News Corporation scandal

The News Corporation scandal developed in mid-2011 out of a series of investigations following up the News of the World royal phone hacking scandal of 2005–2007. Where initially the scandal appeared contained to a single journalist at News Corporation subsidiary News of the World, with the 2007 jailing of Clive Goodman and the resignation of then editor Andy Coulson, investigations eventually revealed a much wider pattern of wrongdoing. This led to the closure of the News of the World on 10 July 2011, an apology by Rupert Murdoch in an advertisement in most British national newspapers, and the withdrawing of News Corporation's bid to take over the majority of BSkyB shares it did not own. However, investigations continued into what the company and individuals at the company knew of the phone hacking and when, as well as into other issues, including questions around police bribery.

United Kingdom

Main article: News International phone hacking scandal

Phone hacking

Main articles: News of the World royal phone hacking scandal and News of the World phone hacking scandal investigations

Police corruption

In a September 2010 interview broadcast on 7 July 2011, on the BBC Radio 4 news programme The World at One, former News of the World features editor Paul McMullan made an admission relating to police corruption. He told of having used material obtained by a colleague's bribery of a police officer as the basis of a series of articles published over several years on Jennifer Elliott, the daughter of the actor Denholm Elliott. He stated, 'The going rate for that kind of thing might have been two to five hundred pounds and that would have been authorised, and he [i.e. the police officer] would have been paid... and he would have been on the lookout for another story...' The articles described Ms Elliott's destitute situation and stated that she had worked as a prostitute. Jennifer Elliott killed herself in 2003. In Mr McMullan's opinion the News of the World — specifically, his own articles — contributed significantly to her suicide.^[1] In 2011, the paper knowingly used private investigators to gain stories from corrupt police officers.^[2]

Operation Elveden

Main article: Operation Elveden

In July 2011, the Metropolitan Police launched Operation Elveden, a probe examining illicit payments to police officers.

United States

News Corporation owns a multitude of news outlets in the United States, including the New York Post, The Wall Street Journal, and the Fox News Channel. Several media critics have called for investigations into whether they too engaged in phone hacking activities. In addition to any possible illegal activities in the U.S., News Corporation and/or its executives might also face civil and criminal liability under the Foreign Corrupt Practices Act.

On February 24, 2011, The New York Times reported that court documents in another, unconnected case revealed that the senior executive at News Corporation that Judith Regan referred to in her 2007 wrongful termination case against HarperCollins was Roger Ailes, head of Fox News. She claimed he had encouraged her to lie two years earlier to federal investigators. They were vetting Bernard B. Kerik for the job of Homeland Security secretary, and Ailes allegedly wanted to protect his close friend Rudy Giuliani who was then running for president. HarperCollins settled her case for $10.75 million.^[3]

According to a former New York City police officer who spoke to The Mirror in 2009, the News of the World also attempted to retrieve private phone records of victims of the September 11 attacks.^[4] In light of the suspected hacking, Senate Commerce Committee chairman Jay Rockefeller suggested that a U.S. investigation of News Corporation should be launched.^[5] On 14 July, the Federal Bureau of Investigation announced it was launching an investigation into alleged hacking by News Corporation.^[6]

New investigations might also consider issues which had been raised in the past. In 2008, Dan Cooper, one of the co-founders of the Fox News Channel, alleged that network president Roger Ailes had threatened to ruin his long-time agent's business if Cooper wasn't dropped as a client. This followed an interview Cooper had given to David Brock for New York magazine shortly after his Fox contract ended in June 1997. Cooper concluded that Ailes had pre-publication knowledge of his interview with Brock, believing that he had accessed Brock's phone records through Fox News' "Brain Room", which he claimed "housed a counterintelligence and black ops office."^[7][8] Fox News denied Cooper's allegations.^[9]

On 20 July 2011, US Senator Frank Lautenberg wrote a letter to the Department of Justice requesting that the on-going FBI probe include allegations that Floorgraphics had also been hacked by News America Marketing, a major marketing business owned by News Corporation.^[10] On 21 July, it was reported that representatives of the US Dept. of Justice and the FBI had begun investigation into the Floorgraphics allegations.^[11]

News Corp is also being investigated over claims that senior executives misled investors in 2011, causing the company's stock to be traded at an artificially high price. A US class action has been filed for investors who purchased News Corporation common stock between March 3, 2011, and July 11, 2011. ^[12][13]

On 11 July 2011, a group of shareholders led by Amalgamated Bank who were already suing News Corps over the purchase of Rupert Murdoch's daughter's media company, Shine Group,^[14] updated the lawsuit to include accusations that the board of News Corp "fail[ed] to exercise proper oversight and take sufficient action since news of the hacking first surfaced at its subsidiary nearly six years ago."^[15] On 13 September they added further charges^[16] concerning the Floorgraphics case and the behaviour of another of News Corps subsidiary companies, NDS Group.^[17] The shareholders' attorney said that the phone hacking which took place in the UK was "part of a much broader, historic pattern of corruption at News Corp., under the acquiescence of a board that was fully aware of the wrongdoing, if not directly complicit in the actions." News Corp has yet to issue a statement on the new allegations.^[16]

