Murdoch's World (32 page)

The questioning briefly gave way to spectacle when Jonathan May-Bowles darted toward Murdoch and attempted to slap him in the face with a platter of shaving cream. One of Murdoch's lawyers stepped forward to block him. Wendi Deng Murdoch, who had played volleyball competitively as a schoolgirl, leaped above the lawyer and slapped May-Bowles, knocking him, the lawyer, and herself to the ground. “Mr. Murdoch, your wife has a very good left hook,” Watson said. Whittingdale cleared the room of all but the MPs, parliamentary staffers, witnesses, their legal team, and the security guards, whose incompetence at allowing the stunt to unfold led to whispers that News Corp's PR advisers had choreographed the event to gain sympathy for the media mogul. The
Telegraph
sent one of its foreign correspondents to profile the
middle school instructor in her hometown of Xuzhou who taught
Deng Wen Ge (her given name) how to play volleyball.

May-Bowles, a
twenty-six-year-old stand-up comic and activist who performed under the name Jonnie Marbles, pleaded guilty later in the month to charges of assault and causing harassment, alarm, and distress. He faced his charges stoically, invoking a familiar phrase: “I'd just like to say that this is the most humble day of my life.”

In New York, some executives were questioning whether it was time to coax Murdoch to allow his hired hands to run the company he had worked so hard to build. Chase Carey, notable among reporters and fellow executives for his handlebar mustache and his evident lack of hunger for the spotlight, had worked for a generation at News Corp helping to guide one division after another. Investors trusted his judgment.

But Murdoch made his verdict on himself clear: he was not ready to yield control of News Corp—especially not to a non-Murdoch.

A NEW legal front was beginning to open in the States. An allegation stated that the actor Jude Law's mobile phone had been hacked when traveling through JFK airport in New York City. Even though the incident involved reporters for Murdoch's British tabloids, and not the
New York Post
, it would show that the tainted practices had jumped the Atlantic. Since the Federal Corrupt Practices Act criminalized payments to government officials abroad,
News Corp moved swiftly to hire many top lawyers—among them former US attorney general Michael Mukasey, former US attorney for New York City Mary Jo White, and Mark Mendelsohn, the former top Justice Department official over federal corruption cases involving American companies. “News Corp has
pretty much assembled a dream team of all-star foreign corrupt practice litigators,” Columbia University legal scholar John Coffee, one of the nation's foremost authorities on corporate governance, told me. “You don't put all that investment into this without having some serious concerns about what might happen.” The company established a new “management and standards committee,” reporting to Joel Klein, who would in turn report to Viet Dinh, the former assistant US attorney general and News Corp director who had been godfather to one of Lachlan Murdoch's children. The MSC was seen as running damage control. In time, however, it would hand police material damning dozens of News International employees. Klein had to prove to US authorities that the company was being fully cooperative.

Those not in the family—those who were no longer “mates”—no longer exhibited “mateship.” The editor,
Colin Myler, had seethed over the closing of the
News of the World
. He had been recalled from the
New York Post
to clean up the mess, and yet the company folded the paper under his editorship. “Of course, I didn't close it,” Myler said
after publishing the paper's final edition several days earlier. “This is not where we wanted to be or deserved to be, but as a final tribute to 7.5 million readers this is for you and the staff.” He led more than a hundred staffers, many of them openly weeping, all cheering, out of the cavernous atrium of the
News of the World
offices at Wapping, around the block to a nearby pub.

Many others had aired their grievances behind closed doors. But
along with Tom Crone, Myler decided to make a public break. They issued a joint statement: James had known about the “for Neville” email, they said, before approving the big secret payment to Taylor. The younger Murdoch knew that hacking was rife. The Murdochs did not just own the company; Myler and Crone's actions would ensure they owned the scandal too.

17

THE JEWEL IN THE CROWN

WHEN RUPERT MURDOCH BOUGHT THE Dow Jones Company in late 2007, he did so to acquire its prized title, the
Wall Street Journal
. The Dow Jones newswires covered the world of business at a feverish pace, competing with Reuters and Bloomberg for scoops. But the
Journal
had global reputation and reach. It was prominent and widely circulated; it had among the most subscriptions of any paper in the US. Murdoch, like the other people populating the
Forbes
list of billionaires, relied on it religiously for news about business, finance, and the regulations that could affect commerce. The
Journal
became the jewel in the crown of Murdoch's media empire. He loved owning it. And yet
Murdoch did not much like the
Journal
itself.

Murdoch's first editor at the
Journal
, Marcus Brauchli, had been installed less than a year before. Compact, fit, smart, with a sly smile and a deceptive wit, Brauchli had come up through the ranks at the
Journal
, making his mark in China and rising within the editing
ranks to win the competition to replace the beloved Paul Steiger as managing editor. (The term “managing editor” for the paper's most senior news executive was a relic, peculiar to the
Journal
, for the job that elsewhere would be editor in chief or executive editor.) Even before getting the top spot, Brauchli had been setting about to modernize the place, energize the paper's digital offerings, and make a greater push globally.

