Audit Notes: Sky News Hacking, JPMorgan Fined, False Balance

Murdoch’s hacking scandal continues to metastasize, spreading to Sky News now, which admitted when asked by The Guardian that it illegally broke into two email accounts of two people in the news.

A senior Sky executive signed off on the hacking, saying it was in the “public interest.” The stories were about the “canoe man,” who faked his own death. The public certainly was interested in the story, I reckon. You can justify breaking laws for any sensational story then.

Intercepting emails is an offence under the Computer Misuse Act, and there is no public interest defence written in law. Theoretically, however, any email hacking charges would have to be brought at the discretion of the police and the Crown Prosecution Service, which could weigh up whether any intrusions could be justified. The role of the CPS in this area is untested, and Keir Starmer, the director of public prosecutions, told the Leveson inquiry in February that he intended to issue guidance to clarify the issue.

Of course, the question now is whether these were the only hackings at Sky News.

The New York Times reports that the Commodity Futures Trading Commission is set to slap JPMorgan Chase with a $20 million fine for lending too much to Lehman Brothers and for withholding customer funds after its bankruptcy. That ought to show them!

The Financial Times follows with an analysis that says press favorite Jamie Dimon’s bank is coming under increased scrutiny. This is a nice lede:

Three times a pallbearer, never a corpse - that is JPMorgan Chase’s experience of the brutal financial markets of the past few years.

At the demise of Bear Stearns, Lehman Brothers and, most recently, MF Global, the bank has been deeply involved: in a rescue bid for Bear and in a complex network of relationships with Lehman and MF Global. Its unrivalled reach raises inevitable questions about its role.

— I like the way Carleton professor Frances Woolley starts off this Globe and Mail column:

On Wednesday, I received a call from a reporter desperately trying to find a credible expert prepared to speak in favour of the OLG’s plans to build a downtown casino in Ottawa. “We need balance,” he said. Which made me wonder, does balanced journalism mean finding people to support stupid ideas?

No, that’s false balance, and it happens far too often—almost an instinct for reporters and editors.

Woolley goes on to argue why casinos are bad public policy:

Study after study, as summarized in this recent comprehensive review, finds that lottery and other gaming revenues come disproportionately from lower income people. Instant games, such as slot machines, are particularly insidious. They prey on those who seek instant gratification, and study after study shows that success in life is strongly related to the ability to defer gratification, to avoid eating the marshmallow.

This same review found no evidence that increased gaming revenues lead to better or improved public services. U.S. studies have found that the introduction of presence of state lotteries ear-marked for education is associated with lower levels of education funding.

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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: , , , ,