The News Corporation scandals

March 28, 2012 8:54 AM

Murdoch's Scandal - Lowell Bergman (the journalist portrayed by Al Pacino in The Insider) has investigated News Corporation for PBS Frontline [transcript]. He depicts Rupert Murdoch's British operation as a criminal enterprise, routinely hacking the voicemail and computers of innocent people, and using bribery and coercion to infiltrate police and government over decades. Enemies are ruthlessly "monstered" by the tabloids. Bergman also spoke to NPR's Fresh Air [transcript]. But the hits keep coming: in recent days News Corp has been accused of hacking rival pay TV services and promoting pirated receiver cards in both the UK and Australia. With the looming possibility of prosecution under America's Foreign Corrupt Practices Act, how long will shareholders consider Rupert Murdoch irreplaceable? [Previous 1 2 3 4]
posted by East Manitoba Regional Junior Kabaddi Champion '94 (58 comments total)

The British TV regulator Ofcom is currently judging whether Murdoch is "fit and proper" to own and operate his satellite TV network, BSkyB.
posted by East Manitoba Regional Junior Kabaddi Champion '94 at 8:57 AM on March 28, 2012 [2 favorites]

Saw this last night. Incredible stuff. All the chicanery just went on, and on, and on, and on, and on... Each individual trespass was a big enough deal when it happened, but compiled all together like that? A man the likes of Frick, Carnegie, Gould, et al, but of our own time, not of some regrettable past.
posted by Capt. Renault at 9:14 AM on March 28, 2012 [1 favorite]

Murdoch's Twitter feed is, as usual, silent on these matters.
posted by codacorolla at 9:15 AM on March 28, 2012

Is it possible to die of Schadenfreude?
posted by The Whelk at 9:17 AM on March 28, 2012 [14 favorites]

See, here's one of the problems with how corporations are dealt with. This is obviously not simply Murdoch's doing -- it's a culture of corruption and attitude of invulnerability which pervades the entire organization. If this were a person doing these crimes, we would try them in court and lock them up and throw away the key. But what is the equivalent punishment for corporate "persons"? Removing someone from their position of power? That doesn't actually punish the corporation which is performing these illegal acts.

I'm quite in favor of the corporate death penalty, and would love to see this be the first case in which it actually is rendered. Dissolve News Corporation out of existence for what they've done. It's the best way to establish the precedent that this kind of bullshit will not be tolerated.
posted by hippybear at 9:17 AM on March 28, 2012 [41 favorites]

I just hacked into this account to say that Rupert Murdoch and his courageous journalist friends have done nothing wrong, and anyone who even thinks that they ever did is just a hateful, jealous monster who wants to destroy the free press and force us all to live under Nazi oppression. If you disagree with that, I can hack into your account too - but please just memail me your password because it saves bribing a police officer to get it for me. Thanks. By the way the password on this account is "hotpants" which is a bit weird, and probably means the user is a sex criminal. See you later, peasant scum.
posted by the quidnunc kid at 9:17 AM on March 28, 2012 [18 favorites]

I'm quite in favor of the corporate death penalty, and would love to see this be the first case in which it actually is rendered. Dissolve News Corporation out of existence for what they've done. It's the best way to establish the precedent that this kind of bullshit will not be tolerated.

If you kill the company, everybody loses their jobs, and a proportion of employees (most of whom weren't actually involved in criminal activity; this isn't the Cosa Nostra) will find themselves unable to make mortgage repayments and losing their homes, through no fault of their own. Rather than killing the company, decapitate it, jail the top brass, bar any egregious offenders below the threshold of actual convictable criminality from management positions, and sell off the divisions. Perhaps some other media company is in need of a broadsheet newspaper or a cable TV division.
posted by acb at 9:22 AM on March 28, 2012 [4 favorites]

Makes Lord Tubby look like a rank amateur (which I guess he was, having to do the heavy lifting on removing documents from his office himself).
posted by Capt. Renault at 9:24 AM on March 28, 2012

Rather than killing the company, decapitate it, jail the top brass, bar any egregious offenders below the threshold of actual convictable criminality from management positions, and sell off the divisions.

