When a committee of Parliament condemned Rupert Murdoch today Tuesday as “not a fit person to exercise the stewardship of a major international company,” it was a statement as obvious as it was astonishing.
Astonishing because, even though Murdoch’s aura of invincibility has been heavily damaged by the hacking scandal, this is the British Parliament saying that a man who “along with Margaret Thatcher arguably the most important public figure in Britain since Churchill,” in the words of The Guardian’s Martin Kettle, should be forced out of his company. It took the murder of a 13 year old girl ten years ago and his newspaper’s abuse of her privacy and the law to get to this point.
Murdoch, a foreigner who controlled some forty percent of the UK’s newspaper circulation, was this close to snagging full control of the country’s biggest private TV provider last July, and extending his domination of the country’s public life. While it’s far from likely, it’s now possible at least to imagine Murdoch’s exit from the UK.
Or perhaps even from News Corp. itself. One of the most interesting aspects of the select committee’s report is how it finds Rupert Murdoch’s conduct to be, at best, “wilful blindness”—a phrase that looks like a message to US prosecutors. Willful blindness is a U.S. legal term for what you might calls implausible deniability, like when a CEO or, say, a mafia boss has underlings do all the dirty work to keep his own hands clean.
You can operate like that and still have plausible deniability, of course. It becomes implausible when it was clear long ago that there were serious problems that Murdoch, if he had wanted to, would have cleaned up.
Instead, Murdoch cultivated a culture of obfuscation and coverup—one that hubristically, but not unrealistically, assumed that his power would be enough to ride out the turbulence.
The scary thing is how close their bet on coverup came to winning. News Corp.’s extensive corruption of the British police system would have buried the scandal but for the heroic work of a small handful of folks like The Guardian’s Nick Davies, MP Tom Watson, and victims’ attorney Mark Lewis.
Despite all that has changed in the balance of power post-Milly Dowler, Murdoch’s reaction to the select committee’s report shows how much the tone at the top hasn’t changed. News Corp.’s strategy is still containment, the Nixonian limited hangout.
The most important line in Murdoch’s letter to News Corp. employees is about his Management Standards Committee’s internal investigation of The Sun and The Times of London, which he says “found no evidence of illegal conduct other than a single incident reported months ago, which led to the discipline of the relevant employee.” Murdoch’s myriad integrity panels and internal investigations have about as much credibility as the “independent” editorial integrity panels he sets up to give the owners of serious papers like The Times and The Wall Street Journal cover to sell out to someone like him.
Murdoch knows the only way he won’t survive is if problems at non-News of the World papers and News Corp. companies prove that the mothership’s culture is the the problem. This ludicrous statement about one crime shows him still trying to put a firewall around the controversy.
It’s not going to work. The committee, which includes Tom Watson, is playing chess here, anticipating that line: “Throughout this affair, senior News of the World and News International executives have tried to have it both ways. They have been quick to point to ‘investigations’ which supposedly cleared the newspaper of wider wrongdoing, but have also distanced themselves from the detail when it suited them.”
Worse for Murdoch, the Metropolitan Police, News Corp.’s one-time partners-in-crime (literally), have already arrested ten Sun editors and reporters for “a culture at The Sun of illegal payments.”
Murdoch himself effectively admitted two months ago that The Sun did indeed have a culture of bribery. Today, he would have us believe that this was a culture of one.
Years ago, a retired Skadden Arps guy started a campaign to require some basic ethics be added to the single thing (increase shareholder value) now required of corporate executives. His idea, as I recall it, was to subject recalcitrant corporate entities to charter revocation in the event they operated like criminal conspiracies. His exhibit A was the tobacco giants.
Many years ago, corporate charters were occasionally revoked by the chartering governments. It used to be understood that governments were the supreme authority in the land, and that incorporation and limited liability were privileges.
This idea is long overdue for revival.
News Corp could be a good test case. Revoke the charter(s), wipe out the shareholders, scatter the assets to the market at whatever prices they'll fetch and thereby send the message to investors: don't try to make money by backing guys like Murdoch.
#1 Posted by Edward Ericson Jr., CJR on Wed 2 May 2012 at 12:13 PM