Audit Notes: Murdoch’s Lobbyists, Reuters on Chesapeake, Shadow Space (UPDATED)

Top News Corporation officials talked about enlisting the top Wall Street Journal Europe editor to lobby politicians for Murdoch’s multibillionaire BSkyB bid.


But email messages released Tuesday indicate that News Corp. executives at least considered dispatching top editors of The Wall Street Journal Europe and The Times of London, both News Corp. holdings, to advocate the BSkyB deal…

On Oct. 18, (News Corp. lobbyist Fred) Michel wrote that Oakeshott would also be “VERY receptive” to a message from Patience Wheatcroft, then the editor of The Wall Street Journal Europe…

That November, Wheatcroft left The Journal after she was named to the House of Lords as a member of the Conservative party, by Prime Minister David Cameron.

It’s unclear whether Wheatcroft was ever asked by her News Corp. bosses to lobby for its business interests, in large part because she declined to comment to ProPublica and other outlets who asked her. But the fact that it was even considered by top brass at the company tells us a lot—and it’s not good.

As ProPublica notes, these emails came out just as Murdoch dissembled to the Leveson Inquiry that “I take particular pride in the fact that we’ve never pushed our commercial interests in our newspapers.”

— Reuters’s big scoop on Chesapeake Energy and its CEO Aubrey McClendon has already gotten results. (ADDING: I should note the great work of the The Pittsburgh Post-Gazette, which broke the story of the loans)

The wire reported two weeks ago that McClendon had borrowed more than a billion dollars against his share of Chesapeake’s wells from a company that did big business with Chesapeake—a serious conflict of interest. The board has now ended the sweetheart program that gave McClendon a 2.5 percent share of every well it drills.

This weekend Reuters uncovered another conflict of interest. McClendon borrowed money from a Chesapeake board member back in 1998—while the board member served on the committee that set his pay.

A summary of the collateral pledged by McClendon shows he granted Whittemore all “right, title and interest” in a company called Chesapeake Investments LP. That firm was established and run by McClendon. It was regularly used to hold stakes McClendon acquired in each new oil or gas well drilled by Chesapeake, both before and after the financing deal with Whittemore, according to mortgage documents filed in Oklahoma, Texas and Louisiana reviewed by Reuters.

The Oregonian had a good report this weekend on how banks are holding foreclosed homes off the market.

In real estate, this is called shadow space, and it’s just part of the business. What is out of the ordinary is the amount of space being held offline (emphasis mine):

The vast majority of repossessed Portland-area homes aren’t up for sale. Instead, more than 80 percent of them are off the market, many vacant and developing maintenance problems that might ultimately take a toll on their resale value if and when they do sell.

Why aren’t they selling more of them? You might think it’s to avoid flooding the market, but Portland is having an “inventory crisis,” according to The Oregonian (one I’m seeing in Seattle too). The robosigning problems are probably a good part of it. But this explanation is interesting:

And some of the delay is likely the result of a bookkeeping maneuver, said Rick Sharga, executive vice president of Carrington Mortgage Holdings. The homes haven’t been marked down to their new, lower market value.

“The banks are going to have to take a loss at the time of the sale,” Sharga said. “One way of managing those losses is to sort of delay the process a little bit.

How many of those toxic mortgages are still not written down?

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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: , , , ,