That's effectively killing the company, and I'm in favor of it. And it's not just cable TV. BSkyB is the UK equivalent of DISH or DirecTV.
posted by hippybear at 9:25 AM on March 28, 2012 [2 favorites]

Corpirate death penalty does not mean that that demand goes away. Sell the assets, give the money to the victims, and be done with it. The next corporation will perhaps behave more ethically.

Do we wring our hands about the families that will be without a bread winner when we put criminals to death?
posted by cjorgensen at 9:26 AM on March 28, 2012 [5 favorites]

I know it is a bit afield, but I would like to see someone analyze whether the film critics at Murdoch owned papers rate movies higher that come out on Fox marquees (Fox Searchlight, Twentieth Century Fox). Maybe the metric at MetaCritic would be useful. I know Kyle Smith (of the New York Post) foams at the mouth when he thinks a movie has a liberal agenda (Wall-E).
posted by dances_with_sneetches at 9:27 AM on March 28, 2012 [2 favorites]

Rather than killing the company, decapitate it, jail the top brass, bar any egregious offenders below the threshold of actual convictable criminality from management positions, and sell off the divisions. Perhaps some other media company is in need of a broadsheet newspaper or a cable TV division.

We need to remove the option for plausible deniability in senior company officers. The type of sustained, flagrant abuses seen in NI and others such as Goldman etc can only exist in an atmosphere of tacit approval by, or the most wilful ignorance of, the top management. Neither should be acceptable, and both should be severely punishable.
posted by Jakey at 9:27 AM on March 28, 2012 [6 favorites]

http://isrupertmurdochdeadyet.com/ I spun that site up a while back. Unfortunately, I am way too busy to make it into what I would like it to be.
posted by cjorgensen at 9:29 AM on March 28, 2012

Also unfortunately, there has hasn't been a reason to update it.
posted by cjorgensen at 9:30 AM on March 28, 2012

The non-family shareholders have considered RM replaceable for quite a while now - Murdoch leaving would mean the opportunity to dump the unprofitable newspapers ( which RM is sentimental about) and News Corp stock would soar. But the Murdoch family has the majority of voting stock...
posted by Bwithh at 9:31 AM on March 28, 2012

Capt. Renault: A man the likes of Frick, Carnegie, Gould, et al, but of our own time, not of some regrettable past.

Agreed. But where's his publicly exhibited art collection? His public library scheme? His University? The stark truth is that "regrettable past ages" didn't suffer their overlords to be complete parasites. There always had to be the illusion of charity; some contribution to the public good. But that has changed: Murdoch's sheer public uselessness seems emblematic of an age that has all but given up the idea that there can be any kinds of moral boundaries imposed on money-making. This has to stop.
posted by Sonny Jim at 9:31 AM on March 28, 2012 [22 favorites]

Surely this...
posted by Talez at 9:32 AM on March 28, 2012

Great post, by the way. This is newsfilter done right.
posted by Blazecock Pileon at 9:38 AM on March 28, 2012 [1 favorite]

Excellent post, I've been trying to make sense of all these headlines of late but it does appear that News Corp resembles the mafia more then it does a traditional corporation.
posted by cell divide at 9:41 AM on March 28, 2012 [1 favorite]

There will be a live chat with Lowell Bergman and Neil Docherty at 1pm Eastern. You can submit questions now, and the chats are generally really informative-- the Online Engagement coordinator does a great job moderating. If you ask a question, use a name with the initials "MF," and we'll know that you're in the club.
posted by Mayor Curley at 9:42 AM on March 28, 2012 [2 favorites]

Looks like that joke about him being a "billionaire tyrant" on the Simpsons wasn't a joke.
posted by The Card Cheat at 9:43 AM on March 28, 2012

But the Murdoch family has the majority of voting stock...

The Guardian says they only have 39% of the voting shares. So a Murdoch ousting is not impossible.
posted by East Manitoba Regional Junior Kabaddi Champion '94 at 9:46 AM on March 28, 2012

Great job with the site Mayor Curley!
posted by East Manitoba Regional Junior Kabaddi Champion '94 at 9:47 AM on March 28, 2012

If you kill the company, everybody loses their jobs, and a proportion of employees (most of whom weren't actually involved in criminal activity; this isn't the Cosa Nostra) will find themselves unable to make mortgage repayments and losing their homes, through no fault of their own.