Australia

In light of News Corporations global review, John Hartigan the boss of News Corps Australian company News Limited, announced a review of all payments in the previous three years, and that he was personally willing to co-operate with any Australian Government led inquiry.^[18] On 22 July, it was reported that two former Victorian Supreme Court judges, Frank Vincent and Bernard Teague, will act as independent assessors of how the review is run and will also assess its outcome.^[19]

In a recent action of wrongful dismissal by the editor in chief of the highest read daily newspaper against The Herald Sun newspaper, published by a subsidiary of the defendant, News Limited, accusations about the reliability of Mr Hartigan as a witness under oath have been made. During the period relevant to the proceedings, Mr John Hartigan was the chairman, and chief executive officer, of News Limited. Justice J Kaye deliberated in his 2010 findings against him in his role as boss of NewsCorp. Specifically Justice Kaye found Hartigan's evidence to be unreliable. Justice Kaye further commented that "were aspects about his evidence, which lead him to be cautious about accepting a number of critical features of it."^[20]

The Australian Greens called for a parliamentary inquiry into News Limited, but Hartigan directly denied allegations by both the Greens and the governing Labor party that News Limited has been running a campaign against them, describing his group's journalism as "aggressive but fair."^[18]

The administration of Prime Minister Julia Gillard stalled a ruling by an independent panel for Sky's bid to run the Australia Network, imposing a "national interest" bar on the process. After the Murdochs had appeared in front of the UK Culture, Media and Sport Committee on 19 July, Gillard commented that: "When people have seen telephones hacked into, when people have seen individuals grieving having to deal with all of this, then I do think that causes them to ask some questions here in our country."^[18]

On the 13 September 2011, the government announced an inquiry into the country's media. Areas of scrutiny include the protection of privacy and the role of the Australian Press Council.^[21]

On the 21 September 2011, documents were leaked to the news website Crikey detailing a proposed rebranding of News Limited as News Australia.^[22]

Criticism of coverage by News Corporation-owned outlets

Various News Corporation owned media outlets have come to defense of News Corporation, and these defense have themselves met with criticism. The Wall Street Journal, a News Corporation owned outlet, opined that "politicians and our competitors are using the phone-hacking years ago at a British corner of News Corp. to assail the Journal, and perhaps injure press freedom in general." ^{[23] [24][25][26][27]} The Times of London, also owned by NewsCorp, published an editorial cartoon labeled "Priorties" that depicted three naked Somalians holding empty bowls. One said, "I've had a bellyful of phone-hacking ...".^{[28][29][30][31]}

Researchers from the Australian Centre for Independent Journalism reported that Newscorp's Australian papers gave the scandal less coverage than independent papers.^[32] The authors also reported that "all papers carried at least one editorial [...] on phone hacking [...] Not one editorial supported the idea that there should be an inquiry into Australia's media."

