detail or context, or just held up in bureaucratic purgatory.
The biggest clash occurred when the investigative reporter Steve Stecklow uncovered a dissonance between the versions of a story on Milly Dowler published in different editions of the News of the World on April 14, 2002. At that time, the girl was missing but not yet known to be dead. In the early editions, Stecklow found detailed quotes from voice mail messages included in the article. The final edition of News of the World instead carried a lone, passing allusion to a voice mail. No one else appeared to have noted the telling switch.
The reporters and editors who worked on the story with Stecklow thought it was a barn-burner. A reporter for News of the World had told the Journal that the tabloid had sent eight reporters and photographers to a factory in the British Midlands during Milly Dowler’s disappearance in 2002, expecting to find the girl working there. An editor deployed the team based on a message left on her voice mail. The Journal learned that the person who sent the reporters north was the paper’s chief reporter, Neville Thurlbeck. If true, this incident doubly contradicted News International’s claims that everyone thought the hacking was confined to one reporter and a private eye until late 2010. First, Thurlbeck had not been publicly implicated in the hacking of the royals. Second, some News of the World editor or company official must have called the news desk and ordered a change in the copy between editions because the paper’s hacking was so blatantly revealed in the first version.
To their frustration, the Journal reporters couldn’t pin down who had intervened (though suspicions focused on Tom Crone). Robert Thomson seized on that omission, saying the article hadn’t met the standards expected of the Journal. You guys didn’t figure out why the story was changed, Thomson told his subordinate editors.
The London bureau was led by Bruce Orwall, a journalist well known at his company’s headquarters. As the Journal’s Hollywood bureau chief, Orwall had edited the front-page story in December 2000 documenting the path Wendi Deng had taken in becoming the third wife of News Corp’s billionaire owner.
In July 2011, however, Orwall could be seen holed up in his office engaging in shouting matches via phone with top news executives in New York over the News of the World coverage. Orwall had some allies in New York on the story, including Alix Freedman. Freedman was one of the paper’s most respected senior editors and a holdover from Paul Steiger’s tenure. But Thomson was adamant. The bureau had covered the lead-up to the London Olympics, the royal wedding of Prince William, the European debt crisis, and the tribulations of the euro. None had elicited a fraction of the interest from the top as had the scandal affecting its parent company.
Thomson tried to kill the story several different times. As a fall-back strategy, several reporters and editors involved believed, Thomson was intentionally trying to set impossible standards so the story would not see the light of day. Finally Thomson relented. On August 20, 2011, the Journal published a front-page piece on the News of the World and the telling changes between editions on the Milly Dowler story. In a compromise, the article did not lead with a hard-news approach, but a more anecdotal top. The revelation of the disparity between editions was not disclosed until the ninth paragraph. Still, the story made it to print.
“The fact that [the Journal article] did run was good,” said one of the paper’s journalists involved in the story. “But the process was so painful. If we hadn’t fought, Robert would have been happy for us not to run it at all.” Freedman left for Reuters the following month.
Covering the parent News Corp under duress was a test of the Journal’s mettle in the Murdoch era. When hacking first came up, two years earlier, in July 2009, Rupert Murdoch had been in Sun Valley, Idaho, clustered with other media moguls at their annual deal-making retreat. During an interview by satellite on Fox Business, anchor Stuart Varney gamely and vainly tried to get his boss to address the scandal. Murdoch shut him down. “I’m not talking about that issue at all today,” Murdoch quickly said, grimacing. “I’m sorry.”
Varney acquiesced swiftly. “No worries, Mr. Chairman. That’s fine with me.”
In that July 2011 interview with the Journal’s Orwall, Rupert Murdoch had blamed outside lawyers at Harbottle & Lewis hired by News Corp for making “a ‘major mistake’ in underestimating the scope of the problem.” In 2007, News International executives including James Murdoch had pointed to the lawyers’ review of internal documents to show the company had taken questions of impropriety seriously. When called by members of Parliament, Rupert Murdoch testified on July 20, 2011, that he had been failed by people in whom his executives had put their faith. Murdoch said Les Hinton brought Colin Myler back to London from the New York Post to become editor in chief of the News of the World specifically “to find out what the hell was going on.” Myler, in turn, commissioned Harbottle & Lewis to do just that in 2007.