I disagree. The only way to clean up this corporate mess is to paint the janitor with the same broad brush as the CEO. If you can't get anyone to do your dirty work then you have to do it yourself. How many people would still eat meat if they had to be the one pulling the trigger of the stunbolt gun? If your corporation is doing bad things, YOU are doing bad things. It's just to easy to rationalize bad actions the further your finger is removed from the trigger.
posted by any major dude at 9:50 AM on March 28, 2012 [1 favorite]

If you kill the company, everybody loses their jobs, and a proportion of employees (most of whom weren't actually involved in criminal activity; this isn't the Cosa Nostra) will find themselves unable to make mortgage repayments and losing their homes, through no fault of their own.

Most of the people who work for mob-owned companies aren't involved in criminal activity, either.
posted by empath at 9:52 AM on March 28, 2012 [3 favorites]

I like the idea of stock dilution instead of direct fines as penalties for corporate crimes. The courts would decide the appropriate level of punishment; let's say in this case, the immediate issuance and auction of voting shares equal in number to those already in existence. The government auctions them off, and keeps the proceeds. The auction is immediately followed by a shareholder's meeting.
posted by fings at 10:00 AM on March 28, 2012 [10 favorites]

So, bottom line, will we see Murdoch in prison or not? Because I would really like to see that.
posted by Mental Wimp at 10:00 AM on March 28, 2012 [4 favorites]

Thank you for posting this.

I am stunned by the utter lack of awareness I find in Americans who consider themselves otherwise well-informed. There appears to be little outrage or visible concern over this ugly cancer masquerading as journalism, or the fact that such activities are not limited to the U.K. I've gotten tired of recounting the sordid story for people who blink at me and say things like "really, you mean like, Our Wall Street Journal?"
posted by kinnakeet at 10:00 AM on March 28, 2012 [5 favorites]

Do we wring our hands about the families that will be without a bread winner when we put criminals to death?

Well, in the UK and Australia, we don't put criminals to death. And in the US, they don't either, for the most part. (Only about 3% of death-row inmates end up being executed.)

I disagree. The only way to clean up this corporate mess is to paint the janitor with the same broad brush as the CEO. If you can't get anyone to do your dirty work then you have to do it yourself.

That works well in a perfectly spherical free-market textbook world where one is always free to follow one's conscience absolutely without consequences and where workers have sufficient security to judge potential employers' ethics quite severely before deciding whether to accept their pay. The real world doesn't work that way. Certainly not in if-you-don't-work-you-don't-eat USA.

Most of the people who work for mob-owned companies aren't involved in criminal activity, either.

There's a difference between working for the mob (as a driver or bookkeeper or someone else complicit in criminal activity) and working for an otherwise legitimate company that's owned by the mob. And I contend that it is inhumane to hold employees with little power responsible for the totality of the ethics of their ultimate employer.
posted by acb at 10:02 AM on March 28, 2012 [4 favorites]

Do we wring our hands about the families that will be without a bread winner when we put criminals to death?

uh

...maybe?
posted by This, of course, alludes to you at 10:05 AM on March 28, 2012 [1 favorite]

There will be a live chat with Lowell Bergman and Neil Docherty at 1pm Eastern.

Heading out to a meeting. Will look forward to reading the transcript of the 'live chat' later.
posted by ericb at 10:06 AM on March 28, 2012

I disagree. The only way to clean up this corporate mess is to paint the janitor with the same broad brush as the CEO.

I find this line of thought extremely troubling.
posted by joe lisboa at 10:15 AM on March 28, 2012

He depicts Rupert Murdoch's British operation as a criminal enterprise, routinely hacking the voicemail and computers of innocent people, and using bribery and coercion to infiltrate police and government over decades.

This is an outrage omg I am shocked anyone could think that.
posted by Decani at 10:35 AM on March 28, 2012

There's a difference between working for the mob (as a driver or bookkeeper or someone else complicit in criminal activity) and working for an otherwise legitimate company that's owned by the mob. And I contend that it is inhumane to hold employees with little power responsible for the totality of the ethics of their ultimate employer.,

So spin off all the subsidiaries that weren't involved in criminal conspiracy.
posted by empath at 10:46 AM on March 28, 2012

joe lisboa wrote:

I disagree. The only way to clean up this corporate mess is to paint the janitor with the same broad brush as the CEO.

