Audit Notes: Murdoch’s hacking scandal, revolving door, Obama’s AMA

Two more arrests, including one for computer hacking

As Rupert Murdoch tells the world to go see Dinesh D’Souza’s “scary” 2016 propaganda (read my 2010 takes on the kookiness that spawned the movie here and here), his News Corporation is back in the headlines for the hacking scandal.

This time, it’s from one of Murdoch’s respectable papers, The Times of London, and it involves not phone hacking, but computer hacking. Bloomberg:

“The phone-hacking scandal could be eclipsed by Rupert Murdoch’s unexploded bomb of computer hacking,” Labour Party lawmaker Tom Watson, who sat on a committee probing News Corp., said in an e-mail today. “It’s infecting all his U.K. titles already and the investigation has only really just begun.”…

The first journalist, identified by Sky News as former Times reporter Patrick Foster, is being questioned at a North London police station about a 2009 article that included the name of a previously anonymous blogger.

But Bloomberg buries what is an irony of ironies:

Foster is now a freelance reporter for the Guardian newspaper, which broke the phone-hacking story. Guardian spokeswoman Christine Crowther declined to comment other than to say Foster hadn’t written a story for the title since January.

Here’s wondering if Murdoch’s Sun is shameless enough to work up a headline trying to tie hacking to The Guardian.

— In a stunning development, SEC enforcement director Robert Khuzami, who (incredibly) came to that critical post straight from a lucrative gig whose responsibilities included overseeing the lawyers vetting Deutsche Bank’s CDO machine, writes an op-ed for Reuters defending the revolving door.

Enforcement staff, having landed a highly sought-after and difficult-to-obtain job, often passing up other opportunities in the process, would not risk reputation and career and even jail by undermining an investigation for a possible future job prospect. Any enforcement staff member who would consider such a betrayal would be so lacking in respect and credibility as to be of no value to future employers. Nor would they get hired — to put it bluntly, would you hire someone so dishonest, so without principle and held in low esteem by former colleagues (which they would have to be to consider such an act of deceit) to represent you in matters of importance? I have seen no evidence of such a betrayal in my years at the SEC, or in my 15 years in public service. To believe the critics on this point is to have a disturbingly cynical and misguided view of public service and the dedicated and professional members of the Enforcement Division.

In addition, the reality is that enforcement case recommendations are made by teams of attorneys, with multiple levels of review and scrutiny throughout the agency — all of which means that it is virtually impossible for any one person to make decisions on a case based on anything other than the facts, the evidence, and the law. This latest academic study simply confirms what I experience every day: that we bring our cases on the merits and the merits alone.

If there’s anything worse than a captured regulator, it’s a regulator who doesn’t believe there’s such a thing as regulatory capture.

— Alexis Madrigal of The Atlantic writes on President Obama’s “ask me anything” appearance on Reddit:

The AMA presumption is unmediated access by which I mean questions can be about Anything, (“And I mean anything!”) and they lack media filtering. Finally, Redditors can hit the President with all those questions that the media won’t!!!

Well, OK. But maybe just asking the question is not really the tough part. Take a look for yourself at the President’s answers. It’s milquetoast defense after quip after simple explainer. It’s a campaign stop (or as Tim Maly put it, “a factory tour”).

Do you get to bathe in the warm glow of charisma, fame, and power? Sure. Did President Obama give a single answer that he wouldn’t to a standard media outlet? I don’t think so. In the 10 answers Obama gave, there was not a single one that’d be interesting to Redditors if it had appeared somewhere else.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum. Tags: , , , ,