Dial M for Murdoch: News Corporation and the Corruption of Britain (50 page)

By dogmatically sticking to the lie of the rogue reporter defence for five years, the Murdochs paid a far higher price than the one payable if they had come clean straight away. The cost can be counted in the shredded reputations of many senior executives; the closure of a best-selling newspaper and the loss of 150 loyal journalists; the failure to take over the whole of Britain’s biggest television network; at least $195 million (and counting) in compensation, legal fees, internal investigations and redundancy payments; some of the worst publicity imaginable for a global corporation; and shareholder revolts which threaten the family’s grip on News Corp. Perhaps worst of all, they have lost most of their lucrative power to influence British politics and policing. Everyone who kow-towed before, who pushed for a place at their side, is going to be wary even of being seen in their company from now on. Like the paper they closed, the Murdochs have become toxic.

And it is going to get worse. There are investigations into media practices in the US and Australia, an increasing number of investigative journalists and parliamentarians looking at other forms of intrusive surveillance techniques, former contracted private investigators and disgruntled former staff members speaking out, civil cases pointing to wrongdoing at other newspapers. In the margins of the scandal, whispered voices speak about the involvement of rogue intelligence officers, secret political campaigns and commercial espionage. Almost certainly there will be several criminal trials, leading to fresh bursts of bad publicity, further disclosures and, possibly, lengthy custodial sentences for former employees. News Corp may not be strong enough to withstand it. ‘What’s happening in Britain is eating News Corp up – its slow, agonizing pace may even be more corrosive than the prospect of trials and even potential convictions,’ Michael Wolff observed in February. ‘An extraordinary corporate death is taking place.’
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In the end, this story is about corruption by power. Some of Murdoch’s enforcers departed from the company line (it’s all about business) and pursued personal agendas and vendettas, even against minor politicians. Their arrogance was so stratospheric they discussed their crimes even though they knew they were being recorded. They thought they could destroy the evidence, threaten and cover up. They thought they were cleverer than everyone else; they thought they were untouchable. From the criminal underworld to the headquarters of London’s police force, from the decks of yachts in the Mediterranean to farmhouses in the Cotswolds and the deep-carpeted rooms of Downing Street, they had spun an invisible web of connections and corruption. They had privileged access to government ministers, state secrets, tax, health and vehicle data, to the records of phone companies and banks, to the intimate personal information of members of the public. They listened to phone messages, of course, but they also blagged, bribed, spied and bullied, and imposed their will through blackmail, corruption and intimidation. The names of their agents spoke of the darkness: Silent Shadow, Shadowmenuk. Rupert Murdoch was not running a normal business, but a shadow state. Now exposed by the daylight, it has been publicly humbled, its apparatus partially dismantled and its executives in retreat, at least for the moment. It stands shaken and ostensibly apologetic but it is still there, and Rupert Murdoch is still in charge.

Illustrations

1. Rupert Murdoch in London in 1969, the year the 38-year-old Australian took over his first British newspaper, the
News of the World
. He dominated Fleet Street for four decades.

2. The 80-year-old tycoon under pressure the day after defending his company’s conduct in front of the Commons Culture Committee. Most rival papers’ front pages screamed ‘Humble pie’, but
The Times
came out for its proprietor.

3. Young tabloid editors Piers Morgan, Rebekah Wade and Andy Coulson partying at the home of Elisabeth Murdoch and Matthew Freud in 2004, when the
News of the World
was systematically hacking phones.

4. Flirtatious and charming, at least with the powerful, Wade made sure she was friendly with senior politicians – including Tony Blair, the Labour Prime Minister, who was endorsed by News International papers at three successive general elections.

5. BSkyB’s chief executive, James Murdoch, Rupert’s son and heir, wooed the new Conservative leader, David Cameron, and his close ally George Osborne, the Shadow Chancellor. In 2007, they enjoyed each other’s company at a summit on social responsibility.

6. Tommy Sheridan and his wife Gail celebrate their libel victory over the
News of the World
in 2006, beginning an epic legal struggle between the socialist politician and the Murdochs’ British newspaper group.

7. Police found thousands of names and PIN codes in the notes of Glenn Mulcaire. The Crown Prosecution Service charged the private detective with hacking the phones of eight individuals. After his release from prison, News International settled his claim against them for £85,000. He has since remained silent.

8. Clive Goodman, the
News of the World
’s royal editor, was jailed in January 2007 for eavesdropping royal phone calls. He subsequently received settlements totalling £243,000 from News International. Like Mulcaire, has since remained silent.