I find this line of thought extremely troubling.

Why? I'm not saying you put a janitor in jail if he hasn't done anything wrong, I'm saying we shouldn't be swayed by the fact that those crooked dollars are being used to pay honest men. This is how the big banks got away with it in 2008, now, from what I read, there are even MORE credit default scams out there now than before the crash - all because we didn't want to put "honest" paper pushers out of their jobs. At what point is a person complicit in the criminal act? If we can't mark it then the entire organization must be dissolved. I've always been a proponent that there should be a certain amount of shame associated with working for a FOX owned organization. I love the Simpsons but over the years how man billions have all those "liberal" writers actual generated for someone like Murdoch to turn around and use it to stomp all over their ideals? Yeah the world is complicated - just the way the corporations want it to be.
posted by any major dude at 10:48 AM on March 28, 2012 [1 favorite]

It was to be expected that the crimes of the great criminal enterprise of the information age would be all about information, but it still amazes me, somehow.
posted by jamjam at 10:48 AM on March 28, 2012

Agreed. But where's his publicly exhibited art collection? His public library scheme? His University?

Point taken, but it must be said that often in such cases, their charity was anything but 'genuine' philanthropy -- Frick gave to buy good publicity and glorify his own name, Carnegie to do the same but largely to assuage his own guilt stemming from the Homestead Strike. Even at the time of those men's deaths, it was a common refrain that their charitable gifts could have been of much greater effect had they not extracted it from their workers at such human cost in the first place. But yes, I agree.
posted by Capt. Renault at 10:52 AM on March 28, 2012 [2 favorites]

Amateurs. There is but one master of the fine art of journalistic kung fu known as monstering.
posted by delfin at 10:53 AM on March 28, 2012

Y'all have identified the really interesting question behind the concept of the corporate death penalty. What to do with the corpse?

Bodies of large animals contain lots of valuable, complex chemicals, and nature has all sorts of mechanisms to reclaim these for re-use. Even a mid-sized corporation has physical assets, capital, contractual obligations, and employees. Are there any serious suggestions out there for how these should be handled, by either the law or the market?
posted by benito.strauss at 10:55 AM on March 28, 2012 [3 favorites]

Are there any serious suggestions out there for how these should be handled, by either the law or the market?

These kinds of things are already handled routinely when companies go insolvent. The state already steps in in a variety of circumstances and liquidates failing business enterprises. Usually in such cases, a company's physical and nonphysical assets are auctioned off with the proceeds going to creditors.

In some cases, whole functional divisions of an enterprise are sold as-is, including all currently active personnel, to private equity investors. So sometimes, the jobs aren't lost at all.

But ultimately, the bigger point is: if market theory means anything, then shutting down a business that abuses its place in the market or that simply embraces a failing business model is creatively destructive (God--I'm really starting to hate that term from over-use, though): assuming sufficient demand for the goods/services the failed company provided existed in the first place, the workers should quickly find reemployment with the next company that springs up to meet the demand in the market. That's how free markets are supposed to work in theory. So... Let companies fail even if it seems to hurt workers in the short run. If necessary, provide state subsidized job placement and re-training services, but in most cases, the market should fix the problem by itself, if free market theory is sound (which it probably isn't, but if it isn't, then all's fair anyway).
posted by saulgoodman at 11:06 AM on March 28, 2012 [2 favorites]

Sadly, at present we as a society (i.e. the West) lack an effective legal structure for dealing with corporate criminals - both corporations which commit crimes and the people in charge of them.

Fines are not a sufficient punishment or deterrent, because they are almost always inadequate and factored in as the cost of doing business. At the same time, a blanket presumption of guilt applying to all who work for a company makes a lot of people understandably uncomfortable: it seems to go against the presumption of innocence in many cases and it also seems to put people who had little or no control over their situation in the same place as those deciding company policy.

I am of the opinion that we need a better approach: something that has genuine deterrent effect without doing too much harm to those who are employees rather than employers or top-level managers (or, in the unlikely event that a department "goes rogue" or is taken over by a psychopath, any managers who were not to blame).

