The single most important task facing Rupert Murdoch right now is to persuade the world that the illegal goings-on in the UK were isolated and not indicative of the News Corp culture more generally. He’s tried this with zero success in the past: first he said that they were isolated to a single reporter, and then to a handful of people having their phones tapped, and then to the News of the World — but in each case the scandal proved bigger than News Corp would have had us believed.

News Corp properties, including most notably the WSJ, are circling the wagons. They still say that the problem was confined to a single publication, that it’s not endemic to News Corp generally, and that anybody who suggests otherwise is biased both ideologically and competitively:

We also trust that readers can see through the commercial and ideological motives of our competitor-critics. The Schadenfreude is so thick you can’t cut it with a chainsaw. Especially redolent are lectures about journalistic standards from publications that give Julian Assange and WikiLeaks their moral imprimatur. They want their readers to believe, based on no evidence, that the tabloid excesses of one publication somehow tarnish thousands of other News Corp. journalists across the world.


That editorial has achieved the remarkable feat of making the WSJ editorial page even less respected than it was before — especially since its publication coincides with a wonderful column from David Carr which shows just how a culture of aggression tipping over into illegality was widespread in News Corp, not only in the UK but also in the US.

Carr concentrates on the News America in-store marketing scandal, which you don’t know about because it was barely covered in the mainstream media at the time. He does a great job of summing it all up; I won’t bother to recapitulate the whole story. But suffice to say that News Corp’s US subsidiary, News America, ended up paying $655 million to silence charges of corporate espionage and anticompetitive behavior, including hacking into rivals’ computer systems.

Murdoch’s reaction to this scandal was telling:

News America was led by Paul V. Carlucci, who, according to Forbes, used to show the sales staff the scene in “The Untouchables” in which Al Capone beats a man to death with a baseball bat…

Given the size of the payouts, along with the evidence and testimony in the lawsuits, the News Corporation must have known it had another rogue on its hands, one who needed to be dealt with. After all, Mr. Carlucci, who became chairman and chief executive of News America in 1997, had overseen a division that had drawn the scrutiny of government investigators and set off lawsuits that chipped away at the bottom line…

So what became of him? Mr. Carlucci, as it happens, became the publisher of The New York Post in 2005 and continues to serve as head of News America, which doesn’t exactly square with Mr. Murdoch’s recently stated desire to “absolutely establish our integrity in the eyes of the public.”

Some of the best contemporaneous coverage of the scandal came from BNet’s Jim Edwards. In April 2009, he found this nugget from a trial transcript. The context is a lunch meeting between Carlucci and two brothers who would end up in court against him:

A: At a certain point in the conversation Mr. Carlucci turned to Richard and said, “So, I understand your —” words to the effect, “So, I understand you’re here to sell your company?”

Q: And was there a response?

A: We were — I was surprised to hear that, and Richard’s response was, “No. That’s not why we’re here. We were really here to meet you, and to discuss the possibility of doing joint promotions.”

Q: What happened after that?

A: … he followed that by saying, “From now on, consider me, us your competitor, and understand this, if you ever get into any of our businesses, I will destroy you.” And he said, “I work for a man who wants it all, and doesn’t understand anybody telling him he can’t have it all.” And that ended his discussion.

This, of course, is the real Murdoch, as opposed to the man who will cry crocodile tears of remorse in front of Britain’s parliament on Tuesday. This is the Murdoch who took Piers Morgan and Rebekah Wade and appointed them to run the News of the World while they were still in their twenties: a clear sign that he had no interest in editors with the wisdom of many years’ experience, and would much prefer someone more ambitious and tractable.

On Twitter, the hashtag for the whole affair seems to have morphed from #hackgate into #Murdochalypse: a sign that it’s already being seen in both a more personal and a more global manner than when it was confined to the News of the World. As, of course, is the craven and defensive editorial in the WSJ; do take my quick Tumblr poll on that if you have a Tumblr account.

It’s now too late for Murdoch and his minions to prevent the virus from spreading into the US, which of course is much more high-minded when it comes to journalistic ethics than the UK. Phone hacking alone wasn’t enough to garner mass opprobrium in the UK: it was only when the victims turned out to include a dead schoolgirl that some kind of line was crossed.

In the US, the line will be crossed much more quickly. In this country, it’s inconceivable that anybody would attempt to defend bribing police officers as something protected under the First Amendment, for instance. Or it was inconceivable, anyway, until today’s WSJ editorial came out:

The political mob has been quick to call for a criminal probe into whether News Corp. executives violated the U.S. Foreign Corrupt Practices Act with payments to British security or government officials in return for information used in news stories. Attorney General Eric Holder quickly obliged last week, without so much as a fare-thee-well to the First Amendment…

Do our media brethren really want to invite Congress and prosecutors to regulate how journalists gather the news?

If this is the best that Murdoch’s apologists can do, his battle in the US looks lost before it has even really been engaged. As the scandal spreads, it will certainly cause damage to Murdoch’s US media holdings. The only question is how big that damage will be.

Felix Salmon is an Audit contributor. He's also the finance blogger for Reuters; this post can also be found at Reuters.com.