But as was subsequently becoming clear, the law firm had not been commissioned to conduct a wide-ranging review at all. Instead, it had examined emails that Clive Goodman, the reporter convicted of involvement in hacking in 2006, had exchanged with five editors.
The company limited Harbottle & Lewis’s involvement to an assessment of whether Goodman had a strong case for a wrongful termination suit. The law firm’s presence was triggered by Goodman’s complaint: “This practice [phone-hacking] was widely discussed in the daily editorial conference, until explicit reference to it was banned by the Editor” (at that time, Andrew Coulson).
Hinton had authorized paying Goodman the equivalent of twelve months’ salary in an agreement that precluded any employment suit.
The Journal reporters didn’t have at hand all those details, many of which would be revealed at the inquiry convened weeks later by Lord Justice Brian Leveson. But they showed that News Corp had wrongly presented a human resources defense as a no-nonsense legal review.
Ultimately, the Wall Street Journal gave prominent play to both stories: the News of the World’s telltale switch in language to mask the hacking done on its behalf, and the sleight of hand in the corporation’s public reliance on a narrow document review as a full-fledged internal investigation. MPs cited the voice mail story repeatedly in its final report on the affair. But the Journal’s reporters and editors had to fight hard to get those stories in print. And that led them to the question that hovered over the entire process: Why was Thomson involved at all?
Over at the New York Times, the top business editor was a former Journal editor named Lawrence Ingrassia. He recused himself from all coverage of the tabloid phone hacking scandal because his son had married the daughter of Colin Myler, the final News of the World editor. That’s what respected news organizations tended to do in such circumstances. Why had Thomson not done the same? Why not assign a senior news executive not in the paper’s top chain of command and without ties to the British papers to oversee the reporting?
Journal staffers batted around two answers. Thomson, like Murdoch, had grown up in a completely different newspaper culture. Papers in the Anglo-Aussie tradition took sides, fought for their interests, and were expected to do so.
Additionally, it served the chairman’s interests to have his best friend run the show during a crisis. Journalistic propriety be damned. When the cards were down, Mr. Murdoch could rely on his mate to mitigate the damage.
19
“THE ONLY PERSON IN LONDON”
IN SEPTEMBER 2011, DEVELOPMENTS IN London raced ahead of News Corp. Klein and his colleagues embarked on a ruthless cull within the tabloids. Arrests mounted. Bribery and corruption joined mobile phone hacking on the list of allegations. Police swept through reporters’ homes in early morning raids. Past courtesies no longer applied. The questions posed the previous April by Murdoch’s former Sunday Times editor took on added urgency: What did James Murdoch know about hacking, and when did he know it?
Especially dangerous to Murdoch was the resentment of Colin Myler and Tom Crone, who had lost their jobs in July when the Murdochs decided to kill News of the World. At the end of the first week of September, the two prepared to take their case public, in front of the cameras at Parliament’s Portcullis House, so that all of Britain and the world could hear them attack the man next in line to take over News Corp.
The family, too, had turned on James, in various ways. First Elisabeth and then Rupert told James to step aside. (Rupert changed his mind the next day.) The younger generation’s efforts to work in unison to manage the transition from Rupert to the next Murdoch had been shredded. Lachlan had come to London to lend support and counsel but not to reenter the corporate fray. Elisabeth thought James and the newspaper hacks beneath him had led News International to the brink of ruin. James and Rebekah fucked the company, Elisabeth was overheard raging at a book party staged by her husband, Matthew Freud, with Times of London editor James Harding. Elisabeth wanted James out, perhaps for good. The sale of Elisabeth’s production company Shine to News Corp had been accompanied by the plan to appoint her to a seat on News Corp’s board of directors. In early August, she announced she would not take it up. James Murdoch’s wife, Kathryn Hufschmid, loathed Freud and saw his machinations to position his own wife as the clean Murdoch behind her husband’s rift with his sister.
Murdoch's World Page 23