Perhaps this would involve a degree of strict liability for top-level staff, i.e. if your company does something wrong and you cannot provide evidence that, upon becoming aware of the wrongdoing, you immediately protested, then, within a set time-frame, publicised the wrong, and finally resigned, then you will be held personally liable for the crimes your company has committed. The limited liability of corporations is supposed to be a shield from risk, not from just punishment for wrongdoing. I suspect that something along these lines would ensure that those in charge of corporations made much more of an effort to keep track of what was going on and to avoid it.

Human nature being what it is, it seems quite likely that high-level executives would attempt to protect themselves with some kind of firewall or "veil of ignorance" in that kind of situation. However, one could make it an offence to do that, even implicitly; this set-up would also allow interested outsiders to "notify" managers of shenanigans at their company.

If you do remove the top-level management of a company - and possibly its largest shareholders - then it may be that the company will collapse. In that case, you would, as people have said, need some mechanism to dispose of the assets. That would not be beyond the wit of man. Companies go bankrupt every day. If anything, this would be more predicted, planned and manageable than a bankruptcy. The court could appoint trustees, the process could be divided into stages. It might be as simple as promoting lower-ranking managers.

This approach is just a sketch and could undoubtedly be improved. I suspect that the reason why we will not see anything like this in my lifetime has less to do with the practicality or potential bad consequences of such a scheme and more to do with the fact that it would subject the more powerful members of our society to the same scrutiny and discipline that they impose on their employees. I am sure that they would strongly resist having to taste their own medicine.
posted by lucien_reeve at 11:07 AM on March 28, 2012 [1 favorite]

The Guardian says they only have 39% of the voting shares. So a Murdoch ousting is not impossible.

But the way the shares are structured the Murdoch's have way more than that when it comes to voting. They also have the backing of some major investors. The last time I checked, and it has been a while, the Murdoch's directly controlled way past a majority share, and when you counted in the backers like this guy, it was up even more.
posted by cjorgensen at 11:23 AM on March 28, 2012

If we all hate this corporation's excessive reach and power-madness, but we fear the damage to individual employees in the event of a death sentence, then why not apoint a Special Master (or whatever) and break it up?
posted by wenestvedt at 11:28 AM on March 28, 2012 [1 favorite]

cjorgensen, clearly it would be really hard for shareholders to force Rupert out. I asked producer Neil Docherty and he thinks that shareholders are just waiting for Rupert to retire. (I sometimes have to be reminded that the man is 81 years old...)
posted by East Manitoba Regional Junior Kabaddi Champion '94 at 11:33 AM on March 28, 2012

An 11 year old thread on Digital Spy forums got bumped recently on talks of THOIC (The House of Ill Compute).

I'm not a Fortune 500 CEO, but I wouldn't base the security of my company's product on the back of my competitors subsidiary.
posted by wcfields at 11:37 AM on March 28, 2012

Murdoch's sheer public uselessness seems emblematic of an age that has all but given up the idea that there can be any kinds of moral boundaries imposed on money-making. This has to stop.

Indeed. And Murdoch is a perfect place to begin stopping it, epitomizing the dual role many have as both robber baron and defender (through the large megaphones bought by money and power) of the myth of the modern anglo conservative: that allowing a select few dynastic families to accumulate vast portions of society's resources is in fact an unquestionable moral good

And we see with this NewsCorp scandal how it inevitably ends - with not just a corrupt news baron, but a corrupt government and corrupt society, bought off by the money of aristocrats, convinced by giant media empires and advertising and pop culture owned by aristocrats
posted by crayz at 12:05 PM on March 28, 2012 [8 favorites]

I haven't paid too much attention to News Corp, but as I understand it, wasn't his son the heir apparent? Is that still the case following all of the NOTW stuff?
posted by I Havent Killed Anybody Since 1984 at 12:17 PM on March 28, 2012

The only way to clean up this corporate mess is to paint the janitor with the same broad brush as the CEO.

And after being painted with the same brush the janitor goes to the unemployment line and the CEO goes to the islands. Aside from that, it's a fine idea! Shame Fox News and Murdoch's tabs are otherwise employed; they're superb at that sort of work.
posted by octobersurprise at 12:35 PM on March 28, 2012 [1 favorite]

I've gotten tired of recounting the sordid story for people who blink at me and say things like "really, you mean like, Our Wall Street Journal?"