Murdoch had his own ideas. He told Brauchli that readers resented setting aside editions with long pieces to digest later in the week because they felt rebuked by piles of unread papers. The feature called the “A-hed” had been a defining element of the
Journal
for decades—a front-page story that provided a great read about a development that was often of little or no immediate consequence. It was
an innovation of the legendary Barney Kilgore, who reinvented the paper amid the chaos of the Great Depression. It was one of two narrative stories placed every day on the front page. The other often generated a behind the scenes look at corporate infighting or malfeasance. Murdoch seemed to suggest that both the A-hed and the daily in-depth piece should disappear.

Moreover, Murdoch
had little tolerance for the “paywall” that required people to purchase a digital subscription to get access to the paper's full site. Murdoch wanted anyone anywhere in the world to be able to read
Journal
stories at any time, on any device.
What's the point of doing all this fine journalism if people can't see it?
he wondered. The
Journal
's paywall was the envy of other newspaper owners, who felt they could not replicate the
Journal
's value to entrepreneurs and investors. Executives at Dow Jones braced for the loss of revenue.

Early on, at a banquet dinner with bureau chiefs who had traveled to New York from all over the world, the chairman sketched out how he thought a story should be told: in
“as few words as possible.” Murdoch underscored that these changes originated with him. His pick as publisher, Robert Thomson, told bureau chiefs that some projects
celebrated in
Journal
's newsroom had the
“gestational period of a llama.” (Eleven-and-a-half months, if you were wondering.) Consequently the
Journal
moved away from stories that deconstructed how business and the markets work—what editors called “how-why-will” stories. Investigative reporting, often strong, still arrived each day, or at least each week, but Thomson put less urgency on it.
Thomson saw many reporters on the
Journal
staff as complacent, trapped in a mind-set defined by intellectuals and liberals on the Upper West Side and the
Columbia Journalism Review
.

Thomson's opinions mattered. For though he had been named publisher of the
Journal
, rather than managing editor, it became clear that his editorial vision would guide the paper—which is to say, Murdoch's vision would guide the paper. Thomson even took a second office on the newsroom floor. It was a break in tradition for
Wall Street Journal
publishers. Fighting up a rear-guard and ultimately futile defense, Brauchli made sure it was located in a no-man's land near its sister publication,
Barron's
.

Thomson was born to parents without means in a small town several hours away from Melbourne. He
showed verve as a rookie reporter for the Melbourne
Herald
, the paper once run by Murdoch's father, and rose to become a reporter in China for the Associated Press and the
Financial Times
. Lean, with a stoop caused by a severe back ailment, Thomson favored black pants and thin ties, and he adopted a spiky hairstyle. He wrote memos littered with such obscure phrasings that they stumped even the
Journal
's hyperliterate staff; he twitched at the scent of stories that were intriguing, devoted more to color than exacting precision, though his reporters would later find he could trip them up on the fine points of their stories, too.

Murdoch saw in Thomson a kindred spirit, and it didn't hurt that the younger man had been slighted by a rival. Thomson had been the US editor of the
Financial Times
, but was hired away by Murdoch to be editor of the
Times of London
after being passed over to become
the
FT
's next executive editor. The two men shared a March birthday separated by precisely three decades; they both married Chinese-born women. (Thomson's wife, Wang Ping, was actually a few years older than Wendi Deng Murdoch.) The two families periodically vacationed together, with the Murdoch girls frolicking with the Thomson boys. Murdoch became not just Thomson's employer and mentor, but by some accounts his best friend as well.

In summer 2007, as Murdoch put the final touches on a package to induce the controlling Bancroft family to sell him the
Wall Street Journal
and Dow Jones, he had to address the Bancrofts' notions of editorial independence. Given the paper's tenuous finances, the sale made financial sense but he had to overcome the Bancrofts' pride. “They weren't able to grow the company and lost interest in running it,” said Beijing-based reporter Ian Johnson, a Pulitzer Prize–winning chronicler of events in China for the
Journal
.
He called the deal a Faustian bargain and
campaigned with a small group of reporters against it. The Bancrofts saw their detachment as principled.

To ensure the newspaper's integrity, Murdoch's lawyers created a five-member panel,
the Special Committee. It was to be constituted without any existing entanglements with News Corp or the Murdoch family. Chairman Thomas Bray had been a staffer for the
Wall Street Journal
, leaving in 1983, an affiliation that raised no hackles. MIT digital futurist Nicholas Negroponte, another member of the panel, however, had received $2 million from News Corp for the foundation he ran that gives laptops to needy schoolchildren. Those
Journal
reporters who opposed the sale to Murdoch seized on Negroponte's affiliation as a sign the panel would be compromised. The veteran
Journal
reporter E.S. Browning told me at the time,
“Murdoch clearly has no intention of creating a board that would be independent. He's going to try to assault it with his lackeys.”