Motley Moose – Archive

Since 2008 – Progress Through Politics

FALL OF THE HOUSE OF MURDOCH XXIII: Bernstein on Murdoch and Nixon: Floorgraphics Smoking Gun

Bernstein on the Watergate Analogy and the Culture of Lawlessness

If you think the Watergate analogy is hyperbolical or fanciful, don’t forget it was first made by Carl Bernstein himself in The Daily Beast nearly three months ago

The circumstances of the alleged lawbreaking within News Corp. suggest more than a passing resemblance to Richard Nixon presiding over a criminal conspiracy in which he insulated himself from specific knowledge of numerous individual criminal acts while being himself responsible for and authorizing general policies that routinely resulted in lawbreaking and unconstitutional conduct. Not to mention his role in the cover-up. It will remain for British authorities and, presumably, disgusted and/or legally squeezed News Corp. executives and editors to reveal exactly where the rot came from at News of the World, and whether Rupert Murdoch enabled, approved, or opposed the obvious corruption that infected his underlings.

And here he is, in a Guardian interview today where he makes the same point

The parallels with Watergate… Had to do with the culture itself that made this possible. In the Nixon Whitehouse Nixon was responsible for the sensibility that permeated the place, that had to do with unconstitutional acts with a cynicism about the political process and how it was practised, and a disregard for the law. And it became apparent to me, as I read more and more what was happening here, that really at bottom what this hacking furore is about, it’s about a culture in the newsroom that has nothing to do with real journalism, real reporting (which is very simply put the best obtainable version of the truth) but rather has to do with serving up both the lowest common denominator of information and calling it news, and obtaining it through a methodology which is outrageous, whether you’re talking about hacking or other kinds of invasions of privacy, and that the atmosphere in that newsroom is a product of the culture that Murdoch in the News of the World .

I’ve always said that Murdoch’s Wizard of Oz like appearance before the House of Commons Select Committee this summer – the first time the most powerful man in my country had faced the people’s elected representatives – was the crucial moment. Murdoch ruled by fear, by politicians self censoring and second guessing his movements. The revelation that he was a rather frail crank oldy man suddenly undermined the fear, and frankly did much to diminish his effective power. As Bernstein says:

I think his power as it were is diminished, because I don’t think he’s held – as a result of what we’ve heard and seen – in the same kind of awe by both his peers and those who feared. At the same time I think it’s a mistake to oversimplify any of this. Is his power over? Is he all good or all bad. I think that’s much too simple.

Let me state for the record. I have no personal opinions of Rupert himself. I’ve never met him. I’ve heard he can be a deeply loyal father and boss. However, the empire he has accumulated , the modal monopoly it deployed to create a ‘market in news’ which was corrupt, was used to game legislation, blackmail politicians, intimidate opponents and destroy the lives of innocent people through tabloid exposure using illegal mean…

That was unequivocally bad, and we should keep campaigning for that empire to be dismantled.

Quiet Intensity: The Raft of Ongoing Investigations

So, while things may seem to be quiet on the Murdoch scandal front, but with three police investigations ongoing in the UK (into phone hacking, computer hacking and payments to police), a public inquiry and two parliamentary committees, it won’t stay like that for long in the UK. Like all criminal scandals, the onus on investigators is to compile evidence – and much more is coming to light.

Just this week it’s been revealed the James Murdoch’s senior PR advisor has resigned: one of the arrested journalists is joining Andy Coulson in suing News International; continued threats to Tom Watson who tirelessly campaigned on this issue in Parliament, the revelation of 11 million emails, and details of illegal practices in other Murdoch tabloid titles, apart from the now defunct News of the World.

So the culture Bernstein talked about extended to Murdoch’s other titles. What is the chance it didn’t extend to the US too?

Ad has been diaried before, there are now three prongs to the ongoing DOJ investigation into Newscorp: the most salient being the Foreign Corrupt Practices Act (it’s illegal to bribe foreign officials as Newscorp seems to have done with British police officers), rumours still of hacking victims on US soil, and by far the least known, but potentially the most deadly, an investigation into an old anti-trust suit from a few years ago, the Floorgraphics case, which could leave Newscorp vulnerable to RICO statutes.

U.S. investigators are looking into potential antitrust activities of Murdoch’s News America Marketing Group, which specializes in producing in-store ads, coupons, advertising inserts and other promotional materials for supermarkets and retail outlets worldwide.

Investigators reportedly are seeking documents relating to a 2009 trial of a suit against News America by a New Jersey advertising company, Floorgraphics, which had accused News America of, among other things, hacking into its computer systems and lying to its customers. The case was settled for an undisclosed sum, and News America subsequently acquired Floorgraphics.

All told, News America has shelled out $655 million to settle suits against competitors alleging unsavory business practices

As Crains put it two days ago (hat tip to the ever watchful Ceebs)

Investigations of News Corp.’s illegal conduct initially involved just News of the World, which represented only 1% of annual revenue for the New York-based media company, publisher of The Wall Street Journal and operator of the Fox television networks. The marketing unit, which promotes products through supermarket coupons, accounted for four times that revenue and about 12% of profit for fiscal 2011.

Rivals of News America Marketing have claimed in court papers that it prospered by violating antitrust laws. It also hacked into a Floorgraphics password-protected website, one of its own lawyers told the jury at the 2009 trial.

“There is a pattern of anticompetitive behavior by News Corp.,” said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, a government watchdog group. “We’ve seen it in Britain, and we’ve seen it in America.”

Remember, News America Marketing provides 12% of Newscorp profits. That’s a really compared with the 1% provided by the biggest English language paper, the News of the World, before it was closed.