See also

• Journalistic scandal

References

1. ^ iPlayer, UK: BBC, http://www.bbc.co.uk/iplayer/console/b012bxf8 ^{[dead link]}
2. ^ Murder trial collapse exposes News of the World links to police corruption, The Guardian, 11 March 2011
3. ^ Russ Buettner, Fox News Chief, Roger Ailes, Urged Employee to Lie, Records Show, The New York Times, February 24, 2011
4. ^ "Phone hacking: 9/11 victims 'may have had mobiles tapped by News of the World reporters'". mirror.co.uk. 2009-08-11. http://www.mirror.co.uk/2011/07/11/phone-hacking-9-11-victims-may-have-had-mobiles-tapped-by-news-of-the-world-reporters-115875-23262694/. Retrieved 2011-07-12. 
5. ^ "Phone-hacking: US senator calls for News Corp probe". BBC News. 13 July 2011. http://www.bbc.co.uk/news/world-us-canada-14132168. Retrieved 2011-07-14. 
6. ^ "FBI to probe Murdoch's company over Sept. 11 allegation". CNN. 2011-07-14. http://www.cnn.com/2011/CRIME/07/14/us.hacking/index.html. Retrieved 2011-07-15. 
7. ^ "I made the connections. Ailes knew I had given Brock the interview. Certainly Brock didn't tell him. Of course. Fox News had gotten Brock's telephone records from the phone company, and my phone number was on the list. Deep in the bowels of 1211 Avenue of the Americas, News Corporation's New York headquarters, was what Roger called the Brain Room. Most people thought it was simply the research department of Fox News. But unlike virtually everybody else, because I had to design and build the Brain Room, I knew it also housed a counterintelligence and black ops office. So accessing phone records was easy pie." - Dan Cooper, Naked Launch: The Prologue
8. ^ How Roger Ailes Built the Fox News Fear Factory, Page 9 of 13, Rolling Stone, 25 May 2011
9. ^ Fox News Knocks Down 'Brain Room' Claim, Portfolio.com, 10 January 2008
10. ^ Sen. Lautenberg Letter
11. ^ Michael Isikoff, NBC News, US looks into alleged hacking by News Corp.'s ad arm
12. ^ 4-Traders EWS CORP CLS A : Hagens Berman LLP Investigates News Corporation Securities Law Violations and Expanded Class Period
13. ^ Hagens Berman class action
14. ^ Meg James (18 March 2011). "Bank sues News Corp. over purchase of Shine Group". LA Times. http://articles.latimes.com/2011/mar/18/business/la-fi-newscorp-shine-20110318. Retrieved 13 September 2011. 
15. ^ Richard Blackden and Josie Ensor (11 July 2011). "Shareholders sue News Corp for failing to take early action on phone hacking scandal". The Telegraph. http://www.telegraph.co.uk/news/uknews/phone-hacking/8630545/Shareholders-sue-News-Corp-for-failing-to-take-early-action-on-phone-hacking-scandal.html. Retrieved 13 September 2011. 
16. ^ ^{a b} Ted Johnson (13 September 2011). "Shareholders add to charges against News Corp.". Variety. http://www.variety.com/article/VR1118042721?refCatId=14. Retrieved 13 September 2011. 
17. ^ Ed Pilkington (13 September 2011). "News Corp shareholders lodge complaint against Rupert Murdoch". The Guardian. http://www.guardian.co.uk/media/2011/sep/13/news-corporation-shareholders-complaint. Retrieved 13 September 2011. 
18. ^ ^{a b c} "Phone hacking: Australian PM promises 'hard questions'". BBC News. 19 July 2011. http://www.bbc.co.uk/news/world-asia-pacific-14212954. Retrieved 19 July 2011. 
19. ^ "Judges to oversee local News review". The Australian. 22 July 2011. http://www.theaustralian.com.au/business/media/judges-to-oversee-local-news-review/story-e6frg996-1226099345435. Retrieved 23 July 2011. 
20. ^ Guthrie v News Limited 2010 VSC 196 (14 May 2010)
21. ^ Associated Press (13 September 2011). "Australia to investigate media after UK phone-hacking scandal". The Guardian. http://www.guardian.co.uk/world/2011/sep/13/australia-investigate-media-phone-hacking. Retrieved 13 September 2011. 
22. ^ Bonnie Malkin (21 September 2011). "Rupert Murdoch's News Limited to change name after phone hacking". The Telegraph. http://www.telegraph.co.uk/news/uknews/phone-hacking/8778424/Rupert-Murdochs-News-Limited-to-change-name-after-phone-hacking.html. Retrieved 21 September 2011. 
23. ^ "News and Its Critics". The Wall Street Journal. 18 July 2011. http://online.wsj.com/article/SB10001424052702303661904576451812776293184.html?mod=djkeyword. 
24. ^ Coverage of responses:[1]
25. ^ Wall Street Journal Criticised After Hitting Back At Critics Accusing Them Of 'Schadenfreude' | World News | Sky News
26. ^ "Wall Street Journal editorial raises hackles; is David Cameron on shaky ground? - BlogPost - The Washington Post". The Washington Post. 18 July 2011. http://www.washingtonpost.com/blogs/blogpost/post/wall-street-journal-editorial-raises-hackles-is-david-cameron-on-shaky-ground/2011/07/18/gIQADbfiLI_blog.html. 
27. ^ Media Critics Pounce on Self-Serving WSJ Op-Ed Defending News Corp. | The Wrap Media
28. ^ Mackey, Robert (21 July 2011). "Cartoon in Murdoch's Paper Calls Hacking Inquiry a Distraction From African Famine". The New York Times. http://thelede.blogs.nytimes.com/2011/07/21/cartoon-in-murdochs-paper-calls-hacking-inquiry-a-distraction-from-african-famine/. 
29. ^ "News Corp. Trips Up Again With [Insert Adjective Cartoon"]. Reuters. 21 July 2011. http://www.reuters.com/article/2011/07/21/idUS200117163420110721. 
30. ^ Murdoch's Times Would Like to Change the Subject - Global - The Atlantic Wire
31. ^ Murdoch-Owned Times Cartoon About Hacking Scandal Draws Fire (VIDEO, PHOTO, POLL)
32. ^ Wendy Bacon, Jenna Price News of the World Scandal a litmus test for independent journalism in Australia