Journalism Scandal at News Corp

While it’s too early to draw conclusions, anyone interested in what goes on at the owner the nation’s leading financial daily should understand precisely what is and isn’t known about the reporting scandal now roiling The Wall Street Journal’s parent, News Corp.

As The Audit’s Ryan Chittum pointed out, The Guardian broke a massive scoop that two News Corp.-owned tabloids paid $1.6 million to end civil suits that had gathered evidence that News Corp. journalists used private investigators to hack into the mobile phone records of celebrities and public figures.

The case is a peek into a news culture overseen by Rupert Murdoch and Les Hinton, who runs the News Corp. unit that publishes the Journal, that is unnerving, to say the least.

The affair dates to the summer of 2006 when Clive Goodman, who covered the royals for News Corp.’s News of the World tabloid, was arrested for hacking into the phone records of three royal family staffers. He was imprisoned in January 2007. A private investigator working for News Corp., Glenn Mulcaire, was also convicted in the case and admitted to hacking into the records of five other targets, including the chief ­executive of the Professional Footballers’ Association, Gordon Taylor.

Taylor, among others, sued.

The arrest triggered investigations by London’s Metropolitan police as well as the U.K.’s Information Commissioner’s Office, an independent body within the Justice Ministry responsible, among other things, for protecting personal information. In 2008, the court ordered the information commissioner and the police to turn over documents related to their investigations. That’s when News Corp. settled and persuaded the court to seal the documents—which remained secret until the Guardian story.

At the time of the Goodman case, Hinton was chairman of News Corp.’s News International unit, which run the company’s U.K. newspaper operations and is the center of the current storm.

News Corp. executives at the time said Goodman acted alone, as Hinton did in this March 2007 testimony before the House of Commons culture committee.

Nonetheless, Hinton accepted the resignation of the Andy Coulson, then News of the World editor, who later reemerged as Conservative Leader David Cameron’s communications chief. Coulson also said he knew nothing of the hacking.

Hinton at the time also sat on something called the Press Complaints Commission, a self-regulatory body that investigates complaints from members of the public about the editorial content of newspapers and magazines and the news-gathering practices of reporters.

By resigning, Coulson didn’t have to testify before the commission.

The Guardian also reports in a separate profile of Hinton that he persuaded the commission not to impose further sanctions after Goodman was jailed. The story doesn’t attribute the assertion and isn’t clear whether it means to imply that Hinton persuaded the commission to let up on Goodman or to drop further probes altogether.

The heart of the latest Guardian revelations is that the use of illegally obtained information at News of the World and its sister paper, the Sun, was rampant. The Guardian quotes a “senior source” at the Metropolitan police that “officers found evidence of News Group staff using private investigators who hacked into ‘thousands’ of mobile phones. Another source with direct knowledge of the police findings put the figure at ‘two or three thousand’ mobiles.”

The paper also reports, a bit cryptically, that a News of the World “executive” had also been involved:

The Scotland Yard files included paperwork which revealed that, contrary to News Group’s denial, Mulcaire had provided a recording of the messages on Taylor’s phone to a News of the World journalist who had transcribed them and emailed them to a senior reporter, and that a News of the World executive had offered Mulcaire a substantial bonus for a story specifically related to the intercepted messages.

So far, this much we know:

1. The information commission has now confirmed that it gave material to the court in the Taylor case “that showed that 31 journalists working for the News of the World and the Sun had acquired people’s personal information through blagging,” or illegal means.

2. British prosecutors in the wake of the story say they will open an “urgent review” of phone-hacking allegations involving other reporters after police said they don’t plan a further investigation, the Guardian reports.

3. A parliamentary select committee says it will call News Corp. executives, including Hinton, to testify as early as next week.

4. Murdoch told a Bloomberg reporter Wednesday that he wasn’t even aware of the payments to settle the Taylor and other cases.

News Corp. Chairman and Chief Executive Officer Rupert Murdoch said yesterday that he wasn’t aware of any payments made to settle legal cases in which the company’s newspaper reporters may have been involved in criminal activity. “If that had happened, I would know about it,” Murdoch said in an interview at the Allen & Co. media conference in Sun Valley, Idaho.

It’s not clear what he means. Is he denying the payments occurred?

5. The Journal has been lost in the headlights on this story. Its headline the morning the story broke was Orwellian.

British Tabloids Face Scrutiny By Government on Privacy Issues

And this update:

Police to Probe U.K. Tabloid Hacking Allegations

No, these are News Corp. tabloids; no other company’s tabloids are implicated in the Guardian stories or the new probes.

Today, the paper chooses to run with this angle: “London Police Decline To Reopen Tabloid Probe.” Well, that’s one way to go.

6. British papers have understandably focused on Coulson’s role now because of his current political job, but bigger questions surround why the police investigation turned up no other suspects beyond Goodman. As the Guardian asks:

• Did anybody at any level of Scotland Yard or the Crown Prosecution Service interfere in any way to protect the interests of the News of the World and its parent company?

7. Another area of interest is the press commission’s role, why its 2007 inquiry named only Goodman and the investigator Mulcaire, and what role, if any, Hinton played.

A couple of other thoughts.

The Audit made no secret of its opposition to Dow Jones’s sale to News Corp. back in 2007. No one ever doubted the value-creating ability of Rupert Murdoch or his company. But its history of subordinating journalism values to corporate interests and skirting ethical boundaries in the U.S. and in China made it a poor home for the world’s leading watchdog of markets, the economy, and corporate behavior.

Recall, for instance, that back in 2006 two Journal reporters were among those subjected to “pretexting,” the use of misrepresentation to obtain personal records, at the hands of investigators for Hewlett-Packard (1). Now it’s called blagging, and it’s alleged to have been done on a mass scale at the Journal’s parent.

Last year, we worried about the “Anglo-ization” of the Journal. By that we meant only its new owners’ light regard for, or even comprehension of, the paper’s traditional strengths in investigations, depth, and storytelling, particularly in its famous page-one stories, known as “leders.”

We noted the weirdness and duplicity displayed by News Corp. in its firing of former high-flying publisher Judith Regan in 2007.

I can’t help thinking about the old Dow Jones, where I used to work. It was so concerned with propriety that it didn’t even like to take out loans for fear of appearing beholden to banks, as former DJ director Jim Ottaway recalled in a 2007 interview with The Audit.

Now we have a hacking/pretexting scandal that involves possible widespread criminal wrongdoing at papers owned by a major media company, the parent of the world’s leading financial watchdog.

It would make a great leder.

1. “I Spy — A Reporter’s Story: How H-P Kept Tabs On Me for a Year —- Firm’s Search for Leak Led Sleuths to Scope Out Trash, Compile Phone Dossier —- Organizing a Bridal Shower”
By Pui-Wing Tam
Wall Street Journal
19 October 2006

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Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.