So though it seems quiet, that doesn’t mean a lot isn’t going on under the surface. Indeed the ‘unnamed source’ regularly talking about Newscorp affairs is either a whistleblower, or some desperate damage limitation..

Remember all the Presidents Men? The movie ends with Bernstein and Woodward filing more stories: it took two years before Nixon resigned, and another year or two after that for the final criminal indictments to be handed down.

Don’t despair: watch this space

Crossposted on Daily Kos and on my own website


  1. Rashaverak

    It is most informative.

    One of the biggest threats is the potential loss of all authorizations issued by the U.S. Federal Communications Commission.  This would relate to Fox-owned broadcasting stations.  However, it would not necessary cripple the Fox Television Network, or the Fox cable channels, as it is at least theoretically possible to operate such networks without holding FCC Authorizations directly.  Fox entities could lease microwave and satellite links needed for program distribution from independent third parties.

    The FCC is likely to refrain from taking any action itself, at least not before any criminal convictions.

    A. Range of Relevant Non-FCC Misconduct

    3. In the Character Policy Statement. we indicated that the Commission would concern itself with “misconduct which demonstrates the proclivity of an applicant or licensee to deal truthfully with the Commission and to comply with our rules and policies.” 102 FCC 2d at 1190-91. We therein generally indicated that the Commission would consider only adjudicated (a) fraudulent representations to governmental units, (b) criminal misconduct involving false statements or dishonesty, and (c) broadcastrelated violations of antitrust or other laws dealing with competition. 102 FCC 2d at 1195-1 197, 1200-1203. However. upon further reflection, we believe a propensity to comply with the law generally is relevant to the Commission’s public interest analysis, and that an applicant’s or licensee’s willingness to violate other laws, and, in particular. to commit felonies, also bears on our confidence that an applicant or licensee will conform to FCC rules and policies.

    4. Thus, evidence of any conviction for misconduct constituting a felony will be relevant to our evaluation of an applicant’s or licensee’s character because all felonies are serious crimes, any conviction provides an indication of an applicant’s or licensee’s propensity to obey the law. We also recognize that not all convictions for serious crimes are equally probative. but, in the context of this Policy Statement, it is not necessary or appropriate to establish a “hierarchy” of felonies that may arise in individual cases.

    5. While conviction for a felony raises questions of whether an applicant or licensee has the requisite propensity to obey the law. we continue to believe that there are mitigating factors that must be taken into consideration in our deliberations. We will continue to look at the kinds of factors set forth in the Character Policy Statement in making determinations in particular cases, e.g.. the willfulness of the misconduct, the frequency of the misconduct. the currentness of the misconduct, the seriousness of the misconduct, the nature of the participation (if any) of managers or owners, efforts made to remedy the wrong, overall record of compliance with FCC rules and policies, and rehabilitation. See 102 FCC 2d at 1227-29.

    6. The Character Policy Statement stated that “broadcast related” violations of the antitrust laws were specifically relevant. Because of the interrelationship of the mass media, we see no reason to limit our focus to broadcast related violations. We therefore believe that adjudicated violations of antitrust or anticompetitive laws involving any media of mass communications, as defined in 47 U.S.C. ยง 309(i), also are relevant to our licensing decisions. However, as with felony convictions, the same factors of mitigation will apply, and applicants and licensees will be permitted to demonstrate that the misconduct should not result in disqualification.

    B. Pending Proceedings Relating to Non-FCC Misconduct

    7. We continue to believe that it is appropriate to refrain from making licensing decisions based on mere allegations of relevant non-FCC misconduct, even where those allegations have resulted in an indictment or are otherwise in the process of being adjudicated by another agency or court. Character Policy Statement, 102 FCC 2d at 1204-05. We indicated in the Character Policy Statement that we retain discretion to condition grants on the outcome of proceedings involving non-FCC misconduct.  Id. at 1206, n.66. We now wish to emphasize that where such matters remain pending in another forum we may, in appropriate cases, condition any grant of the application before us on the outcome of that proceeding. That is, we will consider conditioning the grant in any case in which a matter being litigated in another forum could result in an adjudication that an applicant before the FCC has engaged in relevant non-FCC related misconduct and an adjudication of that misconduct raises serious questions as to whether the applicant before the FCC is possessed of the requisite propensity to obey the law. Where we have determined that a condition is appropriate, we will generally await the decision by the ultimate trier of fact before taking any additional action. If that decision is adverse to the applicant, we will revisit the conditioned grant to determine whether we would have made that grant if the adjudicated misconduct had been before us. We will consider the appropriateness of adding a condition in connection with all types of broadcast applications, e.g., applications for new licenses and the renewal of existing licenses.

    Policy Statement And Order, 5 FCC Rcd 3252 (1990), reconsidered in part, 6 FCC Rcd 3448 (1991)

  2. anna shane

    and the furies are flying. this is sooo cool.  Once one thing can be investigated, it leads to goodness know where (or in this case, badness).  Hope we get to see him do the perp walk.  I agree, it’s always more fun when they’ve broken American laws, just ask Martha – we like to see the mighty fall, and the da’s like the publicity.  We elect our da’s.  

  3. Jacoby_Jones

    Because he’s involved in the Floor Graphics issue as he was running US Attorneys office in NJ at the time and refused to go after the News Corp arm criminally.

    It just so happens Ailes loves Christie and no doubt if Christie would run, would make Fox the 24 hour “Chris Christie is Great” television network because just like he made the floor Graphics mess go away criminally as US Attorney in New Jersey, he could make this bigger News Corp mess go away as President.  

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