Many Americans also don't realize the News Corporation owns 75% of 'The National Geographic Channel'.
posted by ericb at 1:06 PM on March 28, 2012 [4 favorites]

*realize that*
posted by ericb at 1:07 PM on March 28, 2012

And after being painted with the same brush the janitor goes to the unemployment line and the CEO goes to the islands. Aside from that, it's a fine idea! Shame Fox News and Murdoch's tabs are otherwise employed; they're superb at that sort of work.

If Murdoch were content to take his billions, fly off to the islands and leave the world alone there would be no need for this thread. That janitor's life hasn't gotten better in his lifetime and that's due to pricks like Murdoch who are hell-bent on consolidating all the world's wealth in the hands of the top 1%. I'll bet that Newscorp doesn't employ a single janitor - probably outsourced the job years ago along with that janitor's pension and benefits.
posted by any major dude at 1:56 PM on March 28, 2012

Many Americans also don't realize the News Corporation owns 75% of 'The National Geographic Channel'.

I sadly learned this from my sister who just started working there (NatGeo TV). She says the new directive (a new CEO was just brought in from LA) is Deadliest Catch-style "reality" shows to compete with Discovery, TLC, etc.

RIP: National Geographic. We hardly knew ye.
posted by Sangermaine at 2:07 PM on March 28, 2012 [1 favorite]

Is it possible to die of Schadenfreude?
posted by The Whelk at 9:17 AM on March 28 [10 favorites −] Favorite added! [!]

I don't know, but I am literally wet with schadenfreude.
posted by MikeKD at 2:12 PM on March 28, 2012 [1 favorite]

any major dude,

You're being completely unrealistic and childish. The world is complicated because...the world is complicated. Simplistic black-and-white solutions can't and won't work and do more harm than good.

It feels good to self-righteously proclaim, "Better for them to be unemployed than to contribute to a monster like Murdoch!", but we're talking about actual people who would suffer. Apart from your idea not being practical outside of the above-mentioned perfectly-spherical perfectly efficient market, what would be the goal? Teach the evil rich a lesson by crushing the poor who would be the ones actually affected? Someone talked above about the market theoretically adjusting and people getting jobs, but that's more perfect-market bullshit. There would be many, many people who would suffer from such a move so that you can feel you've struck a righteous blow against corruption.

I'd be furious if I my job was gone because some executive way up above me had done something wrong, and now I have to hit the street after struggling to get a decent job. I'm sure as I struggle to find a job before I burn through my savings and can't pay rent I'll be comforted by the fact that we were totally moral and awesome and showed that guy what's what!
posted by Sangermaine at 2:16 PM on March 28, 2012

I'd be furious if I my job was gone because some executive way up above me had done something wrong, and now I have to hit the street after struggling to get a decent job.

Sangermaine, you act as if that hasn't already happened to millions of Americans in the last 5 years. I've spent my professional career getting screwed by myopic executives. Downsizing, outsourcing, stripping of benefits, doubling up on job tasks without compensation, we've all experienced this either personally or through family members. When the fuck is it going to stop? If tomorrow we revoked the charter of every corporation that broke the law millions would be on the street but do you really believe a phoenix of smaller HONORABLE businesses wouldn't immediately rise in their ashes? How many small newspapers have been put out of business by Newscorp in the last 15 years? Where did your sympathy lie then?
posted by any major dude at 2:30 PM on March 28, 2012 [1 favorite]

I'd be furious if I my job was gone because some executive way up above me had done something wrong, and now I have to hit the street after struggling to get a decent job.

And if it happened to enough people, and enough people got angry, and there was some some accountability....

Also: Enron, MCI, etc.
posted by cjorgensen at 5:27 PM on March 28, 2012

RIP: National Geographic. We hardly knew ye.

I'm sure you have this in the US as well, but they opened a NatGeo megastore out here that sells NatGeo branded formal clothes, ties, fashionable lady handbags, and cupcakes / coffee. NatGeo had sold out many many moons ago.
posted by the cydonian at 5:58 PM on March 28, 2012

James Murdoch to step down as BSkyB chairman
posted by futz at 6:39 AM on April 3, 2012